What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-02-23 compared with 2023-03-16 · 709 added, 528 removed, 346 unchanged (78% of the section changed)

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

BIOPHARMA, INC.

TO FINANCIAL STATEMENTS

FINANCIAL STATEMENTS

of Independent Registered Public Accounting Firm (PCAOB ID:

Balance Sheets as of December 31, 2022 and 2021

Statements of Operations for the Years Ended December 31, 2022 and 2021

Statements of Changes in Stockholders’ Equity (Deficit) for the Years Ended December 31, 2022 and 2021

Statements of Cash Flows for the Years Ended December 31, 2022 and 2021

to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets as of December 31, 2023 and 2022

Consolidated Statements of Operations for the Years Ended December 31, 2023 and 2022

Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the Years Ended December 31, 2023 and 2022

Consolidated Statements of Cash Flows for the Years Ended December 31, 2023 and 2022

Notes to Consolidated Financial Statements

of Independent Registered Public Accounting Firm

the Board of Directors and

of Hillstream BioPharma, Inc.:

the Board of Directors and Stockholders of

on the Financial Statements

have audited the accompanying consolidated balance sheets of Hillstream BioPharma, Inc.

(“Company”) as of December 31, 2022

and 2021, and the related consolidated statements of operations, changes in stockholders’ equity (deficit), and cash flows for

each of the two years in the period ended December 31, 2022, 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 each of the two years in the period

ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

Concern Uncertainty

have audited the accompanying balance sheet of Tharimmune, Inc.

(the Company) as of the year ended December 31, 2023, and the related

consolidated statements of operations, stockholders’ equity, and cash flows for the year ended December 31, 2023, and the related

notes (collectively referred to as the consolidated financial statements).

In our opinion, the consolidated financial statements present

fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and

its cash flows for the year ended December 31, 2023, in conformity with accounting principles generally accepted in the United States

financial statements of Tharimmune, Inc.

as of December 31, 2022, and for the year then ended were audited by other auditors.

in Note 2, these financial statements have been revised to retrospectively apply the reverse stock split on all issued and outstanding

common shares and per share amounts.

We have audited the adjustments that were applied to revise the 2022 financial statements.

opinion, such adjustments are appropriate and have been properly applied.

However, we were not engaged to audit, review or apply procedures

to the 2022 financial statements of the Company other than with respect to such adjustments and, accordingly, we do not express an opinion

or any for of assurance on the 2022 financial statements taken as a whole.

Doubt about the Company’s Ability to Continue as a Going Concern

accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note

1 to the financial statements, the Company has incurred recurring losses and negative cash flows from operations and is dependent on

additional financing to fund operations.

These conditions raise substantial doubt about its ability to continue as a going concern.

plans regarding these matters are also described in Note 1.

The financial statements do not include any adjustments that might result

from the outcome of this uncertainty.

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.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

1 to the financial statements, the Company’s limited operating history, recurring negative cash flows from operations and the Company’s

need for substantial additional funding to support future operating activities raise substantial doubt about its ability to continue

as a going concern.

Management’s plans in regard to these matters are also described in Note 1.

The financial statements do not include

any adjustments that might result from the outcome of this uncertainty.

consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion

on the Company’s consolidated financial statements based on our audit.

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.

conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

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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

As part of our audit,

we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion

1 unchanged sentence

Accordingly, we express no such opinion.

audits included performing procedures to assess the risks of material misstatement of the 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.

have served as the Company’s auditor since 2020.

Mayer Hoffman McCann P.C.

Angeles, California

BIOPHARMA, INC.

audit 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 of disclosures in the consolidated 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.

that our audits provide a reasonable basis for our opinion.

We have served as the Company’s auditor since 2023.

Rosenberg Rich Baker Berman P.A.

February 23, 2024

of Independent Registered Public Accounting Firm

To the Board of Directors and

Stockholders of Tharimmune, Inc.

(formerly Hillstream BioPharma, Inc.):

Opinion on the Financial Statements

We have audited, before the effects of the adjustments

to retrospectively apply the reverse stock split described in Note 2, the accompanying consolidated balance sheet of Tharimmune, Inc.

(formerly Hillstream BioPharma, Inc.) (“Company”) as of December 31, 2022, and the related consolidated statements of operations,

changes in stockholders’ equity (deficit), and cash flows for the year then ended, and the related notes (collectively referred

to as the “financial statements”).

The 2022 financial statements before the effects of the adjustments discussed in Note 2

are not presented herein.

In our opinion, the financial statements, before the effects of the adjustments to retrospectively apply the

reverse stock split described in Note 2, present fairly, in all material respects, the financial position of the Company as of December

31, 2022, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally

accepted in the United States of America.

We were not engaged to audit, review, or apply any

procedures to the adjustments to retrospectively apply the reverse stock split described in Note 2 and, accordingly, we do not express

an opinion or any other form of assurance about whether such adjustments are appropriate and have been properly applied.

Those adjustments

were audited by Rosenberg Rich Baker Berman, P.A.

Going Concern Uncertainty

The accompanying financial statements have been prepared

assuming that the Company will continue as a going concern.

As discussed in Note 1 to the financial statements, the Company has incurred

recurring losses and negative cash flows from operations and is dependent on additional financing to fund operations.

These conditions

raise substantial doubt about its ability to continue as a going concern.

Management’s plans regarding these matters are also described

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These 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

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 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 audit 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 audit included performing procedures to assess

the risks of material misstatement of the 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 audit 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 audit provides a reasonable basis for our opinion.

We served as the Company’s auditor from 2020 to 2023.

/s/ Mayer Hoffman McCann P.C.

Los Angeles, California

BALANCE SHEETS

expenses and other current assets

offering costs

Current assets

AND STOCKHOLDERS’ EQUITY (DEFICIT)

portion of related-party convertible notes, net

Prepaid expenses and other

current assets

Total current assets

LIABILITIES AND STOCKHOLDERS’

Current liabilities

Related-party

convertible notes, net of short-term portion

and contingencies (see Note 9)

Stockholders’

equity (deficit)

stock, $ 0.0001 par value, 10,000,000 shares authorized, no shares issued and outstanding as of December 31, 2022 and 2021

stock, $ 0.0001 par value, 250,000,000 shares authorized, 11,604,970 and 6,357,314 shares issued and 11,514,144 and 6,357,314 shares

outstanding as of December 31, 2022 and 2021, respectively

paid-in capital

( 15,384,432 )

Accounts payable

Accrued expenses

Total current liabilities

Total liabilities

Commitments and contingencies (see Note 9)

Stockholders’ equity

Preferred stock, $ 0.0001 par value, 10,000,000

shares authorized, no shares issued and outstanding as of December 31, 2023 and December 31, 2022

Common stock, $ 0.0001 par value, 250,000,000

shares authorized, 11,743,309 shares and 464,213 shares issued and 11,739,676 shares and 460,580 shares outstanding as of December

31, 2023 and December 31, 2022, respectively

Additional paid-in capital

Accumulated deficit

( 24,703,526 )

stock, at cost, 90,826 and 0 shares held in treasury as of December 31, 2022 and 2021, respectively

stockholders’ equity (deficit)

( 15,384,432 )

liabilities and stockholders’ equity (deficit)

Treasury stock, at cost, 3,633 shares held

in treasury as of December 31, 2023 and December 31, 2022

Total stockholders’

Total liabilities and stockholders’

accompanying notes are an integral part of these consolidated financial statements.

BIOPHARMA, INC.

STATEMENTS OF OPERATIONS

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( 6,881,938 )

income (expenses)

income (expense)

( 1,591,244 )

in redemption value

other income (expenses), net

other income (expense), net

( 1,591,244 )

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accompanying notes are an integral part of these consolidated financial statements.

BIOPHARMA, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

THE YEARS ENDED DECEMBER 31, 2023 AND 2022

4 unchanged sentences

( 8,473,182 )

Exercise of stock

based compensation

issuance pursuant

to services agreement

public offering, net of issuance costs of $ 2,054,918

of related-party

convertible notes

of treasury stock at cost

Balance, December

3 unchanged sentences

( 9,319,094 )

Exercise of stock

based compensation

issuance pursuant to services agreement

public offering, net of issuance costs of $ 2,054,918

public offering, net of issuance costs

of related-party convertible notes

of treasury stock, at cost

offerings, net of

issuance costs of $ 1,925,076

offerings, net of

issuance costs

Exercise of pre-funded

stock-split adjustment

issuance pursuant to

service agreements

December 31, 2023

$ ( 24,703,526 )

accompanying notes are an integral part of these consolidated financial statements.

BIOPHARMA, INC.

STATEMENTS OF CASH FLOWS

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issuance pursuant to services agreement

Interest and original issuance discount on promissory notes

in fair value of redemption liability

( 1,832,651 )

and original issuance discount on promissory notes

decrease in operating assets:

expenses and other current assets

(decrease) in:

(decrease) in operating liabilities:

cash used in operating activities

1 unchanged sentence

( 6,557,950 )

cash provided by (used in) investing activities

flows from financing activities:

2 unchanged sentences

from issuance of common stock upon initial public offering, net of underwriting discounts and issuance costs

from issuance of common stock upon public offering, net of underwriting discounts and issuance costs

of deferred offering costs

of pre-funded warrants

from insurance premium financing liability

of insurance premium financing liability

from promissory notes

Repayments on promissory notes

from related party convertible notes

on promissory notes

cash provided by financing activities

increase (decrease) in cash

increase in cash

beginning of period

end of period

Cash paid for interest expense

disclosure of non-cash financing activities:

of common stock for prepaid marketing and investor related consulting services

of related party convertible notes:

party convertible note principal converted to common stock upon initial public offering

party convertible note accrued interest converted to common stock upon initial public offering

party convertible notes principal converted to common stock upon initial public offering

party convertible notes accrued interest converted to common stock upon initial public offering

liability converted to common stock upon initial public offering

deferred offering costs

interest rollover to new notes payable

accompanying notes are an integral part of these consolidated financial statements.

BIOPHARMA, INC.

TO CONSOLIDATED FINANCIAL STATEMENTS

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of Operations

BioPharma, Inc.

(“HBI”) was incorporated on March 28, 2017, as a Delaware C-corporation.

At December 31, 2022, Hillstream

BioPharma, Inc.

had two wholly-owned subsidiaries:

(formerly, Hillstream BioPharma, Inc.) (“Tharimmune” or the “Company”) was incorporated on March 28, 2017,

as a Delaware C-corporation.

At December 31, 2023, Tharimmune had one wholly-owned subsidiary:

HB Pharma Corp.

(“HB”) and Farrington Therapeutics LLC (“Farrington”

and together with HBI and HB, the “Company”).

HBI is a pre-clinical biotechnology company developing novel therapeutic

candidates targeting ferroptosis, an emerging new anti-cancer mechanism resulting in iron mediated cell death (“IMCD”), and

targeted immuno-oncology novel biologics, for the treatment drug resistant cancers.

The Company’s most advanced product candidate,

HSB-1216, is an IMCD inducer, targeting a variety of solid tumors.

In a clinical pilot study conducted at the University of Heidelberg,

Germany, the active drug in HSB-1216 was found to reduce tumor burden in treatment resistant cancers, including triple negative breast

cancer and epithelial carcinomas.

The Company utilizes Quatramer™, its proprietary tumor targeting platform, to enhance the uptake

of HSB-1216 in the tumor microenvironment with an extended duration of action and minimal off-target toxicity.

The Company’s goal

is to submit an investigational new drug application (“IND”) to the U.S.

Food and Drug Administration (“FDA”)

and initiate a clinical study with HSB-1216 in the second half of 2023;

however, no assurance can be provided that the Company’s

IND will be accepted by the FDA in 2023, if at all.

If the Company’s IND is accepted by the FDA, the Company’s HSB-1216 clinical

studies will focus on expanding upon the clinical pilot study conducted in Germany.

If the Company able to initiate its clinical study

with HSB-1216 in the second half of 2023, it anticipates that clinical data from such trial will be released either late 2024 or early

Tharimmune is a clinical-stage biotechnology company developing therapeutic candidates in rare, inflammatory, and oncologic conditions

with high unmet need.

On November 3, 2023, the Company entered into a patent license agreement (the “Avior License Agreement”)

with Avior Inc.

d/b/a Avior Bio, LLC (“Avior”) pursuant to which it received an exclusive sublicensable right and license

to Licensed Patent Rights and Licensed Technology to, among other things, Develop, have Developed, make, have made, use, sell, import,

export and commercialize TH104 and TH10) and to practice the Licensed Technology in connection with the foregoing, throughout the world

(each as defined in the Avior License Agreement.

In February 2023, the U.S.

Food and Drug Administration (“FDA”) approved

an investigational new drug (“IND”) application for TH104.

TH104 has a dual mechanism of action by affecting multiple receptors,

known to suppress chronic, debilitating pruritis or “uncontrollable itching.” With respect to TH104, the Company intends

to first seek approval for the treatment of moderate to severe chronic pruritis in patients with primary biliary cholangitis (“PBC”),

an orphan rare form of liver disease with no known cure in which more than 70% of patients suffer from debilitating chronic pruritis,

and with respect to TH103, it intends to develop the product candidate and potentially file an IND.

Company is also developing an early-stage pipeline of novel therapeutic candidates targeting validated high value immuno-oncology (“IO”)

targets including human epidermal growth factor (“EGF”) receptor 2 (“HER2”), human EGF receptor 3 (“HER3”)

and programmed cell death protein 1 (“PD-1”).

The Company is developing antibodies including bispecific antibodies, antibody

drug conjugates (“ADCs”) and small molecular weight bovine-derived Picobodies™ or antibody “knob” domains

which have the potential to target and bind more tightly to “undruggable” epitopes better than full sized antibodies.

Company is advancing TH3215, a bispecific against both HER2 and HER3 antibody which targets a novel “bridging epitope” encompassing

multiple domains of the HER2 extracellular domain (“ECD”) as well as ligand-dependent and independent blocking of the ECD

of HER3 into IND-enabling studies in 2024.

In addition, the Company anticipates that TH0059, a HER2/HER3 bispecific ADC (“bsADC”),

and TH1940, a PD-1 Picobody, will progress to enter IND-enabling studies in 2024.

Company has deprioritized its previous preclinical candidate, HSB-1216, due to a strategic reprioritization of its vision to focus on

therapeutics in high unmet need cancers focused on novel epitopes of certain antitumor drug targets.

September 21, 2023, Hillstream BioPharma, Inc.

filed a Certificate of Amendment (the “Amendment”) to its Certificate of Incorporation,

as amended (the “Certificate of Incorporation”), with the Secretary of State of the State of Delaware pursuant to which it

changed its name to Tharimmune, Inc.

effective as of September 25, 2023.

The name change became effective with The Nasdaq Capital Market

on September 25, 2023 and the Company’s common stock has since traded on The Nasdaq Capital Market under the new name and new ticker

symbol, “THAR.”

and Going Concern

accompanying consolidated financial statements have been prepared on the basis that the Company is a going concern, which contemplates,

among other things, the realization of assets and satisfaction of liabilities in the normal course of business.

For the year ended December

31, 2022, the Company incurred operating losses in the amount of approximately $ 6.9 million, expended approximately $ 6.6 million in cash

used in operating activities, and had an accumulated deficit of approximately $ 15.4 million as of December 31, 2022.

The Company financed

its working capital requirements through December 31, 2022 primarily through the issuance of common stock in its initial public offering

Net proceeds to the Company from the IPO were approximately $ 13.0 million.

See Note 5 to the consolidated financial

statements for details regarding the IPO.

The shares of the Company’s common stock began trading on The Nasdaq Capital Market on

January 12, 2022 under the ticker symbol “HILS.”

accompanying consolidated financial statements have been prepared on the basis that the Company will continue as a going concern, which

contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business.

the year ended December 31, 2023, the Company incurred operating losses in the amount of approximately $ 9.5 million, expended approximately

$ 7.3 million in net cash used in operating activities, and had an accumulated deficit of approximately $ 24.7 million as of December 31,

Through December 31, 2023, the Company has primarily financed its operations through public and private offerings of equity securities.

The Company received net proceeds from its initial public offering (“IPO”) on January 14, 2022 of approximately $ 12.5 million.

Additionally, the Company closed a public offering (the “May Offering”) of its common stock on May 2, 2023.

to the Company from the offering were approximately $ 2.1 million.

The Company recently closed an additional public offering (the “November

Offering”) of its common stock on November 30, 2023.

Net proceeds to the Company from the offering were approximately $ 8.7 million.

Also see Note 5 to the consolidated financial statements for details regarding the May and November Offerings.

The shares of the Company’s

common stock began trading on The Nasdaq Capital Market on January 12, 2022 under the ticker symbol “HILS” and effective

as of September 25, 2023, are traded under the ticker symbol “THAR.”

on the Company’s limited operating history, recurring negative cash flows from operations, current plans and available resources,

1 unchanged sentence

The Company has concluded that the prevailing

conditions and ongoing liquidity risks faced by the Company raise substantial doubt about the Company’s ability to continue as

a going concern for at least one year following the date these financial statements are issued.

conditions and ongoing liquidity risks faced raise substantial doubt about the Company’s ability to continue as a going concern

for at least one year following the date these consolidated financial statements are issued.

The accompanying consolidated financial

1 unchanged sentence

Company may seek to raise additional funding through the sale of additional equity or debt securities, enter into strategic partnerships,

grants or other arrangements or a combination of the foregoing to support its future operations.

There can be no assurance that the Company

will be able to obtain additional capital on terms acceptable to the Company, on a timely basis or at all.

The failure to obtain sufficient

additional funding could adversely affect the Company’s ability to achieve its business objectives and product development timelines

and may result in the Company delaying or terminating clinical trial activities

which could have a material adverse effect on the Company’s results of operations.

grants, or other arrangements or a combination of the foregoing to support its future operations, however, there can be no assurance

that the Company will be able to obtain additional capital on terms acceptable to the Company, on a timely basis or at all.

to obtain sufficient additional funding could adversely affect the Company’s ability to achieve its business objectives and product

development timelines and may result in the Company delaying or terminating clinical trial activities which could have a material adverse

effect on the Company’s results of operations.

Risks and Uncertainties

12 unchanged sentences

approvals or clearances.

Considerations

March 11, 2020, the World Health Organization characterized the outbreak of a novel strain of coronavirus (“COVID-19”) as

a pandemic, prompting many national, regional, and local governments to implement preventative or protective measures, such as travel

and business restrictions, temporary store closures and capacity limitations, and wide-sweeping quarantines and stay-at-home orders.

As a result, COVID-19 and the related restrictive measures have had a significant adverse impact upon many sectors of the economy.

a result of the COVID-19 pandemic, the Company had to delay the start of its IND enabling studies for over a year.

As the COVID-19 situation

continues to evolve, the Company intends to closely monitor the impact of the COVID-19 pandemic on all aspects of its business, including,

but not limited to, impacts on third-party contractors, suppliers, vendors and employees.

The Company believes that the ultimate impact

of the COVID-19 pandemic on operating results, cash flows, and financial condition is likely to be determined by factors which are uncertain,

unpredictable, and outside of the Company’s control.

The situation surrounding COVID-19 remains fluid, and if disruptions arise,

they could have a material adverse impact on the Company’s business.

2 – Summary of Significant Accounting Policies

3 unchanged sentences

The Company operates in one segment.

September 16, 2021, the Company effectuated a reverse split of shares of its common stock at a ratio of 1-for-26.4 pursuant to an amendment

November 17, 2023, the Company effectuated a reverse split of shares of its common stock at a ratio of 1-for-25 pursuant to an amendment

to the Company’s Certificate of Incorporation, as amended, filed with the Delaware Secretary of State and approved by the Company’s

4 unchanged sentences

of Consolidation

consolidated financial statements include the accounts of HBI and its wholly-owned subsidiaries, HB and Farrington.

All significant intercompany

balances and transactions have been eliminated in consolidation.

consolidated financial statements include the accounts of Tharimmune and its wholly-owned subsidiaries, HB and Farrington Therapeutics

All significant intercompany balances and transactions have been eliminated in consolidation.

On February 27, 2023, the Company

filed a Certificate of Cancellation with the Delaware Secretary of State with respect to Farrington Therapeutics LLC.

preparation of financial statements in conformity with U.S.

6 unchanged sentences

estimates of the ultimate future outcomes, and management must select an amount that falls within that range of reasonable estimates.

Estimates are used in the following areas, among others:

valuation of common shares and stock options prior to the IPO, allowances of

deferred tax assets, valuation of debt related instruments, and cash flow assumptions regarding going concern considerations.

management believes the estimates that have been used are reasonable, actual results could vary from the estimates that were used.

Areas of the consolidated financial statements where estimates may have the most significant effect include research and development

expense recognition, valuation of common shares and share-based compensation, allowances of deferred tax assets, valuation of debt related

instruments, and cash flow assumptions regarding going concern considerations.

Although management believes the estimates that have been

used are reasonable, actual results could vary from the estimates that were used.

Concentration

6 unchanged sentences

The Company has not experienced losses in such accounts.

Company believes that it is not subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

The Company believes that it is not subject

to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

and Cash Equivalents

Company considers all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash

Cash equivalents, if any, are stated at cost and consist primarily of money market accounts.

and Development

8 unchanged sentences

services completed.

Approximately $ 61,000 of prepaid expenses at December 31, 2022 and 2021 relate to a manufacturing services agreement.

Based Compensation

Approximately $ 61,000 of prepaid expenses at December 31, 2022 related to a manufacturing services agreement.

Company recognizes compensation costs resulting from the issuance of stock-based awards to employees, non-employees, and directors as

3 unchanged sentences

using the Black-Scholes option-pricing model, net of actual forfeitures.

The fair value is amortized as compensation cost on a straight-line

The fair value is amortized as compensation cost on the straight-line

basis over the requisite service period of the awards, which is generally the vesting period.

1 unchanged sentence

Prior to January

12, 2022, the Company was a private company and the Company’s common stock has been publicly traded since that date.

the Company has lacked company-specific historical and implied volatility information.

Therefore, it has estimated its expected stock

volatility based on the historical data regarding the volatility of a publicly traded set of peer companies.

The expected term of stock

options granted was between five and seven years.

12, 2022, the Company was a private company and the Company’s common stock has only been publicly traded since that date.

result, the Company has lacked company-specific historical and implied volatility information.

Therefore, it has estimated its expected

stock volatility based on the historical data regarding the volatility of a publicly traded set of peer companies.

The expected term

of stock options granted was between five and seven years.

The risk-free interest rate was determined by reference to the U.S.

Treasury yield

curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award.

Stock Valuations

to the IPO, the Company was required to periodically estimate the fair value of common stock with the assistance of an independent third-party

valuation expert when issuing stock options and computing its estimated stock based compensation expense and value of shares issued in

acquiring product candidates.

The assumptions underlying these valuations represented management’s best estimates, which involved

inherent uncertainties and the application of significant levels of management judgment.

In order to determine the fair value, the Company

considered, among other things, contemporaneous valuations of the Company’s common stock;

the Company’s business, financial

condition and results of operations, including related industry trends affecting its operations;

the likelihood of achieving various

liquidity events;

the lack of marketability of the Company’s common stock;

the market performance of comparable publicly traded

and global economic and capital market conditions.

After the closing of the Company’s IPO on January 14, 2022,

the fair value of common stock is determined by using the closing price of the Company’s common stock on The Nasdaq Capital Market.

Company’s board of directors has authorized the repurchase of up to $ 1

million of shares of the Company’s common stock, from time to time, ending December 31, 2022, in the open market or through

privately-negotiated transactions, at such times and at such prices as the Company’s management may decide.

Treasury stock

purchases are accounted for under the cost method whereby the entire cost of the acquired common stock is recorded as treasury

yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award.

Company’s board of directors authorized the repurchase of up to $ 1 million of shares of the Company’s common stock, from

time to time, until December 31, 2022, in the open market or through privately-negotiated transactions, at such times and at such prices

as the Company’s management may decide.

Treasury stock purchases are accounted for under the cost method whereby the entire cost

of the acquired common stock is recorded as treasury stock.

Discount and Derivative Instruments

2 unchanged sentences

Amortization of debt discount

is recorded as a component of interest expense.

was recorded as a component of interest expense.

If a loan is paid in full, any unamortized debt discounts will be removed from the related

1 unchanged sentence

As the convertible debt was converted into common stock at the date of the IPO, the unamortized debt

discount was charged to interest expense.

In accordance with Financial Accounting Standards Board

(“FASB”) Accounting Standards Update (“ASU”) 2015-03, Interest - Imputation of Interest , the unamortized

debt discount at December 31, 2021 was presented in the accompanying consolidated balance sheet as a direct deduction from the carrying

amount of the related debt.

Company accounts for derivative instruments in accordance with FASB Accounting Standards Codification

(“ASC”) 815, Derivative and Hedging , which establishes accounting and reporting standards for derivative instruments,

including certain derivative instruments embedded in other financial instruments or contracts and requires recognition of all derivatives

on the balance sheet at fair value.

The Company’s derivative financial instrument consisted of an embedded feature contained in

the Company’s convertible debt that was bifurcated and accounted for separately.

See Note 3 to the consolidated financial statements

for further details.

discount of $ 1,569,003 was charged to interest expense during the year ended December 31, 2022.

Company accounts for derivative instruments in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards

Codification (“ASC”) Topic 815, Derivative and Hedging , which establishes accounting and reporting standards for derivative

instruments, including certain derivative instruments embedded in other financial instruments or contracts and requires recognition of

all derivatives on the balance sheet at fair value.

The Company’s derivative financial instrument consisted of an embedded feature

contained in the Company’s convertible debt that was bifurcated and accounted for separately.

See Note 3 to the consolidated financial

statements for further details.

Value Measurements

Company applies FASB ASC 820, Fair Value Measurement (“ASC 820”), which establishes a framework for measuring fair

value and clarifies the definition of fair value within that framework.

ASC 820 defines fair value as an exit price, which is the price

that would be received for an asset or paid to transfer a liability in the Company’s principal or most advantageous market in an

orderly transaction between market participants on the measurement date.

The fair value hierarchy established in ASC 820 generally requires

an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

Company applies FASB ASC Topic 820, Fair Value Measurement (“ASC 820”), which establishes a framework for measuring

fair value and clarifies the definition of fair value within that framework.

ASC 820 defines fair value as an exit price, which is the

price that would be received for an asset or paid to transfer a liability in the Company’s principal or most advantageous market

in an orderly transaction between market participants on the measurement date.

The fair value hierarchy established in ASC 820 generally

requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

inputs reflect the assumptions that market participants would use in pricing the asset or liability and are developed based on market

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and are to be developed based on the best information available in the circumstances.

carrying value of the Company’s prepaid expenses, accounts payable, and accrued expenses approximate fair value because of the

short-term maturity of these financial instruments.

The redemption feature of the debt instruments is recorded at fair value.

4 to the consolidated financial statements for further details.

carrying value of the Company’s cash, prepaid expenses, accounts payable, and accrued expenses approximate fair value because of

the short-term maturity of these consolidated financial instruments.

The redemption feature of the debt instruments is recorded at fair

See Note 4 to the consolidated financial statements for further details.

valuation hierarchy is composed of three levels.

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Offering Costs

offering costs consisted of legal, accounting, printing, and filing fees that the Company capitalized which were offset against the proceeds

from the IPO.

Company accounts for income taxes using the asset-and-liability method in accordance with FASB ASC 740, Income Taxes (“ASC

offering costs consists primarily of legal, accounting, underwriters’ fees, printing, and filing fees that are incurred prior to

an offering of the Company’s common stock and are initially capitalized and then subsequently reclassified to additional paid-in

capital upon completion of the offering.

If an offering is not completed, any associated offering costs will be expensed immediately

upon termination of the offering.

Premium Financing Liability

January 2022, the Company entered into an insurance premium financing agreement for $ 1,207,200 , with a term of 10 months and an annual

interest rate of 3.5 %.

The Company made a down payment of $ 289,728 and was required to make monthly principal and interest payments of

$ 93,225 over the term of the agreement, which was repaid in full in November 2022.

January 2023, the Company entered into an insurance premium financing agreement for $ 955,700 , with a term of nine months and an annual

interest rate of 5.25 %.

The Company made a down payment of $ 238,925 and was required to make monthly principal and interest payments

of $ 81,394 over the term of the agreement, which was repaid in full in October 2023.

Company has a 401(k) defined contribution plan which covers all employees that meet the plan’s eligibility requirements.

employees may contribute a percentage of their salary subject to certain limitations.

The Company makes a discretionary match which is

currently equal to 3% of employee contributions.

Total company contributions to the plan were $ 19,336 and $ 10,696 for the years ended

December 31, 2023 and 2022, respectively.

Company accounts for income taxes using the asset-and-liability method in accordance with FASB ASC Topic 740, Income Taxes (“ASC

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the

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to reduce certain deferred tax assets when, in management’s estimation, it is more-likely-than-not that a tax benefit will not

A valuation allowance has been recognized for all periods since it is more-likely-than-not that some portion or all of the

deferred tax assets will not be realized in future periods.

Company follows the guidance in FASB ASC Topic 740-10 in assessing uncertain tax positions.

A full valuation allowance has been recognized for all periods since it is more-likely-than-not that some portion or all

of the deferred tax assets will not be realized in future periods.

Company follows the guidance in FASB ASC Subtopic 740-10 in assessing uncertain tax positions.

The standard applies to all tax positions

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related to tax positions in income tax expense.

At December 31, 2022 and 2021, the Company had no unrecognized uncertain income

tax positions, and therefore no amounts have been recognized in the consolidated financial statements.

At December 31, 2023 and 2022, the Company had no unrecognized uncertain income tax positions,

and therefore no amounts have been recognized in the consolidated financial statements.

Loss per Share

Company reports loss per share in accordance with FASB ASC 260-10, Earnings Per Share , which provides for calculation of basic

and diluted earnings per share.

Basic earnings per share includes no dilution and is computed by dividing net income or loss available

to common stockholders by the weighted average common shares outstanding for the period.

Diluted earnings per share reflect the potential

dilution of securities that could share in the earnings of an entity.

The calculation of diluted net earnings (loss) per share gives

Company reports loss per share in accordance with FASB ASC Subtopic 260-10, Earnings Per Share , which provides for calculation

of basic and diluted earnings per share.

Basic earnings per share includes no dilution and is computed by dividing net income or loss

available to common stockholders by the weighted average common shares outstanding for the period.

Diluted earnings per share reflect

the potential dilution of securities that could share in the earnings of an entity.

The calculation of diluted net loss per share gives

effect to common stock equivalents;

however, potential common shares are excluded if their effect is anti-dilutive.

dilutive securities not included in the computation of loss per share for the years ended December 31, 2022 and 2021 included options

to purchase 1,628,813 and 903,468 shares of common stock, respectively.

All common share amounts as of December 31, 2022 and 2021 and

per share amounts for the years ended December 31, 2022 and 2021 have been adjusted to reflect a 1-for-26.4 reverse stock split of the

Company’s common stock effectuated on September 16, 2021.

Other potentially dilutive securities also not included in the computation

of loss per share for the year ended December 31, 2022 included warrants to purchase 187,500 shares of the Company’s common stock.

dilutive securities not included in the computation of loss per share for the years ended December 31, 2023 and 2022 included

options to purchase 90,758

shares of common stock, respectively.

Other potentially dilutive securities also not included in the computation of loss per share

for the years ended December 31, 2023 and 2022 included warrants to purchase 7,500

shares of the Company’s common stock related to the IPO and for the year ended December 31, 2023, warrants to purchase an

additional 6,360

shares of the Company’s common stock related to the public offering which closed on May 2, 2023.

All common share amounts as

of December 31, 2023 and 2022 and per share amounts for the years ended December 31, 2023 and 2022 have been retroactively adjusted

to reflect a 1-for-25

reverse stock split of the Company’s common stock effectuated on November 17, 2023.

Adopted Accounting Pronouncements

Company has evaluated all recent accounting pronouncements and believes that none of them will have a material effect on the Company’s

financial position, results of operations, or cash flows, including as described below.

May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic

470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity

(Subtopic 815-40).

This ASU addresses an issuer’s accounting for certain modifications or exchanges of freestanding equity-classified

written call options.

This amendment is effective for fiscal years beginning after December 15, 2021, including interim periods within

those fiscal years, and was effective for the Company beginning January 1, 2022.

This ASU did not have a material impact on the Company’s

consolidated financial statement presentation.

October 2020, the FASB issued ASU 2020-10, Codification Improvements .

The guidance contains improvements to the Codification by

ensuring that all guidance that requires or provides an option for an entity to provide information in the notes to financial statements

is codified in the Disclosure Section of the Codification.

The guidance also contains Codifications that are varied in nature and may

affect the application of the guidance in cases in which the original guidance may have been unclear.

amendment is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years, and was

effective for the Company beginning January 1, 2022.

This ASU did not have a material impact on the Company’s consolidated financial

statement presentation.

Company has evaluated all recent accounting pronouncements that were required to be adopted and believes that none of them will have

a material effect on the Company’s financial position, results of operations, or cash flows.

Accounting Pronouncements Not Yet Adopted

with Conversion and Other Options and Derivatives and Hedging

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”), to reduce complexity in applying US GAAP to certain financial instruments with characteristics of liabilities

The guidance in ASU 2020-06 simplifies the accounting for convertible debt instruments and convertible preferred stock by

removing the existing guidance that requires entities to account for beneficial conversion features and cash conversion features in equity,

separately from the host convertible debt or preferred stock.

The guidance in FASB ASC Subtopic 470-20 applies to convertible instruments

for which the embedded conversion features are not required to be bifurcated from the host contract and accounted for as derivatives.

In addition, the amendments revise the scope exception from derivative accounting in FASB ASC Subtopic 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.

These amendments are expected to result in more freestanding financial

instruments qualifying for equity classification (and, therefore, not accounted for as derivatives), as well as fewer embedded features

requiring separate accounting from the host contract.

The amendments in ASU 2020-06 further revise the guidance in FASB 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.

The amendments in ASU 2020-06 are effective for public entities that meet the definition of an SEC filer,

excluding smaller reporting companies as defined by the SEC for fiscal years beginning after December 15, 2021.

For all other entities,

including the Company, the amendments are effective for fiscal years beginning after December 15, 2023.

Early adoption is permitted.

The Company is currently evaluating the impact this standard will have on its consolidated financial statements.

FASB issued Accounting Standards Update (“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”), to reduce complexity in applying U.S.

GAAP to certain financial

instruments with characteristics of liabilities and equity.

The guidance in ASU 2020-06 simplifies the accounting for convertible debt

instruments and convertible preferred stock by removing the existing guidance that requires entities to account for beneficial conversion

features and cash conversion features in equity, separately from the host convertible debt or preferred stock.

The guidance in ASC Subtopic

470-20 applies to convertible instruments for which the embedded conversion features are not required to be bifurcated from the host

contract and accounted for as derivatives.

In addition, the amendments revise the scope exception from derivative accounting in ASC Subtopic

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.

These amendments are expected to result

in more freestanding financial instruments qualifying for equity classification (and, therefore, not accounted for as derivatives), as

well as fewer embedded features requiring separate accounting from the host contract.

The amendments in ASU 2020-06 further revise the

guidance in FASB ASC Topic 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.

The amendments in ASU 2020-06 are effective for public entities that

meet the definition of an SEC filer, excluding smaller reporting companies as defined by the SEC for fiscal years beginning after December

For all other entities, including the Company, the amendments are effective for fiscal years beginning after December 15, 2023.

The Company adopted this guidance effective January 1, 2024 and the adoption of ASU 2020-06 did not have a material impact on its consolidated

financial statements.

3 – Convertible Notes - Related Parties

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and derivative liability at the issuance date at their estimated fair value for all Notes of approximately $ 2.4 million.

of debt discount for the Notes recorded as interest expense was approximately $ 1.6 million and $ 667,000 for the years ended December

31, 2022 and 2021, respectively.

The amount for the year ended December 31, 2022 contains amortization charged to interest expense of

approximately $ 34,000 up to the date of the IPO and the full amount of the unamortized debt discount of approximately $ 1.5 million charged

to interest expense on the date of the IPO.

interest expense associated with the Notes at December 31, 2021 was approximately $ 180,000 .

Accrued interest at the date of the IPO was

approximately $ 187,000 and was converted into common stock as the IPO qualified as a Next Equity Financing.

Total interest expense, including

accrued interest and amortization of the debt discount, amounted to approximately $ 1.6 million and $ 831,000 for the years ended December

31, 2022 and 2021, respectively.

carrying value of the outstanding related-party convertible notes at December 31, 2021 was as follows:

of Convertible Debt

amount outstanding

debt discount, net of accumulated amortization

( 1,569,003 )

carrying value

October 1, 2020, all Notes which matured, and were not repaid or converted, were rolled over, including the default interest rate of

20 % as disclosed above.

Approximately $ 805,000 of such Notes were rolled over through December 31, 2021, of which approximately $ 166,000

occurred prior to December 31, 2020 and approximately $ 639,000 occurred between January 1, 2021 and December 31, 2021.

Since the terms

of the new notes were not substantially different from the Notes, this was not accounted for as a debt modification or debt extinguishment.

of debt discount for the Notes recorded as interest expense was approximately $ 1.6 million for the year ended December 31, 2022.

amount contains amortization charged to interest expense of approximately $ 34,000 up to the date of the IPO and the full amount of the

unamortized debt discount of approximately $ 1.5 million charged to interest expense on the date of the IPO.

interest expense associated with the Notes at the date of the IPO was approximately $ 187,000 and was converted into common stock upon

completion of the IPO.

4 – Redemption Liability

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The significant assumptions utilized in these calculations are the possible exit scenarios (either a conversion of the principal

and accrued interest of the Notes in the event of a Next Equity Financing (see Note 3 to the consolidated financial statements), a repayment

of the Notes and accrued interest in the event of a corporate transaction (as defined in the Notes) or a repayment of the Notes and accrued

interest at maturity), the pre-money valuation of the Company’s common stock, the probabilities of such exit events occurring,

and discounts/premiums available to the Holders at such measurement dates.

The calculation of the redemption liability at December 31,

2021 was based upon the actual incremental value derived by the Holders at the IPO date.

The fair value of the redemption liability is

re-measured at each period and is summarized as of December 31, 2021 as follows:

of Fair Value of Redemption Liability

Beginning balance as

of December 31, 2020

embedded redemption value

in fair value

( 1,832,651 )

balance as of December 31, 2021

change in fair value of a gain of approximately $ 1.8

million as of December 31, 2021, was recorded as a component of other income (expenses) in the accompanying consolidated statements of

The balance of approximately $ 980,000 as of December 31, 2021 and as of the

date of the IPO was converted into common stock in connection with the related-party convertible debt to which it related.

and accrued interest of the Notes in the event of a Next Equity Financing, further described in Note 3 to the consolidated financial

statements, a repayment of the Notes and accrued interest in the event of a corporate transaction (as defined in the Notes) or a repayment

of the Notes and accrued interest at maturity, the pre-money valuation of the Company’s common stock, the probabilities of such

exit events occurring, and discounts/premiums available to the Holders at such measurement dates.

The calculation of the redemption liability

prior to the IPO was based upon the actual incremental value derived by the Holders at the IPO date.

The balance of approximately $ 980,000

as of the date of the IPO was converted into common stock in connection with the related-party convertible debt to which it related.

5 – Common Stock

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shares of common stock to 250,000,000 shares.

See the Net Loss Per Share section of Note 2 to the consolidated financial statements for

a discussion of the reverse stock split effectuated on September 16, 2021.

On November 17, 2023, the Company effectuated a reverse split of shares of its common stock

at a ratio of 1-for-25 pursuant to an amendment to the Company’s Certificate of Incorporation filed with the Delaware Secretary

of State and approved by the Company’s board of directors and stockholders.

The par value of the Company’s common stock was

not adjusted as a result of the reverse stock split.

January 14, 2022, the Company closed the IPO pursuant to which it issued 150,000 shares of its common stock at a public offering price

of $ 100.00 per share.

The gross proceeds to the Company from the IPO were $ 15.0 million, prior to deducting underwriting discounts of approximately

$ 1.1 million and commissions and other offering expenses of approximately $ 1.0 million.

Other offering expenses include deferred offering

costs of approximately $ 547,000 that were capitalized prior to December 31, 2021 and additional costs incurred prior to the date of the

The net proceeds to the Company from the IPO were approximately $ 13.0 million.

The Company granted the underwriters a 45-day option

to purchase up to an additional 562,500 shares of common stock at the public offering price less discounts and commissions, to cover

over-allotments;

The gross proceeds to the Company from the IPO were $ 15.0 million, prior to deducting underwriting discounts of

approximately $ 1.1 million and commissions and other offering expenses of approximately $ 1.0 million.

Other offering expenses include

deferred offering costs of approximately $ 547,000 that were capitalized and additional costs incurred prior to the date of the IPO.

net proceeds to the Company from the IPO were approximately $ 12.5 million.

The Company granted the underwriters a 45-day option to purchase

up to an additional 22,500 shares of common stock at the public offering price less discounts and commissions, to cover over-allotments;

however, this option expired unexercised.

Additionally, and as a result of the completion of the IPO, all of the Company’s

convertible debt and accrued interest was converted into an aggregate of 1,225,384 shares of the Company’s common stock pursuant

to the terms of the Notes.

Outstanding principal of approximately $ 3.7 million, accrued interest of approximately $ 187,000 , and a redemption

liability of approximately $ 980,000 were converted to common stock as the IPO qualified as a Next Equity Financing.

In addition, the

Company issued warrants in connection with the IPO.

See Note 6 to the consolidated financial statements for a discussion of the warrants

Additionally, and as a result of the completion of the IPO, all of the Company’s convertible

debt and accrued interest was converted into an aggregate of 49,015 shares of the Company’s common stock pursuant to the terms

of the Notes.

Outstanding principal of approximately $ 3.7 million, accrued interest of approximately $ 187,000 , and a redemption liability

of approximately $ 980,000 were converted to common stock as the IPO qualified as a Next Equity Financing.

In addition, the Company issued

warrants in connection with the IPO.

See Note 6 to the consolidated financial statements for a discussion of the warrants issued.

February 16, 2022, the Company entered into an agreement for marketing and investor related consulting services.

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On the effective date of February

16, 2022, the Company issued 31,746 shares of common stock with a per share value of $ 3.15 and a total value of $ 100,000 as compensation

June 9, 2022, the Company’s Board of Directors authorized the repurchase of up to $ 1.0 million of shares of the Company’s

common stock until December 31, 2022.

16, 2022, the Company issued 1,270 shares of its common stock with a per share value of $ 78.75 and a total value of $ 100,000 as compensation

The agreement automatically renews annually and upon renewal, a payment of $ 100,000 of shares of the Company’s common

stock is issued.

On February 16, 2023, the agreement was renewed and on the effective date of August 22, 2023, an additional 2,801 shares

of the Company’s common stock were issued with a per share value of $ 35.70 (as calculated based on the trailing 10-day average

closing value of the Company’s common stock prior to the renewal date) representing compensation expense of $ 100,000 .

June 9, 2022, the Company’s Board of Directors authorized the repurchase of up to $ 1,000,000 shares of the Company’s common

stock until December 31, 2022.

On June 10, 2022, the Company entered into a Repurchase Agreement (the “Repurchase Agreement”)

with a financial institution pursuant to which such financial institution may purchase shares of the Company’s common stock upon

the terms and conditions set forth in such agreement, including in accordance with the guidelines specified in Rules

10b5-1 and 10b-8 under the Securities Exchange Act of 1934, as amended .

the Company’s common stock were able to be repurchased in open market or through privately-negotiated transactions.

to the Repurchase Agreement, the financial institution ceased purchasing shares of the Company’s common stock at the earlier of

(i) the close of trading on December 31, 2022, (ii) the completion of repurchases up to the approved

amount and (iii) the date upon which the Company gives notice of termination of the Repurchase Agreement to the financial institution.

The Company determined the timing and amount of any repurchases based upon its evaluation of market conditions, applicable SEC guidelines

and regulations, and other factors.

the year ended December 31, 2022, the Company purchased 90,826 shares of its common stock for a total purchase cost of approximately

with a financial institution pursuant to which such financial institution was able to purchase shares of the Company’s common stock

upon the terms and conditions set forth in such agreement, including in accordance with the guidelines specified in Rules 10b5-1 and

10b-8 under the Securities Exchange Act of 1934, as amended.

Shares of the Company’s common stock could be repurchased in open

market or through privately-negotiated transactions.

Pursuant to the Repurchase Agreement, the financial institution was to cease purchasing

shares of the Company’s common stock upon the earlier of (i) the close of trading on December 31, 2022, (ii) the completion of

repurchases up to the approved amount and (iii) the date upon which the Company gave notice of termination of the Repurchase Agreement

to the financial institution.

The Company determined the timing and amount of any repurchases based upon its evaluation of market conditions,

applicable SEC guidelines and regulations, and other factors.

the year ended December 31, 2022, the Company purchased 3,633 shares of its common stock, respectively, for a total purchase cost of

approximately $ 70,000 .

March 17, 2023, the Company filed a Registration Statement on Form S-3 with the SEC using a “shelf” registration process

pursuant to which, the Company may sell, from time to time in one or more offerings, shares of common stock and preferred stock, various

series of debt securities and/or warrants to purchase any of such securities, either individually or as units comprised of a combination

of one or more of the other securities in one or more offerings up to a total dollar amount of $ 75 million.

May 2, 2023, the Company closed a public offering pursuant to which it issued 212,000 shares of its common stock at a public offering

price of $ 12.50 per share.

The gross proceeds to the Company from the public offering were approximately $ 2.7 million, prior to deducting

underwriting discounts and commissions of approximately $ 186,000 and other offering expenses of approximately $ 417,000 .

The net proceeds

to the Company from the public offering were approximately $ 2.1 million.

The Company granted the underwriters a 45-day option to purchase

up to an additional 795,000 shares of common stock at the public offering price less discounts and commissions, to cover over-allotments;

however, this option expired unexercised.

July 26, 2023, pursuant to the research and development collaboration and license agreement with Applied Biomedical Science Institute

(“ABSI”), further described in Note 9 to the consolidated financial statements, the Company issued 25,107 shares of its common

stock with a per share value of $ 9.95 , representing total compensation expense of $ 250,000 (as calculated based on the trailing 10-day

average closing value of the Company’s common stock prior to the agreement date).

November 30, 2023, the Company closed a public offering pursuant to which it issued 1,825,000 shares of its common stock at a public

offering price of $ 1.00 per share and pre-funded warrants to purchase up to 8,175,000 shares of the Company’s common stock, exercisable

at an exercise price of $ 0.001 per share, to those purchasers whose purchase of common stock in the offering would otherwise result in

the purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99 % (or, at the election of

the purchaser, 9.99 %) of the Company’s outstanding common stock immediately following the consummation of the offering.

proceeds to the Company from the public offering were approximately $ 10 million, prior to deducting underwriting discounts, commissions,

and other expenses of approximately $ 1.3 million.

The net proceeds to the Company from the public offering were approximately $ 8.7 million.

The Company granted the underwriters a 45-day option to purchase up to an additional 1,500,000 shares of common stock and/or pre-funded

warrants, to cover over-allotments.

The underwriter exercised the option to purchase 1,000,000 pre-funded warrants to purchase shares

of the Company’s common stock for gross proceeds of $ 1 million, prior to deducting underwriting discounts and commissions of approximately

6 – Stock Based Compensation

Plans and Options

the Company’s 2017 Stock Incentive Plan (the “2017 Stock Incentive Plan”) the Company may grant incentive stock options,

non-statutory stock options, rights to purchase common stock, stock appreciation rights, restricted stock, performance shares, and performance

units to employees, directors, and consultants of the Company and its affiliates.

Up to 94,696 shares of the Company’s common stock

may be issued pursuant to the 2017 Stock Incentive Plan.

Company has granted options to acquire 92,801 shares of common stock at $ 13.20 per share under the 2017 Stock Incentive Plan, and 1,895

shares remain available for issuance.

At both December 31, 2022 and 2021, there were options outstanding to acquire 92,801 shares of

common stock.

As of both December 31, 2022 and 2021, all such options were fully vested, and the weighted average remaining contractual

life for such options was approximately 5.2 and 6.2 years, respectively.

July 2019, the Company authorized a new plan (the “2019 Stock Incentive Plan”).

The Company initially reserved 284,090 shares

of its common stock for issuance pursuant to the 2019 Stock Incentive Plan in the form of incentive stock options, non-statutory stock

options, rights to purchase common stock, stock appreciation rights, restricted stock, performance shares, and performance units to employees,

directors, and consultants of the Company and its affiliates.

On August 30, 2019, the Company approved an increase in the number of shares

authorized for issuance under the 2019 Stock Incentive Plan by 2,575,757 shares.

In January 2021, the Company approved an increase in

the number of shares reserved for issuance under the 2019 Stock Incentive Plan by 574,494 shares.

On May 31, 2021, the Company approved

an increase in the number of shares reserved for issuance under the 2019 Stock Incentive Plan by 467,171 shares.

At both December 31,

2022 and 2021, a total of 3,901,512 shares were authorized for issuance under the 2019 Stock Incentive Plan.

Company has granted options to acquire 3,386,385 and 2,420,514 shares of common stock under the 2019 Stock Incentive Plan, and 515,127

and 1,480,998 shares of common stock remain available for issuance under the 2019 Stock Incentive Plan at December 31, 2022 and 2021,

respectively.

There are stock options outstanding to acquire 1,536,012 and 810,667 shares of common stock with weighted average exercise

prices of $ 3.80 and $ 3.25 and weighted average contractual terms of 8.4 years and 8.0 years at December 31, 2022 and 2021, respectively.

following table summarizes stock-based activities under the 2017 Stock Incentive Plan and 2019 Stock Incentive Plans:

of Stock Option Activity

the Company’s 2017 Stock Incentive Plan (the “2017 Plan”) the Company may grant incentive stock options, non-statutory

stock options, rights to purchase common stock, stock appreciation rights, restricted stock, performance shares, and performance units

to employees, directors, and consultants of the Company and its affiliates.

Up to 3,788 shares of the Company’s common stock may

be issued pursuant to the 2017 Plan.

Company has granted options to acquire 3,712 shares of common stock at $ 330 per share under the 2017 Plan, and 76 shares remain available

for issuance.

As of December 31, 2023 and 2022, there were options outstanding to acquire 3,712 shares of common stock.

As of December

31, 2023 and 2022, all such options were fully vested, and the weighted average remaining contractual life for such options was approximately

4.2 and 5.2 years, respectively.

July 2019, the Company authorized an additional plan, the 2019 Stock Incentive Plan (the “2019 Plan”).

The Company initially

reserved 11,363 shares of its common stock for issuance pursuant to the 2019 Plan in the form of incentive stock options, non-statutory

stock options, rights to purchase common stock, stock appreciation rights, restricted stock, performance shares, and performance units

to employees, directors, and consultants of the Company and its affiliates.

On August 30, 2019, the Company approved an increase in the

number of shares authorized for issuance under the 2019 Plan by 22,980 shares.

In January 2021, the Company approved an increase in the

number of shares reserved for issuance under the 2019 Plan by 22,980 shares.

On May 31, 2021, the Company approved an increase in the

number of shares reserved for issuance under the 2019 Plan by 18,687 shares.

As of December 31, 2023 and 2022, a total of 156,060 shares

were authorized for issuance under the 2019 Plan.

of December 31, 2023 and 2022, the Company has granted options to acquire 156,060 and 135,455 shares of common stock under the 2019 Plan,

respectively, and had 0 and 20,605 shares of common stock remain available for issuance under the 2019 Plan, respectively.

stock options outstanding to acquire 82,046 and 61,440 shares of common stock with weighted-average exercise prices of $ 73.66 and $ 95.09

and weighted average contractual terms of 7.8 years and 8.4 years at December 31, 2023 and 2022, respectively.

August 17, 2023, the Company authorized a new plan, the Tharimmune, Inc.

2023 Omnibus Incentive Plan (the “2023 Plan”).

the Company’s 2023 Plan, the Company may grant incentive stock options, non-statutory stock options, rights to purchase common

stock, stock appreciation rights, restricted stock, performance shares, and performance units to employees, directors, and consultants

of the Company and its affiliates.

Up to 2,600,000 shares of the Company’s common stock may initially be issued pursuant to the

the year ended December 31, 2023, the Company granted options to acquire 5,000 shares of common stock under the 2023 Plan, and 2,595,000

shares of common stock remain available for issuance under the 2023 Plan at December 31, 2023.

There are stock options outstanding to

acquire 5,000 shares of common stock with a weighted-average exercise price of $ 3.94 and a weighted-average contractual term of 9.9 years

at December 31, 2023.

following table summarizes stock-based activities under the 2017, 2019, and 2023 Stock Incentive Plans:

Schedule of Stock Option Activity

at December 31, 2021

Forfeited/cancelled

Outstanding at December

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and expected to vest at December 31, 2023

following table summarizes the exercise price range as of December 31, 2022 and 2021:

of Exercise Price Range

fair value of stock option awards is estimated at the date of grant using the Black-Scholes option-pricing model.

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risk-free interest rate and forfeitures.

Forfeitures are accounted for as they occur.

options granted during the years ended December 31, 2023 and 2022 were valued using the Black-Scholes option-pricing model with the following

weighted-average assumptions:

of Options Weighted Average Assumptions

Schedule of Options Weighted Average Assumptions

the years ended December 31,

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fair value of options granted

in the above table are stock options granted in 2019 to purchase 231,058 shares of the Company’s common stock at an exercise price

of $ 0.08 per share, which vest upon a specified performance condition.

These stock options vested at the date of the Company’s

IPO, which was the specified performance condition.

weighted-average grant date fair value of stock options granted during the years ended December 31, 2023 and 2022 was approximately $ 6.41

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approximately $ 23.11 and $ 31.19 , respectively.

in the above table are performance-based stock options granted in 2019 to purchase 9,242 shares of the Company’s common stock at

an exercise price of $ 1.98 per share, which vested upon completion of the Company’s IPO in 2022.

stock-based compensation expense included in the accompanying consolidated statements of operations was as follows:

of Stock Based Compensation Expense

Schedule of Stock Based Compensation Expense

the years ended December 31

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stock-based compensation

December 31, 2022, the total unrecognized compensation expense related to non-vested options was approximately $ 1.9 million and is expected

to be recognized over the remaining weighted average service period of approximately 2.8 years.

March 2021, the Company modified the stock option exercise price for stock options granted during 2020, increasing the exercise price

of such stock options (after adjusting for the 1-for-26.4 reverse stock split) from $0.18 or $2.60 to $0.31 or $3.82 per share, respectively .

The increase in the stock option exercise price was accounted for as a modification of the stock grant in 2021;

however, the impact on

the Company’s consolidated statements of operations was immaterial.

of December 31, 2023, the total unrecognized compensation expense related to non-vested options was approximately $ 1.2 million and is

expected to be recognized over the remaining weighted-average service period of approximately 2.0 years.

connection with the IPO, the Company issued warrants to purchase such number of shares of the Company’s common stock equal to 5%

of the total shares of common stock issued in the IPO.

The warrants are exercisable at

per share, were not exercisable within the first six months after issuance, and may, under certain circumstances, be exercised on a

cashless basis.

The exercise price of the warrants is subject to standard antidilutive provision adjustments for stock splits, stock

combinations, or similar events affecting the Company’s common stock.

The Company has determined that these warrants should be

classified as equity instruments since they do not require the Company to repurchase the underlying common stock and do not require

the Company to issue a variable amount of common stock.

In addition, these warrants are indexed to the

Company’s common stock and do not have any unusual antidilution rights.

Terms of the warrants outstanding at December

31, 2022 are as follows:

The warrants are exercisable at $ 125.00 per share, were not exercisable within

the first six months after issuance, and may, under certain circumstances, be exercised on a cashless basis.

The exercise price of the

warrants is subject to standard antidilutive provision adjustments for stock splits, stock combinations, or similar events affecting

the Company’s common stock.

The Company has determined that these warrants should be classified as equity instruments since they

do not require the Company to repurchase the underlying common stock and do not require the Company to issue a variable amount of common

In addition, these warrants are indexed to common stock and do not have any unusual antidilution rights.

connection with the May 2, 2023 public offering as described in Note 5 to the consolidated financial statements, the Company issued warrants

to designees of the underwriter (the “Representative’s Warrants”) to purchase 6,360 shares of the Company’s common

stock (which is equal to 3 % of the number of shares sold in the public offering) at an initial exercise price of $ 15.625 per share, subject

to adjustment.

The Representative’s Warrants are exercisable at any time and from time to time, in whole or in part, during the

four and one half year period commencing 180 days from the commencement of sales of the shares of common stock in the public offering.

connection with the November 30, 2023 public offering as described in Note 5 to the consolidated financial statements, the Company issued

pre-funded warrants to purchase 8,175,000 shares of the Company’s common stock at an exercise price of $ 0.001 (the “Pre-Funded

The Pre-Funded Warrants were issued to those purchasers whose purchase of common stock in the November Offering would

otherwise result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99 % (or,

at the election of the purchaser, 9.99 %) of outstanding common stock immediately following the consummation of the offering.

The Pre-Funded

Warrants were immediately exercisable and could be exercised at any time until exercised in full.

The Company also granted the underwriters

a 45-day option to purchase up to an additional 1,500,000 shares of common stock and/or prefunded warrants.

The underwriters exercised

the option to purchase 1,000,000 pre-funded warrants at an initial exercise price of $ 0.001 per share, subject to adjustment (the “Underwriters

Pre-Funded Warrants”).

These pre-funded warrants were immediately exercisable and could be exercised at any time until exercised

The underwriters received warrants to purchase 300,000 shares of common stock with an initial exercise price of $ 1.25 , exercisable

beginning May 27, 2024, and expiring May 2, 2028 (the “Underwriters Warrants”).

As of December 31, 2023, all of the Pre-Funded

Warrants and the Underwriters Pre-Funded Warrants have been exercised.

of the warrants outstanding at December 31, 2023 are as follows:

Schedule of Warrants

7 – Income Taxes

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deferred tax assets at December 31, 2023 and 2022.

The valuation allowance increased by approximately $ 2.3 million and $ 652,000 for the years

ended December 31, 2022 and 2021, respectively.

significant components of the Company’s deferred tax assets and liabilities as of December 31, 2022 and 2021 were as follows:

of Significant Components of Company’s Deferred Tax Assets

The valuation allowance increased by approximately $ 2.8 million and $ 2.3 million for

the years ended December 31, 2023 and 2022, respectively.

significant components of the Company’s deferred tax assets and liabilities as of December

31, 2023 and 2022 were as follows:

Schedule of Significant Components of Company’s Deferred Tax Assets

tax asset (liabilities) related to:

net operating loss carryforward

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Company’s valuation allowance.

of Effective Income Tax Expense

Schedule of Effective Income Tax Expense

the years ended December 31,

11 unchanged sentences

2023 and 2022, respectively, were necessary to reduce the deferred tax assets to the amount that will more likely than not be realized.

both December 31, 2022 and 2021, the Company had available net operating loss carryforwards of approximately $ 9.3 million and $ 3.3 million,

respectively, for federal income tax purposes, all of which was generated after 2017 and can be carried forward indefinitely under the

December 31, 2023 and 2022, the Company had available net operating loss carryforwards of approximately $ 14.4

million and $ 9.3

respectively, for federal income tax purposes, all of which were generated after 2017 and can be carried forward indefinitely under the

Tax Cuts and Jobs Act.

At both December 31, 2022 and 2021, the Company had approximately $ 81,000 of federal research and development

(“R&D”) tax credit carryforwards.

If not utilized, the federal R&D credits will begin to expire in 2038.

also had $ 10.3 million of state net operating losses that will begin to expire in 2037.

At December 31, 2023 and 2022, the Company had approximately $ 243,000

federal research and development (“R&D”) tax credit carryforwards.

If not utilized, the federal R&D credits will

begin to expire in 2038.

The Company also had $ 14.9

of state net operating losses that will begin to expire in 2037.

382 and 383 of the Internal Revenue Code, and similar state regulations, contain provisions that may limit the NOL carryforwards available

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it is likely that such an ownership change occurred during 2021.

March 27, 2020, the United States Department of the Treasury enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES

The CARES Act is an emergency economic stimulus package that includes spending and tax breaks to strengthen the United States

economy and fund a nationwide effort to curtail the effect of COVID-19.

While the CARES Act provides sweeping tax changes in response

to the COVID-19 pandemic, some of the more significant provisions which are expected to impact the Company’s financial statements

include removal of certain limitations on utilization of NOLs, increasing the loss carryback period for certain losses to five years,

and increasing the ability to deduct interest expense, as well as amending certain provisions of the previously enacted Tax Cuts and

The Company has concluded that the CARES Act did not have a material impact on its financial position, results of operations,

or cash flows.

December 27, 2020, the United States enacted the Consolidated Appropriations Act which extended many of the benefits of the CARES Act

that were scheduled to expire.

The Company evaluated the impact of the Consolidated Appropriations Act on its consolidated financial

statements and related disclosures and concluded that the impact is immaterial.

The Tax Cuts and Jobs Act

of 2017 (“TCJA”) has modified the IRC 174 expenses related to research and development for the tax years beginning after December

Under the TCJA, the Company must now capitalize the expenditures related to research and development activities and amortize

over five years for U.S.

activities and 15 years for non-U.S.

activities using a mid-year convention.

Therefore, the capitalization of

research and development costs in accordance with IRC 174 results in a gross deferred tax asset of $ 4,487,000 .

8 – Related-Party Transactions

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and third parties that are family members of the founder and CEO.

The Notes were converted into

shares of the Company’s common stock on January 14, 2022 in connection with the closing of the IPO.

The Notes were converted into shares of the Company’s common

stock on January 14, 2022 in connection with the closing of the IPO.

addition to the above Notes, the Company had amounts due to the founder and CEO that totaled $ 200,000 at December 31, 2021 for accrued

compensation.

See Note 9 to the consolidated financial statements.

On April 1, 2022, the founder and CEO received the full amount of

compensation, which was paid in full in April 1, 2022.

January 4, 2022 and January 6, 2022, the Company issued unsecured promissory notes in the aggregate principal amount of approximately

$ 139,000 (including an original issuance discount of an aggregate of approximately $ 14,000 )

to three related-party investors.

The notes were to accrue interest at a rate of 12 % per annum and mature upon the earlier of (i) June

30, 2022, and (ii) the closing of a subsequent equity financing.

“Subsequent equity financing” means the next sale (or series

of related sales) by the Company of its equity securities following the date of the notes pursuant to which the Company receives gross

proceeds of not less than $ 5.0 million.

The notes were repaid in full on January 21, 2022 following the Company’s IPO on January

14, 2022 as the IPO was considered a subsequent Equity Financing.

$ 139,000 (including an original issuance discount of an aggregate of approximately $ 14,000 ) to three related-party investors.

were to accrue interest at a rate of 12 % per annum and mature upon the earlier of (i) June 30, 2022, and (ii) the closing of a subsequent

equity financing.

“Subsequent equity financing” means the next sale (or series of related sales) by the Company of its equity

securities following the date of the notes pursuant to which the Company receives gross proceeds of not less than $ 5.0 million.

were repaid in full on January 21, 2022 following the Company’s IPO on January 14, 2022 as the IPO was considered a subsequent

Equity Financing.

Additionally,

on April 18, 2022, the founder and CEO exercised options to purchase up to 240,526 shares of the Company’s common stock at a weighted

average exercise price of $ 0.10 per share for a total of approximately $ 24,000 .

on April 18, 2022, the founder and CEO exercised options to purchase up to 9,621 shares of the Company’s common stock at a weighted-average

exercise price of $ 2.53 per share for a total of approximately $ 24,000 .

9 – Commitments and Contingencies

3 unchanged sentences

approximately $1.75 million based upon successfully meeting clinical and sales milestones.

As of December 31, 2022 and 2021, such fund-raising

requirement was not met and no payments were made pursuant to the APA.

The Company included, in accounts payable at both December 31,

2022 and 2021, the $ 50,000 required initial payment.

The Company included, in accounts payable

at both December 31, 2023 and 2022, the $ 50,000 required initial payment.

Milestone based payments, if any, will be expensed as incurred.

Research Collaboration and Product License Agreement

with Minotaur Therapeutics, Inc.

(“Minotaur”) and Commercial License Agreement with Taurus Biosciences, LLC (“Taurus”)

Hillstream has entered into a research collaboration and product license

agreement with Minotaur and a commercial license agreement with Taurus to advance Picobodies against novel, unreachable and undruggable

epitopes in high-value validated targets starting with PD-1.

The research and collaboration agreement and product license agreement is

for the development of proprietary targeted biologics, Knob Quatrabodies™ (HSB-1940), against PD-1.

The technologies of Hillstream

and Minotaur will be combined under the license from Taurus to discover, develop and advance biotherapeutics against high-value validated

Picobodies are bovine-derived antibody “knob” domains comprised of cysteine-rich ultralong complementary determining

region H3 sequences of 30-40 amino acids weighing ~3-4KDa, which have the potential to access challenging epitopes better than full size

antibodies can.

By combining Quatramers with their long half-life coated with a PD-1 Picobody™ to create HSB-1940, Hillstream believes

it could more efficiently target novel epitopes with greater binding affinity than approved anti-PD-1 antibodies.

Hillstream believes

that targeting PD-1 is a step toward enabling Hillstream to enter the rapidly growing IO therapeutics market with additional targets thereafter.

The research collaboration with Minotaur includes an up-front payment of

Hillstream shall fund the discovery and characterization study performed by Minotaur as set forth in a statement of work and

For example, the statement of work includes protein target expression and purification, cow immunization, phage display and hit

identification and knob expression.

Each target is estimated to be completed in 32 weeks.

There are development and regulatory milestones

on a target by target basis.

There will be a milestone payment of $ 1,000,000 for each first product directed against a target and first

regulatory approval in the U.S.

In addition, there will be single digit royalties on net sales for up to ten years.

Taurus agreement contains single digit royalties on net product sales and development milestone payments tied to advancement through clinical

trials and final regulatory approval.

January 2019, the Company entered into a three-year employment agreement with its CEO which provides a specified base salary and bonus.

The employment agreement also provides the CEO with certain benefits while employed and if employment ceases.

The Company accrued $ 200,000

in 2019 related to the CEO’s base salary as per the employment agreement, which was included in due to founder as of December 31,

2021, which was paid in full on April 1, 2022.

No bonus was approved by the board of directors of the Company for any period through

December 31, 2022.

January 2020, the Company amended the employment agreement pursuant to which, in lieu of a cash base salary, the CEO was to be compensated

with stock options to purchase 7,575 shares of the Company’s common stock per month (at an exercise price based upon the Company’s

most recent 409A valuation at the date of the grant) effective January 1, 2020 until the Company received a minimum of $ 3.0 million of

gross proceeds from the sale of its securities, after which time, cash compensation, pursuant to the employment agreement, would be paid.

January 1, 2021, the Company amended the employment agreement with its CEO to provide a revised base salary pre-funding (as defined in

the employment agreement).

In lieu of cash base salary, the CEO was to be compensated with stock options to purchase 18,939 shares of

the Company’s common stock per month at an exercise price of $ 7.82 per share effective January 1, 2021 until funding meets or exceeds

$ 5.0 million, after which time, cash compensation, pursuant to his employment agreement, would be paid.

The amended employment agreement

also provides for a future base salary for the CEO after the Company receives funding greater than $ 5.0 million or completes an initial

public offering or similar transaction as set forth in the employment agreement.

In addition, if the CEO acts as the “finder”

of an investor who purchases more than $ 5.0 million of the Company’s equity, he will receive a grant of stock options to acquire

757,575 shares of common stock of the Company at an exercise price equal to the most recent fair value of the Company’s common

stock at the time of grant.

June 1, 2021, the Company entered into an Amended and Restated Employment Agreement, as amended on September 24, 2021 (the “Amended

and Restated Employment Agreement”) with the Company’s CEO.

The term of the Amended and Restated Employment Agreement commenced

upon the closing of the Company’s IPO and continues for a period of five years and automatically renews for successive one-year

periods at the end of each term unless either party provides written notice of their intent not to renew at least 60 days prior to the

expiration of the then effective term.

Pursuant to the Amended and Restated Employment Agreement, the CEO will receive an annual base

salary of $ 485,000 , which may be increased from time to time, and shall be eligible to receive an annual cash bonus equal to 55 % of his

then base salary based upon the achievement of Company and individual performance targets established by the Company’s board of

Collaboration and Product License Agreement with Minotaur Therapeutics, Inc.

(“Minotaur”) and Commercial License Agreement

with Taurus Biosciences, LLC (“Taurus”)

Company has entered into a research collaboration and product license agreement with Minotaur (as amended, the “Minotaur Agreement”)

and a commercial license agreement with Taurus (the “Taurus Agreement”) for use of certain technology, including OmniAb antibodies,

to advance Picobodies against novel, unreachable, and undruggable epitopes in high-value validated targets starting with PD-1.

Agreement and Taurus Agreement are for the development of proprietary targeted biologics, including TH 1940, against PD-1.

It is anticipated

that the Company will collaborate with Minotaur under the license from Taurus to discover, develop, and advance biotherapeutics against

high-value validated IO targets starting with PD-1.

Minotaur Agreement included an up-front payment of $ 150,000 , which was paid in January 2023.

In addition, the Company shall fund the

discovery and characterization study performed by Minotaur as set forth in the Minotaur Agreement.

Pursuant to the Minotaur Agreement,

the Company shall pay Minotaur a milestone payment of $ 1,000,000 for each first Product (as defined in the Minotaur Agreement) directed

against a target and first regulatory approval in the U.S.

In addition, the Company shall pay a low single digit royalty on net sales

until the later of (i) ten years after the First Commercial Sale (as defined in the Minotaur Agreement) of such Product in such country

and (ii) the expiration of the last-to-expire Valid Claim (as defined in the Minotaur Agreement) of a Collaboration Patent (as defined

in the Minotaur Agreement) or MINT Patent (as defined in the Minotaur Agreement) covering the manufacture, use, or sale of such Product.

The Taurus Agreement contains single digit payments on net product sales and certain development milestone payments tied to the advancement

through clinical trials and final regulatory approval.

and Development Collaboration and License Agreement with Applied Biomedical Science Institute

July 5, 2023 (the “ABSI Effective Date”), the Company entered into a Research and Development Collaboration and License Agreement

(the “ABSI Agreement”) with ABSI pursuant to which ABSI granted the Company an exclusive royalty-bearing, sublicensable license

to the ABSI Patents (as defined in the ABSI Agreement) and a non-exclusive, royalty-bearing, sublicensable license to the ABSI Know-How

(as defined in the ABSI Agreement) to Exploit (as defined in the ABSI Agreement) the ABSI Products (as defined in the ABSI Agreement)

for the treatment, diagnosis, prediction, detection or prevention of disease in humans and animals worldwide (the “Territory”).

to the ABSI Agreement, the parties shall form a committee to manage the preclinical, investigational new drug enabling studies and such

other activities as shall lead to the initiation of a Phase 1 clinical trial of the ABSI Product.

The parties will collaborate on a Target-by-Target

basis to identify and evaluate ABSI Products directed against such Target (as defined below) with a view to identifying or generating

suitable Products (as defined in the ABSI Agreement) for the Company to Exploit.

“Target” means ErB2 (Her2) and ErbB3.

completion of the Discovery Timeline (as defined in the ABSI Agreement) for a Target, subject to the terms and conditions of ABSI Agreement,

the Company shall exclusively own any ABSI Products against such Target.

In the event the committee determines that the discovery activities

are unsuccessful with respect to a Target, the Company may propose an additional target, which, upon approval by ABSI, shall replace

a failed Target.

to the ABSI Agreement:

(i) the Company issued ABSI 25,107 shares of its common stock which is equal to $ 250,000 based on the ten day

trailing volume weighted-average price of the Company’s common stock prior to the date of issuance (see Note 5 to the consolidated

financial statements for details of the July 27, 2023 issuance of the Company’s common stock to ABSI);

(ii) in the event the Company

closes a financing pursuant to which it receives more than $ 10 million in Net Proceeds (as defined in the ABSI Agreement), the Company

shall pay ABSI a mid six digit amount;

(iii) upon the achievement of certain milestones as set forth in the ABSI Agreement, the Company

shall pay ABSI up to an aggregate of $ 8,250,000 ;

(iv) after the second anniversary of the ABSI Effective Date, the Company shall pay

ABSI a low five digit amount for the first year and a mid five digit amount thereafter during the Royalty Term (as defined in the ABSI

and (v) during the Royalty Term for each Product, the Company shall pay ABSI a quarterly royalty on the Net Sales (as defined

in the ABSI Agreement) with royalties at percentages which range from the low to mid single digits, with high Net Sales being subject

to lower royalty rates, subject to adjustment as set forth in the ABSI Agreement.

In addition, in the event the Company transfers all

or substantially all of its rights to a Product to a third party, the Company shall pay to ABSI the percentage of Net Proceeds attributable

to the transfer of the Product.

Specifically, the Company shall pay ABSI amounts at percentages which range from the mid single digit

to low double digits depending on the Company Expenses (as defined in the ABSI Agreement), with higher Company Expenses being subject

to lower rates.

a Product by Product basis, upon the expiration of the last Royalty Term of such Product in the Territory, licenses granted to the Company

with respect to such Product shall be deemed non-exclusive, fully paid, royalty-free, perpetual and irrevocable.

The ABSI Agreement shall

expire upon the expiration of the last Royalty Term of the last Product, unless such agreement is terminated earlier pursuant to its

The ABSI Agreement may also be terminated (i) by either the Company or ABSI for (A) a material breach of the ABSI Agreement or

(B) bankruptcy, (ii) ABSI may terminate the ABSI Agreement upon the commencement of a Challenge Proceeding (as defined in the ABSI Agreement)

or (iii) the Company may terminate the ABSI Agreement at any time upon 90 days prior written notice to ABSI.

Upon termination or expiration

of the ABSI Agreement other than as a result of a bankruptcy or Challenge Proceeding, all licenses granted to the Company pursuant to

such agreement will terminate and all rights under such licenses shall revert to ABSI.

the year ended December 31, 2023, the Company paid milestone fees of $ 500,000 to ABSI in accordance with the terms of the agreement,

which included a non-cash common stock equity grant of $ 250,000 .

Patent License Agreement

November 3, 2023 (the “Avior Effective Date”), the Company entered into the Avior Patent License Agreement with Avior pursuant

to which the Company received an exclusive sublicensable right and license to Licensed Patent Rights and Licensed Technology to, among

other things, Develop, have Developed, make, have made, use, sell, import, export and commercialize TH104 and TH103 and to practice the

Licensed Technology in connection with the foregoing, throughout the world.

Pursuant to the Avior Patent License Agreement, the Company

shall pay Avior a mid six digit up front license fee within ten days of the Avior Effective Date and an additional mid six digit license

fee which shall be paid in four equal installments within ten days of the end of each fiscal quarter following the Avior Effective Date.

In addition, the Company shall pay Avior a high single digit percentage of any upfront payments received by it as a result of the grant

of any sublicenses with respect to TH104.

The Company shall also pay Avior milestone payments in the aggregate amount of $ 24,250,000

upon the occurrence of various development milestones (the “Development Milestone Payments”).

Furthermore, the Company shall

pay Avior certain fees based upon sales milestones.

The payments for such sales milestones range from the low seven digits to the low

eight digits with higher sales being subject to higher fees.

Finally, the Company shall pay Avior royalties based on net sales.

royalties range from low single digit percentages to mid single digit percentages with higher sales being subject to lower percentages.

The Avior Patent License Agreement shall expire upon the expiration of the final payment obligation due to Avior as set forth in such

Upon the expiration of the Avior Patent License Agreement, the Company shall have a fully paid, irrevocable, freely transferable

and sublicensable worldwide license to the Licensed Patent Rights and Licensed Technology to Develop, have Developed, make, have made,

use, have used sell, offer for sale, have sold, import, have imported, export, have exported, commercialize or have commercialized any

and all Licensed Products and to practice the Licensed Technology worldwide.

Pursuant to the Avior Patent License Agreement, the Company

may terminate the agreement at any time without cause, upon 30 days’ prior written notice to Avior along with payment of the next

unpaid Development Milestone Payment, if any.

Furthermore, either the Company or Avior may terminate the Avior Patent License Agreement

(i) on written notice to the other party if the other party materially breaches any provision of the Avior Patent License Agreement and

fails to cure such breach within 30 days after the breaching party receives written notice thereof or (ii) on written notice in the event

that either party (A) becomes insolvent or admits its inability to pay its debts generally as they become due;

(B) becomes subject, voluntarily

or involuntarily, to any proceeding under any domestic or foreign bankruptcy or insolvency law, which is not fully dismissed or vacated

within 60 days;

(D) makes a general assignment for the

benefit of creditors;

or (E) has a receiver, trustee, custodian or similar agent appointed by order of any court of competent jurisdiction

to take charge of or sell any material portion of its property or business.

Upon termination of the Avior Patent License Agreement, the

license granted pursuant to such agreement shall terminate and all rights in the Licensed Patent Rights and Licensed Products shall revert

back to Avior.

the year ended December 31, 2023, the Company paid milestone fees of $ 380,000 to Avior in accordance with the terms of the agreement.

June 1, 2021, the Company entered into an Amended and Restated Employment Agreement with the Company’s CEO, as amended periodically

(the “Amended and Restated Employment Agreement”).

The term of the Amended and Restated Employment Agreement commenced upon

the closing of the Company’s IPO in January 2022 and continues for a period of five years and automatically renews for successive

one-year periods at the end of each term unless either party provides written notice of their intent not to renew at least 60 days prior

to the expiration of the then effective term.

Pursuant to the Amended and Restated Employment Agreement, the CEO will receive an annual

base salary of $ 485,000 , which may be increased from time to time, and shall be eligible to receive an annual cash bonus equal to 55 %

of his then base salary based upon the achievement of Company and individual performance targets established by the Company’s board

of directors.

In addition, in the first year in which the Company’s market capitalization (as defined in the Amended and Restated

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shall be in addition to any additional equity-based compensation awards the Company may grant the CEO from time to time.

January 1, 2023, in lieu of half of his 2023 salary, the CEO was issued options to purchase up to 20,605 shares of the Company’s

common stock at an exercise price of $ 9.75 per share, which options vested immediately on the date of grant.

July 6, 2023, the Company entered into an amended and restated employment agreement (the “CEO Employment Agreement”) with

The Employment Agreement has the same terms as of the COO Employment Agreement (as defined below) except, the CEO shall (i)

receive a base salary of $ 500,000 per year, which may be increased by the Board;

and (ii) be eligible to receive an annual bonus equal

to 60 % of his then base salary based upon the achievement of Company and individual targets to be established by the Board, in its sole

In addition, in the event the CEO’s employment is terminated by the Company other than as a result of his death or

Disability and other than for Cause, or if the CEO terminates his employment for Good Reason, then, in addition to the Accrued Compensation,

the Company shall continue to pay the CEO’s base salary and provide health benefits for a period of 18 months following the termination

date (each as defined in the CEO Employment Agreement).

In addition, all Restricted Shares and Stock Options that have not vested as

of the date of termination shall be forfeited and outstanding unvested time-based equity awards shall be accelerated in accordance with

the applicable vesting schedule as if the CEO had been in service for an additional 12 months as of the termination date.

connection with the appointment of the Company’s Chief Operating Officer, on July 11, 2023 (the “Effective Date”),

the Company entered into an employment agreement (the “COO Employment Agreement”) with the COO.

The COO Employment Agreement

shall continue for a period of five years and, thereafter, shall automatically renew for successive one-year terms unless either party

provides the other party with written notice of non-renewal at least 60 days prior to the last day of the then-current term.

to the COO Employment Agreement, the COO shall:

(i) receive a base salary of $ 400,000

per year, which may be increased by the Board;

(ii) be eligible to receive an annual bonus equal to 50 %

of his then base salary based upon the achievement of Company and individual targets to be established by the Board, in its sole discretion;

(iii) shall be eligible to receive equity-based compensation awards as determined by the Company;

(iv) receive reimbursement of reasonable

business expenses;

and (v) receive such other benefits that the Company may make available to its senior executives from time to time

along with vacation, sick and holiday pay in accordance with the Company’s policies established and in effect from time to time.

10 – Subsequent Events

January 1, 2023, the Company granted its Chief Executive Officer stock options to purchase up to 515,127

shares of common stock of the Company at an exercise price of $ 0.39

per share in lieu of half of his salary for 2023.

On February 27, 2023, the Company filed a Certificate of Cancellation with

the Delaware Secretary of State with respect to Farrington Therapeutics LLC.

as noted above, there were no material subsequent events that required recognition or additional disclosure in these consolidated

financial statements.

as noted below, there were no material subsequent events that required recognition or additional disclosure in these consolidated financial

January 2024, the Company entered into an insurance premium financing agreement for $ 492,450 , with a term of 10 months and an annual

interest rate of 7.5 %.

The Company made a down payment of $ 98,490 and is required to make monthly principal and interest payments of

$ 40,763 over the term of the agreement, which matures in November 2024.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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 8. Financial Statements and Supplementary Data