What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-03-14 compared with 2024-03-29 · 229 added, 246 removed, 54 unchanged (90% of the section changed)

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following discussion and analysis of the results of operations and financial condition of Bullfrog AI Holdings, Inc.

as of and for the years ended December 31, 2023 and 2022 should be read in conjunction with our consolidated financial statements and

the notes to those consolidated financial statements that are included elsewhere in this Annual Report.

References in this Management’s

Discussion and Analysis of Financial Condition and Results of Operations to “us”, “we”, “our” and

similar terms refer to the Company.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations

contains statements that are forward-looking.

These statements are based on current expectations and assumptions that are subject to

risk, uncertainties, and other factors.

These statements are often identified by the use of words such as “may,” “will,”

“expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,”

or “continue,” and similar expressions or variations.

Actual results could differ materially because of the factors discussed

in “Risk Factors” elsewhere in this Annual Report, and other factors that we may not know.

or the “Company”) as of and for the years ended December 31, 2024 and 2023 should be read in conjunction with our consolidated

financial statements and the notes to those consolidated financial statements that are included elsewhere in this Annual Report on Form

References in this Management’s Discussion and Analysis of Financial Condition and Results of Operations to “us”,

“we”, “our” and similar terms refer to the Company.

This Management’s Discussion and Analysis of Financial

Condition and Results of Operations contains statements that are forward-looking.

These statements are based on current expectations

and assumptions that are subject to risk, uncertainties, and other factors.

These statements are often identified by the use of words

such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,”

“could,” “estimate,” or “continue,” and similar expressions or variations.

Actual results could differ

materially because of the factors discussed in “Risk Factors” elsewhere in this Annual Report on Form 10-K, and other factors

that we may not know.

AI Holdings, Inc.

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on advanced Artificial Intelligence / Machine Learning (“AI/ML”) analysis of complex data in the advancement of medicine.

Our AI/ML platform

bfLEAP™) was created from technology originally developed at The Johns Hopkins University Applied Physics Laboratory

February 2018, BullFrog AI Holdings secured the original exclusive, worldwide, royalty-bearing license from JHU-APL for the technology.

The license covers three (3) issued patents, one (1) new provisional patent application, non-patent rights to proprietary libraries of

algorithms and other trade secrets including modifications and improvements.

We entered into a license agreement in July 2022 that provides

the Company with new intellectual property and also encompasses most of the intellectual property from the February 2018 license.

objective is to utilize our for a precision medicine approach toward drug development with biopharmaceutical collaborators, as well as

our own internal clinical development programs.

We believe the bfLEAP™ platform is ideally suited for evaluating pre-clinical and

clinical trial data generated in translational research and clinical trial settings that lead to faster, less expensive drug approvals.

Our AI/ML platform (trade name:

bfLEAP™) was created from technology originally developed at The Johns Hopkins University Applied

Physics Laboratory (“JHU-APL”).

Subsequently, we have developed new tools and capabilities composed of an ensemble of machine

learning and artificial intelligence models.

February 2018, the Company secured an original exclusive, worldwide, royalty-bearing license from JHU-APL for the technology underlying

our bfLEAP™ platform.

The license covers three (3) issued patents, one (1) new provisional patent application, non-patent rights

to proprietary libraries of algorithms and other trade secrets including modifications and improvements.

We entered into a license agreement

in July 2022 that provides the Company with new intellectual property and also encompasses most of the intellectual property from the

February 2018 license.

Our objective is to utilize bfLEAP™, our AI/ML platform, with a precision medicine approach toward drug

development with biopharmaceutical collaborators, as well as our own internal clinical development programs.

We believe the bfLEAP™

platform is ideally suited for evaluating pre-clinical and clinical trial data generated in translational research and clinical trial

settings in order to lead to faster, less expensive drug approvals.

aim is to improve the odds of success in each stage of developing medicine, ranging from early pre-clinical through late-stage clinical

Our ultimate objective is to utilize bfLEAP™ to enable the success of ongoing clinical trials or rescue 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.

July 8, 2022, the Company entered into an exclusive, worldwide, royalty-bearing license from JHU-APL for the additional technology.

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.

In consideration of the new license, the Company issued to JHU-APL 39,879

shares of common stock.

In September 2020 and October of 2021, the Company executed amendments to the original license which

represents improvements and new advanced analytics capabilities.

In consideration of the rights granted to the Company under the

original License Agreement, the Company granted JHU 178,571 warrants exercisable to purchase shares of common stock at $2.10 per

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 developed drug projects in which the JHU license was utilized.

new license also contains tiered sub licensing fees that start at 50% and reduce to 25% based on revenues.

On May 31, 2023, the

Company and JHU-APL entered into Amendment number 1 of the July 8, 2022 License Agreement whereby the Company gained access to

certain improvements including additional patents and knowhow in exchange for a series of payments totaling $275,000.

these payments for $75,000 was due in July 2023 followed by annual payments of $75,000, $75,000 and $50,000 in years 2024, 2025 and

2026, respectively.

The amendment also reduced the 2023 minimum annual royalty payment to $60,000, all other financial terms remain

As a result of this Amendment, the minimum annual payments are set to be $30,000 for 2022, $60,000 for 2023, and $300,000

for 2024 and beyond, all of which are creditable by royalties.

Our ultimate objective is to utilize bfLEAP™ to enable the success of ongoing third-party clinical trials or rescue

late-stage failed drugs (i.e., Phase II or Phase III clinical trial failures) for in-house development and divestiture.

consider collaborations for earlier stage drugs.

July 2022, the Company entered into an exclusive, worldwide, royalty-bearing license from JHU-APL that provides additional intellectual

property rights including patents, copyrights, and knowhow for the technology underlying the Company’s bfLEAP™ analytical

AI/ML platform.

In consideration for the new license entered into in July 2022 with JHU-APL, the Company issued to JHU-APL 39,879 shares

of common stock.

Under the terms of the new license agreement, JHU-APL will be entitled to eight (8%) percent of net sales for the services

provided by the Company to other parties and three (3%) percent for internally developed drug projects in which the JHU-APL license was

The new license also contains tiered sub licensing fees that start at fifty (50%) percent and reduce to twenty-five (25%) percent

based on revenues.

The Company and JHU-APL entered into Amendment Number 1 of the July 2022 license agreement pursuant to which the Company

gained access to certain improvements including additional patents and knowhow in exchange for a series of payments totaling $275,000.

The first of these payments of $75,000 was paid in July 2023 and the remaining payments of $75,000, $75,000 and $50,000 are due in years

2025, 2026 and 2027, respectively.

The amendment also reduced the 2023 minimum annual royalty payment to $60,000.

All other financial

terms remain the same.

As a result of this amendment, the minimum annual payments were $30,000 for 2022 and $60,000 for 2023, and the

minimum annual payments will be $300,000 for 2024 and beyond, all of which are creditable against royalties paid by us.

As of December

31, 2024, we have accrued $300,000 of the 2024 minimum annual royalty payments, and the entire accrued balance was paid in January 2025.

intend to continue to evolve and improve bfLEAP™, either in-house or with development partners like JHU-APL.

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been successfully applied in multiple sectors.

have staffed our business using funds from our initial public offering and have entered into partnerships and relationships and recently

completed our first commercial service contract with a leading rare disease non-profit organization for AI/ML analysis of late-stage

clinical data.

We have also acquired the rights to a series of preclinical and early clinical drug assets from universities, as well

as a strategic collaboration with a world-renowned research institution to create a HSV1 viral therapeutic platform to engineer immunotherapies

for a variety of diseases.

We have signed exclusive worldwide License Agreements with JHU for a cancer drug that targets glioblastoma

(brain cancer), pancreatic cancer, and others.

We have also signed an exclusive worldwide license from George Washington University for

another cancer drug that targets hepatocellular carcinoma (liver cancer) and other liver diseases.

Additionally, we intend to gain access

to later-stage clinical assets through partnerships or the acquisition of rights to failed therapeutic candidates for drug rescue.

certain circumstances, we intend to conduct late-stage clinical trials in an effort to rescue therapeutic assets that previously failed.

have staffed our business using funds from our initial public offering and subsequent financings and have entered into partnerships and

relationships and recently completed our first commercial service contract with a leading rare disease non-profit organization for AI/ML

analysis of late-stage clinical data.

We have also acquired the rights to a series of preclinical and early clinical drug assets from

universities, as well as a strategic collaboration with a world-renowned research institution to create a HSV1 viral therapeutic platform

to engineer immunotherapies for a variety of diseases.

We have signed exclusive worldwide License Agreements with JHU for a cancer drug

that targets glioblastoma (brain cancer), pancreatic cancer, and others.

We have also signed an exclusive worldwide license from George

Washington University for another cancer drug that targets hepatocellular carcinoma (liver cancer) and other liver diseases.

we have signed three-year strategic data and commercialization agreements with the Lieber Institute for Brain Development (“LIBD”)

whom we believe has a repository of the largest collection of postmortem brains in the world, including molecular, clinical, and other

The objective of this collaboration with LIBD is for the Company to analyze these rich data sets using its proprietary AI/ML tools

and models and then go to market with the discoveries with the ultimate goal of securing revenue generating strategic partnership deals

with biopharmaceutical companies.

We intend to secure the rights to other proprietary data sets and repeat this strategy.

Additionally,

we intend to gain access to later-stage clinical assets through partnerships or the acquisition of rights to failed therapeutic candidates

for drug rescue.

In certain circumstances, we intend to conduct late-stage clinical trials in an effort to rescue therapeutic assets

that previously failed.

In these cases, there will be a requirement for drug supply and regulatory services to conduct clinical trials.

The success of our clinical

development programs will require finding partners to support the clinical development, adequate availability of raw materials and/or

drug product for our R&D and clinical trials, and, in some cases, may also require establishment of third-party arrangements to obtain

finished drug product that is manufactured appropriately under (GMP) industry-standard guidelines, and packaged for clinical use or sale.

Since we are a company focused on using our AI technology to advance medicines, any clinical development programs will also require,

in all cases, partners and the establishment of third-party relationships for execution and completion of clinical trials.

completing our IPO on February 14, 2023, aided by the receipt of the IPO proceeds, we have initiated several initiatives:

relations and marketing to promote and raise awareness of the company in the financial and business sectors, research and

development, collaboration with J Craig Venter Institute and in the quarter ended September 30, 2023, completed a preclinical study

for our Mebendazole prodrug program.

The Company is actively engaged in developing and seeking out new intellectual property as it

strives to continuously evolve its AI/ML platform.

Additionally, the Company has engaged a business development firm specializing in

the biopharmaceutical industry to seek and secure a strategic development partner for our Mebendazole program.

The success of our clinical development programs will require finding partners to support the clinical development, adequate availability

of raw materials and/or drug product for our R&D and clinical trials, and, in some cases, may also require establishment of third-party

arrangements to obtain finished drug product that is manufactured appropriately under good manufacturing practices, and packaged for

clinical use or sale.

Since we are a company focused on using our AI/ML technology to advance medicines, any clinical development programs

will also require, in all cases, partners and the establishment of third-party relationships for execution and completion of clinical

completing our initial public offering in February 2023 (the “IPO”), aided by the receipt of the IPO proceeds in addition

to the proceeds from our February 2024 and October 2024 offerings, we have implemented several initiatives:

investor relations and marketing

to promote and raise awareness of the Company in the financial and business sectors, research and development, collaboration with J Craig

Venter Institute (“JCVI”) and initiated preclinical studies with our in-licensed drug programs.

The Company is actively engaged

in developing and pursuing new intellectual property as it strives to continuously evolve its AI/ML platform.

the Company has added incremental staff to accelerate execution and the development of processes and custom scripts for use in performing

analytical services for customers, while also launching initiatives targeting large public health data sources and seeking access to

proprietary health data sources.

We also transitioned our accounting and financial reporting systems and processes to enhance our internal

control environment as a public company.

Capital from the IPO was also used to retire two notes that were sold to fund the Company through

the IPO that did not convert into common stock as well as other debts accrued over time to our staff, employees and consultants as well

as obligations related to the acquisition of our licensed drug programs.

February 2024 the Company received net proceeds of approximately $4.9 million dollars from an underwritten public offering of 1,507,139

shares of common stock (or pre-funded warrants in lieu thereof) and accompanying warrants to purchase 1,507,139 shares of common stock

at an offering price of $3.782.

The 5 year warrants have an exercise price of $4.16.

On February 21, 2024, the underwriters elected to

exercise the over-allotment option for the purchase of an additional 218,382 shares of common stock, and the Company received additional

net proceeds of approximately $750,000, pursuant to the exercise of the over-allotment.

In the absence of significant revenues in 2024

the Company believes that its capital resources are sufficient to fund planned operations for more than 12 months from the date of this

new drug target discovery and analytical services for customers, while also launching initiatives targeting large public health data

sources and seeking access to proprietary health data sources, such as our agreement with the LIBD.

We also transitioned our accounting

and financial reporting systems and processes to enhance our internal control environment as a public company.

Capital from the IPO was

also used to retire two notes that were sold to fund the Company through the IPO as well as other debts accrued over time to our staff,

employees and consultants, and obligations related to the acquisition of our licensed drug programs.

Company has had negative cash flows from operations and operated at a net loss since inception.

In the first quarter of 2023, we completed

In February 2024, we received net proceeds of approximately $5.7 million from an underwritten secondary public offering

of common stock and warrants.

Additionally, in October 2024, we received net proceeds of approximately $2.7 million from a registered

direct offering of common stock and pre-funded warrants, and concurrent private placement of common stock warrants.

As of December 31,

2024, the Company has a cash balance of approximately $5.4 million.

As of December 31, 2024, the Company’s cash and cash equivalents

position is not sufficient to fund the Company’s planned operations for at least a year beyond the filing date of the consolidated

financial statements.

These factors raise substantial doubt about the Company’s ability to continue as a going concern.

to continue as a going concern is dependent upon the Company obtaining the necessary financing and/or revenues to meet its obligations

arising from normal business operations when they become due.

Company has a unique strategy designed to reduce risk and increase the frequency of cash flow.

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The objective of these engagements will be to uncover valuable insights

to reduce the risk and/or increase the speed of the drug development process which can be achieved through manual or automated integration

to reduce the risk and increase the speed of the drug development process, which can be achieved through manual or automated integration

into the client’s workflow or analysis of discrete data sets.

the future, the second part of our strategy involves acquiring the rights to clinical stage drugs, using our bfLEAP technology to design

a precision medicine trial, conduct the trial with a partner, and sell the asset.

This approach may also apply to earlier phases in the

drug development process such as discovery and preclinical.

In any case, the objective is to create near term value and exit and monetize

the future, the second part of our strategy involves acquiring the rights to drugs at various stages of development and using our proprietary

AI/ML technology to advance the development of such drugs, with the objective of creating near term value and then exiting and monetizing

as quickly as possible, preferably within approximately 30 months.

of Operations

the years ended December 31, 2023 and 2022

and Costs of Goods Sold

recognized $65,000 and $10,000 in revenue and $5,200 and $800 in costs of goods sold during the years ended December 31, 2023 and 2022,

respectively.

Year ended December 31,

Operating expenses:

Research and development

General and administrative

Total operating expenses

years ended December 31, 2024 and 2023

Costs of Goods Sold

recognized $65,000 in revenue and $5,200 in costs of goods sold during the year ended December 31, 2023 related to a commercial service

We did not recognize any revenue in the year ended December 31, 2024.

ended December 31,

and development

research and development expenses for the year ended December 31, 2023 increased by $823,344 compared to the same period ended December

31, 2022, primarily due to the inclusion of the cost of salaries and consulting fees in 2023 as we initiated our collaboration with J

Craig Venter Institute and completion of a preclinical study for our Mebendazole prodrug program, as well as the cost of acquiring access

to additional technology from JHU-APL related to bfLEAP™ pursuant to Amendment 1 of the July 2022 License Agreement.

majority of the research and development expenses were directly related to the acquisition of two drug development product candidates

including Mebendazole.

and administrative

general and administrative expenses for the year ended December 31, 2023 increased by $2,138,979, compared to the same period ended December

31, 2022, primarily due to higher salary and consulting costs reflecting an increased level of service as well the initiation of investor

relations and marketing efforts and the transition of our accounting and financial reporting process to support a public company.

2023 period also reflects approximately $120,000 in recruiting fees related to staff additions.

Income (Expense), Net

expense decreased $268,056 for the year ended December 31, 2023, compared to the same period ended December 31, 2022 due to the majority

of our debt converting or being paid off in the first quarter of 2023.

The loss on the conversion of notes of $92,959 for the year ended

December 31, 2023 was due to the conversion of the convertible notes.

Other income increased by $183,244 due to interest earned on our

IPO proceeds which we hold in an overnight sweep account.

Total operating expenses

research and development expenses for the year ended December 31, 2024 increased by approximately $791,000 or 55% compared the year ended

December 31, 2023, primarily due to increased personnel costs related to the hiring of additional R&D staff members.

in the first quarter of 2024, we engaged disease experts as area consultants, we expanded our target discovery efforts, and we also initiated

a preclinical obesity study related to an siRNA program.

Going forward, we expect our R&D expenses to increase as we begin the validation

process on potential targets identified in our target discovery program.

Administrative

general and administrative expenses for the year ended December 31, 2024 increased by approximately $1,018,000 or 25% compared to the

year ended December 31, 2023, primarily due to increased personnel costs related to the hiring of additional staff members, as well as

associated increases in equity compensation costs and recruiting fees as we work to expand our headcount and capabilities.

(Expense), Net

expense decreased by approximately $61,000 for the year ended December 31, 2024, compared to the same period ended December 31, 2023

due to our outstanding notes converting or being paid off in 2023.

In 2023, we also recognized a loss on the conversion of notes of approximately

$93,000 in the year ended December 31, 2023.

Interest income increased by approximately $77,000 primarily due to an increase in our average

cash balances.

and Capital Resources

2022, the Company received net proceeds from the sale of Convertible Bridge Notes of approximately $1,016,000 and repaid the unsecured

promissory notes sold in 2021 in the amount of $49,000.

The Company sold one additional promissory note and received net proceeds of

$100,000 in January 2023.

the year ended December 31, 2022, the Company used approximately $911,000 on operating activities versus approximately $382,000 for

the same period in 2021.

The 2022 cash use included approximately $548,000 in salaries, approximately $634,000 in consulting and

professional fees including legal, accounting and auditing fees, as well as consulting fees for operational activities and

approximately $609,000 in technology license fees, patent cost reimbursements and minimum annual royalties which has been recorded

as a research & development expense.

December 31, 2023, the Company has an accumulated deficit of approximately $9,755,000 and funded its operations through the sale of common

stock and debt.

We anticipate that our expenses will increase in the future to support our service offerings, clinical and pre-clinical

research and development activities associated with strategic partnering and collaborations, as well as acquired product candidates and

the increased costs of operating as a public company.

These increases could include increased costs related to the hiring of additional

personnel and fees to outside consultants, lawyers and accountants, among other expenses.

Additionally, we anticipate increased costs

associated with being a public company including expenses related to services associated with maintaining compliance with exchange listing

and Securities and Exchange Commission requirements, insurance, and investor relations costs.

Company’s current operations include BullFrog AI, Inc.

and BullFrog Management, LLC, which are wholly owned subsidiaries of BullFrog

AI Holdings, Inc., which is a holding company that depends upon the sale of its securities and cash generated through its subsidiaries

to fund consolidated operations.

February 16, 2023, the Company completed its IPO 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.

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.

In connection with the IPO, the Company also completed a 1-for-7

reverse stock split of our common stock.

connection with the IPO, a SAFE and convertible loan agreement held by a related party converted into 55,787 shares of post reverse split

common stock.

Additionally, all outstanding convertible bridge notes and accrued interest through November 30, 2022 were converted into

276,289 shares of common stock and 276,289 warrants to purchase common stock were issued to the Convertible Bridge Note holders at conversion.

The convertible bridge note conversions and the warrant exercise pricing were determined using a $25 million dollar company valuation

immediately before the IPO.

April 5 and April 13, 2023, the holders of warrants exercised 436,533 warrants for common stock at various exercise prices and the Company

received proceeds of approximately $1,495,000.

the absence of revenues in 2024 management believes the company’s capital resources are sufficient to fund planned operations for

substantially longer than 12 months from the date of this filing.

December 31, 2024, the Company has an accumulated deficit of approximately $16.8 million and has funded its operations through the sale

of common stock, warrants and debt.

We anticipate that our expenses will increase in the future to support our service offerings, clinical

and pre-clinical research and development activities associated with strategic partnering and collaborations, as well as acquired product

These increases could include increased costs related to the hiring of additional personnel and fees to outside consultants,

lawyers, and accountants, among other expenses.

February 2023, the Company completed its IPO of 1,297,318 units at a price of $6.50 per unit for a total of approximately $8.4 million

of gross proceeds.

Each unit consists of one share of the Company’s common stock, one tradeable warrant to purchase one share of

common stock at an exercise price of $7.80 per share, and one non-tradeable warrant to purchase one share of the Company’s common

stock at an exercise price of $8.125.

connection with, and immediately prior to, the IPO, the Company also completed a 1-for-7 reverse stock split of our common stock.

connection with the IPO, a simple agreement for future equity (“SAFE”) and convertible loan agreement held by a related party

converted into 55,787 shares of common stock.

Additionally, all outstanding convertible bridge notes and accrued interest were converted

into 276,289 shares of common stock and 276,289 warrants to purchase common stock and were issued to the holders of such notes at conversion.

April 2023, the holders of outstanding warrants exercised 436,533 warrants for common stock at various exercise prices and the Company

received net proceeds of approximately $1.5 million.

February 2024, we completed an underwritten offering of common stock and warrants generating approximately $5.7 million of net proceeds.

October 2024, we completed a registered direct offering of common stock and pre-funded warrants, and concurrent private placement of

common stock warrants generating approximately $2.7 million of net proceeds.

2024, we received approximately $0.1 million from the exercise of warrants.

of December 31, 2024, the Company’s cash and cash equivalents position is not sufficient to fund the Company’s planned operations

for at least a year beyond the filing date of the consolidated financial statements.

These factors raise substantial doubt about the

Company’s ability to continue as a going concern.

The ability to continue as a going concern is dependent upon the Company obtaining

the necessary financing and/or revenues to meet its obligations arising from normal business operations when they become due.

we will seek additional capital to continue to execute our strategy as discussed above.

Cash Flow Data

Year ended December 31,

ended December 31,

Net cash (used in) provided by

Research and development Operating activities

$ (5,610,249 )

$ (6,001,299 )

General and administrative Investing activities

Financing activities

Net increase in cash and cash equivalents

Flows Used in Operating Activities

cash used in operating activities for the year ended December 31, 2023 increased by $5,090,409 compared to the same period ended December

31, 2022 primarily due to paying down accrued expenses for technology access, consultants, and compensation in 2023, coupled with increased

operating costs, including D&O insurance premiums.

Flows Used in Investing Activities

was no cash used in investing activities during the year ended December 31, 2023.

Flows Provided by Financing Activities

cash provided by financing activities for the year ended December 31, 2023 increased by $7,601,069, compared to the same period ended

December 31, 2022 primarily due to the completion of our Initial Public Offering in February 2023 and proceeds received pursuant to warrant

Investing activities

Net increase in cash

and cash equivalents

Used in Operating Activities

cash used in operating activities for the year ended December 31, 2024 decreased by approximately $391,000 compared to the same period

ended December 31, 2023 primarily due to paying down accrued expenses for technology access, consultants, and compensation in 2023, partially

offset by increased operating costs in 2024 primarily relating to increased personnel costs.

Used in Investing Activities

was no cash used in investing activities during any of the periods presented.

Provided by Financing Activities

cash provided by financing activities for the year ended December 31, 2024 decreased by approximately $147,000, compared to the same

period ended December 31, 2023 primarily due to fewer proceeds from equity issuances in 2024 partially offset by payments of debt in

Accounting Policies

Footnote 2 of our Audited Financial Statements for the year ended December 31, 2023 found elsewhere in this filing, we included a discussion

of the most critical accounting policies used in the preparation of our financial statements.

There has been no material change in the

policies and estimates used in the preparation of our financial statements since the completion of the 2023 audit.

Note 2 of our Audited Financial Statements for the year ended December 31, 2024 found elsewhere in this Annual Report on Form 10-K, we

included a discussion of the most critical accounting policies used in the preparation of our financial statements.

There has been no

material change in the policies and estimates used in the preparation of our financial statements since the completion of the 2024 audit.

Sheet Arrangements

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Operations Overview

we generated our first revenues in late 2022 from our services provided to a pharmaceutical customer, in the third quarter of 2023 we

completed our first commercial service contract and recognized revenue in the amount of $65,000.

We have service contracts with two organizations

and currently have multiple discussions underway, although there can be no assurance of entering into additional service agreements and

business relationships in 2024.

completed our first commercial service contract and recognized revenue in the amount of $65,000 in the third quarter of 2023.

not recognize any revenue in 2024.

In February 2025, we announced our entry into a collaboration agreement with Eleison Pharmaceuticals

(“Eleison”), a Phase III oncology company focused on novel chemotherapeutic treatments for rare cancers.

We are in discussions

with other potential partners, although there can be no assurance of entering into other business relationships in 2025 or beyond.

classify our operating expenses into two categories:

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These activities and related expenditures have been recorded and reported as general and administrative in our financial statements.

In 2022, we licensed two drug development programs from universities and also entered into a new license with JHU-APL for new IP and

other enhancements used with our bfLEAP™ platform.

In 2022, we expended appropriately $608,000 on license related payments for

our bfLEAP™ AI/ML platform and our two drug development programs from universities.

We expect that our research and development

expenses will increase in 2024 as we initiate activities directed towards the development of service offering products, collaborations

(JCVI) and preclinical studies aimed at generating the data to enable the filing of an Investigational New Drug (IND) application.

and Development Costs and Expenses

and development costs and expenses in 2022 consisted primarily of costs related to the acquisition of licensed technology.

have initiated development activities on our licensed drug candidates and our discovery collaboration with JCVI.

In addition to fees

paid to external service providers, we are also allocating internal costs for personnel working on these efforts in addition to personnel

costs related to our internal efforts to develop our product and service offerings using bfLEAP™.

We anticipate our research and

development costs could become significant as we execute on our business plan and begin conducting preclinical research and development

activities directed at securing development partners and filing an IND for our licensed drug development programs described in this filing,

as well as under strategic partnerships and for other drug development programs we may acquire.

Research and development expenses are

recorded in operating expenses in the period in which they are incurred.

Estimates will be used in determining the expense liability

of certain costs where services have been performed but not yet invoiced.

We will monitor levels of performance under each significant

contract for external services through communications with the service providers to reflect the actual amount expended.

and Administrative Expenses

anticipation of the IPO, a management team with deep industry experience was identified and engaged as employees and consultants to assist

the Company in preparing for the IPO and subsequently, to operate and function as a public company.

Through 2022, the primary activities

technology evaluation, acquisition, and validation, capital acquisition and business development activities which in general,

have readied the Company for contract services while exploring strategic partnering and asset acquisition as noted above.

2023, the Company achieved its objective of completing an IPO and listing on NASDAQ.

Our 2023 general and administrative expenses are

significantly higher than our 2022 general and administrative expenses due to several factors.

The primary increases in 2023 relate to

new costs associated with being a public company such as D&O insurance, professional services engaged to support SEC compliance as

well as higher salary and consulting expenses as we have hired additional staff and consultants.

We have also increased our business

development, investor relations and marketing efforts.

We anticipate that our general and administrative expenses may increase in the

future to support our service offerings, clinical and pre-clinical research and development activities associated with strategic partnering

and collaborations.

In 2022, we licensed two drug development programs from universities and entered into a new license with JHU-APL for new intellectual

property and other enhancements used with our bfLEAP™ platform.

We incurred license and annual minimum royalty fees associated

with these relationships in 2023 and 2024, and we expect our research and development expenses to increase in 2025 as we initiate activities

directed towards the development of service offering products, collaborations and preclinical studies aimed at generating the data to

enable the filing of an Investigational New Drug (IND) application.

Development Costs and Expenses

and development costs and expenses in 2023 and 2024 include development activities on our licensed drug candidates and our discovery

collaborations with JCVI.

In addition to fees paid to external service providers, we are also allocating internal costs for personnel

working on these efforts in addition to personnel costs related to our internal efforts to develop our product and service offerings

using bfLEAP™.

We anticipate our research and development costs could become significant as we execute on our business plan and

begin conducting preclinical research and development activities directed at securing development partners and filing an IND for our

licensed drug development programs described in this filing, as well as under strategic partnerships and for other drug development programs

we may acquire.

Research and development expenses are recorded in operating expenses in the period in which they are incurred.

will be used in determining the expense liability of certain costs where services have been performed but not yet invoiced.

We will monitor

levels of performance under each significant contract for external services through communications with the service providers to reflect

the actual amount expended.

Administrative Expenses

and administrative costs and expenses in 2023 and 2024 include personnel costs and costs associated with being a public company such

as D&O insurance, audit and tax provider fees, SEC legal counsel, and exchange listing costs.

Additionally, our general and administrative

costs include expenses for our business development, investor relations and marketing efforts.

We anticipate our general and administrative

expenses increasing in the future to support our service offerings and clinical and pre-clinical research and development activities

associated with strategic partnering and collaborations.

Growth Company and Smaller Reporting Company Status

8 unchanged sentences

exemptions because of the potential differences in accounting standards used.

are also a “smaller reporting company”, meaning that the market value of our stock held by non-affiliates plus the aggregate

amount of gross proceeds to us as a result of the IPO is less than $700 million and our annual revenue was less than $100 million during

the most recently completed fiscal year.

We may continue to be a smaller reporting company if either (i) the market value of our stock

held by non-affiliates is less than $250 million or (ii) our annual revenue was less than $100 million during the most recently completed

fiscal year and the market value of our stock held by non-affiliates is less than $700 million.

If we are a smaller reporting company

at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that

are available to smaller reporting companies.

Specifically, as a smaller reporting company we may choose to present only the two most

recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller

reporting companies have reduced disclosure obligations regarding executive compensation.

are also considered a “smaller reporting company”, meaning that the market value of our stock held by non-affiliates plus

the aggregate amount of gross proceeds to us as a result of the IPO is less than $700 million and our annual revenue was less than $100

million during the most recently completed fiscal year.

We may continue to be a smaller reporting company if either (i) the market value

of our stock held by non-affiliates is less than $250 million or (ii) our annual revenue was less than $100 million during the most recently

completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million.

If we are a smaller reporting

company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements

that are available to smaller reporting companies.

Specifically, as a smaller reporting company we may choose to present only the two

most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies,

smaller reporting companies have reduced disclosure obligations regarding executive compensation.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

a smaller reporting company, this disclosure is not required.

reporting company, the Company is not required to provide the information required by this Item.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis