Telomir Pharmaceuticals, Inc.

NOTES TO CONDENSED FINANCIAL STATEMENTS

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

Overview

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, cancer, and Alzheimer’s disease. Oxidative stress also plays a critical role in the propagation and severity of viral infections like bird flu, where the virus triggers an imbalance between increased production of reactive oxygen species (ROS) and reduced antioxidant host responses that leads to increased redox stress, a process which ultimately excessive weakens immune defenses, increases inflammation, and enables enhanced viral replication. By reversing oxidative stress, Telomir-1 may help strengthen immune resilience and reduce disease severity, offering broad therapeutic potential across both age-related and infectious diseases. Telomeres are repetitive DNA sequences at the end of chromosomes that protect the chromosomes from becoming frayed or tangled. Each time a cell divides, the telomeres become slightly shorter, and eventually they become so short that the cell can no longer divide, with the result being that the cell dies. Effectively, telomeres protect the ends of our chromosomes by forming a cap, much like the plastic tip on shoelaces, thereby allowing the chromosome to be replaced properly during cell division. If demonstrated by future clinical trials and approved by the U.S. Food and Drug Administration, or FDA, we believe Telomir-1 may protect variable cells by elongating and stimulating the telomeres to sustain self-renewal and longevity. Based on our preclinical studies, we have gathered experimental evidence suggesting that Telomir-1 may act as a regulator of essential metal ions such as iron, zinc, and copper. While these trace elements are critical for various physiological functions, imbalances—whether due to excess or deficiency —can drive oxidative stress, leading to cellular damage, telomere shortening, and accelerated aging. This oxidative burden is also linked to age-related conditions and certain cancers. We believe Telomir-1 has the potential to protect cells in situ by mitigating metal overload, particularly of iron and copper, which are known to accelerate oxidative stress and contribute to telomere attrition. By modulating ion levels and reducing oxidative damage, Telomir-1 may help preserve telomere integrity, restore cellular homeostasis, and enhance overall cell resilience, potentially slowing down age-related degeneration. Additionally, by reversing oxidative stress, Telomir-1 may help mitigate the severity of viral infections such as bird flu by strengthening cellular defense mechanisms and improving immune system function, potentially reducing disease progression and severity.

Basis of presentation

The accompanying unaudited condensed financial statements include the accounts of the Company and have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information, the instructions to Quarterly Report on Form 10-Q, and Regulation S-X. These financial statements do not include all information and notes required by GAAP for annual financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the notes to the financial statements included in the Company’s Form 10-K for the year ended December 31, 2024. In the opinion of management, all adjustments, consisting of normal recurring adjustments considered necessary for a fair presentation of interim financial information, have been included. Operating results for the periods presented are not necessarily indicative of expected results for the full year. Additionally, certain prior period amounts have been reclassified to conform to current period presentation in accompanying unaudited condensed consolidated financial statements.

Research and development expense

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 balances at two financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”). The Company’s account at these institutions is insured by the FDIC up to $250,000. On March 31, 2025, the Company had cash in excess of FDIC limits of approximately $0.2 million. 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 deems these institutions to be of high caliber and, to date, has not experienced any losses related to these holdings.

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 forfeiture 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. The Company considers the carrying amount of deferred offering costs to approximate fair value due to short-term nature of this instrument. 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).

Earnings (loss) per Share

Earnings (loss) per share is computed in accordance with ASC Topic 260, “Earnings per Share”. 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. During the three months ended March 31, 2025 and 2024, outstanding aggregate stock options and warrants of 5,154,227 and 2,824,057, respectively, were not included in the computation of diluted earnings per share, because to do so would have had an antidilutive effect.

Recent accounting pronouncements not yet adopted

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.

In December 2023, the FASB issued ASU 2023-09,Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This new standard requires a company to expand its existing income tax disclosures, specifically related to the rate reconciliation and income taxes paid. The standard will be effective beginning in fiscal year 2025, with early adoption permitted. The new standard is expected to be applied prospectively, but retrospective application is permitted. We are currently evaluating the impact of ASU 2023-09 on the consolidated financial statements and related disclosures. The Company does not expect the adoption of this new guidance to have a material impact on the consolidated financial statements.

Management has considered all other recent accounting pronouncements that are issued, but not effective, and it does not believe that they will have a significant impact on the Company’s results of operations or financial position.

**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 March 31, 2025, the Company had cash of approximately $0.4 million. The Company has used approximately $0.9 million of cash in operations during the three months ended March 31, 2025, had a net loss of $2.2 million in the three months ended March 31, 2025 and had stockholders’ deficit and a working capital deficit of approximately $0.2 million, 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 its initial public offering in February 2024, and related party financings-see Note 4. Additional sources of financing will be required by the Company to continue operations and its Telomir-1 programs. 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 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 established by Jonnie R. Williams, Sr., the founder of the Company and the sole inventor of Telomir-1.

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 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 party transactions:

Due to related parties- The Company received working capital advances from companies under common control. These advances are due on demand and are non-interest bearing. During the year ended December 31, 2024, there were advances received by the Company in the amount of $0.1 million for payments made regarding studies on behalf of Telomir. No additional activity has occurred as of March 31, 2025, and $0.1 million remains outstanding.

Starwood Trust Line of Credit-

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 for the benefit of the founder’s family. 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 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, 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 March 31, 2025, 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.

Note 5. Stockholders’ equity (deficit):

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.

ATM Agreement

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 sold of up to $100,000,000. As of March 31, 2025, the Company has not sold any shares under the ATM Agreement. (See Note 8.)

Warrants

In connection with various transactions and the IPO summarized below, the Company issued stock warrants. Warrant activity for the three months ended March 31, 2025 and 2024 is summarized below:

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 are exercisable immediately and will expire in the four-and-a-half-year period commencing six months after the IPO. The warrants will be exercisable at any time and from time to time, in whole or in part. 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).

2023 Omnibus Incentive Plan

In December 2023, the Company’s Board of Directors adopted the Company’s 2023 Omnibus Incentive Plan, (“2023 Omnibus Plan”). The 2023 Omnibus 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 Omnibus Plan provides that 6,500,000 shares of the Company’s Common Stock are reserved for issuance under the 2023 Omnibus Plan, all of which may be issued pursuant to the exercise of incentive stock options.

The fair value of each option award is estimated on the grant date using the Black-Scholes valuation model that uses assumptions for expected volatility, expected dividends, expected term, and the risk-free interest rate. 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. The Company intends to continue to consistently apply this process using the same or similar public companies until a sufficient amount of historical information regarding the volatility of the Company’s own stock price becomes available, or unless circumstances change such that the identified companies are no longer similar to the Company, in which case, more suitable companies whose share prices are publicly available would be utilized in the calculation.

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 following is option activity during the three months ended March 31, 2025.

As of March 31, 2025, options exercisable totaled 2,073,920. The Company recognized approximately $1.4 million in stock-based compensation in the three months ended March 31, 2025. There is approximately $0.8 million of unrecognized compensation cost related to non-vested share-based compensation awards, which will be expensed through 2026.

Note 7. Segment Information

The Company operates inone reportable segment related to the development and commercialization of pharmaceuticals targeting neurologic and neuropsychiatric disorders. The CODM for the Company is the Chief Executive Officer (the “CEO”). The Company’s CEO reviews operating results on an aggregate basis and manages the Company’s operations as a whole for the purpose of evaluating financial performance and allocating resources. Accordingly, the Company has determined that it has a single reportable and operating segment structure. The CEO uses aggregate net loss to allocate resources in the annual budgeting and forecasting process and also uses that measure as a basis for evaluating financial performance regularly by comparing actual results with established budgets and forecasts.

The accounting policies of the Company’s single segment are the same as those described in the summary of significant accounting policies within Note 1. The CEO assesses performance for the Company and decides how to allocate resources based on the aggregate net loss that is also reported on the statement of operations as net loss. The measure of segment assets is reported on the balance sheets as total assets.

The table below provides information about the Company’s revenue, significant segment expenses and other segment expenses.

Note 8. Subsequent Events

ATM Offering

From April 1, 2025 through May 13, 2025, under the ATM Agreement, the Company sold and issued 18,300 shares of Common Stock at a weighted average price per share of $2.67, and received net proceeds of approximately $47,769, after deducting commissions and other fees in the amount of approximately $1,000.

Executive Incentive Compensation Program

On May 14, 2025, the compensation committee (the “Committee”) of Telomir Pharmaceuticals, Inc. (the “Company”) adopted the Company’s Executive Incentive Compensation Plan (the “EICP”) for Erez Aminov, its Chairman and Chief Executive Officer. The EICP was approved by the Committee following greater presentation of the EICP to the board of directors of the Company (the “Board”). The specific terms of the EICP were prepared by the Board’s independent compensation consultant.

Under the EICP, Mr. Aminov is eligible to receive an annual target bonus of $300,000, with a threshold value of $150,000 and a maximum bonus of up to $600,000 (the “Annual Target Bonus”). The Annual Target Bonus is equally weighted (though as adjusted as appropriate) based on the following three components: (i) achievement of clinical milestones for the Company’s drug candidates, (ii) entering into certain strategic partnerships, and (iii) achieving capital raise milestones. Each component under the 2025 Program may be achieved and a corresponding payout made independent of the other components, but only after such component meets the minimum threshold of $50,000 before any bonus payments will be made.

Under the EICP, Mr. Aminov will be eligible until 2032 for certain long-term incentives based upon the Company reaching certain market capitalization values, raising capital, and the progress of the Company’s drug candidates. Any awards or grants received by Mr. Aminov under the EICP is subject to prior board approval. As the awards have not been granted officially through board approval, there is no grant date under ASC 718, and therefore no measurement date for the value of such awards

Mr. Aminov will also be entitled to an amount equal to 3% of the total value of any mergers and acquisition or strategic transactions completed by the Company.

The Board and the Committee, each in its sole discretion, generally retain the right to amend, supplement, supersede or cancel any awards under the EICP for any reason, and reserve the right to determine whether and when to pay out any bonus amounts pursuant to or outside of the EICP, regardless of the achievement of the performance targets.