Telomir Pharmaceuticals, Inc.

notes to the financial statements

DECEMBER 31, 2025 and 2024

Note 1. Description of business and summary of significant accounting policies

Overview

Telomir Pharmaceuticals, Inc. (“Telomir” or the “Company”) was formed in August 2021 and is a Florida-incorporated pre-clinical stage biotechnology company developing therapies designed to target the root epigenetic mechanisms underlying cancer, aging, and degenerative disease. The Company’s lead candidate, Telomir-1, has demonstrated activity in preclinical studies involving modulation of DNA and histone methylation patterns, which may contribute to balanced gene expression, cellular function, and genomic stability.

Telomir-1 is a novel oral small molecule metal ion regulator designed to extend telomere caps, maintain cellular balance, and combat oxidative stress, a key driver of aging and disease progression. By modulating essential metal ions such as iron, and copper, Telomir-1 may help protect against age related conditions, including Progeria (a rare genetic disorder that causes rapid aging in children), Wilson’s disease (a genetic disorder leading to toxic copper buildup in the body), and Age-related Macular Degeneration (AMD), as well as Type 2 diabetes, breast cancer, and Alzheimer’s disease.

As used herein, the Company’s common stock, no par value per share, is referred to as the “Common Stock” and the Company’s preferred stock, no par value per share, is referred to as the “Preferred Stock.

Initial public offering

On February 13, 2024, the Company closed its initial public offering (the “IPO”) consisting of 1,000,000 shares of Common Stock at a price of $7.00 per share for approximately $7.0 million in gross proceeds. After deducting the underwriting commission and other offering expenses totaling $1.2 million, the net proceeds to the Company were $5.8 million. The Common Stock began trading on The Nasdaq Capital Market on February 9, 2024 under the symbol “TELO” (See Note 7 “Common Stock”).

Proposed merger

The Company and TELI Pharmaceuticals, Inc., a related party private company incorporated under the laws of Delaware (“TELI”) have entered into an Agreement and Plan of Merger and Reorganization, dated November 20, 2025, and as amended on February 4, 2026 (collectively, the “Merger Agreement”), pursuant to which a wholly owned subsidiary of Telomir will merge with and into TELI, with TELI surviving as a wholly owned subsidiary of Telomir (the “Merger”), subject to shareholder approval. At the effective time of the Merger (the “Effective Time”), each outstanding share of common stock of TELI, $0.0001 par value per share (“TELI Common Stock”), will be converted into the right to receive such number of Telomir Common Stock as is calculated based on the exchange ratio of the shares for the Merger (the “Exchange Ratio”). The Exchange Ratio is calculated using the relative company valuations of each of Telomir and TELI, as determined by a third-party valuation firm (as further described herein). It is expected that shareholders of TELI will receive one share of Telomir Common Stock for each share of TELI Common Stock held (the “Merger Share Consideration”). The Telomir Common Stock issued as the consideration will not be registered for trading under the Securities Act. The Merger will result in an alignment of U.S. and non-U.S. rights to Telomir-1 within a single public company structure, thereby simplifying global development and partnership efforts. As a result of the Merger, TELO will own the entire worldwide intellectual property portfolio and development programs related to Telomir-1. See Note 5,Merger Agreement.

Revenue recognition

The Company currently has no source of revenue. Miscellaneous income, including interest, is recognized when earned by the Company.

***Income taxes ***

The Company accounts for income taxes pursuant to the provision of Accounting Standards Codification (“ASC”) 740-10, “Accounting for Income Taxes” (“ASC 740-10”), which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized.

The Company follows the provision of ASC 740-10 related to Accounting for Uncertain Income Tax Positions. When tax returns are filed, there may be uncertainty about the merits of positions taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the consolidated financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more likely than not recognition threshold are measured at the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefit associated with tax positions taken that exceed the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all more likely than not to be upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits.

The Company has adopted ASC 740-10-25, “Definition of Settlement”, which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion and examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. The federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally for three years after they are filed.

Research and development expenses

Research and development costs are expensed in the period in which they are incurred and include the expenses paid to third parties, such as contract research organizations and consultants, who conduct research and development activities on behalf of the Company.

Use of estimates

The preparation of financial statements in accordance with generally accepted accounting principles in the United States of America requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results may differ from such estimates and such differences could be material. Significant estimates during the reporting periods include stock-based compensation and the deferred tax asset valuation allowance.

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments and other short-term investments with maturities of three months or less, when purchased, to be cash equivalents. The Company maintains cash and cash equivalent balances at two financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”). The Company’s accounts at these institutions are insured by the FDIC up to $250,000. On December 31, 2025 and 2024, the Company had cash in excess of FDIC limits of approximately $7.0 million and $1.0 million, respectively. To reduce its risk associated with the failure of such financial institution, the Company evaluates at least annually the rating of the financial institution in which it holds deposits. Any material loss that the Company may experience in the future could have an adverse effect on its ability to pay its operational expenses or make other payments and may require the Company to move its cash to other high quality financial institutions.

The Company accounts for stock-based compensation under the provisions of FASB ASC 718, “Compensation - Stock Compensation”, which requires the measurement and recognition of compensation expense for all stock-based awards made to employees, directors and consultants based on estimated fair values on the grant date. The Company estimates the fair value of stock-based awards on the date of grant using the Black-Scholes model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods using the straight-line method. The Company has elected to account for forfeitures of stock-based awards as they occur.

Fair Value Measurements and Financial Instruments

The Company measures the fair value of financial instruments in accordance with GAAP which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.

GAAP defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. GAAP also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. GAAP describes three levels of inputs that may be used to measure fair value:

Level 1 – quoted prices in active markets for identical assets or liabilities.

Level 2 – quoted prices for similar assets and liabilities in active markets or inputs that are observable.

Level 3 – inputs that are unobservable (for example cash flow modeling inputs based on assumptions).

The Company considers the carrying amount of prepaid assets and all current liabilities to approximate fair value due to the short-term nature of those elements.

Earnings per Share

Earnings (loss) per share is computed in accordance with ASC Topic 260, “Earnings per Share” Basic weighted-average number of shares of common stock outstanding for the year ended December 31, 2025 and December 31, 2024 include the shares of the Company issued and outstanding during such period, on a weighted average basis. The basic weighted average number of shares of common stock outstanding excludes common stock equivalents such as stock options and warrants, while diluted weighted average number of shares outstanding includes such stock options and warrants. As of December 31, 2025 there were 2,814,057 common stock warrants and 4,187,670 common stock options that were not included in the computation of diluted earnings per share, because to do so would have an antidilutive effect. As of December 31, 2024 there were 2,814,057 stock warrants and 2,352,670 stock options that were not included in the computation of diluted earnings per share, because to do so would have an antidilutive effect.

Recent accounting pronouncements not yet adopted

In December 2023, the FASB issued ASU 2023-09,Income Taxes (Topic 740) - Improvements to Income Tax Disclosures. The new standard requires a company to expand its existing income tax disclosures, specifically related to the rate reconciliation and income taxes paid. The standard is effective for the Company beginning in fiscal year 2025. The Company applied the amendments prospectively for the year ended December 31, 2025, and the impact of the adoption of the amendments in this update was not material to the Company’s financial position and results of operations for the year ended December 31, 2025, since the amendments require only enhancement of existing income tax disclosures in the footnotes to the Company’s financial statements.

In November 2024, the FASB issued ASU 2024-03,Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures(Subtopic 220-40), which requires entities to provide more detailed disaggregation of expenses in the income statement, focusing on the nature of the expenses rather than their function. The new disclosures will require entities to separately present expenses for significant line items, including but not limited to, depreciation, amortization, and employee compensation. Entities will also be required to provide a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, disclose the total amount of selling expenses and, in annual reporting periods, provide a definition of what constitutes selling expenses. This pronouncement is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company does not expect the adoption of this new guidance to have a material impact on the consolidated financial statements.

Note 2. Going Concern

The accompanying financial statements have been prepared assuming the Company will continue as a going concern which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business.

As of December 31, 2025, the Company had cash of approximately $7.3 million. The Company raised approximately $9.6 million in 2025, used approximately $3.7 million of cash in operations during the year ended December 31, 2025, had a net loss of $10.4 million in 2025 and had stockholders’ equity of approximately $5.9 million at December 31, 2025, versus stockholders’ equity of approximately $0.6 million at December 31, 2024.

Historically, the Company has been primarily engaged in developing Telomir-1. During these activities, the Company sustained substantial losses. The Company’s ability to fund ongoing operations and future clinical trials required for FDA approval is dependent on the Company’s ability to obtain significant additional external funding in the near term. Since inception, the Company has financed its operations through related party financings-see Note 4, an initial public offering – see Note 1, and ATM financings. Additional sources of financing may be sought by the Company. However, there can be no assurance that any fundraising will be achieved on commercially reasonable terms, if at all.

As of the date of filing this Annual Report, the Company will continue to generate losses and have insufficient cash and cash equivalents on hand to support its operations for at least the 12 months following the date the financial statements are issued. These factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the issuance date of this report. Management cannot provide assurance that the Company will ultimately achieve profitable operations or become cash flow positive or raise additional debt and/or equity capital. The Company is seeking to raise capital through additional debt and/or equity financings to fund our operations in the future. If the Company is unable to raise additional capital or secure additional lending in the near future, management expects that the Company will need to curtail its operations. These financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Note 3. License agreement, related party

The Company licenses the U.S. patent rights for the use of Telomir-1 in human applications from MIRALOGX, LLC (“MIRALOGX”), an intellectual property development and holding company owned by a trust established by the Company’s founder—a related party to the Company and greater than 10% shareholder.

On August 11, 2023, (the “Effective Date”), the Company and MIRALOGX entered into an Amended and Restated Exclusive License Agreement, under which the Company has the exclusive perpetual right and license under the above-described patent rights to make, have made, use, and sell “Licensed Products” in the U.S. for human uses and preclinical studies and activities of any kind conducted in furtherance of obtaining regulatory approval or commercialization for human uses (the “MIRALOGX License Agreement”). On November 10, 2023, the Company and MIRALOGX entered into the Amendment No. 1 to the Amended and Restated License Agreement, pursuant to which the field of use relating to the license was amended to include therapeutic treatments and other medical or health uses in animals, in addition to humans, and related preclinical studies and activities conducted in furtherance of obtaining regulatory approval for and commercialization of veterinary, in addition to human, therapeutic treatments and uses (together with the “Initial MIRALOGX License Agreement, the “MIRALOGX License Agreement”). “Licensed Product” is defined in the agreement as a drug product containing as an active agent 2,4,6-tris(3,4-dihydro-2H-pyrrol-2-yl) pyridine or a pharmaceutically acceptable salt, ester, or solvate thereof. The Company also has the right to grant corresponding sublicenses under the licensed patent rights. The MIRALOGX License Agreement provides for the payment to MIRALOGX of an 8% royalty (payable quarterly) on the Company’s net sales of Licensed Products by the Company or its sublicensees and on non-royalty bearing milestone revenue. There are no up-front, execution, or milestone payments in the license agreement. Further, no payments have been made to date under the agreement.

The term of the license from MIRALOGX will continue through the date of the expiration of the last-to-expire licensed patent or, if later, the date of the expiration of the last strategic partnership/sublicensing agreement covering the licensed products. The patent rights are expected to extend through 2043, and additional patent terms may be awarded, including additional patent terms based on the time taken for regulatory review of drug products.

The agreement also provides that Telomir may bring suit in its own name to enforce patent rights. MIRALOGX will control the prosecution of the patent applications for Telomir-1. Telomir is required to be kept informed by MIRALOGX of patent prosecution activities and may select identified countries for patent protection. Telomir is to reimburse MIRALOGX for patent prosecution and maintenance costs.

Note 4. Related parties balances and transactions

Due to Officer

On May 27, 2025,400,000 fully vested common shares were granted for services to our Chairman and Chief Executive Officer, Erez Aminov, who is the son-in-law of Jonnie R. Williams (see below). The shares were valued at $840,000 based on the stock quoted trading price at the grant date and were expensed immediately as compensation expense. In December 2025, Mr. Aminov transferred $155,518 to the Company, for the Company to use to pay certain payroll withholding taxes Mr. Aminov owed as a result of this RSU grant. These payroll taxes ultimately were not paid in the Company’s payroll processing. Therefore, in January 2026, $155,518 was paid back to Mr. Aminov so he can remit this amount directly to the IRS. The company, however, did remit the employer portion of his Medicare taxes totaling $12,180 in 2025.

Due from related parties

During the year ended December 31, 2023, the Company provided working capital advances to companies under common control. These advances were due on demand and are non-interest bearing. Amounts due from related parties as of December 31, 2023 were $0.13 million. In 2024, the company under common control was dissolved and therefore the amount due become uncollectable and was written off and reflected as credit loss expense, which is included in general and administration expenses. As of December 31, 2024, there wasno amount due from related parties.

Due to related parties

During the year ended December 31, 2024, the Company received working capital advances from related party companies under common control. These advances are due on demand and are non-interest bearing. During the year ended December 31, 2025, a related party, MIRALOGX, shipped pharmaceutical chemicals to Telomir’s service provider for ongoing research at a cost of approximately $224,800. As of December 31, 2025 and 2024, the amounts due to related parties is $318,234 and $93,432, respectively.

Investment from Largest Shareholder

On May 19, 2025, the Company entered into an agreement to raise $3 million in equity financing through a direct investment by The Bayshore Trust, an entity affiliated with the Company’s largest shareholder, Jonnie R. Williams, Sr. The transaction was structured as a straight restricted common stock deal with no warrants. The Company issued 333,334 restricted shares of its common stock, no par value (the “Common Stock”) at a purchase price of $3.00 per share, representing an 18% premium to the closing share price of the Common Stock of $2.54 on the date of execution (the “Bayshore Financing”). The Company received the initial payment of $1 million for the Bayshore Financing on May 20, 2025. In July 2025, an additional $2 million was received, for the issuance of 666,666 shares.

Bay Shore Trust Line of Credit

On June 15, 2023, the Company entered into a Promissory Note and Loan Agreement with the Bay Shore Trust, a trust established by the Company’s founder, Jonnie R. Williams, Sr., and under which various of his family members are beneficiaries. Under this Promissory Note and Loan Agreement (the “Bay Shore Note”), the Company had the right to borrow up to an aggregate of $5 million from the Bay Shore Trust at any time up to the second anniversary of the issuance of the Bay Shore Note or, if earlier, upon the completion of the Company’s IPO. As of December 31, 2025 and 2024, the line of credit is no longer available as the IPO was completed in February 2024.

In consideration of the loan facility provided by the Bay Shore Trust, the Company issued to the Bay Shore Trust a Common Stock purchase warrant on June 15, 2023 giving the Bay Shore Trust the right to purchase up to 2,439,025 shares of Common Stock at an exercise price of $3.73 per share (See Note 7).

Starwood Trust Line of Credit and Stock Purchase Agreement

On September 24, 2024 the Company entered into an unsecured Promissory Note and Loan Agreement (“the Starwood Note”) with the Starwood Trust, a separate related party trust established by the Company’s founder, Jonnie R. Williams, Sr. who is the sole owner of Bay Shore Trust as well as our largest shareholder, and under which various of his family members are beneficiaries. Under the Starwood Note, the Company has the right to borrow up to an aggregate of $5 million from the Starwood Trust at any time up until September 24, 2026, the second anniversary of the note. The Company’s right to borrow funds under the Starwood Note is subject to the absence of a material adverse change in its assets, operations, or prospects The Starwood Note contains default provisions in which in the event of the Company misses payment, makes false representations, fails to comply in any material respect to covenants, files for bankruptcy, or experiences a material adverse change in is assets or operations than the Company is considered in default and the entire unpaid principal and accrued interest is due immediately. The Starwood Note, together with accrued interest, is to become due and payable on the second anniversary of the issuance of the note, provides for prepayment at any time without penalty, and accrues simple interest at a rate equal 7% per annum. As of December 31, 2025 and 2024, the Company has not borrowed any amounts under the Starwood Note.

Further, on December 9, 2024, Starwood Trust entered into a stock purchase agreement with the Company to purchase 142,857 shares of unregistered common stock at $7 a share for a total of $1.0 million in proceeds to the Company.

**License agreement -**See Note 3

Related Party Travel Costs

On April 1, 2023 the Company entered into an Agreement For Shared Lease Costs (the “Shared Agreement”) with MIRALOGX, LLC, a related party under which we have agreed to pay our pro rata share of the operating usage costs owing by MIRALOGX under an aircraft lease agreement between MIRALOGX and Supera Aviation I LLC (“Supera Aviation”) based on our usage of the leased aircraft each month. No amounts are payable by the Company under this agreement unless and to the extent the Company chooses to utilize the leased aircraft, and the Company may discontinue the use of the aircraft and terminate this agreement at any time. Supera Aviation is a company owned by Starwood Trust, a trust established by Mr. Williams, the Company’s founder and largest shareholder. For the year ended December 31, 2025 and December 31, 2024, the Company incurrednil and $0.37 million, respectively, in expenses under the aircraft lease agreement. The aircraft lease was terminated in April 2024 and no other costs have been incurred under this agreement since the lease termination (See Note 6 Variable lease costs).

Related Party Rental Agreement*-* see Note 6 for Variable lease costs.

**Note 5. Proposed Merger Agreement **

The Company and TELI Pharmaceuticals, Inc., a related party private company incorporated under the laws of Delaware (“TELI”) have entered into an Agreement and Plan of Merger and Reorganization, dated November 20, 2025, and as amended on February 4, 2026 (collectively, the “Merger Agreement”), pursuant to which a wholly owned subsidiary of Telomir will merge with and into TELI, with TELI surviving as a wholly owned subsidiary of Telomir (the “Merger”), subject to shareholder approval. At the effective time of the Merger (the “Effective Time”), each outstanding share of common stock of TELI, $0.0001 par value per share (“TELI Common Stock”), will be converted into the right to receive such number of Telomir Common Stock as is calculated based on the exchange ratio of the shares for the Merger (the “Exchange Ratio”). The Exchange Ratio is calculated using the relative company valuations of each of Telomir and TELI, as determined by an independent valuation firm. It is expected that shareholders of TELI will receive one share of Telomir Common Stock for each share of TELI Common Stock held (the “Merger Share Consideration”). The Telomir Common Stock issued as the consideration will not be registered for trading under the Securities Act. The Merger will result in an alignment of U.S. and non-U.S. rights to Telomir-1 within a single public company structure, thereby simplifying global development and partnership efforts. As a result of the Merger, Telomir will own the entire worldwide intellectual property portfolio and development programs related to Telomir-1.

The transaction is expected to be recorded as an asset acquisition from a related party at acquired cost basis with two assets to be acquired, the license agreement and $1,000,000 in cash or marketable securities. TELI is a newly formed legal entity with no revenue, no employees, no facilities, and no infrastructure. TELI’s assets as of the Merger Date will consist exclusively of the $1,000,000 in cash or marketable securities and the Telo-1 license agreement with MIRALOGX. MIRALOGX is the licensor of the Company’s and TELI’s rights to Telomir-1. MIRALOGX is a separate intellectual property development company owned by the Bayshore Trust. The Bayshore Trust, a related party, is also TELI’s largest stockholder. The license agreement grants rights to develop and commercialize the Telomir-1 compound in the United Arab Amirates, Australia, Canada, China, European Union, Israel, India, Japan, South Korea, Mexico, Argentina, Taiwan and Uruguay. No other tangible or intangible assets, such as equipment, customer relationships, or developed technologies, will be transferred. The contingent consideration to Telomir in the transaction consists of two possible payments. Certain shareholders of TELI will agree to provide $2 million upon FDA acceptance of an Investigational New Drug or IND application for Telomir-1, and $2 million upon initiation of a Phase 1/2 study.

Note 6. Leases

The Company’s former corporate headquarters was located in Baltimore, Maryland, which included a lease for office space. This lease began in November 2022 and expired in April 2024. The lease was not renewed. To align with the accounting and administrative staff detailed below, the Company moved all remaining corporate activities in April 2024 to the shared space in Tampa, Florida referenced below within variable lease costs. In September 2024, the Company decided to no longer utilize the shared space and moved to a virtual office model. The Company has not had a physical office space since October 2024.

Variable lease costs

Variable lease costs primarily include utilities, property taxes, and other operating costs that are passed on from the lessor for the former corporate headquarters in Baltimore, Maryland. Variable lease costs related to the usage of the MIRALOGX airplane include usage expenses, which includes pilot expenses, jet fuel and general flight expenses that totalednil and $0.32 million in 2025 and 2024, respectively.

Beginning August 1, 2023, the Company’s accounting and administrative staff began sharing office space with a related party in Tampa, Florida. During the year ended December 31, 2024, this variable least cost related to the Tampa, Florida space totaled $0.02 million. The Company did not have lease costs during the year ended December 31, 2025.

The components of lease expense were as follows:

Note 7. Stockholders’ equity

Capital stock

The Company has the authority to issue 400,000,000 shares of capital stock, consisting of 300,000,000 shares of Common Stock and 100,000,000 shares of undesignated preferred stock, whose rights and privileges will be defined by the Board of Directors when a series of preferred stock is designated.

Common Stock

2024

On February 13, 2024, the Company closed its initial public offering consisting of 1,000,000 shares at a price of $7.00 per share for approximately $7.0 million in gross proceeds. After deducting the underwriting commission and other offering expenses totaling $1.2 million, the net proceeds to the Company were $5.8 million (the “IPO”).

On December 9, 2024, Starwood Trust, a related party, entered into a stock purchase agreement with the Company to purchase 142,857 shares of unregistered common stock at $7 a share for a total of $1.0 million in proceeds to the Company.

During the year ended December 31, 2024, deferred offering costs from December 31, 2023 of $303,281 and offering costs of $863,744 incurred in 2024 were charged against additional paid in capital.

2025

On February 14, 2025, the Company filed a shelf registration statement with the SEC to facilitate the issuance of our common stock and entered into an At The Market Offering Agreement (the “ATM Agreement”) with Rodman & Renshaw LLC under which the Company may offer and sell shares of its Common Stock, with an aggregate offering amount to be sold of up to $100,000,000. During the year ended December 31, 2025, the Company sold a total of 3,218,300 shares of its common stock, at a weighted average price of $2.12 for total proceeds of $6,553,209, net of costs of $72,092.

On May 19, 2025, the Company entered into an agreement to raise $3 million in equity financing through a direct investment by The Bayshore Trust, an entity affiliated with the Company’s largest shareholder. The transaction was structured as a straight restricted common stock deal with no warrants. The Company issued 333,334 restricted shares of its common stock, no par value at a purchase price of $3.00 per share, representing an 18% premium to the closing share price of the Common Stock of $2.54 on the date of execution (the “Bayshore Financing”). The Company received the initial payment of $1 million for the Bayshore Financing on May 20, 2025. In July 2025, an additional $2 million was received, for the issuance of 666,667 shares.

On May 27, 2025,400,000 fully vested common shares were granted for services to the Company’s CEO. The restricted shares were valued at $840,000 based on the stock quoted trading price at the grant date and were expensed immediately as compensation expense.

Warrants

In connection with various transactions and the IPO summarized below, the Company issue stock warrants. Warrant activity for the years ended December 31, 2025 and 2024 is summarized below:

Private placement Warrants

During the year ended December 31, 2023, the Company issued to the 2023 Private Placement investors a Common Stock warrant the right to purchase up to 268,025 shares of common stock at an exercise price of $15.42 per share. The Company also issued to the placement agent a Common Stock warrant the right to purchase up to 67,007 shares of common stock at an exercise price of $3.73 per share. Both issuances of warrants are immediately vested and will be exercisable any time until the day that is one year plus ninety days from the date an Investigational New Drug, or IND, filing is made with the FDA.

Bay Shore Trust Warrants

In consideration of the line of credit provided by the Bay Shore Trust, the Company issued to the Bay Shore Trust a common stock purchase warrant on June 15, 2023 giving the Bay Shore Trust the right to purchase up to 2,439,025 shares of common stock at an exercise price of $3.73 per share. This warrant will expire five years after the date of grant.. The fair value of the warrants were estimated on the grant date using the Black-Scholes valuation model and level 3 inputs based on assumptions for expected volatility, expected dividends, expected term, and the risk-free interest rate, which resulted in $5.95 million of deferred financing costs. In 2023 this cost was recorded as deferred financing costs and additional paid in capital on the balance sheet and was amortized straight-line over the term of the line of credit (which is 24 months). Associated amortization of deferred finance costs was recorded to interest expense on the statement of operations. The line of credit expired upon the IPO occurring in February 2024, and as such the remaining deferred financing costs associated with the warrant was fully amortized to interest expense in 2024. As of December 31, 2024, the warrant is fully amortized (see Note 4).

On November 22, 2024, Bay Shore Trust transferred 100,000 warrants to an unaffiliated party as part of a gift transfer.

In December 2024,10,000 Common Stock warrants were exercised at an exercise price of $3.73 per share and the Company issued 10,000 shares of Common Stock upon such exercise in exchange for $37,300 delivered to the Company.

Underwriter warrants

In connection with the IPO in February 2024, the Company issued 50,000 warrants to purchase Common Stock to the IPO underwriter (or its designees) at an exercise price of $7.00 which are exercisable immediately and expire in the four-and-a-half-year period commencing six months after the commencement of sales in the IPO. The warrants provide for registration rights (including a one-time demand registration right and piggyback registration rights that expire 5 years from the commencement of sales of the offering) and customary anti-dilution provisions as permitted under FINRA Rule 5110(g)(8). The fair value of the warrants were estimated on the grant date using the Black-Scholes valuation model and level 3 inputs based on assumptions for expected volatility, expected dividends, expected term, and the risk-free interest rate, which resulted in $0.2 million of equity issuance costs. The warrants were considered equity issuance costs and therefore there was no financial statement impact during the year ended December 31, 2024.

Key assumptions used to value underwriter warrants in February 2024 are as follows:

2023 Omnibus Incentive Plan

In December 2023, the Company’s Board of Directors adopted the Company’s 2023 Omnibus Incentive Plan, (“2023 Plan”). The 2023 Plan authorizes the grant of incentive stock options, within the meaning of Section 422 of the Internal Revenue Code, to the Company’s employees and any of its parent and subsidiary corporations’ employees, and for the grant of nonstatutory stock options, restricted stock, restricted stock units, stock appreciation rights, performance units and performance shares to the Company’s employees, directors, and consultants and any of its future subsidiary corporations’ employees and consultants

The 2023 Plan provides that 6,500,000 shares of the Company’s Common Stock are reserved for issuance under the 2023 Plan, all of which may be issued pursuant to the exercise of incentive stock options.

Stock options

The vesting period for stock options granted is generally immediately to one year. All stock options granted under the 2023 Plan have a maximum contractual term of ten years.

The grant-date fair value of each option award is estimated on the date of grant using the Black-Scholes-Merton option-pricing model that uses assumptions for expected volatility, expected dividends, expected term, and the risk-free interest rate. In 2024 expected price volatility is based on the historical volatilities of a peer group as the Company does not have a multi-year trading history for its shares. Industry peers consist of several public companies in the biotech industry similar to the Company in size, stage of life cycle and product indications. Starting in 2025 expected price volatility is based solely on the Company’s trading history for its common stock.

Expected term of options granted is derived using the “simplified method” which computes expected term as the average of the sum of the vesting term plus contract term. The risk-free rate is based on the 5-year U.S. Treasury yield curve in effect at the time of grant. The Company recognizes forfeitures as they occur.

The weighted average assumptions for grants are provided in the following table:

During the year ended December 31, 2025, the Company issued stock options under the 2023 Plan as follows:

A summary of the Company’s stock option activity is as follows:

The Company recognized approximately $5.3 million and $6.9 million in stock-based compensation in 2025 and 2024, respectively. The weighted average grant-date fair values of options granted during the years ended December 31, 2025 and 2024 were $1.84 and $3.80 per share, respectively. The grant date fair value of shares vested during the years ended December 31, 2025 and 2024 was $11.8 million and $4.0 million, respectively. As of December 31, 2025, there is $83,600 of unrecognized compensation cost related to unvested stock options granted under the Company’s 2023 Plan that is expected to be recognized over the next year.

Restricted Stock Units (RSUs)

In 2025 the Chairman and CEO was issued RSUs for 400,000 common shares which were fully vested upon grant. These RSUs were valued at $840,000 based on the stock quoted trading price at the grant date and were expensed immediately as compensation expense.

Note 8 –Income Taxes

The significant components of the Company’s net deferred tax assets and liabilities consisted of the following:

Provision for (benefit from) income taxes consisted of the following:

Beginning in 2022, in accordance with Internal Revenue Code Section 174, Qualified Research Expenditures are capitalized for tax purposes and amortized over a period of five years. Accordingly, for income tax purposes, and as of December 31, 2025 and 2024, the Company has recorded a deferred tax asset totaling approximately $0.7 million and $1.0 million, respectively, related to the timing difference between GAAP and Tax recognition of these expenditures. Under current law, beginning in tax years after December 31, 2024, domestic research and experimental expenditures may again be deducted currently for U.S. federal income tax purposes; however, the Company continues to carry deferred tax assets related to research costs capitalized in prior periods that will reverse as amortization deductions are claimed.

A reconciliation of the statutory U.S. federal income tax rate to the Company’s effective income tax rate is as follows:

ASC Topic 740 requires that a deferred tax amount be reduced by a valuation allowance if, based on the weight of available evidence it is more likely than not (a likelihood of more than 50%) that some portion or all of the deferred tax assets will not be realized. The valuation allowance should be sufficient to reduce the deferred tax asset to the amount that is more likely than not to be realized. The Company has recorded a full valuation allowance against its deferred tax assets generated by net operating loss carryforwards as it has determined that such amounts may not be recognizable, given the historical losses of the Company to date. As of December 31, 2025, the Company has a cumulative federal net operating loss carryforward of approximately $30.2 million. The net operating loss carryforward have no expiry date.