BullFrog AI Holdings, Inc. 10-K

ITEM 9A. CONTROLS AND PROCEDURES Disclosure Controls and Procedures We are transitioning to and will maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and timely reported as provided in SEC rules and forms and that such information is accumulated and communicated to our management, as appropriate, to allow for timely decisions regarding required disclosure. We will periodically review the design and effectiveness of our disclosure controls and procedures, including compliance with various laws and regulations that apply to our operations. We will make modifications to improve the design and effectiveness of our disclosure controls and procedures and may take other corrective action if our reviews identify a need for such modifications or actions. In designing and evaluating the disclosure controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and we will apply judgment in evaluating the cost-benefit relationship of possible controls and procedures. In addition, the design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a control system, misstatements due to error or fraud may occur and not be detected. Changes in Internal Control Over Financial Reporting There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal year ended December 31, 2022 which have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Management’s Report on Internal Control over Financial Reporting This Annual Report does not include a report of management’s assessment regarding internal control over financial reporting due to a transition period established by the rules of the SEC for newly public companies. Attestation Report of Independent Registered Public Accounting Firm This Annual Report does not include an attestation report of our registered independent public accounting firm regarding internal control over financial reporting due to an exemption established by the JOBS Act for “emerging growth companies.” ITEM 9B. OTHER INFORMATION None. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS None. 22 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE Executive Officers and Directors The following table sets forth the name, age and position of each of our executive officers, key employees and directors. Name Age Position(s) Executive Officers: Vin Singh 54 Chief Executive Officer and Director Dane Saglio 65 Chief Financial Officer Non-Executive Directors: Don Elsey 69 Director and Chair Audit Committee William Enright 60 Director and Chair of Compensation Committee Jason Hanson 54 Director and Chair of Nominating and Corporate Governance Committee Vininder (Vin) Singh is the Founder, Chairman, and CEO of BullFrog AI Holdings, Inc. since its inception in August 2017. Over the past five years, he has built the Company from scratch and during that time he led strategy, built a highly experienced team of leaders, spear headed the acquisition and development of BullFrog’s core AI technology and drug assets, secured the first revenue, and raised approximately $2M in financing. In February of 2020, he formed BullFrog AI Holdings, Inc. and BullFrog AI Inc. became a wholly owned subsidiary designated as the holder of core intellectual property. Vin is a serial entrepreneur and experienced executive with 25 years of experience in the life sciences and biotechnology industries. He has extensive start-up experience having founded and built several pioneering investor backed companies including BullFrog AI, which uses machine learning/AI to enable drug development, Next Healthcare Inc., a personalized diagnostics and adult cell banking service, and MaxCyte Inc. (MXCT), a cell therapy company. He was also an executive at GlobalStem Inc. and ThermoFisher Scientific, leading their global cell therapy services business. Vin has a BS in Electrical Engineering from Rutgers University, an MS in Biomedical Engineering from Rensselaer Polytechnic Institute, and an MBA from Johns Hopkins University. We believe that Mr. Singh is qualified to serve as a member of our board of directors due to the perspective and experience that he brings as our Founder and Chief Executive Officer, his extensive experience in the science and biotechnology industries and in the management of startup companies. Dane Saglio joined BullFrog Holdings AI, Inc. as Chief Financial Officer in September 2021. Mr. Saglio brings more than 40 years of financial management experience in both public and private companies across a number of business sectors. Previously, Mr. Saglio has served as CFO at Seneca Biopharma, RegeneRx Biopharmaceuticals since 2011, New Generation Biofuels 2010 until 2011, and EntreMed from 2000 until 2008, all public companies in the biotechnology arena. Prior to joining the Company, Mr. Saglio was the CFO of Seneca Biopharma, initially as a consultant in August 2019 and then as an employee in April 2020 until the Company merged with Leading Bio Sciences, forming Palisades Bio, Inc. in April 2021. He previously served as CFO at Celios Corporation from October 2017 until July 2019 and Helomics Corporation, a personalized medicine company in cancer from October 2014 through July 2017. He began his career at Informatics Corp, now Computer Associates International and then at Bressler & Reiner, a DC-based real estate developer and homebuilder. Dane has a BS from the University of Maryland is a licensed CPA in Maryland (inactive). Non-Executive Directors R. Don Elsey has been a director and chair of the Audit Committee of our board since February 14, 2023. Currently, Mr. Elsey serves as an advisor to the CEO of Lyra Therapeutics, a private company pioneering a new therapeutic approach to treat debilitating ear, nose and throat diseases. Mr. Elsey was the CFO of Lyra until his retirement in December 2020. Previously, from February 2015 to February 2019, Mr. Elsey served as Chief Financial Officer at Senseonics, Inc., a medical device company. From May 2014 until February 2015, Mr. Elsey served as Chief Financial Officer of Regado Biosciences, Inc., a biopharmaceutical company. From December 2012 to February 2014, Mr. Elsey served as Chief Financial Officer of LifeCell Corporation, a privately held regenerative medicine company. Mr. Elsey holds a B.A. in economics and an M.B.A. in finance from Michigan State University. We believe that Mr. Elsey is qualified to serve as a member of our board of directors because of his extensive professional experience in science and biotechnology companies, William “Bill” Enright has been a director and chair of the Compensation Committee of our board since February 14, 2023. He is a seasoned biotech executive with more than thirty years of experience in building and financing both privately held and publicly held companies and will join the board on the effective date of this registration statement. He is currently the CEO and a Director of Vaccitech plc (NASDAQ: VACC), which he helped to take public in April 2021. Prior to Vaccitech, Bill spent more than ten years at Altimmune (NASDAQ: ALT) as a Director, President & CEO, moving multiple programs into clinical testing, completing several acquisitions, and eventually taking the company public. Prior to joining Altimmune, Bill spent six years with GenVec, Inc. (acquired by Intrexon) with increasing responsibilities, culminating as Head of Business Development. 23 Bill brings a breadth of experiences in a variety of positions within the life science/biotech industry, including time as a consultant, a bench scientist and 12 years with Life Technologies, Inc. (acquired by Thermo-Fisher), working in various senior level licensing, business management, manufacturing and research roles. In addition to Vaccitech, Bill sits on the Board of Gravitas Therapeutics, Inc. and on a Business Advisory Board for Creatv MicroTech, Inc., both privately held companies. Bill received a Master of Arts in Molecular Biology from SUNY at Buffalo and a Master of Science in Business Management from Johns Hopkins University. We believe that Mr. Enright is qualified to serve as a member of our board of directors because of his extensive professional experience in life science/biotech companies and in the management of public companies Jason Hanson became a director and chair of the Nominating and Corporate Governance Committee on the February 14, 2023. He currently serves as President, Chief Executive Officer, and Director at enGene, Inc. (“enGene”), a position he has held since 2018. In this role, he has built “from the ground up” a new scientific, technical and strategic vision for enGene, a Montreal based gene therapy company with a ten plus year history, re-launched the company with new science, personnel and strategy within six months of joining the company. In addition, at enGene, Mr. Hanson continues to build on the new strategy by conceptualized a groundbreaking genetherapy product from ideation stage into a multi-billion dollar clinical stage asset, has assembled senior team experienced in R&D, oncology and gene therapy, and has successfully led efforts at FDA to expand BLA, clinical activities to first line NMIBC (Non-Muscle Invasive Bladder Cancer) effectively doubling addressable market from $3B to $6B Previously, Mr. Hanson served as President and Chief Executive Officer of Ohana Biosciences, a biotechnology company based in Cambridge, MA. Mr. Hanson previously served as Executive Vice President and Chief Strategy Officer for NuVasive, Inc. and as Corporate Vice President of General Electric Company and member of the senior executive team of GE Healthcare, a $20-plus billion dollar global pharmaceutical, medical device and healthcare services business. At GE Healthcare he had global business responsibilities for a range of portfolio management, corporate development, legal, compliance, and government relations activities. Prior to joining GE Healthcare, Mr. Hanson served as company Group Chairman and Executive Vice President at Valeant Pharmaceuticals with responsibility for the company’s Consumer, Ophthalmology, Latin American and Dental businesses, as well as the manufacturing and supply chain, R&D, regulatory and medical affairs teams. Previously, he served as Executive Vice President and Chief Operating Officer at Medicis Pharmaceutical Corporation, where he led R&D and other critical functions and helped build the pre-eminent pipeline of prescription dermatology and aesthetic medicine products prior to its acquisition by Valeant for $2.6 billion. Mr. Hanson received a bachelor’s degree from Cornell University and a law degree from Duke University School of Law. We believe that Mr. Hanson is qualified to serve as a member of our board of directors because of his extensive professional experience in life science/biotech companies. Family Relationships There are no family relationships between any director and executive officer. Role of Board of Directors in Risk Oversight Process The board of directors has extensive involvement in the oversight of risk management related to us and our business and accomplishes this oversight through the regular reporting by the Audit Committee. Director Independence Messrs. Elsey, Enright and Hanson, three members of our Board of Directors, are independent using the definition of independence under Nasdaq Listing Rule 5605(a)(2) and the standards established by the SEC. Committees of the Board of Directors Our board of directors has established an audit committee, a compensation committee, and a nominating and corporate governance committee. The composition and responsibilities of each of the committees of our board of directors are described below. All directors hold office until the next annual meeting of the stockholders of the company and until their successors have been duly elected and qualified. Officers are elected by and serve at the discretion of our Board. Our board of directors may establish other committees as it deems necessary or appropriate from time to time. 24 Audit Committee Our audit committee consists of Don Elsey, William Enright and Jason Hanson, with Mr. Elsey serving as chair. Our board of directors has affirmatively determined that each meets the definition of “independent director” under the rules of The Nasdaq Capital Market, and that they meet the independence standards under Rule 10A-3. Each member of our audit committee meets the financial literacy requirements of Nasdaq rules. Our board of directors has adopted a written charter for the audit committee, which can be found on our website at https://ir.bullfrogai.com/corporate-governance/governance-documents. The audit committee is appointed by the board of directors to assist the board of directors in its duty to oversee the Company’s accounting, financial reporting, and internal control functions and the audit of the Company’s financial statements. The role of the audit committee is to oversee management in the performance of its responsibility for the integrity of the Company’s accounting and financial reporting and its systems of internal controls, the performance and qualifications of the Company’s independent auditor, including the independent auditor’s independence, the performance of the Company’s internal audit function; and the Company’s compliance with legal and regulatory requirements. Compensation Committee Our compensation committee consists of William Enright, Don Elsey and Jason Hanson, with Mr. Enright serving as chair. Our board of directors has adopted a written charter for the compensation committee, which can be found on our website at https://ir.bullfrogai.com/corporate-governance/governance-documents. The compensation committee is responsible for reviewing and recommending, among other things: ● the adequacy and form of compensation of the board; ● the compensation of Chief Executive Officer, including base salary, incentive bonus, stock option and other grant, award and benefits upon hiring and on an annual basis; ● the compensation of other senior management upon hiring and on an annual basis; and ● the Company’s incentive compensation and other equity-based plans and recommending changes to such plans to our board of directors, when necessary. Nominating and Corporate Governance Committee Our nominating and corporate governance committee consists of Jason Hanson, William Enright and Don Elsey, with Mr. Hanson serving as chair. Our board of directors has adopted a written charter for the nominating and corporate governance committee, which can be found on our website at https://ir.bullfrogai.com/corporate-governance/governance-documents. The nominating committee is responsible for, among other things: ● developing criteria for membership on the board of directors and committees; ● identifying individuals qualified to become members of the board of directors; ● recommending persons to be nominated for election as directors and to each committee of the board of directors; ● annually reviewing our corporate governance guidelines; and ● monitoring and evaluating the performance of the board of directors and leading the board in an annual self-assessment of its practices and effectiveness. 25 Code of Ethics We have adopted a Code of Business Conduct and Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, employees or persons performing similar functions. Our code of ethics can be found at https://ir.bullfrogai.com/corporate-governance/governance-documents. Involvement in Certain Legal Proceedings Our directors and executive officers have not been involved in any of the following events during the past ten years: 1. any bankruptcy petition filed by or against such person or any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; 2. any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); 3. being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from or otherwise limiting his involvement in any type of business, securities or banking activities or to be associated with any person practicing in banking or securities activities; 4. being found by a court of competent jurisdiction in a civil action, the SEC or the Commodity Futures Trading Commission to have violated a Federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated; 5. being subject of, or a party to, any Federal or state judicial or administrative order, judgment decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of any Federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or 6. being subject of or party to any sanction or order, not subsequently reversed, suspended, or vacated, of any self-regulatory organization, any registered entity or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. Section 16(a) Beneficial Ownership Compliance Based solely upon a review of copies of such forms filed on Forms 3, 4 and 5, and amendments thereto furnished to us, we believe that as of the date of this Report, our executive officers, directors and greater than 10 percent beneficial owners have complied on a timely basis with all Section 16(a) filing requirements, except Messrs. Elsey, Enright and Hanson did not file Form 3s upon their appointment to the Board. Nomination Process As of December 31, 2022, we did not affect any material changes to the procedures by which stockholders may recommend nominees to the Board of Directors. 26 ITEM 11. EXECUTIVE COMPENSATION Name and Principal Position Year Salary ($) Bonus ($) Stock Awards ($) Option Awards ($) Non-Equity Incentive Compensation Plan ($) Nonqualified deferred compensation earnings ($) All other compensation ($) Total Compensation ($) Vininder Singh 2022 $ 179,000 $ - $ - $ - $ - $ 179,000 Chief Executive Officer and Director 2021 $ 116,000 - - - - 116,000 Dane Saglio 2022 $ 30,000 $ - $ - $ - $ - $ 30,000 Chief Financial Officer 2021 - - 17,600 - - 17,600 Employment Agreements On May 16, 2022, we entered into an employment agreement with Vininder Singh, pursuant to which he will receive received an annual base salary of $400,000, which is subject to bi-annual review by the Company. Mr. Singh will also be eligible for an annual bonus based on the achievement of certain goals and performance criteria established by the Board. Mr. Singh’s target annual bonus for the fiscal years ended 2022 through 2025 will be a minimum of twenty (20%) percent of the current base salary, with a maximum payout of up to one-hundred (100%) percent based on target achievement. For 2022, the criteria to determine Mr. Singh’s bonus will include the following: (i) the Company achieves $500,000 in sales; (ii) the filing of an Investigational New Drug (IND) Application with the FDA for mebandazole; (iii) the Company enters into two (2) strategic partnerships; and (iv) the Company commences partner negotiations with a third party for HSV-1, bf-114 or bf-222. Mr. Singh will also be eligible to participate in the Company’s stock incentive plan, subject to Board approval. The agreement with Mr. Singh shall continue until either his resignation, termination for cause by the Company, or death or disability of Mr. Singh. Consulting Agreements We have also entered into a consulting agreement (the “Newman Agreement”) with Gerald Newman pursuant to which Mr. Newman will assist the Company with general business consulting, strategic relationships and the recruiting of certain key personnel. The Newman Agreement will terminate on June 23, 2023 and may be renewed upon mutual written agreement by both parties. Pursuant to the Newman Agreement, Newman will receive a monthly fee of $7,500 per month payable for eight months, which commenced on February 14, 2023, payable on the last day of each month. Further, we have entered into an advisory agreement (the “Greentree Agreement”) with Greentree Financial Group, Inc. (“Greentree”) to render certain professional services to the Company including but not limited to responding to comments from the NASDAQ Listing Qualifications Staff as necessary, assisting the Company in preparing a Code of Conduct applicable to directors, officers and employees, and advising on all documents and accounting systems relating to its finances and transactions, with the purpose of bringing such documents and systems into compliance with Generally Accepted Accounting Principles or disclosures required by the SEC. Pursuant to the Greentree Agreement, Greentree received 350,000 shares of the Company’s common stock. Director Compensation No compensation has been paid out to the directors during the fiscal year ended December 31, 2022. 27 Equity Compensation Plans Our Board of Directors has adopted the 2022 Equity Incentive Plan, or 2022 Plan. Once our 2022 Plan became effective, no further grants were made under the Company’s previous Incentive Plan. Outstanding Equity Awards at Fiscal Year-End There are no outstanding equity awards held by the Company’s named executive officers or directors as of December 31, 2022. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The following table sets forth certain information regarding the beneficial ownership of our common stock as of April 14, 2023 by: ● each of our named executive officers; ● each of our directors; ● all of our current directors and named executive officers as a group; and ● each stockholder known by us to own beneficially more than 5% of our common stock. Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the securities. Shares of common stock that may be acquired by an individual or group within 60 days of April 14, 2023, pursuant to the exercise of options or warrants, vesting of common stock or conversion of convertible debt, are deemed to be outstanding for the purpose of computing the percentage ownership of such individual or group, but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person shown in the table. Percentage of ownership is based on 6,086,952 shares of common stock issued and outstanding as of April 14, 2023. Except as otherwise indicated, all shares are owned directly. Unless otherwise indicated, the address of each of the persons shown is c/o Bullfrog AI Holdings, Inc., 325 Ellington Blvd., Unit 317, Gaithersburg, MD 20878. Name of Beneficial Owner Common Stock Beneficially Owned Percentage of Common Stock Directors and Officers: Vininder Singh Chief Executive Officer and Director 2,742,446 45.05 % Dane Saglio Chief Financial Officer(1) 82,142 1.34 % R. Don Elsey - - William Enright - - Jason Hanson - - All officers and directors as a group (5 persons) 2,824,588 46.21 % Beneficial owners of more than 5% Tivoli Trust (2) 904,391 13.04 % TEDCO 205,984 3.38 % Johns Hopkins University Applied Physics Laboratory, LLC 218,450 3.49 % ● Less than 1% (1) Comprised of 57,142 shares, including 10,000 shares held by his children, of Common Stock and 25,000 Stock Options exercisable within 60 days. (2) Comprised of 73,449 shares of non-voting Series A Preferred Stock, 115,185 warrants exercisable at $2.50 per shares and 54,714 shares of Common Stock. Assumes the conversion of all Series A Preferred Stock into common stock in an amount equal to ten shares of common stock for each one share of Series A Preferred Stock. Securities Authorized for Issuance under Equity Compensation Plans General . In November 2022, our Board of Directors adopted our 2022 Equity Incentive Plan (the “2022 Plan”) and the 2022 Plan was submitted to our stockholders for approval. Our 2022 Plan became effective immediately on adoption. Our 2022 Plan replaces our previous incentive plan. However, awards outstanding under our previous incentive plan will continue to be governed by their existing terms. Share Reserve . The number of shares of our common stock available for issuance under our 2022 Plan is 900,000 shares . Notwithstanding the number of shares available for issuance, on the first day of each month commencing January 1, 2023, or the first business day of the calendar year if the first day of the calendar year falls on a Saturday or Sunday, the number of shares eligible for awards under the 2022 Plan will automatically increase in an amount equal to 15% of the total number of shares of common stock outstanding as of December 31st of the preceding fiscal year. Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) Weighted-average exercise price of outstanding options, warrants and rights (b) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a) Equity compensation plans approved by security holders $ Equity compensation plans not approved by security holders 69,217 $ 3.06 $ Total 69,217 $ 3.06 $ 28 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS, AND DIRECTOR INDEPENDENCE Other than as set forth below and compensation arrangements, including employment, and indemnification arrangements, discussed, there have been no transactions since January 1, 2021, in which the amount involved in the transaction exceeded or will exceed the lesser of $120,000 or one percent of the average of our total assets as at the year-end for the last two completed fiscal years, and to which any of our directors, executive officers or beneficial holders of more than 5% of our capital stock, or any immediate family member of, or person sharing the household with, any of these individuals, had or will have a direct or indirect material interest. On July 8, 2021, the Company entered into a Simple Agreement for Future Equity (SAFE), with a related party, Tivoli Trust, our second largest shareholder (the “Investor”), with an amount of $150,000, with 0% interest. Under the SAFE agreement, if there is an Equity Financing before the termination of this SAFE , on the initial closing of such Equity Financing, this SAFE will automatically convert into the number of shares of SAFE Preferred Stock equal to the Purchase Amount divided by the Conversion Price, which means either: (1) the Safe Price (the price per share equal to the Post-Money Valuation Cap divided by the Company Capitalization) or (2) the Discount Price (the price per share of the Standard Preferred Stock sold in the Equity Financing multiplied by the Discount Rate), whichever calculation results in a greater number of shares of Safe Preferred Stock. If there is a Liquidity Event before the termination of this SAFE , this SAFE will automatically be entitled (subject to the liquidation priority set forth in Section 1(d) below) to receive a portion of Proceeds, due and payable to the Investor immediately prior to, or concurrent with, the consummation of such Liquidity Event, equal to the greater of (i) the Purchase Amount (the “Cash-Out Amount”) or (ii) the amount payable on the number of shares of Common Stock equal to the Purchase Amount divided by the Liquidity Price (the “Conversion Amount”). If any of the Company’s securityholders are given a choice as to the form and amount of Proceeds to be received in a Liquidity Event, the Investor will be given the same choice, provided that the Investor may not choose to receive a form of consideration that the Investor would be ineligible to receive as a result of the Investor’s failure to satisfy any requirement or limitation generally applicable to the Company’s securityholders, or under any applicable laws. This SAFE will automatically terminate (without relieving the Company of any obligations arising from a prior breach of or non-compliance with this SAFE ) immediately following the earliest to occur of: (i) the issuance of Capital Stock to the Investor pursuant to the automatic conversion of this SAFE under agreement; or (ii) the payment, or setting aside for payment, of amounts due the Investor pursuant to the agreement. As of December 31, 2021, the $150,000 received from SAFE was recorded at 6% imputed interest. The maturity date of the loan is defined by the SAFE agreement as discussed above. The SAFE was converted into 32,967 shares of common stock (post reverse stock split) upon the Company’s IPO in February 2023. On August 19, 2021, the company entered into a convertible loan agreement with a related party, with a principal balance of $99,900 at 9% interest. The noteholder has the right to convert the principal and interest into common shares of the Company. This loan included an original issuance discount of 5% and included 99,900 Warrants at an exercise price of $1, exercisable for 5 years from the issue date on the face of the Warrant. The maturity date of the loan was February 19, 2022. In May 2022, the Company and the note holder agreed to cancel and void previous warrants and entered into a new agreement for 115,185 warrants with an exercise price of $2.50. As of December 31, 2022, the $99,900 principal and the $4,950 overpayment of the note remained outstanding and had accrued interest of $12,462.53. The warrants discussed above were initially discounted against the notes, subsequent to year end December 31, 2021, they were deemed voided and new warrants in accordance with the new terms were issued. We assessed the differences in fair value and determined that they were de minimis and expensed the full value of the new warrants. The noteholder elected to convert the loan into 21,747 shares of common stock (post reverse stock split) upon the Company’s IPO in February 2023. 29 On June 15, 2021, the company entered into a unsecured short term loan agreement with the Investor for an aggregate principal balance of $34,000, with a one-year maturity date, accruing interest at 5% and imputing an additional 1% interest. On November 19, 2021, 2021, the company entered into an unsecured short term loan agreement with the Investor for an aggregate principal balance of $5,000, with a one-year maturity date, accruing interest at 5% and imputing an additional 1% interest. On December 13, 2021, the company entered into an unsecured short term loan agreement with the Investor for an aggregate principal balance of $10,000, with a one-year maturity date, accruing interest at 5% and imputing an additional 1% interest. On October 5, 2022, the Company entered into an exchange agreement with the Investor whereby all of his common stock, 734,493 shares of common stock (post reverse split shares), were exchanged into 73,449 shares of Series A Convertible Preferred Stock that converts to common at a rate of 10 common for one preferred. The Series A Preferred Stock is the economic equivalent of the common stock but has no voting rights and is subject to a blocker which prohibits the conversion into common stock if it would result in the Investor owning more than 4.99% of the Company’s outstanding common stock at such time. For a description of the rights and preferences of the Series A Preferred Stock, see “Description of Securities- Series A Convertible Preferred Stock”. Other Transactions None. Director Independence Messrs. Elsey, Enright and Hanson, three members of our Board of Directors, are independent using the definition of independence under Nasdaq Listing Rule 5605(a)(2) and the standards established by the SEC. Policies and Procedures for Related Party Transactions For purposes of our policy only, a related person transaction is a transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, in which we and any related person are, were or will be participants in which the amount involved exceeds the lesser of $120,000 or 1% of the average of our total assets at year-end. Transactions involving compensation for services provided to us as an employee or director are not covered by this policy. A related person is any executive officer, director or beneficial owner of more than 5% of any class of our voting securities, including any of their immediate family members and any entity owned or controlled by such persons. Under the policy, if a transaction has been identified as a related person transaction, including any transaction that was not a related person transaction when originally consummated or any transaction that was not initially identified as a related person transaction prior to consummation, our management must present information regarding the related person transaction to our audit committee, or, if audit committee approval would be inappropriate, to another independent body of our Board of Directors, for review, consideration and approval or ratification. The presentation must include a description of, among other things, the material facts, the interests, direct and indirect, of the related persons, the benefits to us of the transaction and whether the transaction is on terms that are comparable to the terms available to or from, as the case may be, an unrelated third party or to or from employees generally. Under the policy, we will collect information that we deem reasonably necessary from each director, executive officer and, to the extent feasible, significant stockholder to enable us to identify any existing or potential related-person transactions and to effectuate the terms of the policy. In addition, under our code of business conduct and ethics, our employees and directors will have an affirmative responsibility to disclose any transaction or relationship that reasonably could be expected to give rise to a conflict of interest. In considering related person transactions, our audit committee, or other independent body of our Board of Directors, will take into account the relevant available facts and circumstances including, but not limited to: ● the risks, costs and benefits to us; ● the impact on a director’s independence in the event that the related person is a director, immediate family member of a director or an entity with which a director is affiliated; ● the availability of other sources for comparable services or products; and ● the terms available to or from, as the case may be, unrelated third parties or to or from employees generally. The policy requires that, in determining whether to approve, ratify or reject a related person transaction, our audit committee, or other independent body of our Board of Directors, must consider, in light of known circumstances, whether the transaction is in, or is not inconsistent with, our best interests and those of our stockholders, as our audit committee, or other independent body of our Board of Directors, determines in the good faith exercise of its discretion. 30 Item 14. Principal Accounting Fees and Services The following table summarizes the fees billed by M&K CPAs for the fiscal years ended December 31, 2022 and 2021, inclusive of out-of-pocket expenses. Pre-Approval Policy Our audit committee was formed upon the consummation of our initial public offering. As a result, the audit committee did not pre-approve all of the foregoing services, although any services rendered prior to the formation of our audit committee were approved by our board of directors. Since the formation of our audit committee, and on a going-forward basis, the audit committee has and will pre-approve all auditing services and permitted non-audit services to be performed for us by our auditors, including the fees and terms thereof (subject to the de minimis exceptions for non-audit services described in the Exchange Act which are approved by the audit committee prior to the completion of the audit). Year Ended December 31, Fee Category 2022 2021 Audit fees (1) $ 52,450 $ 10,000 Audit-related fees (2) 12,150 - Tax fees (3) - - All other fees (4) - - Total fees $ 64,690 $ 10,000 (1) Audit fees consist of fees for professional services rendered in connection with the annual audit of our consolidated financial statements, the review of our quarterly condensed consolidated financial statements and consultations on accounting matters directly related to the audit. (2) Audit-related fees consist of fees for professional services rendered in connection with the submission of our Registration Statement on Form S-1 in connection with our initial public offering. (3) Tax fees consist of fees for professional services for tax compliance, tax advice and tax planning. (4) All other fees consist of fees related to engagement administration. PART IV Item 15. Exhibits, Financial Statement Schedules a) Financial Statements For a list of the consolidated financial statements included herein, see Index to Consolidated Financial Statements on page F-1 of this Annual Report, which is incorporated into this Item by reference. b) Exhibits Exhibit No. Description 1.1 Underwriting Agreement between the Company and WallachBeth Capital LLC dated February 14, 2023, incorporated by reference to Exhibit 1.1 of the Current Report on Form 8-K filed with the Securities and Exchange Commission on February 21, 2023. 3.1 Amended and Restated Articles of Incorporation of Bullfrog AI Holdings, Inc. incorporated by reference to Exhibit 3.1 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333-267951) filed with the Securities and Exchange Commission on February 13, 2023. 3.2 Bylaws of Bullfrog AI Holdings, Inc. incorporated by reference to Exhibit 3.2 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333-267951) filed with the Securities and Exchange Commission on February 13, 2023. 10.1 Acquisition Agreement with Bullfrog AI, Inc. incorporated by reference to Exhibit 10.1 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333-267951) filed with the Securities and Exchange Commission on February 13, 2023. 10.2 Advisor Agreement between the Company and Greentree Financial Group, Inc. incorporated by reference to Exhibit 10.2 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333-267951) filed with the Securities and Exchange Commission on February 13, 2023. 10.3 Consulting Agreement between the Company and Garrett Newman incorporated by reference to Exhibit 10.3 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333-267951) filed with the Securities and Exchange Commission on February 13, 2023. 10.4 Employment Agreement with Vininder Singh incorporated by reference to Exhibit 10.4 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333-267951) filed with the Securities and Exchange Commission on February 13, 2023. 10.5 Patent License Agreement between the Company and George Washington University, dated January 14, 2022 incorporated by reference to Exhibit 10.6 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333-267951) filed with the Securities and Exchange Commission on February 13, 2023. 10.6 Exclusive License Agreement between the Company and Johns Hopkins University, dated February 22, 2022 incorporated by reference to Exhibit 10.7 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333-267951) filed with the Securities and Exchange Commission on February 13, 2023. 10.7 License Agreement between the Company and Johns Hopkins Applied Physics Laboratory LLC, dated July 8, 2022 incorporated by reference to Exhibit 10.8 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333-267951) filed with the Securities and Exchange Commission on February 13, 2023. 10.8 License Agreement between the Company and Johns Hopkins Applied Physics Laboratory LLC, dated February 7, 2018 incorporated by reference to Exhibit 10.5 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333-267951) filed with the Securities and Exchange Commission on February 13, 2023. 10.9 License Agreement between the Company and Johns Hopkins University (JHU) and the Institute of Organic Chemistry and Biochemistry (IOCB) of the Czech Academy of Sciences, dated October 13, 2022 incorporated by reference to Exhibit 10.9 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333-267951) filed with the Securities and Exchange Commission on February 13, 2023. 10.10 ● 2022 Equity Compensation Plan 21.1 List of significant subsidiaries of Bullfrog AI Holdings, Inc., incorporated by reference to Exhibit 21.1 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333-267951) filed with the Securities and Exchange Commission on February 13, 2023. 23.1 Consent of M&K CPAS PLLC, an independent registered public accounting firm 31.1 Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act, as amended. 31.2 Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act, as amended. 32.1 Certification of Principal Executive Officer and Principal Financial Officer pursuant to Rules 13a-14(b) or 15d-14(b) of the Securities Exchange Act, as amended, and 18 U.S.C. Section 1350. 101.INS Inline XBRL Instance Document 101.SCH Inline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Document 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) ● Filed herewith. ITEM 16. FORM 10-K SUMMARY None. 31 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. April 25, 2023 Bullfrog AI Holdings, Inc. By: /s/ Vininder Singh Vininder Singh Chief Executive Officer and Director (Principal Executive Officer) By: /s/ Dane Saglio Dane Saglio Chief Financial Officer (Principal Financial and Accounting Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date By: /s/ Vininder Singh Chief Executive Officer and Chairman (Principal Executive Officer) April 25, 2023 Vininder Singh By: /s/ Dane Saglio Chief Financial Officer (Principal Financial and Accounting Officer) April 25, 2023 Dane Saglio By: /s/ Don Elsey Director April 25, 2023 R. Don Elsey By: /s/ William Enright Director April 25, 2023 William Enright By: /s/ Jason Hanson Director April 25, 2023 Jason Hanson 32 BULLFROG AI HOLDINGS, INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm (PCAOB ID: 2738 F-2 Consolidated Balance Sheets as of December 31, 2022 and 2021 F-3 Consolidated Statements of Operations for the Years Ended December 31, 2022 and 2021 F-4 Consolidated Statements of Changes in Stockholders’ Deficiency for the Years Ended December 31, 2022 and 2021 F-5 Consolidated Statements of Cash Flows for the Years Ended December 31, 2022 and 2021 F-6 Notes to Consolidated Financial Statements F-7 F- 1 BULLFROG AI HOLDINGS, INC. AUDITED FINANCIAL STATEMENTS 2022 and 2021 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Bullfrog AI Holdings, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Bullfrog AI Holdings, Inc. (the Company) as of December 31, 2022 and 2021, and the related consolidated statements of operations, changes in stockholders’ deficit, and cash flows for the years ended December 31, 2022 and 2021, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021 and the results of its operations and its cash flows for flows for the two-year period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which they relate. As discussed in Note 2, the Company had a going concern disclosure in the previous year due to continued net losses from operations and negative cash flows in operations. Auditing management’s evaluation of a going concern can be a significant judgment given the fact that the Company uses management estimates on future revenues and expenses, which are difficult to substantiate. We evaluated the appropriateness of the removal of the going concern, we examined and evaluated the financial information along with management’s plans to mitigate the going concern and management’s disclosure on going concern. /s/ M&K CPAS, PLLC We have served as the Company’s auditor since 2021. Houston, Texas April 25, 2023 F- 2 BULLFROG AI HOLDINGS, INC. CONSOLIDATED BALANCE SHEETS December 31 December 31 2022 2021 (Audited) (Audited) ASSETS CURRENT ASSETS: Cash $ 57,670 $ 10,014 Prepaid expense 15,000 - Total Current Assets $ 72,670 $ 10,014 NON-CURRENT ASSETS: Property and Equipment, net 7,699 - Total Non-Current Assets $ 7,699 - TOTAL ASSETS $ 80,369 $ 10,014 LIABILITIES AND STOCKHOLDERS’ DEFICIT CURRENT LIABILITIES: Accounts payable $ 543,993 $ 68,594 Accrued expenses 416,072 68,557 Accrued expenses-related party 566,916 285,666 Deferred revenue 32,000 10,000 Notes payable-related party - 49,000 Convertible notes, net of $ 0 and $ 12,962 debt discount, respectively 1,323,890 284,038 Convertible notes-related party, net of $ 0 and $ 1,584 debt discount, respectively 254,850 253,266 Total Current Liabilities $ 3,137,721 $ 1,019,121 TOTAL LIABILITIES $ 3,137,721 $ 1,019,121 STOCKHOLDERS’ DEFICIT: Series A Preferred stock, $ 0.00001 par value, 5,500,000 shares authorized; 73,449 and 0 shares are issued and outstanding, respectively, 1 - Common stock, $ 0.00001 par value, 100,000,000 shares authorized; 4,021,935 and 4,622,789 shares are issued and outstanding as of December 31, 2022 and 2021, respectively 40 46 Additional paid-in capital 1,341,662 587,415 Accumulated deficit ( 4,399,055 ) ( 1,596,568 ) Total BullFrog stockholders’ deficit $ ( 3,057,352 ) $ ( 1,009,107 ) TOTAL STOCKHOLDERS’ DEFICIT ( 3,057,352 ) ( 1,009,107 ) TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT $ 80,369 $ 10,014 The accompanying notes are an integral part of these financial statements F- 3 BULLFROG AI HOLDINGS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS For Years Ended December 31 2022 2021 NET REVENUES: Revenues, net $ 10,000 $ - TOTAL NET REVENUES $ 10,000 - COST OF GOODS SOLD: Cost of goods sold 800 - TOTAL COST OF GOODS SOLD 800 - GROSS PROFIT 9,200 - OPERATING EXPENSES: Research and development expenses 609,270 25,000 General and administrative expenses 1,307,882 327,329 Payroll and salary 98,250 - Payroll and salary-related party 449,599 203,033 TOTAL OPERATING EXPENSES 2,465,001 555,362 (LOSS) FROM OPERATIONS ( 2,455,801 ) ( 555,362 ) OTHER INCOME (EXPENSE): Interest expense ( 347,145 ) ( 40,395 ) Other Income 459 9,917 TOTAL OTHER (EXPENSE) ( 346,686 ) ( 30,478 ) NET (LOSS) ( 2,802,487 ) ( 585,840 ) NET (LOSS) PER COMMON SHARE: Basic and diluted $ ( 0.70 ) $ ( 014 ) WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: Basic and diluted 4,009,852 4,116,336 The accompanying notes are an integral part of these financial statements F- 4 BULLFROG AI HOLDINGS, INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ (DEFICIENCY) EQUITY FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 Shares Amount Shares Amount Capital Receivables Deficit Total Series A Preferred stock Common Stock Additional Paid in Subscription Accumulated Shares Amount Shares Amount Capital Receivables Deficit Total Balances, December 31, 2020 - $ - 3,603,422 $ 36 $ 470,274 $ ( 100 ) $ ( 1,010,728 ) $ ( 540,518 ) Cash from subscription receivables - - - - - 100 - 100 Warrants issued with convertible notes - - - - 13,661 - - 13,661 Imputed Interest - - - - 4,539 - - 4,539 Equity compensation - - - - 9,385 - - 9,385 Equity compensation - - 1,019,367 10 89,556 - - 89,566 - Net (Loss) - - - - - - ( 585,840 ) ( 585,840 ) Balances, December 31, 2021 - $ - 4,622,789 $ 46 $ 587,415 - $ ( 1,596,568 ) $ ( 1,009,107 ) Balance - $ - 4,622,789 $ 46 $ 587,415 - $ ( 1,596,568 ) $ ( 1,009,107 ) Imputed Interest - - - - 9,221 - - 9,221 Equity compensation - - - - 340,152 - - 340,152 Conversion of convertible notes - - 205,984 2 226,136 - - 226,138 Reclassification of warrant - - - - ( 11,097 ) - - ( 11,097 ) Shares cancellation - - ( 112,225 ) ( 1 ) 1 - - - Shares issuance for license - - 39,879 - 189,828 - - 189,828 Common stocks converted to Series A Preferred stock 73,449 1 ( 734,492 ) ( 7 ) 6 - - - Net (Loss) - - - - - - ( 2,802,487 ) ( 2,802,487 ) Balances, December 31, 2022 73,449 1 4,021,935 $ 40 1,341,662 $ - $ ( 4,399,055 ) $ ( 3,057,352 ) Balance 73,449 $ 1 4,021,935 $ 40 $ 1,341,662 $ - $ ( 4,399,055 ) $ ( 3,057,352 ) The accompanying notes are an integral part of these financial statements F- 5 BULLFROG AI HOLDINGS, INC. CONSOLIDATED STATEMENTS OF CASH FLOW 2022 2021 For The Years Ended December 31 2022 2021 CASH FLOWS FROM OPERATING ACTIVITIES: Net (loss) $ ( 2,802,487 ) $ ( 585,840 ) Adjustment to reconcile change in net (loss) to net cash and cash equivalents used in operating activities: Gain on debt forgiveness - ( 9,917 ) Depreciation expense 1,045 - Shares issuance for license 189,828 - Stock-based compensation 340,152 98,951 Amortization of debt discount 214,429 12,665 Imputed Interest 9,221 4,539 Changes in operating assets and liabilities: Prepaid Expense ( 15,000 ) - Accounts payable 475,399 ( 25,853 ) Accrued expenses 373,273 27,384 Accrued expenses-related party 281,250 85,666 Deferred revenue 22,000 10,000 NET CASH USED IN OPERATING ACTIVITIES ( 910,890 ) ( 382,405 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of Property and Equipment ( 8,744 ) - NET CASH FROM INVESTING ACTIVITIES ( 8,744 ) - CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from convertible notes payables 1,016,290 - Proceeds from convertible notes payables-related party - 298,900 Repayment of note payable and interest-related party ( 49,000 ) - Proceeds from notes payables - related party - 88,400 Proceeds from subscription payable - 100 NET CASH FROM FINANCING ACTIVITIES 967,290 387,400 Net increase/(decrease) in cash and cash equivalents 47,656 4,995 Cash, beginning of year 10,014 5,019 Cash, end of period $ 57,670 $ 10,014 SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid for interest $ 5,757 $ - Cash paid for taxes $ - $ - SUPPLEMENTAL DISCLOSURE of NON-CASH ACTIVITY: Reclassification of warrant $ 11,097 $ - Conversion of Convertible Note payable $ 226,138 $ - Cancellation of common stocks $ 8 $ - Shares issued for license $ 189,828 $ - Shares issued for services $ 340,152 $ 20 Warrants issued with convertible notes $ - $ 13,661 The accompanying notes are an integral part of these financial statements F- 6 BULLFROG AI HOLDINGS, INC. NOTES TO FINANCIAL STATEMENTS December 31, 2022 and 2021 NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS Bullfrog AI Holdings, Inc. was incorporated in the State of Nevada on February 6, 2020. Bullfrog AI Holdings, Inc. is the parent company of Bullfrog AI, Inc. and Bullfrog AI Management, LLC. which were incorporated in Delaware and Maryland, in 2017 and 2021, respectively. All of our operations are currently conducted through BullFrog AI Holdings, Inc., which began operations on February 6, 2020. We are a company focused specifically on advanced AI/ML-driven analysis of complex data sets in medicine and healthcare. Our objective is to utilize our platform for precision medicine approach to drug asset enablement through external partnerships and selective internal development. Most new therapeutics will fail at some point in preclinical or clinical development. This is the primary driver of the high cost of developing new therapeutics. A major part of the difficulty in developing new therapeutics is efficient integration of complex and highly dimensional data generated at each stage of development to de-risk subsequent stages of the development process. Artificial Intelligence and Machine Learning (AI/ML) has emerged as a digital solution to help address this problem. We use artificial intelligence and machine learning to advance medicines for both internal and external projects. Most current AI/ML platforms still fall short in their ability to synthesize disparate, high-dimensional data for actionable insight. Our platform technology, named, bfLEAP™ is an analytical AI/ML platform developed at The Johns Hopkins University Applied Physics Laboratory (JHU-APL) which is able to surmount the challenges of scalability and flexibility currently hindering researchers and clinicians by providing a more precise, multi-dimensional understanding of their data. We are deploying bfLEAP™ for use at several critical stages of development for internal programs and through strategic partnerships and collaborations with the intention of streamlining data analytics in therapeutics development, decreasing the overall development costs by decreasing failure rates for new therapeutics, and impacting the lives of countless patients that may otherwise not receive the therapies they need. The bfLEAP™ platform utilizes both supervised and unsupervised machine learning – as such, it is able to reveal real/meaningful connections in the data without the need for an a priori hypothesis. Algorithms used in the bfLEAP™ platform are designed to handle highly imbalanced data sets to successfully identify combinations of factors that are associated with outcomes of interest. Our primary goal is to improve the odds of success at any stage of pre-clinical and clinical therapeutics development, for in house programs, and our strategic partners and collaborators. Our primary business model is enabling the success of ongoing clinical trials or rescue of late stage failed drugs (i.e., Phase 2 or Phase 3 clinical trial failures) for development and divestiture; although, we will also consider collaborations for earlier stage drugs. We hope to accomplish this through strategic acquisitions of current clinical stage and failed drugs for in-house development, or through strategic partnerships with biopharmaceutical industry companies. We are able to pursue our drug asset enhancement business by leveraging a powerful and proven AI/ML platform (trade name: bfLEAP™) initially developed at JHU-APL. We believe the bfLEAP™ analytics platform is a potentially disruptive tool for analysis of pre-clinical and/or clinical data sets, such as the robust pre-clinical and clinical trial data sets being generated in translational R&D and clinical trial settings. NOTE 2– SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Estimates include, but are not limited to, revenue recognition, allowances for doubtful accounts, recoverability of deferred tax assets and certain other of our accrued liabilities. Actual results could differ from those estimates. F- 7 Financial Instruments The carrying value of short-term instruments, including cash and cash equivalents, accounts payable and accrued expenses approximate fair value due to the relatively short period to maturity for these instruments. Fair value is defined 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. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Company utilizes a three-level valuation hierarchy for disclosures of fair value measurements, defined as follows: Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value. The Company does not have any assets or liabilities that are required to be measured and recorded at fair value on a recurring basis. Revenue Recognition For annual reporting periods after December 15, 2017, the Financial Accounting Standards Board (“FASB”) made effective ASU 2014-09 “Revenue from Contracts with Customers,” to supersede previous revenue recognition guidance under current U.S. GAAP. Revenue is now recognized in accordance with FASB ASC Topic 606, Revenue Recognition. The objective of the guidance is to establish the principles that an entity shall apply to report useful information to users of financial statements about the nature, amount, timing, and uncertainty of revenue and cash flows arising from a contract with a customer. The core principle is to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. Two options were made available for implementation of the standard: the full retrospective approach or modified retrospective approach. The guidance became effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, with early adoption permitted. We have adopted FASB ASC Topic 606 for our reporting period as of the year-ended December 31, 2019. As of December 31, 2021, we have had no revenue. In Q4 2022 the Company recognized its first service revenues in the amount of $ 10,000 related to the achievement of a contract milestone under a contract with a Pharmaceutical company. In compliance with the agreement, we have met the following milestones – receipt of data for analysis; data conversion and staging for ingestion. For the years-ended December 31, 2022 and 2021, our balance sheet reflects customer down payment received in early 2022 and late 2021 as unearned revenue in the amount of $ 32,000 and $ 10,000 , respectively. This unearned revenue represents payments received from a leading rare disease non-profit organization under a contract with a single deliverable. As is more fully discussed below, we are of the opinion that none of our contracts for products contain significant financing components that require revenue adjustment under FASB ASC Topic 606. Revenue is recognized based on the following five step model: - Identification of the contract with a customer This step outlines the criteria that must be met when establishing a contract with a customer to supply goods or services - Identification of the performance obligations in the contract This step describes how distinct performance obligations in the contract must be handled - Determination of the transaction price This step outlines what must be considered when establishing the transaction price, which is the amount the business expects to receive for transferring the goods and services to the customer - Allocation of the transaction price to the performance obligations in the contract This step outlines guidelines for allocating the transaction price across the contract’s separate performance obligations, and is what the customer agrees to pay for the goods and services - Recognition of revenue when, or as, the Company satisfies a performance obligation Revenue can be recognized as the business meets each performance obligation. This step specifies how that should happen F- 8 Contract Services The Company anticipates that the majority of revenues to be recognized in the near future will result from our fee for service partnership offering, designed for biopharmaceutical companies, as well as other organizations, of all sizes that have challenges analyzing data throughout the drug development process. The Company provides the customer with an analysis of large complex data sets using the Company’s proprietary Artificial Intelligence / Machine Learning platform called bfLEAP™. This platform is designed to predict targets of interest, patterns, relationships, and anomalies. The Company believes that there will be additional on-going work requested from partners therefore the service model utilizes a master services agreement with work or task orders issued for discrete analysis performed at the discovery, preclinical, or clinical stages of drug development. The Company receives a cash fee and in some instances the potential for rights to new intellectual property generated from the analysis. Collaborative Arrangements The Company also intends to enter collaborative arrangements with pharmaceutical companies who have drugs that have failed late Phase 2 or Phase 3 trials. These arrangements could take several forms including true partnerships where BullFrog contributes data analysis using the bfLEAP™ platform with the partner contributing the drug candidate and other resources needed to continue development towards commercialization with BullFrog receiving an equity or royalty right in the commercialized product. In other arrangements the Company may earn cash payments based on achieving certain milestones as determined under each specific arrangement. Acquisition of Rights to Certain Drugs In certain circumstances, we may also acquire rights to drugs that are in early-stage clinical trials, use our technology to sponsor and support a successful later stage precision medicine trial, and divest the asset. The same process may apply to the discovery of new drugs. In these instances, divestiture may be in the form of an outright sale of all rights or possibly a license to develop and commercialize enhanced development candidates. License agreements could include developmental and commercial milestones in addition to royalties. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include the fair value of the Company’s stock, stock-based compensation, fair values relating to derivative liabilities, debt discounts and the valuation allowance related to deferred tax assets. Actual results may differ from these estimates. Cash The Company considers cash to consist of cash on hand and temporary investments having an original maturity of 90 days or less that are readily convertible into cash. As of December 31, 2022 and 2021, cash balances were $ 57,670 and $ 10,014 , respectively. Concentrations of Credit Risk The Company’s financial instruments that are exposed to a concentration of credit risk are cash and accounts receivable. Occasionally, the Company’s cash in interest-bearing accounts may exceed FDIC insurance limits. The financial stability of these institutions is periodically reviewed by senior management. F- 9 Accounts Receivable Trade receivables are carried at their estimated collectible amounts. Trade credit is generally extended on a short-term basis. Thus, trade receivables do not bear interest. Trade accounts receivable are periodically evaluated for collectability based on past credit history with customers and their current financial condition. Allowance for Doubtful Accounts Any charges to the allowance for doubtful accounts on accounts receivable are charged to operations in amounts sufficient to maintain the allowance for uncollectible accounts at a level management believes is adequate to cover any probable losses. Management determines the adequacy of the allowance based on historical write-off percentages and the current status of accounts receivable. Accounts receivables are charged off against the allowance when collectability is determined to be permanently impaired. As of December 31, 2022 and 2021, allowance for doubtful accounts was $ 0 . Inventories The Company does not have inventory and does not plan to have inventory in the near future. Cost of Sales Cost of sales is comprised of royalties and the cost of outsourced services provided to the Company related to customer service contracts. We recognized $ 800 as cost of goods sold which represents the 8 % royalty on the $ 10,000 in service revenue in 2022. Property and Equipment Property and equipment are stated at cost. When retired or otherwise disposed, the related carrying value and accumulated depreciation are removed from the respective accounts and the net difference less any amount realized from disposition, is reflected in earnings. For financial statement purposes, property and equipment are recorded at cost and depreciated using the straight-line method over their estimated useful lives. Advertising The Company follows the policy of charging the costs of advertising to expense as incurred. Income Taxes Deferred income tax assets and liabilities are determined based on the estimated future tax effects of net operating loss and credit carry forwards and temporary differences between the tax basis of assets and liabilities and their respective financial reporting amounts measured at the current enacted tax rates. The Company records an estimated valuation allowance on its deferred income tax assets if it is not more likely than not that these deferred income tax assets will be realized. The Company recognizes a tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the condensed consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. As of December 31, 2022 and 2021, the Company has not recorded any unrecognized tax benefits. Stock-Based Compensation Employee and non-employee share-based compensation is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period. Net Loss per Share We compute net loss per share in accordance with ASC 260, Earning per Share. We report both basic and diluted loss per share. Loss earnings per share is calculated based on the weighted average number of shares of common stock outstanding and excludes the dilutive effect of warrants, stock options or any other type of convertible securities. Considering that the Common shares of the Company were not publicly traded as of December 31, 2022, the contingently convertible notes and related dilutive shares are not included in the dilutive shares calculation upon the Initial Public Offering (IPO). Diluted loss per share is calculated based on the weighted average number of shares of common stock outstanding and the dilutive effect of stock options, warrants and other types of convertible securities are included in the calculation. Dilutive securities are excluded from the diluted earnings per share calculation because their effect is anti-dilutive. As of December 31, 2021 and December 31, 2022, 927,373 and 753,174 warrants (post reverse stock split) were not included in the calculation of net loss per share, respectively. In addition, 486,571 and 56,242 options for common shares (post reverse stock split) were not included in the calculation of net loss per share, respectively. F- 10 Recent Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This ASU requires lessees to recognize a lease liability, on a discounted basis, and a right-of-use asset for substantially all leases, as well as additional disclosures regarding leasing arrangements. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842), which provides an optional transition method of applying the new lease standard. Topic 842 can be applied using either a modified retrospective approach at the beginning of the earliest period presented, or as permitted by ASU 2018-11, at the beginning of the period in which it is adopted. We adopted this standard using a modified retrospective approach since inception of the company. The modified retrospective approach includes a number of optional practical expedients relating to the identification and classification of leases that commenced as of the inception of the company; initial direct costs for leases that commenced as of inception of the company; and the ability to use hindsight in evaluating lessee options to extend or terminate a lease or to purchase the underlying asset. The Company elected the package of practical expedients permitted under ASC 842 allowing it to account for its prior operating lease that commenced before the adoption date as an operating lease under the new guidance without reassessing (i) whether the contract contains a lease; (ii) the classification of the lease; or (iii) the accounting for indirect costs as defined in ASC 842. All staff are working remotely; therefore, the Company does not currently have a lease or rent office space. Consistent with ASC 842-20-50-4, the Company’s financial statements for the years ended December 31, 2022 and 2021, do not have a monthly rent obligation. The Company had no cash flows arising from a lease, no finance lease cost, short term lease cost, or variable lease costs. The Company does not produce any sublease income or any net gain or loss recognized from sale and leaseback transactions. As a result, the Company did not need to segregate amounts between finance and operating leases for cash paid for amounts included in the measurement of lease liabilities, segregated between operating and financing cash flows; supplemental non-cash information on lease liabilities arising from obtaining right-of-use assets; weighted-average calculations for the remaining lease term; or the weighted-average discount rate. The adoption of this guidance resulted in no significant impact to the Company’s results of operations or cash flows. In December 2019, the FASB issued ASU No. 2019-12 - Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 is part of the FASB’s overall simplification initiative and seeks to simplify the accounting for income taxes by updating certain guidance and removing certain exceptions. The updated guidance is effective for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years. Early adoption is permitted. The adoption of this update did not have a material effect on the Company’s financial statements. In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470- 20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. This ASU (1) simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20, Debt: Debt with Conversion and Other Options, that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock; (2) revises the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification; and (3) revises the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares. For SEC filers, excluding smaller reporting companies, ASU 2020-06 is effective for fiscal years beginning after December 15, 2021 including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. For all other entities, ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Entities should adopt the guidance as of the beginning of the fiscal year of adoption and cannot adopt the guidance in an interim reporting period. The Company elected early adoption, effective January 1, 2021. Considering that the Common shares of the Company were not publicly traded as of December 31, 2022, the convertible options are not considered to be readily convertible to cash. In addition, the beneficial conversion feature was eliminated under ASU 2020-06. Therefore, no derivative liabilities will be triggered from these convertible notes. In October 2020, the FASB issued ASU 2020-10, Codification Improvements, which updates various codification topics by clarifying or improving disclosure requirements to align with the SEC’s regulations. The Company adopted ASU 2020-10 as of the reporting period beginning January 1, 2021. The adoption of this update did not have a material effect on the Company’s financial statements. F- 11 The Company does not believe that any other recently issued effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have a material effect on the accompanying financial statements. COVID-19 In March 2020, the World Health Organization declared the global emergence of the COVID-19 pandemic. The impact of COVID-19 on the Company’s business is currently unknown. The Company will continue to monitor guidance and orders issued by federal, state, and local authorities with respect to COVID-19. As a result, the Company may take actions that alter its business operations as may be required by such guidance and orders or take other steps that the Company determines are in the best interest of its employees, customers, partners, suppliers and stockholders. Any such alterations or modifications could cause substantial interruption to the Company’s business and could have a material adverse effect on the Company’s business, operating results, financial condition, and the trading price of the Company’s common stock, and could include temporary closures of one or more of the Company’s facilities; temporary or long-term labor shortages; temporary or long-term adverse impacts on the Company’s supply chain and distribution channels; and the potential of increased network vulnerability and risk of data loss resulting from increased use of remote access and removal of data from the Company’s facilities. In addition, COVID-19 could negatively impact capital expenditures and overall economic activity in the impacted regions or depending on the severity, globally, which could impact the demand for the Company’s products and services. It is unknown whether and how the Company may be impacted if the COVID-19 pandemic persists for an extended period of time or if there are increases in its breadth or in its severity, including as a result of the waiver of regulatory requirements or the implementation of emergency regulations to which the Company is subject. The COVID-19 pandemic poses a risk that the Company or its employees, contractors, suppliers, and other partners may be prevented from conducting business activities for an indefinite period. The Company may incur expenses or delays relating to such events outside of its control, which could have a material adverse impact on its business, operating results, financial condition and the trading price of its common stock. Going Concern The Company has had negative cash flows from operations and operated at a net loss since inception. In the prior year our auditors included a paragraph in their opinion regarding the substantial doubt that existed of our ability to continue as a going concern. As noted in note 14 we completed our initial public offering subsequent to year end. We believe that the funds raised and notes that were converted from debt to equity now provides enough liquidity to alleviate the substantial doubt. There can be no assurance that we will not need additional funding in the future. NOTE 3 – PROPERTY AND EQUIPMENT Property and equipment consisted of the following: During the year ended December 31, 2022, the Company acquired $ 8,744 of equipment and has accumulated depreciation of $ 1,045 , for a net of $ 7,699 . Depreciation expense totaled $ 1,045 , and $ 0 in the years ended December 31, 2022 and 2021, respectively. NOTE 4 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES As of December 31, 2022 and 2021, the Company had accounts payable and accrued expenses totaling $ 1,526,981 and $ 422,817 , respectively. NOTE 5 – NOTES PAYABLE On May 5, 2020 the Company received an SBA PPP loan in the amount of $ 9,917 , at 1 % interest. The loan was forgiven on March 15, 2021. NOTE 6 – NOTES PAYABLE RELATED PARTY On June 15, 2021, the company entered into an unsecured short term loan agreement with a related party for an aggregate principal balance of $ 34,000 , with a one-year maturity date, accruing interest at 5 % and imputing an additional 1 % interest. The full amount of the loan and interest was repaid in 2022. On November 19, 2021, 2021, the company entered into an unsecured short term loan agreement with a related party for an aggregate principal balance of $ 5,000 , with a one-year maturity date, accruing interest at 5 % and imputing an additional 1 % interest. The full amount of the loan and interest was repaid in 2022. On December 13, 2021, the company entered into an unsecured short term loan agreement with a related party for an aggregate principal balance of $ 10,000 , with a one-year maturity date, accruing interest at 5 % and imputing an additional 1 % interest. The full amount of the loan and interest was repaid in 2022. F- 12 NOTE 7 – CONVERTIBLE NOTES PAYABLE On March 27, 2020, the company entered into a convertible loan agreement with the Maryland Technology Development Corporation with a principal balance of $ 200,000 at 6 % interest. The maturity date of the loan was September 27, 2021 . During the year ended ended December 31, 2022, the full amount of the loan and interest totaling $ 226,138 was converted into 205,984 shares of common stock (post reverse stock split) of the Company, in accordance with the conversion notice submitted by the noteholder. Pursuant to the note agreement, the number of shares that the note converted into was based on the note balance plus accrued interest divided by $ 5,000,000 times the fully diluted equity of the company, excluding convertible securities issued for capital raising purposes. There was no gain or loss due to conversion, being within the terms of the agreement. On August 9, 2021, the company entered into a convertible loan agreement with an unrelated party to loan up to $ 195,000 at 9 % interest, with a principal balance of $ 72,000 , as of December 31, 2021. This loan included an original issuance discount of 5 % , and included 195,000 Warrants at an exercise price of $ 1 , exercisable for 5 years from the issue date on the face of the Warrant. The noteholder has the right to convert the principal and interest into common shares of the Company. The maturity date of the loan was February 9, 2022 . During the year ended December 31, 2022, another $ 123,000 principal with an additional $ 6,150 original issuance discount, was loaned to the Company. In May 2022, the Company and the note holder agreed to cancel and void previous warrants and entered into a new agreement for 225,000 warrants with an exercise price of $ 2.50 . As of December 31, 2022, the loan was outstanding with a principal balance of $ 195,000 , accrued interest of $ 35,078 , amortization of debt discount of $ 8,393 , and unamortized debt discount of $ 0 . The warrants discussed above were initially discounted against the notes, subsequent to year end December 31, 2021, they were deemed voided and new warrants in accordance with the new terms were issued. We assessed the differences in fair value and determined that they were de minimis and expensed the full value of the new warrants. During the year ended December 31, 2022 the Company recorded an expense of $ 64,978 . On December 20, 2021, the company entered into a loan agreement with an unrelated party, with a principal balance of $ 25,000 at 6 % interest. The maturity date of the loan was December 19, 2022 . During the year ended December 31, 2022, the note principal was increased by $ 2,778 representing a 10 % original issue discount pursuant to the enhanced terms mentioned below. As of December 31, 2022, the loan remained outstanding had accrued interest of $ 2,301 . The loan was converted to common stock in February 2023 in connection with the Company IPO. Initially, the loan was estimated to be issued with 355,114 warrants. Subsequent to the entry into the December 20, 2021 the loan agreement, the Company enhanced the terms of the Bridge Note Offering under which the loan was closed and in April 2022 closed on the sale of approximately $ 1 M in face value of convertible bridge notes, as described in footnote 13. Pursuant to the enhanced terms, the warrants will not be issued until the note converts. On April 11, 2022, the Company entered into an Exclusive placement agent and/or underwriter agreement with WallachBeth Capital LLC in connection with a proposed private and/or public offerings by the Company. As discussed in Footnote 2, a significant component of the Company’s plan to secure capital is the intention of the Company to seek to be listed on a national exchange through an initial public offering (“IPO”) of its common stock. WallachBeth was engaged in this regard and on April 28, 2022, the Company received net proceeds of approximately $ 775,000 from the sale of Convertible Bridge Notes and Warrants to several institutional investors as well as several individual accredited investors. In connection with the April 28th note sale, the Company paid approximately $ 91,560 in fees and expenses. In addition to the money received on April 28th, the Company also received $ 100,000 from the sale of a Convertible Bridge Note and Warrants to a related party earlier in April. In September 2022, the Company sold one additional bridge note to an unrelated party, with a principal balance of $ 27,779 . The Convertible Bridge Notes were issued with a 10 % original issue discount and are convertible at the IPO at a 20 % discount to the IPO price. The purchasers will also be issued a warrant for each share of common stock issued upon conversion of the Note at a price equal to 110% of the IPO price or, if the Company fails to complete the IPO before October 22, 2022, 90% of the IPO price. The Convertible Bridge Notes maturity date was October 31, 2022 . The Company has amended the Convertible Bridge Notes to extend the maturity date until December 31, 2022 . The Company has filed an S-1 Registration Statement and conducted an IPO in February 2023. All of the Convertible Bridge Notes and accrued interest through November, 30, 2022 were converted at the IPO. Pursuant to further amendments to the notes, the maturity date was extended, interest accrued after November 30, 2022 though conversion will be paid to the holders in cash and the conversion right was revised to be equal to a $ 25 million dollar Company valuation, or $ 4.27 , which was also established as the warrant exercise price. As of December 31, 2022, the table below reflects the balances of the Convertible Bridge Notes sold pursuant April 11, 2022 agreement with WallachBeth. All notes are mandatorily converted at the IPO at the conversion ratio noted above and the purchasers will also be issued a warrant for each share of common stock issued upon conversion with an exercise price set by the exchange ratio. Due to the IPO price not yet being probable at year end, no current accounting for these warrants has been journalized. F- 13 SCHEDULE OF CONVERTIBLE DEBT Note Date Purchase Price Principal Balance Original Issue Discount Accrued Interest Note Purchase Principal Original Issue Accrued Date Price Balance Discount Interest 4/28/2022 $ 250,000 $ 277,778 $ 27,778 $ 17,083 4/28/2022 $ 250,000 $ 277,778 $ 27,778 $ 17,083 4/28/2022 $ 250,000 $ 277,778 $ 27,778 $ 17,083 4/28/2022 $ 25,000 $ 27,778 $ 2,778 $ 1,708 4/28/2022 $ 28,000 $ 31,111 $ 3,111 $ 1,913 4/28/2022 $ 28,000 $ 31,111 $ 3,111 $ 1,913 4/28/2022 $ 35,000 $ 38,889 $ 3,889 $ 2,392 12/20/2021 * $ 25,000 $ 27,778 $ 2,778 $ 2,301 4/13/2022 * $ 100,000 $ 111,111 $ 11,111 $ 7,111 9/9/2022 $ 25,000 $ 27,778 $ 2,778 $ 1,088 Total $ 1,016,000 $ 1,128,889 $ 112,889 $ 69,675 * Notes sold by Company prior to the April 28, 2022 closing In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470- 20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. The Company specified that an entity should adopt the guidance as of the beginning of its annual fiscal year. After adoption of ASU 2020-06, if the equity securities underlying the conversion option are not readily convertible to cash, and the conversion option requires gross physical settlement of the underlying shares, the embedded conversion option may not meet the net settlement criterion, and therefore would not meet the definition of a derivative. Considering that the Common shares of the Company were not publicly traded as of December 31, 2022, the convertible options are not considered to be readily convertible to cash. In addition, the beneficial conversion feature was eliminated under ASU 2020-06. Therefore, no derivative liabilities will be triggered from these convertible notes. All conversions are contingent upon an effective IPO, which had not yet been considered probable. NOTE 8 – CONVERTIBLE NOTES PAYABLE RELATED PARTY On July 8, 2021, the company entered into a Simple Agreement for Future Equity (SAFE), with a related party, with an amount of $ 150,000 , with 0 % interest. Under the SAFE agreement, if there is an Equity Financing before the termination of this SAFE , on the initial closing of such Equity Financing, this SAFE will automatically convert into the number of shares of SAFE Preferred Stock equal to the Purchase Amount divided by the Conversion Price, which means either: (1) the Safe Price (the price per share equal to the Post-Money Valuation Cap divided by the Company Capitalization) or (2) the Discount Price (the price per share of the Standard Preferred Stock sold in the Equity Financing multiplied by the Discount Rate), whichever calculation results in a greater number of shares of Safe Preferred Stock If there is a Liquidity Event before the termination of this SAFE , this SAFE will automatically be entitled (subject to the liquidation priority set forth in Section 1(d) below) to receive a portion of Proceeds, due and payable to the Investor immediately prior to, or concurrent with, the consummation of such Liquidity Event, equal to the greater of (i) the Purchase Amount (the “Cash-Out Amount”) or (ii) the amount payable on the number of shares of Common Stock equal to the Purchase Amount divided by the Liquidity Price (the “Conversion Amount”). If any of the Company’s securityholders are given a choice as to the form and amount of Proceeds to be received in a Liquidity Event, the Investor will be given the same choice, provided that the Investor may not choose to receive a form of consideration that the Investor would be ineligible to receive as a result of the Investor’s failure to satisfy any requirement or limitation generally applicable to the Company’s securityholders, or under any applicable laws. This SAFE will automatically terminate (without relieving the Company of any obligations arising from a prior breach of or non-compliance with this SAFE ) immediately following the earliest to occur of: (i) the issuance of Capital Stock to the Investor pursuant to the automatic conversion of this SAFE under agreement; or (ii) the payment, or setting aside for payment, of amounts due the Investor pursuant to the agreement. F- 14 As of December 31, 2022 and 2021, the $ 150,000 received from SAFE was recorded at 6 % imputed interest. The maturity date of the loan is defined by the SAFE agreement as discussed above. On August 19, 2021, the company entered into a convertible loan agreement with a related party, with a principal balance of $ 99,900 at 9 % interest. The noteholder has the right to convert the principal and interest into common shares of the Company. This loan included an original issuance discount of 5 % and included 99,900 Warrants at an exercise price of $ 1 , exercisable for 5 years from the issue date on the face of the Warrant. The maturity date of the loan was February 19, 2022 . In May 2022, the Company and the note holder agreed to cancel and void previous warrants and entered into a new agreement for 115,185 warrants with an exercise price of $ 2.50 . As of December 31, 2022, the $ 99,900 principal and the $ 4,950 overpayment of the note remained outstanding and had accrued interest of $ 12,463.53 . The warrants discussed above were initially discounted against the notes, subsequent to year end December 31, 2021, they were deemed voided and new warrants in accordance with the new terms were issued. We assessed the differences in fair value and determined that they were de minimis and expensed the full value of the new warrants. The SAFE and the convertible loan agreement with accrued interest converted to common stock at the IPO. The Company specified that an entity should adopt ASU 2020-06 as of the beginning of its annual fiscal year. After adoption of ASU 2020-06, no derivative liabilities will be triggered from these convertible notes. See Note 7 for details. NOTE 9 – RELATED PARTY During the year-ended December 31, 2021, there were 57,143 shares of common stock (post reverse stock split) issued to CFO Dane Saglio, for services rendered. As of December 31, 2022 and 2021, the accrued salary for related parties was $ 566,916 and $ 285,666 , respectively. The increase reflects salaries accrued for employees, but not paid in the year ended December 31, 2022. As of December 31, 2022, the Company accrued consulting fees to related parties of $ 90,000 for services provided to the Company. During the year ended December 31, 2021, the Company issued options totaling 29,286 shares of common stock (post reverse stock split) to related party for services rendered. The options have an original life of ten years and vest at different rates over as much as 24 months. During the year ended December 31, 2022, the Company did not issue any options and recognized $ 1,803 of stock-based compensation related to outstanding stock options. NOTE 10– SHAREHOLDER’S DEFICT Preferred Stock The Company has 10,000,000 shares of preferred stock authorized at a par value of $ 0.00001 . As of December 31, 2021, there were no preferred shares issued. On October 5, 2022, the Company entered into an exchange agreement with the Investor whereby all of his common stock, 734,492 shares of commons stock (post reverse stock split), were exchanged into 73,449 shares of Series A Convertible Preferred Stock (post reverse stock split). Per the agreement the exchange was based on a 1 Series A Convertible Preferred Stock for each 10 shares of common stock. Each holder of Series A Preferred Stock may, from time to time, convert any or all of such holder’s shares of Series A Preferred Stock into fully paid and nonassessable shares of Common Stock in an amount equal to ten shares of common stock for each one share of Series A Preferred Stock surrendered. The Series A Preferred Stock is the economic equivalent of the common stock but has no voting rights and is subject to a blocker which prohibits the conversion into common stock if it would result in the Investor owning more than 4.99 % of the Company’s outstanding common stock at such time. T he Company evaluated the terms of the exchange and determined there would be no significant change in fair value and therefore no accounting entry recorded as a result of the exchange. The value of the Series A Preferred Stock was determined to be $ 315,000 which is the Investor’s basis in the common stock that was exchanged. Common Stock In June of 2020, BullFrog AI Holdings, Inc. acquired BullFrog AI, Inc. via a 1:1 share exchange. Immediately prior to the share exchange, each authorized common share of BullFrog AI, Inc. was split into 25 shares of common stock . Share amounts in our financial statements for December 31, 2022 and 2021, have been adjusted to reflect this forward share split and shares exchange. All of our operations are currently conducted through BullFrog AI Holdings, Inc. BullFrog AI, Inc., is a wholly owned subsidiary, has the sole purpose of housing and protecting all of the organization’s intellectual property. BullFrog AI Management, LLC is a wholly owned subsidiary that handles all HR and payroll activities. The Company has 100,000,000 shares of common stock authorized at a par value of $ 0.00001 . During year ended December 31, 2022, 734,492 shares of common stock (post reverse stock split) were exchanged for preferred shares as noted above, 205,984 shares of common stock (post reverse stock split) were issued for conversion of principal and interest of $ 226,138 by a noteholder, 112,225 shares of common stock (post reverse stock split) were canceled as the change in number of shares issued as part of the cancellation of the prior agreements and new agreements with advisors, and 38,879 shares of common stock (post reverse stock split) were issued under a license agreement and valued at $ 189,828 , see Note 12 for further discussion. As of December 31, 2022 and 2021, there are 4,021,935 and 4,622,789 , shares of common stock (post reverse stock split) outstanding, respectively. F- 15 After the Company signed two licenses for two drug programs from universities in the first half of 2022 it engaged an independent valuation firm to perform an Enterprise-Equity valuation. The results of this engagement resulted in an increase in the value per share of common stock used in the Black Scholes option pricing model employed to value the Company’s equity grants and warrant issuances. Our Board of Directors and stockholders approved an amendment to our Certificate of Incorporation to effect a 1-for-7 reverse stock split of our common stock in connection with the offering, subsequent to the year ended December 31, 2022. As a result of the reverse stock split, every 7 shares of our outstanding common stock will be combined and reclassified into one share of our common stock. Unless otherwise noted, the share and per share information in this Form 10-K filing reflects, other than in our historical financial statements and the notes thereto, a proposed reverse stock split of the outstanding common stock of the Company at an assumed 1-for-7 ratio. Stock Options During the first quarter of 2022, 399,354 shares of options (post reverse stock split) were forfeited due to the termination of employment. During the year ended December 31, 2021, the Company granted a total of 29,286 shares of options (post reverse stock split) to employees of the Company for services rendered. The options have an original life of ten years and vest at different rates over as much as 48 months . During the years ended December 31, 2021, the Company vested 1,310 of these options (post reverse stock split) and recognized $ 157 of stock-based compensation related to outstanding stock options. During the year ended December 31, 2022, 16,601 shares of these options (post reverse stock split) were vested and $ 2,010 stock-based compensation was recognized. The following tables summarizes the stock options (post reverse stock split) activity for the years ended December 31, 2022 and 2021: SCHEDULE OF STOCK OPTIONS ACTIVITY Granted and outstanding, December 31, 2020 884,821 Granted during 2021 29,286 Exercised - Forfeited - Expired during 2021 ( 445,536 ) Granted and outstanding, December 31, 2021 468,571 Granted during 2022 - Exercised - Forfeited ( 399,354 ) Expired during 2022 - Granted and outstanding, December 31, 2022 69,217 SCHEDULE OF VESTED AND OUTSTANDING OPTIONS Options Intrinsic Value of Vested Options Weight Averaged exercise Price Vested and outstanding, December 31, 2020 104,795 12,706 3.36 Granted and vested during 2021 1,310 157 2.66 Exercised - - - Forfeited - - - Expired ( 66,524 ) ( 7,922 ) ( 3.36 ) Vested and outstanding, December 31, 2021 39,581 4,941 3.36 Granted and vested during 2022 16,661 2,010 2.73 Exercised - - - Forfeited - - - Expired - - - Vested and outstanding, December 31, 2022 56,242 6,951 3.15 As of December 31, 2022 and 2021, 16,661 and 1,310 options (post reverse stock split) vested, respectively, 0 and 66,524 (post reverse stock split) options expired and the outstanding stock options have a weighted average remaining life of 7.08 and 7.38 years, respectively. As of December 31, 2022 and 2021, the fair value of options vested and outstanding was $ 6,951 and $ 4,941 , respectively. The aggregate fair value of the options measured during the year ended December 31, 2022 and 2021 was calculated using the Black-Scholes option pricing model based on the following assumption: SCHEDULE OF BLACK SCHOLES OPTION PRICING MODEL December 31, 2022 December 31, 2021 Fair Value of Common Stock on measurement date $ 4.76 $ 0.308 Risk free interest rate From 0.79 % to 3.01 % From 1.26 % to 1.33 % Volatility 89 % 93 % Dividend Yield 0 % 0 % Expected Term 4 - 10 10 (1) The risk-free interest rate was determined by management using the market yield on U.S. Treasury securities with comparable terms as of the measurement date. (2) The trading volatility was determined by calculating the volatility of the Company’s peer group. (3) The Company does not expect to pay a dividend in the foreseeable future. F- 16 Warrants During the year ended December 31, 2022, the Company granted a total of 123,660 warrants (post reverse stock split) . The warrants have an original life of four to ten years and vest immediately and over 12 months. During the year ended December 31, 2022, 174,105 shares of warrants (post reverse stock split) were vested and amended with an intrinsic value of $ 337,269 , 51,941 shares of warrants (post reverse stock split) were reclassified with an intrinsic value of $ 11,097 , and 42,057 shares of warrants (post reverse stock split) with an intrinsic value of $1,883 were forfeited. During the year ended December 31, 2021, the Company granted a total of 431,659 warrants (post reverse stock split) . Of this amount 200,000 warrants (post reverse stock split) , with a fair value of $ 12,462 , were granted to advisors related to the Company’s IPO objective. The warrants have an original life of five years and vest 30 days before the intended IPO . During the year ended December 31, 2021, 0 shares of these warrants were vested. As of June 30, 2022, the warrants for 200,000 shares (post reverse stock split) were cancelled and voided per agreement of the warrant holder and the Company. There was no gain or loss due to cancellation. In 2021, 138,929 warrants (post reverse stock split) , with a fair value of $ 28,683 , were issued for services rendered. The warrants have an original life of ten years and vest at different rates over as much as 36 months. During the year ended December 31, 2021, the Company issued 92,859 warrants (post reverse stock split) with a fair value of $ 12,980 , in connection with convertible bridge debt agreements with multiple parties including a related party. The warrants had an original life of five years . During the period ending June 30, 2022, the Company determined that 50,735 warrants (post reverse stock split) , with a fair value of $ 11,097 , should not have been issued as further described in footnote 8. The fair value was reclassified to Additional Paid in Capital. As discussed in Note 8 in May 2022, the Company and the note holders agreed to cancel and void the previous 99,000 warrants (post reverse stock split) and entered into a new agreement for 115,185 (post reverse stock split) and the exercise price increased to $ 2.50 from $ 1 , with a fair value of $ 15,412 . As discussed in Note 8 in May 2022, the Company and the note holders agreed to cancel and void the previous 195,000 (post reverse stock split) warrants and entered into a new agreement for 225,000 warrants (post reverse stock split) with an exercise price of $ 2.50 , with a fair value of $ 64,978 . The 92,859 warrants (post reverse stock split) discussed above were initially discounted against the notes, subsequent to year end December 31, 2021, they were deemed voided and these individuals were or will be issued new warrants in accordance with the new terms as stated above. We assessed the differences in fair values and determined the values were de minimis and expensed the full value of the new warrants. The following tables summarize the warrant activity (post reverse stock split) for the year ended December 31, 2022 and 2021, SCHEDULE OF STOCK WARRANT ACTIVITY Warrants Granted and outstanding, December 31, 2020 495,714 Granted during 2021 431,659 Exercised - Forfeited - Expired during 2021 - Granted and outstanding, December 31, 2021 927,373 Granted during 2022 123,660 Exercised - Forfeited ( 298,088 ) Expired during 2022 - Granted and outstanding, December 31, 2022 752,945 SCHEDULE OF VESTED AND OUTSTANDING WARRANTS Warrants Intrinsic Value of Warrants Weight Averaged exercise Price Vested and outstanding, December 31, 2020 479,940 127,480 0.98 Granted and Vested 2021 137,552 22,208 3.15 Exercised - - - Forfeited - - - Expired - - - Vested and outstanding, December 31, 2021 617,492 149,688 2.80 Granted and Vested 2022 174,105 337,263 3.15 Exercised - - - Forfeited ( 94,665 ) ( 12,980 ) - Expired - - - Vested and outstanding, December 31, 2022 696,932 473,971 1.96 F- 17 As of December 31, 2022, 752,945 warrants (post reverse stock split) are outstanding, and 696,932 warrants (post reverse stock split) vested, and the vested stock warrants have a weighted average remaining life of 7.13 years. For the year ended December 31, 2022, the aggregate fair value of warrants vested was $ 324,283 . The aggregate fair value of the warrants measured during the year ended December 31, 2022 was calculated using the Black-Scholes option pricing model and recorded as stock-based compensation. For the year ended December 31, 2021, 927,516 warrants (post reverse stock split) are outstanding, 617,492 warrants (post reverse stock split) are vested with an intrinsic value of $ 22,208 , and the vested stock warrants have a weighted average remaining life of 7.73 years. As of December 31, 2021, the aggregate fair value of warrants vested was $ 149,688 . The aggregate fair value of the warrants measured during the year-ended December 31, 2021 was calculated using the Black-Scholes option pricing model. The number of warrants related to the Convertible Bridge Notes discussed Note 7 is not yet determinable, given some of the terms discussed in Note 8 have not been completed. Therefore, the warrants to be issued are not accounted for in our warrants outstanding. Due to the IPO price not being completed at December 31, 2022, no current accounting for these warrants has been journalized. SCHEDULE OF BLACK SCHOLES OPTION PRICING MODEL December 31, 2022 December 31, 2021 Fair Value of Common Stock on measurement date $ 4.76 $ 0.308 Risk free interest rate From 1.86 % to 1.97 % From 0.78 % to 1.63 % Volatility 89 % 93 % Dividend Yield 0 % 0 % Expected Term 10 years 5 - 10 years (1) The risk-free interest rate was determined by management using the market yield on U.S. Treasury securities with comparable terms as of the measurement date. (2) The trading volatility was determined by calculating the volatility of the Company’s peer group. (3) The Company does not expect to pay a dividend in the foreseeable future. (4) After the Company signed two licenses for two drug programs from universities in the first half of 2022 it engaged an independent valuation firm to perform an Enterprise-Equity valuation. The results of this engagement resulted in an increase in the value per share of common stock used in the Black Scholes option pricing model employed to value the Company’s equity grants and warrant issuances for all 2022 grant date stock prices. NOTE 11 – INCOME TAXES As of December 31, 2022, the Company has available for federal income tax purposes a net operating loss carry forward of approximately $ 4,399,055 , that do not expire, that may be used to offset future taxable income, but could be limited under Section 382. The Company has provided a valuation reserve against the full amount of the net operating loss benefit, since in the opinion of management based upon the earnings history of the Company; it is more likely than not that the benefits will not be realized. Due to possible significant changes in the Company’s ownership, the future use of its existing net operating losses may be limited. All or portion of the remaining valuation allowance may be reduced in future years based on an assessment of earnings sufficient to fully utilize these potential tax benefits. We have adopted the provisions of ASC 740-10-25, which provides recognition criteria and a related measurement model for uncertain tax positions taken or expected to be taken in income tax returns. ASC 740-10-25 requires that a position taken or expected to be taken in a tax return be recognized in the financial statements when it is more likely than not that the position would be sustained upon examination by tax authorities. Tax position that meets the more likely than not threshold is then measured using a probability weighted approach recognizing the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement. The Company had no tax positions relating to open income tax returns that were considered to be uncertain. We file income tax returns in the U.S. and in the state of California and Utah with varying statutes of limitations. The Company’s deferred taxes as of December 31, 2022 and 2021 consist of the following: SCHEDULE OF DEFERRED TAXES 2022 2021 Non-Current deferred tax asset: Net operating loss carryforwards $ 924,000 $ 339,000 Valuation allowance ( 924,000 ) ( 339,000 ) Net non-current deferred tax asset $ — $ — F- 18 NOTE 12 – MATERIAL AGREEMENTS JHU-APL Technology License On February 7, 2018, the Company entered into an exclusive, world-wide, royalty-bearing license from JHU-APL for the technology. The license covers three (3) issued patents, 1 new provisional patent application, non-patent rights to proprietary libraries of algorithms and other trade secrets, the license also includes modifications and improvements. In October of 2021, the Company executed an Amendment to the original license which represents improvements and new advanced analytics capabilities. In consideration of the rights granted to the Company under the License Agreement JHU received a warrant equal to five ( 5 % ) percent of the then fully diluted equity base of the Company, which shall be diluted following the closing of this offering. Under the terms of the License Agreement, JHU will be entitled to eight ( 8 % ) percent royalty on net sales for the services provided by the Company in which the JHU licensed technology was utilized, as well as fifty ( 50 % ) percent of all sublicense revenues received by the Company. In addition, the Company is required to pay JHU an annual maintenance fee of $ 1,500 . Minimum annual royalty payments are $ 20,000 for 2022, $ 80,000 for 2023, and $ 300,000 for 2024 and beyond, if cumulative annual royalty payments do not reach these levels, the amount due to JHU to reach the annual minimum is due by January 31 st of the following year. Failure to make annual royalty payments is considered a material breach under the agreement and upon notice from JHU of a material breech, the Company shall have 60 days to cure the material breech. On July 8, 2022, the company entered into an exclusive, world-wide, royalty-bearing license from JHU-APL for the additional technology developed to enhance the bfLEAP™ platform. The new license provides additional intellectual property rights including patents, copyrights and knowhow to be utilized under the Company’s bfLEAP™ analytical AI/ML platform. This license supersedes the previous license. In consideration of the new license, the Company issued 279,159 shares of common stock. (see note 10) Under the terms of the new License Agreement, JHU will be entitled to eight ( 8 % ) percent of net sales for the services provided by the Company to other parties and 3 % for internally development drug projects in which the JHU license was utilized. The new license also contains tiered sub licensing fees that start at 50 % and reduce to 25 % based on revenues. In addition, under the new license agreement, the minimum annual royalty payments are $ 30,000 for 2022, $ 80,000 for 2023, and $ 300,000 for 2024 and beyond. As of December 31, 2022, we have accrued, $ 30,000 of the 2022 minimum annual royalty payments. See Note 10 for details on common shares and warrants issued related to this agreement. George Washington University - Beta2-spectrin siRNA License On January 14, 2022, the Company entered into an exclusive, world-wide, royalty-bearing license from George Washington University (GWU) for rights to use siRNA targeting Beta2-spectrin in the treatment of human diseases, including hepatocellular carcinoma (HCC). The license covers methods claimed in three US and worldwide patent applications, and also includes use of this approach for treatment of obesity, non-alcoholic fatty liver disease, and non-alcoholic steatohepatitis. In consideration of the rights granted to the Company under the License Agreement GWU received a $ 20,000 License Initiation Fee. Under the terms of the License Agreement, GWU will be entitled to a three percent ( 3 % ) royalty on net sales subject to quarterly minimums once the first sale has occurred subsequent to regulatory approval, as well sublicense or assignment fees in the event the Company sublicenses or assigns their rights to use the technology. The Company will also reimburse GWU for previously incurred and ongoing patent costs. The Sublicense and Assignment fee amounts decline as the Company advances the clinical development of the licensed technology. The license agreement also contains milestone payments for clinical development through the approval of an NDA and commercialization. As of December 31, 2022, there has been no accrual for royalties, since we have not begun revenue. The Company assessed whether the license should be capitalized and determined that the licensed program is early stage and therefore the Company expensed the license fee and will expense development costs until commercial viability is likely. Johns Hopkins University – Mebendazole License On February 22, 2022, the Company entered into an exclusive, world-wide, royalty-bearing license from Johns Hopkins University (JHU) for the use of an improved formulation of Mebendazole for the treatment of any human cancer or neoplastic disease. This formulation shows potent activity in animal models of different types of cancer and has been evaluated in a Phase I clinical trial in patients with high-grade glioma (NCT01729260). The trial, an open-label dose-escalation study, assessed the safety and efficacy of the improved formulation with adjuvant temozolomide in 24 patients with newly diagnosed gliomas. Investigators observed no dose-limiting toxicity in patients receiving all but the highest tested dose (200mg/kg/day). Four of the 15 patients receiving the maximum tested dose of 200mg/kg/day experienced dose-limiting toxicity, all of which were reversed by decreasing or eliminating the dose given. There were no serious adverse events attributed to mebendazole at any dose during the trial. 41.7% of patients who received mebendazole were alive at two years after enrollment, and 25% were alive at four years (Gallia et al., 2021). F- 19 The license covers six (6) issued patents and one (1) pending application. In consideration of the rights granted to the Company under the License Agreement JHU will receive a staggered Upfront License Fee of $ 250,000 . The Company will also reimburse JHU for previously incurred and ongoing patent costs. Under the terms of the License Agreement, JHU will be entitled to three- and one-half percent ( 3.5 % ) royalty on net sales by the Company. In addition, the Company is required to pay JHU minimum annual royalty payments of $ 5,000 for 2023, $ 10,000 for 2024, $ 20,000 for 2025, $ 30,000 for 2026 and $ 50,000 for 2027 and each year after until the first commercial sale after which the annual minimum royalty shall be $ 250,000 . The license agreement also contains milestone payments for clinical development steps through the approval of an NDA and commercialization. The license covers six (6) issued patents and one (1) pending application. In consideration of the rights granted to the Company under the License Agreement JHU will receive a staggered Upfront License Fee of $ 250,000 . The initial payment for $ 50,000 was paid and the remaining balance is deferred until the earlier of; we complete the IPO, raise $ 10 million in financing or until 9 months from the effective date of the license. As of December 31, 2022, the balance of accrued expense related to this license agreement was $ 242,671 . The Company assessed whether the license should be capitalized and determined that the licensed program is early stage and therefore the Company expensed the license fee and will expense development costs until commercial viability is likely. Johns Hopkins University – Prodrug License On October 13, 2022, the Company entered into an exclusive, world-wide, royalty-bearing license from Johns Hopkins University (JHU) and the Institute of Organic Chemistry and Biochemistry (IOCB) of the Czech Academy of Sciences for rights to commercialize N-substituted prodrugs of mebendazole that demonstrate improved solubility and bioavailability. The license covers prodrug compositions and use for treating disease as claimed in multiple US and worldwide patent applications. In consideration for the rights granted to the Company under the License Agreement JHU and IOCB will receive a staggered upfront license fee of $ 100,000 . The Company will also reimburse JHU and IOCB for previously incurred patent costs. Under the terms of the License Agreement, JHU and IOCB will be entitled to four percent ( 4.0 % ) royalty on net sales by the Company. In addition, the Company is required to pay JHU and IOCB minimum annual royalty payments of $ 5,000 for 2027, $ 10,000 for 2028, $ 20,000 for 2029, $ 30,000 for 2030 and $ 50,000 for 2031 and each year after until the first commercial sale after which the annual minimum royalty shall be $ 150,000 . The license agreement also contains milestone payments for patent grants, clinical development steps through the approval of an NDA and commercialization. As of December 31, 2022, the balance of accrued expense related to this license agreement was $ 133,238 . The Company assessed whether the license should be capitalized and determined that the licensed program is early stage and therefore the Company expensed the license fee and will expense development costs until commercial viability is likely. NOTE 13 – COMMITMENTS AND CONTINGENCIES The Company follows ASC 450, Contingencies, which requires the Company to assess the likelihood that a loss will be incurred from the occurrence or non-occurrence of one or more future events. Such assessment inherently involves an exercise of judgment. In assessing possible loss contingencies from legal proceedings or unasserted claims, the Company evaluates the perceived merits of such proceedings or claims, and of the relief sought or expected to be sought. If the assessment of a contingency indicates that it is probable that a material loss will be incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. While not assured, management does not believe, based upon information available at this time, that a loss contingency will have material adverse effect on the Company’s financial position, results of operations or cash flows. NOTE 14 – SUBSEQUENT EVENTS On February 14, 2023 the Company conducted its initial public offering of 1,297,318 units (each, a “Unit,” collectively, the “Units”) at a price of $ 6.50 per unit for a total of approximately $ 8.4 million of gross proceeds to the Company. Each Unit consists of one share of the Company’s common stock, one tradeable warrant (each, a “Tradeable Warrant,” collectively, the “Tradeable Warrants”) to purchase one share of common stock at an exercise price of $ 7.80 per share , and one non-tradeable warrant (each, a “Non-tradeable Warrant,” collectively, the “Non-tradeable Warrants”; together with the Tradeable Warrants, each, a “Warrant,” collectively, the “Warrants”) to purchase one share of the Company’s common stock at an exercise price of $ 8.125 . The offering closed on February 16, 2023. In connection with the offering, the Company common shares were subject to a 1-7 reverse stock split - 1 share of new common for 7 shares then outstanding common stock . Also, in connection with the IPO a SAFE and convertible loan agreement held by a related party converted into 55,787 shares of post reverse common stock. Additionally, all outstanding Convertible Bridge Notes and accrued interest through November 30, 2022 were converted into 276,289 shares common stock and 276,289 warrants to purchase common stock were issued to the Convertible Bridge Note holders at conversion. The Bridge Note conversions and the warrant exercise pricing was determined using a $ 25 million dollar company valuation immediately before the IPO. Between April 5 and April 13, 2023, the holders of warrants exercised 436,533 warrants for common shares at various exercise prices and the Company received proceeds of approximately $ 1,495,000 . F- 20