Shuttle Pharmaceuticals Holdings, Inc.

Previous wording

ITEM 2. MANAGEMENT**’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Current wording

Item 2. Management**’sDiscussion and Analysis of Financial Condition and Results of Operations

Previous wording

The following Management’s Discussion and Analysis of Financial Condition and Result of Operations (the “MD&A”) should be read in conjunction with our unaudited financial statements and the related notes thereto included elsewhere in this Quarterly Report and our financial statement and related notes contained in our annual report on From 10-K for the fiscal year ended December 31, 2025. The MD&A contains forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations, and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words “believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,” “expect,” and the like, and/or future-tense or conditional constructions (“will,” “may,” “could,” “should,” etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements in this report. Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors including, but not limited to, those noted under “Risk Factors” in this report and in our annual report on Form 10-K for the fiscal year ended December 31, 2025.

Current wording

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (the “MD&A”) should be read in conjunction with our unaudited financial statements and the related notes thereto included elsewhere in this Quarterly Report and our financial statement and related notes contained in our annual report on From 10-K for the fiscal year ended December 31, 2025. The MD&A contains forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations, and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words “believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,” “expect,” and the like, and/or future-tense or conditional constructions (“will,” “may,” “could,” “should,” etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements in this report. Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors including, but not limited to, those noted under “Risk Factors” in this report and in our annual report on Form 10-K for the fiscal year ended December 31, 2025.

Previous wording

On November 21, 2025, we acquired substantially all of the assets of Molecule.ai, a pharmaceutical software company building an artificial intelligence (“AI”) driven platform for molecular discovery and early-stage drug development, were acquired by a wholly owned subsidiary of ours. By combining modern AI techniques with structured scientific workflows, the Molecule.ai platform (hereafter, “Molecule.ai” or the “platform”) helps researchers explore the chemical space more efficiently, evaluate molecular ideas with greater clarity and make more informed decisions during the earliest stages of drug development. The platform is engineered to accelerate the iteration cycles that characterize modern drug discovery while preserving scientific reproducibility, traceability and operational reliability. Molecule.ai adapts state of the art AI algorithms to create a practical, domain-specific AI infrastructure layer for molecular research and development. We will seek to leverage Molecule.ai’s molecular modeling and predictive analytics platform to significantly augment our drug discovery and development business purpose. In tandem with the Molecule.ai asset acquisition, on November 20, 2025, we committed to a plan to wind-down the Clinical Trials of Ropidoxuridine.

Current wording

On November 21, 2025, we acquired substantially all of the assets of Molecule.ai, a pharmaceutical software company building an artificial intelligence driven platform for molecular discovery and early-stage drug development, were acquired by a wholly owned subsidiary of ours. By combining modern AI techniques with structured scientific workflows, the Molecule.ai platform helps researchers explore the chemical space more efficiently, evaluate molecular ideas with greater clarity and make more informed decisions during the earliest stages of drug development. The platform is engineered to accelerate the iteration cycles that characterize modern drug discovery while preserving scientific reproducibility, traceability and operational reliability. Molecule.ai adapts state-of-the-art AI algorithms to create a practical, domain-specific AI infrastructure layer for molecular research and development. We will seek to leverage Molecule.ai’s molecular modeling and predictive analytics platform to significantly augment our drug discovery and development business purpose. In tandem with the Molecule.ai asset acquisition, on November 20, 2025, we committed to a plan to wind-down the Clinical Trials of Ropidoxuridine.

Previous wording

On December 31, 2024, we received a letter from the Nasdaq Staff stating that for the 30 consecutive business day period between November 15, 2024 to December 30, 2024 our common stock had failed to maintain a minimum closing bid price of $1.00 per share, as required for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2). Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), we had a period of 180 calendar days, or until June 30, 2025, to regain compliance with the Minimum Bid Price Requirement.

Current wording

On December 31, 2024, we received a letter from the Staff of the Nasdaq Stock Market stating that for the 30 consecutive business day period between November 15, 2024 to December 30, 2024 our common stock had failed to maintain a minimum closing bid price of $1.00 per share, as required for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2). Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), we had a period of 180 calendar days, or until June 30, 2025, to regain compliance with the Minimum Bid Price Requirement.

Previous wording

Following the March 2025 $5.75 million equity financing, on March 14, 2025, Nasdaq acknowledged that we had regained compliance with the Listing Rule 5550(b)(1) but indicated that if we failed to evidence compliance upon filing the March 31, 2025 Form 10-Q, we may have been subject to delisting. We evidenced compliance through maintaining a minimum closing bid price of our common stock of $1.00 per share or greater from June 16, 2025 to July 1, 2025. Accordingly, we regained compliance with the Minimum Bid Price Requirement.

Current wording

Following our March 2025 $5.75 million equity financing, on March 14, 2025, Nasdaq acknowledged that we had regained compliance with the Listing Rule 5550(b)(1) but indicated that if we failed to evidence compliance upon filing the March 31, 2025 Form 10-Q, we may have been subject to delisting. We evidenced compliance through maintaining a minimum closing bid price of our common stock of $1.00 per share or greater from June 16, 2025 to July 1, 2025. Accordingly, we regained compliance with the Minimum Bid Price Requirement.

Previous wording

On June 16, 2025, in order to maintain the Minimum Bid Price Requirement, we effectuated a 1-for-25 reverse stock split of our issued and outstanding common stock, rounding up to account for any fractional shares. The reverse stock split had no effect on our authorized shares of common stock or preferred stock and the par value will remain unchanged at $0.00001, respectively. All common stock share, option, warrant and per share amounts (except our authorized but unissued shares and previously reserved shares) have been retroactively adjusted in these consolidated financial statements and related disclosures.

Current wording

On June 16, 2025, in order to maintain the Minimum Bid Price Requirement, we effectuated a 1-for-25 reverse stock split of our issued and outstanding common stock, rounding up to account for any fractional shares. The reverse stock split had no effect on our authorized shares of common stock or preferred stock and the par value remained unchanged at $0.00001, respectively. All common stock share, option, warrant and per share amounts (except our authorized but unissued shares and previously reserved shares) have been retroactively adjusted in these consolidated financial statements and related disclosures.

Previous wording

We reported stockholders’ equity of $1,394,161 in our Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2025, and, as a result, were not in compliance with Nasdaq Listing Rule 5550(b)(1), which requires companies listed on the Nasdaq Capital Market (“Nasdaq”) to maintain a minimum of $2,500,000 in stockholders’ equity for continued listing (the “Stockholders’ Equity Requirement”). We believe as of November 17, 2025, we regained compliance with the Stockholders’ Equity Requirement based upon our private placement consummated on November 4, 2025, pursuant to which we raised aggregate gross proceeds of approximately $2.5 million, before deducting placement agent fees and offering expenses payable by us.

Current wording

We reported stockholders’ equity of $1,394,161 in our Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2025, and, as a result, were not in compliance with Nasdaq Listing Rule 5550(b)(1), which requires companies listed on Nasdaq to maintain a minimum of $2,500,000 in stockholders’ equity for continued listing (the “Stockholders’ Equity Requirement”). We believe as of November 17, 2025, we regained compliance with the Stockholders’ Equity Requirement based upon our private placement consummated on November 4, 2025, pursuant to which we raised aggregate gross proceeds of approximately $2.5 million, before deducting placement agent fees and offering expenses payable by us.

Previous wording

For the year ended December 31, 2025, we reported stockholders’ equity of $2,254,446, and, as a result, were not in compliance with the Stockholders’ Equity Requirement. As of March 31, 2026, we regained compliance with the Stockholders’ Equity Requirement based upon our underwritten public offering of 2,238,800 shares of its common stock at a public offering price of $0.50 per share, resulting in gross proceeds of $3,500,000 and net proceeds of approximately $3,100,000 after deducting underwriting discounts, commissions, and estimated offering expenses of $396,000. The offering included 4,761,000 pre-funded warrants at a price of $0.499 per warrant, each exercisable for one share of common stock at a nominal exercise price of $0.001 per share.

Current wording

For the year ended December 31, 2025, we reported stockholders’ equity of $2,254,446, and, as a result, were not in compliance with the Stockholders’ Equity Requirement. As of March 31, 2026, we regained compliance with the Stockholders’ Equity Requirement based upon our underwritten public offering of 223,880 shares of common stock at a public offering price of $5.00 per share, resulting in gross proceeds of $3,500,000 and net proceeds of approximately $3,100,000 after deducting underwriting discounts, commissions, and estimated offering expenses of $396,000. The offering included 476,120 pre-funded warrants at a price of $5.00 per warrant, each exercisable for one share of common stock at a nominal exercise price of $0.001 per share.

Previous wording

Legal and Professional Expenses. During the three months ended March 31, 2026, legal and professional expenses increased by $0.009 million or 1% compared to the same period in 2025. The increase in legal and professional fees was primarily due to higher legal and professional fees in the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Current wording

Legal and Professional Expenses. During the three months ended June 30, 2026, legal and professional expenses increased by $1.4 million or 254% compared to the same period in 2025. The increase in legal and professional fees was primarily attributable to legal, accounting, valuation and regulatory compliance activities related to the merger with United Dogecoin during the three months ended June 30, 2026.

Previous wording

*Other Income (expense).*During the three months ended March 31, 2026, other income increased by $0.2 million or 163% compared to other expense of the same period in 2025. The increase was primarily driven by a $0.1 million increase in change in fair value of derivative liabilities, partially offset by a $0.09 million decrease in change in fair value of convertible notes.

Current wording

*Other Income (Expense).*During the three months ended June 30, 2026, other income increased by $0.8 million or 294% compared to other expense of the same period in 2025. The increase was primarily driven by a $0.8 million increase in gain on extinguishment of debt, partially offset by a $0.2 million decrease in change in fair value of convertible notes.

Previous wording

*Research and Development.*Total research and development (“R&D”) expense was $0.3 million for the three months ended March 31, 2026, as compared to $1.6 million to the three months ended March 31, 2025. The decrease in total R&D expense of $1.3 million, or 83%, is primarily related to a $0.9 million decrease in subcontractor expenses and $0.2 million decrease in R&D compensation related expenses in the three months ended March 31, 2026 compared to the three months ended March 31, 2025. Subcontractor expense made up 36% of total R&D expenses in the three months ended March 31, 2026 and 58% of total R&D expenses during the three months ended March 31, 2025. R&D compensation related expenses were $0.2 million in the three months ended March 31, 2026 as compared to $0.6 million in the three months ended March 31, 2025. For the three months ended March 31, 2026, R&D compensation related expenses were 37% as a percent of total R&D expense, representing a decrease from the 26% of total R&D incurred in the three months ended March 31, 2025. The decrease is largely attributable to the lower employee headcount year over year and retirement of our CSO.

Current wording

Research and Development. Total R&D expense was $0.3 million for the six months ended June 30, 2026, as compared to $2.6 million to the six months ended June 30, 2025. The decrease in total R&D expense of $2.3 million or 88%, is primarily related to a $1.5 million decrease in subcontractor expenses and $0.8 million decrease in R&D compensation related. Subcontractor expense made up 42.14% of total R&D expenses in the six months ended June 30, 2026 and 63% of total R&D expenses during the six months ended June 30, 2025. R&D compensation related expenses were an insignificant amount in the six months ended June 30, 2026 as compared to $0.9 million in the six months ended June 30, 2025. For the six months ended June 30, 2026, R&D compensation related expenses were 20% as a percent of total R&D expense, representing a decrease from the 34% of total R&D incurred in the six months ended June 30, 2025. The decrease is largely attributable to the lower employee headcount year over year and retirement of our CSO.

Previous wording

General and Administrative Expenses. General and administrative expenses in the three months ended March 31, 2026 increased by $0.6 million, or 94%, from $0.6 million in the three months ended March 31, 2025 to $1.2 million in the three months ended March 31, 2026. The increase in general and administrative expenses was primarily due to costs associated with advertising for investor relations of $0.1 million and amortization expense for developed technology of $0.6 for the three months ended March 31, 2026.

Current wording

General and Administrative Expenses. General and administrative expenses in the six months ended June 30, 2026 increased by $0.2 million, or 7%, from 2.9 million in the six months ended June 30, 2025 to $3.1 million in the six months ended June 30, 2026. The increase in general and administrative expenses was primarily due to costs associated with investor relations of $0.5 million and amortization expense for developed technology of $1.3 million for the six months ended June 30, 2026.

Previous wording

Our unaudited condensed consolidated financial statements are prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. We have incurred losses since inception and had a net loss of $2.2 million and no revenues generated during the three months ended March 31, 2026 and working capital deficit of approximately $5.8 million as of March 31, 2026. We do not expect to generate positive cash flows from operating activities in the near future.

Current wording

Our unaudited condensed consolidated financial statements are prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. We have incurred losses since inception and had a net loss of $5.3 million and no revenues generated during the six months ended June 30, 2026 and working capital deficit of approximately $3.1 million as of June 30, 2026. We do not expect to generate positive cash flows from operating activities in the near future.

Previous wording

In January 2025, we entered into a change order to the existing agreement with Theradex Systems, Inc., our primary third-party CRO, for purposes of supporting our clinical trials of Ropidoxuridine. As disclosed in our SEC Form 8-K filings on October 21, 2025 and November 21, 2025, the Company received a letter from Theradex Systems, Inc., providing written notice of termination of the master agreement, dated November 1, 2018 (the “Master Agreement”), between us and Theradex, and all work orders thereunder, and demanding immediate payment of all outstanding amounts owed thereunder in the aggregate amount of $1.091 million. Pursuant to the notice of termination, on November 20, 2025, we entered into a release and settlement agreement (the “Settlement Agreement”) with Theradex, pursuant to which we will pay a partial payment of $300,000 to Theradex as full and final payment of any and all claims relating to the debt or obligation previously owed by us to Theradex, totaling approximately $557,000 (the “Outstanding Liabilities”) and in consideration of such payment, each party will release, acquit and discharge each other from all claims arising from the Outstanding Liabilities and Theradex will properly wind down operations in a manner compliant with the Food and Drug Administration. After the payments pursuant to the Settlement Agreement, we will still owe amounts, under five separate research site agreements between the Company and various hospitals, as disclosed in the Settlement Agreement. As part of the Company’s wind down of its Clinical Trials, the Company has incurred expenses that qualify as exit and disposal costs under U.S. GAAP. These include right of use asset impairment charges, accelerated expense recognition of share-based payments, and contract termination costs. Costs associated with the wind down of the Clinical Trials are recorded within research and development expenses in the consolidated financial statements of operations.

Current wording

In January 2025, we entered into a change order to the existing agreement with Theradex Systems, Inc., our primary third-party CRO, for purposes of supporting our clinical trials of Ropidoxuridine. As disclosed in our SEC Form 8-K filings on October 21, 2025 and November 21, 2025, the Company received a letter from Theradex Systems, Inc., providing written notice of termination of the master agreement, dated November 1, 2018 (the “Master Agreement”), between us and Theradex, and all work orders thereunder, and demanding immediate payment of all outstanding amounts owed thereunder in the aggregate amount of $1.1 million. Pursuant to the notice of termination, on November 20, 2025, we entered into a release and settlement agreement (the “Settlement Agreement”) with Theradex, pursuant to which we will pay a partial payment of $300,000 to Theradex as full and final payment of any and all claims relating to the debt or obligation previously owed by us to Theradex, totaling approximately $557,000 (the “Outstanding Liabilities”) and in consideration of such payment, each party will release, acquit and discharge each other from all claims arising from the Outstanding Liabilities and Theradex will properly wind down operations in a manner compliant with the Food and Drug Administration. After the payments pursuant to the Settlement Agreement, we will still owe amounts, under five separate research site agreements between the Company and various hospitals, as disclosed in the Settlement Agreement. As part of the Company’s wind down of its Clinical Trials, the Company has incurred expenses that qualify as exit and disposal costs under U.S. GAAP. These include right of use asset impairment charges, accelerated expense recognition of share-based payments, and contract termination costs. Costs associated with the wind down of the Clinical Trials are recorded within research and development expenses in the consolidated financial statements of operations.

Previous wording

In March 2025, we entered into a consulting services agreement (the “Bowery Consulting Agreement”) with Bowery Consulting Group Inc. (the “Consultant”). According to the Bowery Consulting Agreement, the Consultant will provide consulting services in connection with our business, advising on viability of plans for scaling activities, growth and capital raising strategies and cost minimization associated with technological platform improvements and marketing spend. We agreed to pay the Consultant $260,000 for their services, which we are not obligated to pay until we regain full Nasdaq listing requirement. We received notice from Nasdaq on July 2, 2025 that we had regained compliance with the listing requirement and have since paid the fee.

Current wording

In March 2025, we entered into a consulting services agreement (the “Bowery Consulting Agreement”) with Bowery Consulting Group Inc. (the “Consultant”). According to the Bowery Consulting Agreement, the Consultant will provide consulting services in connection with our business, advising on viability of plans for scaling activities, growth and capital raising strategies and cost minimization associated with technological platform improvements and marketing spend. We agreed to pay the Consultant $0.3 million for their services, which we are not obligated to pay until we regain full Nasdaq listing requirement. We received notice from Nasdaq on July 2, 2025 that we had regained compliance with the listing requirement and have since paid the fee.

Previous wording

In October 2025, the October 2024 Convertible Bridge Notes mandatorily converted into 117,612 shares of common stock due to reaching maturity. The Convertible Bridge Notes converted at a share price of $6.38, which is the conversion price with a 15% discount per the Convertible Bridge Notes’ terms. See Note 5 for more information.

Current wording

In October 2025, the October 2024 Convertible Bridge Notes mandatorily converted into 11,761 shares of common stock due to reaching maturity. The Convertible Bridge Notes converted at a share price of $63.8, which is the conversion price with a 15% discount per the Convertible Bridge Notes’ terms. See Note 5 for more information.

Previous wording

On November 20, 2025, the Company entered into an asset purchase agreement (the “APA”) to acquire Molecule.ai. The total purchase consideration was $10,117,304. For the year ended December 31, 2025, the Company made a $3,000,000 cash payment and issued 320,496 shares of common stock with a fair value of $564,073. As of December 31, 2025, the Company had contingent consideration payable and consideration payable of $2,000,000 and $4,435,927, respectively, related to the Molecule.ai acquisition.

Current wording

On November 20, 2025, the Company entered into an asset purchase agreement to acquire Molecule.ai. The total purchase consideration was $10,117,304. For the year ended December 31, 2025, the Company made a $3,000,000 cash payment and issued 32,050 shares of common stock with a fair value of $564,073. As of December 31, 2025, the Company had contingent consideration payable and consideration payable of $2,000,000 and $4,435,927, respectively, related to the Molecule.ai acquisition. See Footnote 6 to the unaudited condensed consolidated financial statements included earlier in this Quarterly Report on Form 10-Q.

Previous wording

On March 19, 2026, the Company entered into a consulting agreement with the IR Agency. Pursuant to the consulting agreement, IR Agency agreed to provide certain marketing and advertising services to communicate information about the Company to the financial community, including, but not limited to, creating company profiles, media distribution and building a digital community with respect to the Company. As consideration for the performance of the services, the Company paid $1.25 million to IR Agency. The term of the consulting agreement was three months starting on March 19, 2026. For the period ended March 31, 2026, the Company incurred $176,630 of costs under the consulting agreement.

Current wording

On March 19, 2026, the Company entered into a consulting agreement with IR Agency LLC. Pursuant to the consulting agreement, IR Agency agreed to provide certain marketing and advertising services to communicate information about the Company to the financial community, including, but not limited to, creating company profiles, media distribution and building a digital community with respect to the Company. As consideration for the performance of the services, the Company paid $1.3 million to IR Agency. The term of the consulting agreement was three months starting on March 19, 2026. For the six months ended June 30, 2026, the Company incurred $1.3 million of costs under the consulting agreement.

Previous wording

Our ability to continue as a going concern is dependent upon our ability to continue to successfully raise additional equity or debt financing to allow us to fund ongoing operations, and commercialize, fund milestone and contingent payments due under the APA, and market our Molecule.ai platform in order to generate revenues. These conditions raise substantial doubt about our ability to continue as a going concern within one year after the date that the consolidated financial statements contained in the report are issued.

Current wording

Our ability to continue as a going concern is dependent upon our ability to successfully raise additional equity or debt financing to fund ongoing operations, commercialize and further develop the Molecule.ai platform, develop and expand United Dogecoin’s digital asset infrastructure operations and other business strategies, and generate sufficient revenues and cash flows from our business activities. The Company and UD are currently negotiating a data center land deal and exploring other acquisition opportunities. Building on this anticipated transaction, management plans to undertake a significant capital raise in the near term, targeting between $120 million and $150 million. This financing will leverage the Company and UD’s existing sector network, investment bankers, and established industry relationships. The successful completion of the acquisition or any other acquisition, or such financing, however, cannot be guaranteed. These conditions raise substantial doubt about our ability to continue as a going concern within one year after the date that the consolidated financial statements contained in this report are issued.

Previous wording

On March 9, 2026, the Company closed an underwritten public offering of 2,238,800 shares of our common stock at a public offering price of $0.50 per share, resulting in gross proceeds of $3.5 million and net proceeds of approximately $3.2 million after deducting underwriting discounts, commissions, and estimated offering expenses of $275,000. The offering included 4,761,200 pre-funded warrants at a price of $0.499 per warrant, each exercisable for one share of common stock at a nominal exercise price of $0.001 per share. The Company used $1.25 million of the net proceeds from this offering for marketing efforts and the remainder will be used for working capital and general corporate purposes.

Current wording

On March 9, 2026, the Company closed an underwritten public offering of 223,880 shares of our common stock at a public offering price of $5.00 per share, resulting in gross proceeds of $3.5 million and net proceeds of approximately $3.2 million after deducting underwriting discounts, commissions, and estimated offering expenses of $0.3 million. The offering included 476,120 pre-funded warrants at a price of $5.00 per warrant, each exercisable for one share of common stock at a nominal exercise price of $0.001 per share. The Company used $1.25 million of the net proceeds from this offering for marketing efforts and the remainder will be used for working capital and general corporate purposes.

Previous wording

As of March 31, 2026, total current assets were $2.5 million and total current liabilities were $8.3 million, resulting in working capital deficit of $5.8 million. As of December 31, 2025, total current assets were $0.5 million and total current liabilities were $8.0 million, resulting in a working capital deficit of $7.5 million. The Company’s current assets as of March 31, 2026 are comprised of $1.1 million of cash and cash equivalents and $1.4 million of prepaid expenses and other current assets, with the increase from December 31, 2025 being primarily due to the March 2026 equity raise that provided $3.2 million in net cash.

Current wording

As of June 30, 2026, total current assets were $0.4 million and total current liabilities were $3.5 million, resulting in a working capital deficit of $3.1 million. As of December 31, 2025, total current assets were $0.5 million and total current liabilities were $8.0 million, resulting in a working capital deficit of $7.5 million. The Company’s current assets as of June 30, 2026 are comprised of $0.1 million of cash and cash equivalents and $0.3 million of prepaid expenses and other current assets. The decrease in current liabilities from December 31, 2025 was primarily due to the extinguishment of the $4.4 million consideration payable pursuant to the Molecule.ai Second Amendment and the Company’s remittance of $1.8 million in contingent milestone payments following the achievement of the Technology Development Milestones under the Molecule.ai Asset Acquisition, partially offset by a $1.3 million increase in accounts payable and accrued expenses and the recognition of a $0.4 million payable due to United Dogecoin.

Previous wording

During the three months ended March 31, 2026, net cash used in operating activities of $2.4 million was primarily due to our net loss of $2.2 million, change in fair value of derivative liabilities of $0.08 million, and the net change in operating assets and liabilities of $0.9 million, partially offset by stock-based compensation of $0.04 million and depreciation and amortization of $0.6 million.

Current wording

During the six months ended June 30, 2026, net cash used in operating activities of $3.0 million was primarily due to our net loss of $5.3 million, and change in fair value of derivative liabilities of $0.1 million, partially offset by depreciation and amortization of $1.3 million, and net change in operating assets and liabilities of $1.0 million.

Previous wording

During the three months ended March 31, 2025, net cash used in operating activities of $2.5 million was primarily due to our net loss of $3.0 million, stock-based compensation of $0.5 million, change in fair value of convertible notes of $0.1 million, partially offset by the net change in operating assets and liabilities of $0.1 million.

Current wording

During the six months ended June 30, 2025, net cash used in operating activities of $5.9 million was primarily due to our net loss of $6.8 million, change in fair value of convertible notes of $0.1 million, and interest payments on convertible notes accounted for at fair value of $0.1 million, partially offset by stock-based compensation of $0.6 million and the net change in operating assets and liabilities of $0.5 million.

Previous wording

During the three months ended March 31, 2026, net cash used in investing activities of $0.04 million was primarily due to payments for capitalized software development costs. During the three months ended March 31, 2025, the Company did not have investing activities.

Current wording

During the six months ended June 30, 2025, the Company did not have investing activities.

Previous wording

For the three months ended March 31, 2026, cash flows from financing activities was primarily comprised of proceeds of $3.5 million from the sale of common stock and pre-funded warrants as part of the March 2026 equity financing, net of placement agent costs of $0.3 million.

Current wording

For the six months ended June 30, 2026, cash flows provided by financing activities of $8.2 million was primarily attributable to $3.2 million of net proceeds from the issuance of common stock and pre-funded warrants in the Company’s March 2026 equity financing, net of placement agent costs, and $5.0 million of proceeds from the Company’s May 2026 PIPE Financing, net of issuance costs paid.

Previous wording

As permitted under ASC 825, Financial Instruments (“ASC 825”), we elected the fair value option to account for the October 2024 Convertible Bridge Notes. In prior periods, the valuation of the October 2024 Convertible Bridge Notes utilized a Monte Carlo simulation model. Monte Carlo simulation models require the use of simulations that are weighted based on projected future stock prices, the volatility of a set of guideline companies and significant unobservable inputs including probabilities assigned to not achieving a successful capital raise and a registration of related securities. Each simulation is based on the range of inputs in a scenario with the mean of the output on each simulation calculated as an average.

Current wording

As permitted under ASC 825, we elected the fair value option to account for our October 2024 Convertible Bridge Notes. In prior periods, the valuation of the October 2024 Convertible Bridge Notes utilized a Monte Carlo simulation model. Monte Carlo simulation models require the use of simulations that are weighted based on projected future stock prices, the volatility of a set of guideline companies and significant unobservable inputs including probabilities assigned to not achieving a successful capital raise and a registration of related securities. Each simulation is based on the range of inputs in a scenario with the mean of the output on each simulation calculated as an average.

Previous wording

For warrants with uncertain or more complex terms (such as variability in the warrant shares or exercise price), we may utilize more complex models to address such provisions, including Monte Carlo simulations or Black-Sholes Models. Monte Carlo simulation models require the use of simulations that are weighted based on projected future stock prices, the volatility of a set of guideline companies and significant unobservable inputs including probabilities assigned. Each simulation is based on the range of inputs in a scenario with the mean of the output on each simulation calculated as an average. Black-Sholes Models require specification of the current stock price, exercise price, expected term, expected volatility, a risk-free interest rate aligned with the expected term, and expected dividend yield.

Current wording

For warrants with uncertain or more complex terms (such as variability in the warrant shares or exercise price), we may utilize more complex models to address such provisions, including Monte Carlo simulations or Black-Scholes Models. Monte Carlo simulation models require the use of simulations that are weighted based on projected future stock prices, the volatility of a set of guideline companies and significant unobservable inputs including probabilities assigned. Each simulation is based on the range of inputs in a scenario with the mean of the output on each simulation calculated as an average. Black-Scholes Models require specification of the current stock price, exercise price, expected term, expected volatility, a risk-free interest rate aligned with the expected term, and expected dividend yield.

Previous wording

We evaluate our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, such as the Acceleration Option in the Alto warrants (as defined in Note 5). For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the unaudited condensed consolidated statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities are evaluated at the end of each reporting period.

Current wording

We evaluate our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, such as the Acceleration Option in the Alto Warrants (as defined in Note 9 to the financial statements included earlier in this Quarterly Report on Form 10-Q). For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the unaudited condensed consolidated statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities are evaluated at the end of each reporting period.

Previous wording

For our derivative financial instruments classified as a liability, we use a Black-Sholes Models to value the derivative instruments at inception and on subsequent valuation dates. The model require specification of the current stock price, exercise price, expected term, expected volatility, a risk-free interest rate aligned with the expected term, and expected dividend yield.

Current wording

For our derivative financial instruments classified as a liability, we use a Black-Scholes Model to value the derivative instruments at inception and on subsequent valuation dates. The model requires specification of the current stock price, exercise price, expected term, expected volatility, a risk-free interest rate aligned with the expected term, and expected dividend yield.