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Item 1. Financial Statements

2025-05-15 compared with 2024-11-13 · 477 added, 524 removed, 412 unchanged (71% of the section changed)

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CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

Current assets:

Cash and cash equivalents

Amount due from sale of assets

Prepaid expenses

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Property and equipment, net

Right of use asset- operating lease

Intangibles, net

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Accounts payable and accrued liabilities

Lease liability- short term portion

Financed director and officer insurance premiums

Total current liabilities

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Common stock, par value $ 0.0001 , 100,000,000 shares authorized;

1,044,914 and 1,041,582 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively

2,705,263 and 1,394,263 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively

Additional paid-in capital

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AND COMPREHENSIVE LOSS

For the Three Months Ended

September 30,

For the Nine Months Ended

September 30,

For the Three Months Ended March 31,

Operating expenses:

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( 4,040,774 )

( 10,990,412 )

( 10,830,579 )

Other income (expense):

Change in fair value of warrant liabilities

Realized foreign currency translation loss from dissolution of subsidiaries

Interest and dividends, net

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( 3,860,840 )

( 10,726,923 )

( 10,476,484 )

Provision for income taxes

Net loss from continuing operations

$ ( 3,563,238 )

$ ( 3,860,840 )

$ ( 10,726,923 )

$ ( 10,476,484 )

Net loss from discontinued operations, net of tax

$ ( 2,999,834 )

$ ( 3,612,590 )

$ ( 10,726,923 )

$ ( 10,913,499 )

Weighted-average common shares outstanding, basic and diluted

Basic and diluted loss per share from continuing operations

Basic and diluted loss per share from discontinuing operations

Basic and diluted loss per share

Comprehensive loss:

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$ ( 3,860,840 )

$ ( 10,726,923 )

$ ( 10,913,499 )

Foreign currency translation

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$ ( 3,861,460 )

$ ( 10,757,588 )

$ ( 10,920,555 )

See accompanying notes to the unaudited condensed

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$ ( 39,179,378 )

Stock-based compensation:

-restricted stock units

-stock options

Foreign currency translation

( 3,866,249 )

Balance at June 30, 2024

$ ( 43,045,627 )

Stock-based compensation:

-restricted stock units

-stock options

Foreign currency translation

Issuance of September 2024 pre-funded and common warrants, net

Dividend - warrant modification

( 2,999,834 )

Balance at September 30, 2024

$ ( 46,405,117 )

Balance at January 1, 2025

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Stock-based compensation:

-restricted stock units

-stock options

Issuance of common stock at-the-market for cash, net of offering costs

Issuance of common stock from the exercise of pre-funded warrants, net

Foreign currency translation

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$ ( 53,146,016 )

Stock-based compensation:

-restricted stock units

-stock options

Foreign currency translation

( 3,763,230 )

Balance at June 30, 2023

$ ( 26,657,789 )

Stock-based compensation:

-restricted stock units

-stock options

Stock repurchase

( 3,726,389 )

( 3,726,416 )

Foreign currency translation

( 3,612,590 )

Balance at September 30, 2023

$ ( 30,270,379 )

See accompanying notes to the unaudited condensed

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended

September 30,

For the Three Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss from continuing operations

$ ( 3,563,238 )

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Change in fair value of warrant liabilities

Non-cash lease expense

Gain on sale of assets

Loss on asset write-off

Realized foreign currency translation loss from dissolution of subsidiaries

Changes in operating assets and liabilities:

Prepaid expenses

Other current assets

Accounts payable and accrued liabilities

( 1,915,862 )

Lease liabilities

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( 4,321,085 )

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property and equipment

Net cash proceeds from sale of assets

Net cash provided by investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from sale of September 2024 Offering warrants

Payment of offering costs in connection with September 2024 Offering warrants

Note payable proceeds

Principal payments on note payable

Repurchase of common stock

( 3,726,416 )

Net cash provided by (used in) financing activities

( 3,726,416 )

Payments on financed director and officer insurance

Proceeds from exercises of pre-funded warrants

Proceeds from at-the-market common stock sales

Net cash provided by financing activities

Effect of foreign currency translation on cash

Net cash used in operating activities of discontinued operations

Net cash provided by investing activities of discontinued operations

NET CHANGE IN CASH

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Amount due from sale of assets

Dividend - warrant modification

$ ( 359,656 )

See accompanying notes to the unaudited condensed

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER

30, 2024 AND 2023

FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND

NOTE 1 – NATURE OF THE ORGANIZATION AND

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“Initial Public Offering”) on September 17, 2021.

The Company is a biotechnology company focused on the discovery, research

and development of innovative treatments for central nervous system (CNS) disorders and other diseases, including RASopathies.

is leveraging its expertise in the fields of neuroscience, translational medicine, and drug development to bring life-changing therapies

The Company is a clinical-stage biotechnology company focused on the discovery,

research and development of innovative treatments for central nervous system (CNS) disorders and other diseases, including RASopathies.

The Company’s primary operations (the “Therapeutics”

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In December 2023, the U.S.

Food and Drug Administration (the “FDA”) cleared our Investigational

New Drug application (the “IND”) for PAS-004 and the Company received a study may proceed letter from the FDA for the Company’s

Phase 1 multicenter, open-label, dose escalation trial of PAS-004 in patients with MAPK pathway-driven advanced tumors with a documented

RAS, NF1 or RAF mutation or patients who have failed BRAF/MEK inhibition.

The Company is currently conducting the Phase 1 clinical trial

at clinical sites in the United States and plans to open additional sites in Eastern Europe in the fourth quarter of 2024.

The Company’s

clinical development plan for PAS-004 is to begin a Phase 1/2a clinical trial in adult patients with neurofibromatosis type 1 (NF1)-associated

Food and Drug Administration (the “FDA”) cleared the Company’s

Investigational New Drug application (the “IND”) for PAS-004 and the Company received a study may proceed letter from the

FDA for the Company’s Phase 1 multicenter, open-label, dose escalation trial of PAS-004 in patients with MAPK pathway-driven advanced

tumors with a documented RAS, NF1 or RAF mutation or patients who have failed BRAF/MEK inhibition (the “FIH Phase 1 Dose Escalation

The Company is currently conducting the FIH Phase 1 Dose Escalation Study at four clinical sites in the United States and

three sites in Eastern Europe.

The Company expects to complete the FIH Phase 1 Dose Escalation Study in 2026.

The Company’s clinical

development plan for PAS-004 is to begin a Phase 1/1b clinical trial in adult patients with neurofibromatosis type 1 (NF1)-associated

plexiform and/or cutaneous neurofibromas followed by pediatric patients and ultimately seek FDA marketing approval in these patient populations.

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to address with these programs, which are currently amyotrophic lateral sclerosis (“ALS”) for PAS-003 and schizophrenia for

During the year ended December 31, 2023, we determined to cease further development of our PAS-002 program for multiple sclerosis

due to several factors including the significant capital, resources and time required to develop the program, and the current and projected

availability of effective treatment options for MS patients, among others.

During the year ended December 31, 2023, the Company

discontinued providing business support services to anti-depression clinics (the “Clinics” segment) in the U.K.

United States, previously conducted through partnerships with healthcare providers.

During the year ended December 31, 2023, the at home

services in New York, NY as well as in the U.K were discontinued and the Company sold and disposed of the assets associated with the Clinics

operations in Los Angeles, CA.

The lease associated with the related property in Los Angeles was assumed by the buyer in the transaction.

Throughout this report, the terms “our,”

“we,” “us,” and the “Company” refer to Pasithea Therapeutics Corp.

and its subsidiaries, Pasithea

Therapeutics Limited (U.K.), Pasithea Therapeutics Portugal, Sociedade Unipessoal Lda, Pasithea Clinics Inc., Alpha-5 Integrin, LLC (“Alpha-5”),

and AlloMek Therapeutics, LLC (“AlloMek”).

Pasithea Therapeutics Limited (U.K.), legally dissolved as of January 2, 2024 was

a private limited Company, registered in the United Kingdom (U.K.).

Pasithea Therapeutics Portugal, Sociedade Unipessoal Lda is a private

limited Company registered in Portugal.

Throughout this report, the terms “our,” “we,”

“us,” and the “Company” refer to Pasithea Therapeutics Corp.

and its subsidiaries, Pasithea Therapeutics Limited

(U.K.), Pasithea Therapeutics Portugal, Sociedade Unipessoal Lda, Pasithea Clinics Inc., Alpha-5 Integrin, LLC (“Alpha-5”),

AlloMek Therapeutics, LLC (“AlloMek”) and Pasithea MacroMEK Pty Ltd.

Pasithea Therapeutics Limited (U.K.), legally dissolved

as of January 2, 2024 was a private limited Company, registered in the United Kingdom (U.K.).

Pasithea Therapeutics Portugal, Sociedade

Unipessoal Lda is a private limited Company registered in Portugal.

Pasithea Clinics Inc.

is incorporated in Delaware.

Alpha-5 and AlloMek are both Delaware limited

liability companies.

The operations of Pasithea Therapeutics Limited (U.K.), Pasithea Therapeutics Portugal, Sociedade Unipessoal Lda,

and Pasithea Clinics Inc.

Alpha-5 and AlloMek

are both Delaware limited liability companies.

Pasithea MacroMEK Pty Ltd is registered in Australia.

The operations of Pasithea Therapeutics

Limited (U.K.), Pasithea Therapeutics Portugal, Sociedade Unipessoal Lda, and Pasithea Clinics Inc.

have been discontinued.

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Liquidity and Capital Resources

As of September 30, 2024, the Company had approximately

As of March 31, 2025, the Company had approximately

$ 5.3 million of cash and cash equivalents and working capital of approximately $ 4.5 million.

The Company’s major sources of

cash have been comprised of proceeds from various private offerings, the Initial Public Offering and the exercise of warrants.

The Company’s major sources

of cash have been comprised of proceeds from various private and public offerings, the Initial Public Offering and the exercise of warrants.

Company is dependent on obtaining additional working capital funding from the sale of equity and/or debt securities in order to continue

to execute its development plans and continue operations.

Based on the foregoing, management believes that the Company will not

have sufficient working capital to meet its needs through twelve months from the date of these financial statements if additional funding

cannot be obtained.

Based on the foregoing, management believes that the Company will not have

sufficient working capital to meet its needs through twelve months from the date of these financial statements if additional funding cannot

Going Concern Uncertainty

The accompanying unaudited condensed consolidated

The accompanying condensed consolidated

financial statements have been prepared as if the Company will continue as a going concern.

The Company has incurred significant operating

losses and negative cash flows from operations since inception.

On September 30, 2024, the Company had cash and cash equivalents of approximately

$9.4 million and an accumulated deficit of approximately $ 46.4 million.

The Company has incurred recurring losses, has experienced

recurring negative operating cash flows, and requires significant cash resources to execute its business plans.

Historically, the Company’s

major sources of cash have been comprised of proceeds from various public and private offerings of its capital stock.

The Company is dependent

on obtaining additional working capital funding from the sale of equity and/or debt securities in order to continue to execute its development

plans and continue operations.

Without additional funding, there is substantial doubt about the Company’s ability to continue as

a going concern through twelve months from the date of these financial statements.

The Company has incurred significant

operating losses and negative cash flows from operations since inception.

On March 31, 2025, the Company had cash and cash

equivalents of approximately $ 5.3 million and an accumulated deficit of approximately $ 53.1 million.

The Company has

incurred recurring losses, has experienced recurring negative operating cash flows, and requires significant cash resources to

execute its business plans.

Historically, the Company’s major sources of cash have been comprised of proceeds from various

public and private offerings of its capital stock.

The Company is dependent on obtaining additional working capital funding from the

sale of equity and/or debt securities in order to continue to execute its development plans and continue operations.

additional funding, there is substantial doubt about the Company’s ability to continue as a going concern through twelve

months from the date of these financial statements.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING

Principles of Consolidation

The Company evaluates the need to consolidate

affiliates based on standards set forth in Accounting Standards Codification (“ASC”) 810, “Consolidation,” (“ASC

The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Alpha-5,

AlloMek, Pasithea Therapeutics Limited (U.K.) (was legally dissolved as of January 2, 2024) and Pasithea Clinics Inc.

All significant

intercompany transactions and balances have been eliminated in consolidation.

The Company evaluates the need to

consolidate affiliates based on standards set forth in Accounting Standards Codification (“ASC”) 810,

“Consolidation,” (“ASC 810”).

The condensed consolidated financial statements include the accounts of the

Company and its wholly owned subsidiaries, Alpha-5 Integrin, LLC, AlloMek Therapeutics, LLC, Pasithea Therapeutics Limited (U.K.),

Pasithea Clinics Inc.

and Pasithea MarcoMEK Pty Ltd.

All significant intercompany transactions and balances have been eliminated in

consolidation.

These condensed consolidated financial statements

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and expenses during the reporting period.

Making estimates requires management to exercise

significant judgment.

It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances

that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near

term due to one or more future confirming events.

Management regularly makes estimates related to the fair value of warrant liabilities;

Making estimates requires management to

exercise significant judgment.

It is at least reasonably possible that the estimate of the effect of a condition, situation or set

of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate,

could change in the near term due to one or more future confirming events.

Management regularly makes estimates related to the fair

value of warrant liabilities;

the recoverability of long-lived assets;

the fair values and useful lives of intangible assets acquired in business combinations;

potential impairment of goodwill;

the fair values and useful lives of intangible assets

acquired in business combinations;

the potential impairment of goodwill;

and income taxes.

The Company bases its estimates on historical experience and on various assumptions

that are believed to be reasonable, the results of which form the basis for the amounts recorded in the consolidated financial statements.

As appropriate, the Company obtains reports from third-party valuation experts to inform and support estimates related to fair value measurements.

The Company bases its estimates on

historical experience and on various assumptions that are believed to be reasonable, the results of which form the basis for the

amounts recorded in the condensed consolidated financial statements.

As appropriate, the Company obtains reports from third-party

valuation experts to inform and support estimates related to fair value measurements.

Research and Development

Research and development costs are charged

to operations when incurred and are included in operating expense, except for goodwill related to intellectual property and

Our research and development costs consist principally of compensation of employees and consultants that perform the

Company’s research and development activities, payments to third parties for preclinical, clinical and regulatory activities,

costs to acquire drug supply and drug product from contract development and manufacturing organizations and third-party contractors

relating to chemistry, manufacturing and controls (“CMC”) efforts, and research and development costs related to our

discovery programs.

Depending upon the timing of payments to the service providers, the Company recognizes prepaid expenses or

accrued expenses related to these costs.

These accrued or prepaid expenses are based on management’s estimates of the work

performed under service agreements, milestones achieved and experience with similar contracts.

Research and development

costs are charged to operations when incurred and are included in operating expense, except for goodwill related to intellectual

property & patents.

Research and development costs consist principally of compensation of employees and consultants that perform the

Company’s research activities, payments to third parties for preclinical and non-clinical activities, costs to acquire drug product

from contract development and manufacturing organizations and third-party contractors relating to chemistry, manufacturing and controls

(“CMC”) efforts, the fees paid for and to maintain the Company’s intellectual property, and research and development

costs related to our discovery programs.

Depending upon the timing of payments to the service providers, the Company recognizes prepaid

expenses or accrued expenses related to these costs.

These accrued or prepaid expenses are based on management’s estimates of the

work performed under service agreements, milestones achieved and experience with similar contracts.

The Company monitors each of these

factors and adjusts estimates accordingly.

Research and development also includes contra

expense related to costs reimbursed under the Company’s grant agreement.

For the three months ended March 31, 2025 and 2024, the

Company recorded grant income of $ 43,029 and zero as a contra expense within research and development, respectively.

General and Administrative

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development and other professional services.

connection with the acquisition of Alpha-5, the Company legally assumed rights under a grant agreement with FightMND, which was entered

into by Alpha-5 on September 23, 2021.

FightMND supports pre-clinical research, development and assessment of therapeutics for motor neuron

disease, including ALS.

Under the grant agreement, the Company is entitled to reimbursements for costs incurred for research related to

its monoclonal antibody targeting a5 b 1

integrin as a potential treatment for ALS.

There was no grant income recognized for the nine months ended September 30, 2024 and 2023.

In connection with the

acquisition of Alpha-5, the Company legally assumed rights under a grant agreement with FightMND, which was entered into by Alpha-5 on

September 23, 2021.

FightMND supports pre-clinical research, development and assessment of therapeutics for motor neuron disease, including

Under the grant agreement, the Company is entitled to reimbursements for costs incurred for research related to its monoclonal antibody

targeting a5 b 1 integrin as a potential treatment for ALS.

Cash and Cash Equivalents

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with an original maturity of three months or less when purchased to be cash equivalents, classified as trading securities.

had cash equivalents of $ 4.5 million and $ 13.4 million as of September 30, 2024 and December 31, 2023, respectively.

had cash equivalents of $ 4.1 million and $ 6.1 million as of March 31, 2025 and December 31, 2024, respectively.

Property and Equipment, net

Property and equipment is recorded at cost, net

of depreciation.

Depreciation is computed using straight-line and accelerated methods over the estimated useful lives of the related assets

which range from three to ten years.

Property and equipment is recorded at cost.

is computed using straight-line and accelerated methods over the estimated useful lives of the related assets which range from three to

Expenditures that enhance the useful lives of the assets are capitalized and depreciated.

and repairs are expensed as incurred.

When properties are retired or otherwise disposed of, related costs and related accumulated depreciation

are removed from the accounts.

Leasehold improvements are amortized over the shorter of the estimated useful life of those leasehold improvements

and the remaining lease term.

Maintenance and repairs are expensed

When properties are retired or otherwise disposed of, related costs and related accumulated depreciation are removed from

the accounts.

Leasehold improvements are amortized over the shorter of the estimated useful life of those leasehold improvements and the

remaining lease term.

Warrant Liability

The Company accounts for the publicly traded warrants

issued in its Initial Public Offering (the “Public Warrants”) and the warrants issued as compensation to the underwriters

in its Initial Public Offering (the “Representative Warrants” and together with the Public Warrants, the “IPO Warrants”)

in accordance with the guidance contained in ASC 815, “Derivatives and Hedging,” under which the IPO Warrants do not meet

the criteria for equity treatment and must be recorded as derivative liabilities.

Accordingly, the Company classifies the IPO Warrants

as liabilities at their fair value and adjusts the IPO Warrants to fair value at each reporting period.

This liability is subject to re-measurement

at each balance sheet date until the IPO Warrants are exercised or expired, and any change in fair value is recognized in the Company’s

condensed consolidated statement of operations and comprehensive loss.

The fair value of the IPO Warrants was initially measured using

a Black Scholes pricing model.

Currently, the fair value of the Public Warrants is measured using quoted market prices, and the fair value

of the Representative Warrants is based on an estimate of the relative fair value to the Public Warrants, accounting for a small difference

in the exercise price.

The Company accounts for the publicly traded

warrants issued in its Initial Public Offering (the “Public Warrants”) and the warrants issued as compensation to the

underwriters in its Initial Public Offering (the “Representative Warrants” and together with the Public Warrants, the

“IPO Warrants”) in accordance with the guidance contained in ASC 815, “Derivatives and Hedging,” under which

the IPO Warrants do not meet the criteria for equity treatment and must be recorded as derivative liabilities.

Accordingly, the

Company classifies the IPO Warrants as liabilities at their fair value.

This liability is subject to re-measurement at each balance

sheet date until the IPO Warrants are exercised or expire, and any change in fair value is recognized in the Company’s

condensed consolidated statements of operations and comprehensive loss.

The fair value of the IPO Warrants was initially measured

using a Black-Scholes pricing model.

Currently, the fair value of the Public Warrants is measured using quoted market prices, and

the fair value of the Representative Warrants is based on an estimate of the relative fair value to the Public Warrants, accounting

for a small difference in the exercise price.

The Company follows the asset and liability

method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized

for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing

assets and liabilities and their respective tax bases.

Deferred tax assets and liabilities are measured using enacted tax rates

expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the

enactment date.

Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be

As of March 31, 2025 and December 31, 2024, respectively, the Company had deferred tax assets related to certain net

operating losses.

A valuation allowance was established against these deferred tax assets at their full amount, resulting in a zero

balance of deferred tax assets on the condensed consolidated balance sheets as of March 31, 2025 and December 31, 2024.

ASC 740 prescribes a recognition threshold and

a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax

For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities.

The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense.

There were no unrecognized

tax benefits and no amounts accrued for interest and penalties as of March 31, 2025 and December 31, 2024.

The Company is currently not

aware of any issues under review that could result in significant payments, accruals or material deviation from its position.

is subject to income tax examinations by major taxing authorities since inception.

Concentration of Credit Risk

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Depository Insurance Coverage of $ 250,000 .

As of September 30, 2024, the Company has not experienced losses on this account and management

As of March 31, 2025, the Company has not experienced losses on this account and management

believes the Company is not exposed to significant risks on such account.

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These tiers include:

1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;

2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices

for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active;

3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions,

such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

The following table presents information about

the Company’s assets and liabilities that are measured at fair value on a recurring basis and indicates the fair value hierarchy

of the valuation inputs the Company utilized to determine such fair value:

Fair value measurements at reporting date using:

Quoted prices

in active markets for

identical liabilities

Significant other

observable inputs

Cash equivalents, September 30, 2024

Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;

Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active;

Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

The following table presents information

about the Company’s assets and liabilities that are measured at fair value on a recurring basis and indicates the fair value

hierarchy of the valuation inputs the Company utilized to determine such fair value:

Quoted prices in active markets for identical liabilities (Level 1)

Significant other observable inputs (Level 2)

Significant unobservable inputs (Level 3)

Cash equivalents, March 31, 2025

Cash equivalents, December 31, 2024

Public warrant liabilities, September 30, 2024

Representative warrant liabilities, September 30, 2024

Public warrant liabilities, March 31, 2025

Representative warrant liabilities, March 31, 2025

Public warrant liabilities, December 31, 2024

Representative warrant liabilities, December 31, 2024

following tables present a reconciliation of the Level 3 Representative Warrants liabilities:

The following tables present a reconciliation of the Level 3 Representative

Warrants liabilities:

Three Months Ended

September 30,

Representative warrant liabilities, July 1

Change in fair value

Representative warrant liabilities, September 30

Nine Months Ended

September 30,

Representative warrant liabilities, January 1

Change in fair value

Representative warrant liabilities, September 30

The change in fair value of the Representative Warrants liabilities

is recorded in change in fair value of warrant liabilities on the condensed consolidated statement of operations and comprehensive loss.

Representative warrant liabilities, March 31

The change in fair value of the

Representative Warrants liabilities is recorded in change in fair value of warrant liabilities on the condensed consolidated

statements of operations and comprehensive loss.

The fair value of the cash equivalents is based

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The fair value of the liability associated with

the Public Warrants as of September 30, 2024 was based on the quoted closing price on The Nasdaq Capital Market and is classified as Level

The fair value of the liability associated with the Representative Warrants as of September 30, 2024 was based on an estimate of the

relative fair value to the Public Warrants, accounting for a small difference in the exercise price, and is classified as Level 3.

the Public Warrants as of March 31, 2025 and December 31, 2024, was based on the quoted closing price on The Nasdaq Capital Market and

is classified as Level 1.

The fair value of the liability associated with the Representative Warrants as of March 31, 2025 and December

31, 2024, was based on an estimate of the relative fair value to the Public Warrants, accounting for a small difference in the exercise

price, and is classified as Level 3.

In some circumstances, the inputs used to measure

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because including them would have had an anti-dilutive effect:

Nine Months Ended

September 30,

Three Months Ended

Stock options

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income and expenses are translated at average exchange rates for the period.

Exchange differences arising from translation

of foreign operations are transferred directly to the Company’s accumulated other comprehensive loss in the condensed consolidated

financial statements.

Transaction gains and losses arising from exchange rate fluctuation on transactions denominated in a currency other

than the functional currency are included in the condensed consolidated statements of operations and comprehensive loss.

Exchange differences arising on translation of foreign operations are transferred

directly to the Company’s accumulated other comprehensive loss in the condensed consolidated financial statements.

Transaction gains

and losses arising from exchange rate fluctuation on transactions denominated in a currency other than the functional currency are included

in the condensed consolidated statements of operations and comprehensive loss.

During the three months ended March 31, 2025, the Company

had no operating subsidiaries with functional currencies other than the US dollar.

A loss related to the now dissolved subsidiaries which

were previously operating in functional currencies not that of the US Dollar as the parent were realized in the consolidated statements

of operations within other income (expense) in the amount of $ 7,171 .

The relevant translation rates are as follows:

September 30,

Closing rate, British Pound (GBP) to $USD at period end

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Average rate, EUR to $USD for the period ended

Comprehensive Income (Loss)

* Not applicable due to the Company

having no operating subsidiaries with functional currencies other than that of the parent company U.S.

Comprehensive Loss

ASC 220, “Comprehensive Income,” establishes

standards for reporting and display of comprehensive income (loss) and its components in a full set of general-purpose financial statements.

As of September 30, 2024 and December 31, 2023, the Company had no material items of other comprehensive income (loss) except for the

foreign currency translation adjustment.

During the three months ended March 31, 2025 and 2024, the Company had no material items of other comprehensive income (loss) except for

the unrealized foreign currency translation adjustment.

Acquisitions, Intangible Assets and Goodwill

The condensed consolidated financial

statements reflect the operations of an acquired business beginning as of the date of acquisition.

Assets acquired and liabilities

assumed are recorded at their fair values at the date of acquisition;

goodwill is recorded for any excess of the purchase price over

the fair value of the net assets acquired.

Significant judgment is required to determine the fair value of certain tangible and

intangible assets and in assigning their respective useful lives.

Accordingly, we typically obtain the assistance of third-party

valuation specialists for significant tangible and intangible assets.

The fair values are based on available historical information

and on future expectations and assumptions deemed reasonable by management but are inherently uncertain and could affect the

accuracy or validity of the estimates and assumptions.

Determining the useful life of an intangible asset also requires judgment.

Intangible assets are amortized over their estimated lives.

Any intangible assets associated with acquired in-process research and

development activities (“IPR&D”) are not amortized until a product is available for sale.

Impairment of Long-Lived Assets and Goodwill

19 unchanged sentences

goodwill impairment for all periods presented.

The Company determines whether a contract is or

contains a lease at the time of the contract’s inception based on the presence of identified assets and the Company’s right

to obtain substantially all the economic benefit from or to direct the use of such assets.

When the Company determines a lease exists,

it records a right-of-use (“ROU”) asset and corresponding lease liability on its balance sheet.

ROU assets represent the Company’s

right to use an underlying asset for the lease term.

Lease liabilities represent the Company’s obligation to make lease payments

arising from the lease.

ROU assets are recognized at the lease commencement date at the present value of the remaining future lease payments

the Company is obligated for under the terms of the lease.

Lease liabilities are recognized concurrently with the recognition of the ROU

asset and represent the present value of lease payments to be made under the lease.

These ROU assets and liabilities are adjusted for

any prepayments, lease incentives received, and initial direct costs incurred.

As the discount rate implicit in the lease is not readily

determinable in most of the Company’s leases, the Company uses its incremental borrowing rate based on the information available

at the lease commencement date in determining the present value of lease payments.

If the Company’s lease terms include an option

to extend the lease for a set period, the Company evaluates the renewal option and should it be reasonably certain that the Company will

exercise that option, adjusts the ROU asset and liability accordingly.

The Company’s has leases related to office

The Company determines whether a contract is or contains a lease at the time of the contract’s inception based on the presence

of identified assets and the Company’s right to obtain substantially all the economic benefit from or to direct the use of such

When the Company determines a lease exists, it records a right-of-use (“ROU”) asset and corresponding lease liability

on its balance sheet.

ROU assets represent the Company’s right to use an underlying asset for the lease term.

Lease liabilities

represent the Company’s obligation to make lease payments arising from the lease.

ROU assets are recognized at the lease commencement

date at the present value of the remaining future lease payments the Company is obligated for under the terms of the lease.

Lease liabilities

are recognized concurrently with the recognition of the ROU asset and represent the present value of lease payments to be made under

These ROU assets and liabilities are adjusted for any prepayments, lease incentives received, and initial direct costs incurred.

As the discount rate implicit in the lease is not readily determinable in most of the Company’s leases, the Company uses its incremental

borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments.

If the Company’s lease terms include an option to extend the lease for a set period, the Company evaluates the renewal option and

should it be reasonably certain that the Company will exercise that option, adjusts the ROU asset and liability accordingly.

Stock-Based Compensation

5 unchanged sentences

this fair value as stock-based compensation using a straight-line method over the requisite service period, generally the vesting period.

Financed Director and Officer Insurance Premiums

In January 2025, the Company finalized a financing arrangement for its

Director and Officer Insurance policy.

The total amount financed was approximately $ 379,000 after a down payment of approximately $ 68,000

or a total amount of $ 447,000 .

The note bears an annual interest rate of 9.2 %, to be paid over a period of twelve months.

of March 31, 2025, the remaining payable balance on the note was approximately $ 269,000 .

Segment Information

Operating segments are defined as components of

an enterprise for which separate discrete information is available for evaluation by the Chief Operating Decision Maker (“CODM”)

or decision-making group in deciding how to allocate resources and in assessing performance.

The Company views its operations and manages

its business as one operating and reporting segment, which is the business of research and development of innovative treatments for central

nervous system (CNS) disorders and other diseases, including RASopathies and certain cancers.

See Note 11 Segment Information for further

Recent Accounting Pronouncements

Management does not believe that any recently

issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s condensed

consolidated financial statements.

The Company does not believe that any recently

issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial

Adopted Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, Segment

Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which requires incremental disclosure of segment information

on an interim and annual basis.

This ASU is effective for public entities for fiscal years beginning after December 15, 2023, and interim

periods within fiscal years beginning after December 15, 2024.

Retrospective application to all prior periods presented in the financial

statements is required for public entities.

The Company adopted ASU 2023-07 as of January 1, 2024, which resulted in additional disclosures

of significant segment expenses and other segment items as well as incremental qualitative disclosures.

NOTE 3 – PROPERTY AND EQUIPMENT, NET

Property and equipment, net consists of the following:

September 30,

Leasehold improvements

4 unchanged sentences

Property and equipment, net

Depreciation expense was $ 4,166 and $ 4,717 for the three months ended March 31,

2025 and 2024, respectively.

During the three months ended March 31, 2025, the Company wrote off gross leasehold improvements of $ 3,193

and related accumulated amortization of $ 2,538 , resulting in a loss of $ 655 recorded in general and administrative in the condensed consolidated

statements of operations and comprehensive loss.

NOTE 4 – LEASES

Laboratory Lease – South San Francisco,

In August 2022, the Company, as a lessee, entered

into an amended sublease agreement to sublease laboratory and office space in South San Francisco, California.

The lease commenced on

August 15, 2022.

The term of this sublease is for a period of thirty-nine and one-fourth ( 39.25 ) months commencing on the effective date,

until May 15, 2024.

The lease had a gross monthly rent of $ 15,700 per month to December 31, 2022.

Starting January 1, 2023, the monthly

rent increased by 3 % annually, to $ 16,171 per month in 2023.

Starting January 1, 2024, the monthly rent increased to $ 16,656 .

had no remaining lease payments as of September 30, 2024.

In August 2022, the Company, as a lessee, entered into an amended sublease agreement to sublease laboratory and office space in South

San Francisco, California.

The lease term was from August 15, 2022 through May 15, 2024, and month-to-month through June 2024.

rent was $ 16,656 during 2024.

This lease was accounted for as an operating lease

1 unchanged sentence

$ 332,000 at inception.

The ROU asset is recorded as a component of non-current assets and the liability a component of current and

non-current liabilities on the Company’s consolidated balance sheets.

The Company discounted the future lease payments of this lease

using the prevailing collateralized lending rate which would be extended to the Company based on its credit profile relative to the period

of inception, and the duration of the lease from inception.

The interest rate used in calculating the fair value listed above was 7.8 %.

As of September 30, 2024 and December 31, 2023,

the Company recognized total ROU assets and lease liabilities as follows:

September 30,

Non-current leases - right of use assets

Current liabilities - operating lease liabilities

Non-current liabilities - operating lease liabilities

The ROU asset was separately presented as a non-current asset, and the liability is recorded as a component of

current and non-current liabilities on the Company’s Consolidated Balance Sheets.

The Company discounted the future lease payments

of this lease using the prevailing collateralized lending rate which would be extended to the Company based on its credit profile relative

to the period of inception, and the duration of the lease from inception.

The interest rate used in calculating the fair value listed

above was 7.8 %.

As of March 31, 2025 and December 31, 2024, the

Company had no recognized ROU assets and lease liabilities.

The following table summarizes ROU asset and lease

liability activity for the periods presented:

Three Months Ended

Operating lease expense

Cash paid for amounts included in the measurement of operating lease liabilities

There are no additional lease payments as of March 31, 2025.

NOTE 5 – INTANGIBLE ASSETS

Intangible assets, net consists of the following:

September 30, 2024

March 31, 2025

December 31, 2024

Gross Carrying

Gross Carrying Amount

Accumulated Amortization

Gross Carrying Amount

Accumulated Amortization

In-process research and development

1 unchanged sentence

( 1,417,869 )

( 1,260,328 )

Intangible assets, net

1 unchanged sentence

$ ( 1,260,328 )

As of September 30, 2024, future expected amortization expense of Intangible

As of March 31, 2025, future expected amortization expense of Intangible

assets was as follows:

1 unchanged sentence

Remaining future amortization expense

There were no changes to goodwill for the nine

months ended September 30, 2024.

There were no changes to goodwill for the three

months ended March 31, 2025 and 2024.

NOTE 6 – STOCKHOLDERS’ EQUITY

The Company is authorized to issue an aggregate

of 105,000,000 shares.

The authorized capital stock is divided into:

(i) 100,000,000 shares of Common Stock having a par value of $ 0.0001

per share and (ii) 5,000,000 shares of preferred stock having a par value of $ 0.0001 per share.

The Company has an aggregate of 105,000,000 authorized

The authorized shares are divided into:

(i) 100,000,000 shares of Common Stock having a par value of $ 0.0001 per share and (ii)

5,000,000 shares of preferred stock having a par value of $ 0.0001 per share.

The Company had 2,705,263 and 1,394,263 shares

of its Common Stock issued and outstanding at September 30, 2024 and December 31, 2023, respectively.

Each holder of Common Stock is entitled to one vote

for each share of Common Stock held on all matters submitted to a vote of the stockholders.

Our Second Amended and Restated Certificate

of Incorporation and Second Amended and Restated Bylaws do not provide for cumulative voting rights.

In addition, the holders of our Common Stock are

entitled to receive ratably such dividends, if any, as may be declared by the Board out of legally available funds;

of its Common Stock issued and outstanding at March 31, 2025 and December 31, 2024, respectively.

Each holder of Common Stock is entitled to one

vote for each share of Common Stock held on all matters submitted to a vote of the stockholders.

Our Charter and Amended and Restated

Bylaws (the “ Bylaws ”) do not provide for cumulative voting rights.

In addition, the holders of our Common Stock will

be entitled to receive ratably such dividends, if any, as may be declared by the Board out of legally available funds;

however, the current

7 unchanged sentences

Effective January 2, 2024, the Company amended

its Second Amended and Restated Certificate of Incorporation to effect a one-for-twenty ( 1 :

20 ) reverse stock split of our outstanding

shares of Common Stock.

No fractional shares were issued as a result of the reverse stock split.

Any fractional shares resulting from

the reverse stock split were paid in cash.

The reverse stock split did not otherwise affect any of the rights currently accruing to holders

of our Common Stock.

its certificate of incorporation to effect a one-for-twenty ( 1 :

20 ) reverse stock split of our outstanding shares of Common Stock.

No fractional

shares were issued as a result of the reverse stock split.

Any fractional shares resulting from the reverse stock split were paid in cash.

The reverse stock split did not otherwise affect any of the rights currently accruing to holders of our Common Stock.

2023 Stock Incentive Plan

The Board and stockholders have adopted and approved

the Company’s 2023 Stock Incentive Plan (the “2023 Plan”) which took effect on December 19, 2023.

The 2023 Plan allows

for the issuance of securities, including stock options, restricted stock, and restricted stock units (“RSUs”) to employees,

Board members and consultants.

The initial number of shares of Common Stock available for issuance under the 2023 Plan was 125,000

shares plus 28,389 unused shares reserved under the Company’s 2021 Stock Incentive Plan, which will, on January 1 of each calendar

year, beginning on January 1, 2024 and ending on and including January 1, 2033, unless the Board decides otherwise, automatically increase

to equal to the lessor of (A) three percent ( 3 %) of the number of shares of Common Stock outstanding on the final day of the immediately

preceding calendar year or (B) such smaller number of Shares as is determined by the Board.

On January 1, 2024, the number of shares of Common

Stock available for issuance under the 2023 Plan automatically increased by 31,254 shares.

As of September 30, 2024, a total of 197,393

shares of Common Stock were available under the 2023 Plan, of which 99,534 shares were issued and outstanding and 97,859 shares were available

for potential issuances.

Common Stock Issuances for the Three and Nine

Months Ended September 30, 2024

During the three and nine months ended September

30, 2024, the Company issued 833 and 3,332 shares of Common Stock, respectively, due to the vesting of restricted stock units (“RSUs”)

and recognized approximately $ 24,000 and $ 96,000 of stock-based compensation expense, respectively, related to its outstanding RSUs.

compensation expense related to the Company’s RSUs is recognized within general and administrative expense on the condensed consolidated

statements of operations and comprehensive loss.

As of September 30, 2024, the remaining unamortized

RSU stock-based compensation expense was approximately $ 21,000 with remaining three months of amortization.

the 2023 Plan which took effect on December 19, 2023.

The 2023 Plan allows for the issuance of securities, including stock options, restricted

stock, and restricted stock units (“RSUs”) to employees, Board members and consultants.

The initial number of shares

of Common Stock available for issuance under the 2023 Plan was 125,000 shares plus 28,389 unused shares reserved under the 2021 Plan,

which will, on January 1 of each calendar year, beginning on January 1, 2024 and ending on and including January 1, 2033, unless the Board

decides otherwise, automatically increase to equal to the lessor of (A) three percent ( 3 %) of the number of shares of Common Stock outstanding

on the final day of the immediately preceding calendar year or (B) such smaller number of Shares as is determined by the Board.

On January 1, 2025, the number of shares of Common Stock available

for issuance under the 2023 Plan automatically increased by 41,828 shares.

As of March 31, 2025, 254,221 total shares were available

under the 2023 Plan, of which 93,596 shares were issued and outstanding and 160,625 shares were available for potential issuances.

Total stock-based compensation related to the

Company’s stock options was $ 96,985 and $ 297,602 , respectively, for three months ended March 31, 2025 and 2024.

2024 Offering

52 unchanged sentences

bonds with a remaining term consistent with the expected term of the instrument being valued.

As of September 30, 2024, all 1,219,153 of

the Pre-Funded Warrants are paid and issued but unexercised.

In addition, the September 2024 PIPE Warrants have not been exercised as

of September 30, 2024.

Stock Issuances for the Three and Nine Months Ended September 30, 2023

During the three and nine months ended September

30, 2023, the Company issued 833 and 5,832 shares of common stock, respectively, due to the vesting of restricted stock units (“RSUs”),

and recognized approximately $ 24,175 and $ 71,736 , respectively, of stock-based compensation expense related to its outstanding restricted

Stock-based compensation expense related to the Company’s restricted stock units is recognized within selling, general

and administrative expense.

As of September 30, 2023, the remaining unamortized

As of March 31, 2025, all 1,219,153 of the Pre-Funded Warrants

were paid, issued and exercised.

In addition, the September 2024 PIPE Warrants have not been exercised as of March 31, 2025.

Common Stock Issuances for the Three Months

Ended March 31, 2025

During the quarter ended March 31, 2025, we sold 440,000 shares

of Common Stock under our ATM Agreement at an average price of $ 3.88 for gross proceeds of $ 1,705,528 and net proceeds of $ 1,652,745 .

During the quarter ended March 31, 2025, all remaining 871,000 Pre-Funded

Warrants were exercised resulting in 871,000 shares of Common Stock being issued and there are no Pre-Funded Warrants outstanding.

Stock Issuances for the Three Months Ended March 31, 2024

During the three months ended March 31, 2024,

the Company issued 1,666 shares of Common Stock due to the vesting of restricted stock units (“RSUs”) and recognized approximately

$ 48,000 of stock-based compensation expense related to its outstanding RSUs.

Stock-based compensation expense related to the Company’s

RSUs is recognized within general and administrative expense on the condensed consolidated statements of operations and comprehensive

As of March 31, 2024, the remaining unamortized

RSU stock-based compensation expense was approximately $ 69,000 .

The Company did not grant any RSUs or restricted

stock awards during the three and nine months ended September 30, 2023.

Tender Offer (Common Stock Repurchase)

On July 20, 2023, the Company announced that its

Board of Directors authorized the repurchase, through a $ 4.0 million tender offer of up to approximately 5.7 million shares of the Company’s

outstanding common stock at a cash purchase price of $ 0.70 per share (the “Tender Offer”).

The Company launched the Tender

Offer on August 9, 2023 and it expired on September 8, 2023.

On September 14, 2023, the Company disclosed the

results of the Tender Offer.

A total of 266,171 shares of the Company’s common stock (the “Tender Offer Shares”) were

validly tendered and not properly withdrawn at a purchase price of $ 0.70 per for an aggregate purchase price of $ 3,726,416 , including

fees and expenses relating to the Tender Offer.

The Company had 1,040,998 shares of common stock outstanding following payment for the

shares of common stock purchased in the Tender Offer.

The Tender Offer Shares were retired and cancelled following the closing of the

Tender Offer.

Warrants modification

On November 29, 2021, the Company issued warrants

to purchase up to 434,000 shares of Common Stock with an exercise price of $ 70.00 per share (the “2021 PIPE Warrants”) in

a private placement.

Due to a certain anti-dilution provision, the exercise price of each 2021 PIPE Warrant was reduced to $ 20.00 per

share (the “Warrant Modification”) as a result of the September 2024 Offering.

The Company recognized the effect of the Warrant

Modification as a dividend of $ 359,656 .

At The Market Agreement with H.C.

On November 26, 2024, the Company entered into

an At The Market Offering Agreement (the “ATM Agreement”) with H.C.

Wainwright & Co., LLC (“Wainwright”),

as sales agent, pursuant to which the Company may issue and sell, from time to time, through Wainwright, shares of its Common Stock, and

pursuant to which Wainwright may sell its Common Stock by any method permitted by law deemed to be an “at the market offering”

as defined by Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended.

The Company will pay Wainwright a commission

of 3.0 % of the aggregate gross proceeds from each sale of Common Stock.

As of December 31, 2024, the Company was authorized to offer

and sell up to $ 2,076,000 of its Common Stock pursuant to the ATM Agreement.

During the quarter ended March 31, 2025, we sold 440,000

shares of Common Stock under our ATM Agreement at an average price of $ 3.88 for gross proceeds of $ 1,705,528 and net proceeds of $ 1,652,745 .

Restricted Stock Units

During the three months ended March 31, 2025 and

2024, the Company did not grant any RSUs or restricted stock awards.

During the three months ended March 31, 2025 and 2024, the Company

issued a total of 0 and 4,166 shares of Common Stock, respectively, pursuant to the vesting of RSUs.

The Company recognized approximately

$ 0 and $ 48,000 of stock-based compensation expense for the three months ended March 31, 2025 and 2024, respectively, in relation to the

vesting of historically granted RSUs.

As of March 31, 2025, there were no outstanding RSUs and no more remaining unamortized RSU compensation

NOTE 7 – STOCK OPTIONS

Stock Options Issued, Vested and Cancelled

During the three months ended September

During the three months ended March

31, 2025 , the Company did not issue any stock options.

During the three months ended September 30, 2024, 4,771 stock options subject

to time-based milestone vesting conditions, vested.

During the nine months ended September 30, 2024,

the Company granted stock options under the 2023 Plan to employees, to purchase an aggregate of 104,433 shares of Common Stock with a

strike price equal to $ 8.13 per share and a term of ten years .

Of the stock options granted, stock options to purchase an aggregate of

37,433 shares of Common Stock were fully vested at issuance and the remaining stock options are subject to time-based vesting over a term

ranging between one to three years .

These stock options had a total fair value of approximately $ 849,000 , as calculated using the Black-Scholes

pricing model with the following assumptions:

volatility of 88.41 %, discount rate of 4.20 %, expected term of 6.5 years, and an exercise

price of $ 8.13 .

During the nine months ended September 30, 2024,

During the three months ended March 31, 2025, stock options to purchase

an aggregate of 22,899 shares of Common Stock, subject to time-based milestone vesting conditions, vested.

During the three months ended March 31, 2024,

the Company issued stock options under the 2023 Plan to employees, to purchase an aggregate of 104,433 shares of Common Stock

with a strike price equal to $ 8.13 per share and a term of ten years .

Of the stock options granted, stock options to purchase

an aggregate of 37,433 shares of Common Stock were fully vested at issuance and the remaining stock options are subject to time-based

vesting over a term ranging between one to three years .

These stock options had a total fair value of approximately $ 657,000 , as calculated

using the Black-Scholes pricing model with the following assumptions:

volatility of 88.41 %, discount rate of 4.20 %, expected

term of 6.5 years, and an exercise price of $ 8.13 .

During the three months ended March 31, 2024,

stock options to purchase an aggregate of 42,767 shares of Common Stock, subject to time-based milestone vesting conditions, vested.

During the nine months ended September 30, 2024,

stock options to purchase an aggregate of 17,649 shares of Common Stock were cancelled in connection with the reduction in workforce related

to the closure of our research laboratory.

Stock-Based Compensation

three months ended September 30, 2024 and 2023, total stock-based compensation expense related to the Company’s stock options was

approximately $ 121,000 and $ 102,000 , respectively.

For the three months ended September 30, 2024, the Company recognized approximately

$ 107,000 of stock-based compensation related to its stock options within general and administrative expense, and approximately $ 14,000

within research and development expense on the condensed consolidated statements of operations and comprehensive loss .

For the three months ended September 30, 2023, all stock-based compensation expense was recorded within general and administrative expense

on the condensed consolidated statements of operations and comprehensive loss .

For the nine months ended September 30, 2024 and

2023, total stock-based compensation expense related to the Company’s stock options was approximately $ 553,000 and approximately

For the three months ended March

31, 2025 and 2024, total stock-based compensation expense related to the Company’s stock options was approximately $ 97,000 and $ 298,000 ,

respectively.

For the nine months ended September 30, 2024, the Company recognized approximately $ 398,000 of stock-based compensation

related to its options within general and administrative expense, and approximately $ 155,000 within research and development expense.

For the nine months ended September 30, 2023, all stock-based compensation expense was recorded within general and administrative expense.

For the three months ended March 31, 2025, the Company recognized approximately $ 92,000 of stock-based compensation related

to its stock options within general and administrative expense, and approximately $ 5,000 within research and development expense on

the condensed consolidated statements of operations and comprehensive loss.

For the three months

ended March 31, 2024, the Company recognized approximately $ 184,000 of stock-based compensation related to its stock options within general

and administrative expense, and approximately $ 114,000 within research and development expense on the condensed consolidated statements

of operations and comprehensive loss.

The following

table summarizes the activity related to the Company’s stock options for the nine months ended September 30, 2024:

Number of Options Weighted average

exercise price

per share Weighted average

contractual term

(years) Aggregate

intrinsic value

(in thousands)

table summarizes the activity related to the Company’s stock options for the three months ended March 31, 2025:

Number of Options Weighted average exercise price per share Weighted average remaining contractual term (years) Aggregate intrinsic value (in thousands)

Outstanding, January 1, 2025 182,034 $ 21.17 8.98 $ -

Granted 104,433 8.13 8.63 -

Expired/Cancelled ( 17,188 ) 9.24 -

Outstanding, September 30, 2024 185,784 $ 20.21 9.13 -

Exercisable, September 30, 2024 95,514 $ 30.27 8.24 $ -

As of September

Outstanding, March 31, 2025 164,846 $ 22.41 8.18 -

Exercisable, March 31, 2025 112,247 $ 28.20 7.94 $ -

31, 2025 , the remaining unamortized stock-based compensation expense related to the stock options was approximately $ 196,000 with

remaining 28 months of amortization.

22 months of amortization remaining.

NOTE 8 – WARRANTS

As of September

31, 2025 , the fair value of the Public Warrants was approximately $ 0.364 per Public Warrant based on the closing price of the warrants

4 unchanged sentences

outstanding warrants:

Exercise Price Number of warrants (1) Weighted-average

contractual term

(years) Weighted average

exercise price

Exercise Price Number of warrants Weighted-average remaining contractual term (years) Weighted average exercise price

$ 3.85 2,439,026 2.76

6 unchanged sentences

3,293,692 2.55 15.62

(1) The number of warrants do not include 1,219,153

Pre-Funded Warrants that were issued but not exercised as of September 30, 2024.

During the three months ended September 30, 2024,

the Company issued warrants to purchase an aggregate of 2,524,392 shares of Common Stock in connection with the September 2024 Offering

as described in Note 6 above, excluding the Pre-Funded Warrants.

This consisted of (i) Series A Warrants to purchase 1,219,513 shares

of Common Stock, (ii) Series B Warrants to purchase 1,219,513 shares of Common Stock, and (iii) Placement Agent Warrants to purchase 85,366

shares of Common Stock

The Series A Warrants have an exercise price of

$ 3.85 per share and have a term of exercise equal to five (5) years from the date of issuance.

The Series B Warrants have an exercise

price of $ 3.85 per share and have a term of exercise equal to eighteen (18) months from the date of issuance.

The Placement Agent Warrants

have an exercise price of $ 5.13 per share and have a term of exercise equal to five (5) years from the date of issuance.

The exercise price of each 2021 PIPE Warrant was

reduced from $ 70.00 per share to $ 20.00 per share in connection with the Warrant Modification.

The Company recognized the effect of the

Warrant Modification as a dividend of $ 359,656 .

three months ended September 30, 2024 and 2023, total stock-based compensation expense related to the Company’s warrants was approximately

three months ended March 31, 2025 and 2024, total stock-based compensation expense related to the Company’s warrants was approximately

$ 1,573 and $ 787 , respectively, and is recognized within general and administrative expense on the condensed consolidated statements

of operations and comprehensive loss .

During the nine months ended September 30, 2024,

During the three months ended March 31, 2025,

the Company issued no warrants.

During the three months ended March 31, 2024,

the Company issued warrants to purchase an aggregate of 1,500 shares of Common Stock in exchange for consulting services.

were issued on March 1, 2024 and September 30, 2024 at $ 8.13 per share, $ 3.85 per share and $ 5.13 per share.

These warrants become exercisable

in twelve equal monthly instalments commencing the day after issue date.

warrants were issued on March 1, 2024 and became exercisable in twelve equal monthly installments commencing on April 1, 2024 at $ 8.13 per

The warrants expire ten years from the date of issuance.

nine months ended September 30, 2024 and 2023, total stock-based compensation expense related to the Company’s warrants was approximately

$ 5,507 and $ 0 , respectively, and is recognized within general and administrative expense on the condensed consolidated statements of operations

and comprehensive loss.

No warrants were expired/cancelled or exercised

during the nine months ended September 30, 2024 .

during the three months ended March 31, 2025 and 2024 .

NOTE 9 – COMMITMENTS AND CONTINGENCIES

and Regulatory Environment

The healthcare

industry is subject to numerous laws and regulations of federal, state and local governments.

These laws and regulations include, but

are not limited to, matters such as licensure, accreditation, government healthcare program participation requirement, reimbursement for

patient services and Medicare and Medicaid fraud and abuse.

Government activity has increased with respect to investigations and allegations

concerning possible violations of fraud and abuse statutes and regulations by healthcare providers.

of these laws and regulations could result in expulsion from government healthcare programs, together with the imposition of significant

fines and penalties, as well as significant repayments for patient services previously billed.

Management believes that the Company is

in compliance with fraud and abuse regulations, as well as other applicable government laws and regulations.

While no material regulatory

inquiries have been made, compliance with such laws and regulations can be subject to future government review and interpretation, as

well as regulatory actions unknown or unasserted at this time.

NOTE 10 – DISCONTINUED OPERATIONS

During the year ended December 31, 2023, the Company

sold and disposed of our assets associated with the Clinics operations in Los Angeles, CA and disposed of our services in the U.K.

lease associated with the related property in Los Angeles was assumed by the buyer in the transaction.

As of September 30, 2024 and December 31, 2023,

the carrying amounts of the classes of assets and liabilities related to the discontinued operations of the Clinics operations were $ 0 .

The results of operations from discontinued operations for

the three and nine months ended September 30, 2024 and 2023, have been reflected in the condensed

consolidated statements of operations and consist of the following:

Three Months Ended

September 30,

Nine Months Ended

September 30,

Cost of services

Selling, general and administrative

Loss from discontinued operations

Gain on sale of assets

Loss from discontinued operations, before income tax

Income tax expense

Net loss from discontinued operations, net of tax

$ ( 437,015 )

Weighted-average common shares outstanding, basic and diluted

Basic and diluted loss per share from discontinued operations

In accordance with U.S.

GAAP, only expenses specifically

identifiable and related to a business to be disposed may be allocated to discontinued operations.

As such, the general and administrative

expenses recorded in discontinued operations include corporate costs incurred directly in support of the Clinics business.

Legal and Regulatory Environment

The healthcare industry is subject to numerous

laws and regulations of federal, state and local governments.

These laws and regulations include, but are not limited to, matters such

as licensure, accreditation, government healthcare program participation requirement, reimbursement for patient services and Medicare

and Medicaid fraud and abuse.

Government activity has increased with respect to investigations and allegations concerning possible violations

of fraud and abuse statutes and regulations by healthcare providers.

Violations of these laws and regulations could

result in expulsion from government healthcare programs, together with the imposition of significant fines and penalties, as well as significant

repayments for patient services previously billed.

Management believes that the Company is in compliance with fraud and abuse regulations,

as well as other applicable government laws and regulations.

While no material regulatory inquiries have been made, compliance with such

laws and regulations can be subject to future government review and interpretation, as well as regulatory actions unknown or unasserted

at this time.

NOTE 10 – RELATED PARTY TRANSACTIONS

PsychoGenics,

In April 2023 we entered into a contract with

PsychoGenics, Inc.

(“PsychoGenics”) for the conduct of one of our preclinical studies.

PsychoGenics is a contract manufacturing

organization with extensive preclinical experience in CNS and orphan disorders.

Pursuant to the contract, we made aggregate payments to

PsychoGenics totaling approximately $ 0.3 million over the term of the contract.

The contract was completed in September 2023.

Emer Leahy, a member of our Board, is

the current Chief Executive Officer and a less than 5 % owner of PsychoGenics.

Consulting Agreement with Prof.

Lawrence Steinman

The Steinman Consulting Agreement memorializes

the compensation arrangements pursuant to which Prof.

Steinman has been compensated for his services to our Company, as previously disclosed

in our public filings.

The Steinman Consulting Agreement memorializes the compensation arrangements

pursuant to which Prof.

Steinman has been compensated for his services to the Company, as previously disclosed in our public filings.

Pursuant to the Steinman Consulting Agreement, Prof.

Steinman provides a variety of consulting and advisory services

relating principally to the clinical and commercial development of our product candidates, including our research and development strategy

through all phases of discovery and preclinical development, identifying potential partners for our pre-clinical assets, and business

development efforts related to our pre-clinical assets, among other things.

Steinman provides a variety of consulting and advisory services relating principally

to the clinical and commercial development of our product candidates, including our research and development strategy through all phases

of discovery and preclinical development, identifying potential partners for our pre-clinical assets, and business development efforts

related to our pre-clinical assets, among other things.

Pursuant to the Steinman Consulting Agreement, Prof.

receives $ 25,000 per quarter for his services.

Steinman receives $ 25,000 per

quarter for his services.

NOTE 11 – SEGMENT INFORMATION

The Company views its operations and manages its

business as one operating and reportable segment, which is the business of research and development of innovative treatments

for central nervous system (CNS) disorders and other diseases, including RASopathies and certain cancers.

The determination of a single

operating segment is consistent with the consolidated financial information regularly provided to the CODM.

Consistent with the operational

structure, the Chief Executive Officer, as the CODM, reviews and evaluates net loss for purposes of assessing performance, making operating

decisions, allocating resources available and how to best deploy these resources across functions, therapeutic areas and research and

development projects, and planning and forecasting for future periods on a consolidated basis.

Operating expenses are used to monitor

budget versus actual results in assessing performance of the segment.

Total assets are monitored by the CODM on a consolidated basis which

is reported on the face of the consolidated balance sheets.

All the Company’s long-lived assets are held in the United States.

The following table is representative of the significant

expense categories regularly provided to the CODM when managing the Company’s single reporting segment.

A reconciliation to

the consolidated net loss for the three months ended March 31, 2025 and 2024 is included at the bottom of the table below.

For the Three Months

Significant segment expenses

General and administrative (1)

Pre-clinical research (1)

Clinical development (1)

Depreciation and amortization

Share based compensation expense

Other segment items (2)

Total operating and segment expenses

Reconciliation of net loss

Change in fair value of warrant liabilities

Realized foreign currency translation loss from dissolution of subsidiaries

Interest and dividends, net

Segment and consolidated net loss

(1) includes personnel costs and excludes

share-based compensation expense

(2) includes loss from sale of assets,

and loss on asset write offs

NOTE 12 – SUBSEQUENT EVENTS

The Company has evaluated events and transactions subsequent to September

30, 2024 through the date these condensed consolidated financial statements were included on Form 10-Q and filed with the SEC.

this period, the Company did not have any material reportable subsequent events, except as disclosed below.

On November 12, 2024, Dr.

Graeme Currie resigned

from his position as Chief Development Officer effective as of November 15, 2024.

In the interim, the Company will proceed with clinical

development of its product candidates without disruption, in consultation with its existing consultants.

The Company has evaluated events and transactions

subsequent to March 31, 2025 through the date these condensed consolidated financial statements were included on Form 10-Q and filed with

During this period, the Company did not have any material reportable subsequent events, except as disclosed below.

ATM Agreement

Subsequent to the quarter ended March 31, 2025, we sold 252,600 shares

of Common Stock under our ATM Agreement at an average price of $ 1.47 for gross proceeds of $ 370,160 and net proceeds of $ 358,037 .

May 2025 Public Offering

On May 7, 2025, the Company closed a public offering

of 3,571,428 shares of Common Stock (or pre-funded warrants in lieu thereof) and accompanying Series C warrants to purchase up to 3,571,428

shares of Common Stock and Series D warrants to purchase up to 3,571,428 shares of Common Stock, at a combined offering price of $ 1.40

per share of Common Stock (or per pre-funded warrant in lieu thereof) and accompanying warrants.

The Series C warrants have an exercise

price of $ 1.40 per share, are exercisable upon issuance and will expire five years thereafter.

The Series D warrants have an exercise

price of $ 1.40 per share, are exercisable upon issuance and will expire 18 months thereafter.

Additionally, in connection with the consummation

of the offering, certain investors exercised Series D warrants to purchase an aggregate of 914,286 shares of Common Stock resulting in

gross proceeds of approximately $ 1.3 million to the Company.

Total gross proceeds to the Company from the

offering were $ 5.0 million, before deducting the placement agent’s fees and other offering expenses payable by the Company.

Aggregate gross proceeds from the offering and the exercise of the Series D warrants were approximately $ 6.3 million.

intends to use the net proceeds from this offering for general corporate purposes, which includes, without limitation, ongoing

research and pre-clinical studies, clinical trials, the development of new biological and pharmaceutical technologies, investing in

or acquiring companies that are synergistic with or complementary to the Company’s technologies, licensing activities related

to its current and future product candidates, and to the development of emerging technologies, investing in or acquiring companies

that are developing emerging technologies, licensing activities, or the acquisition of other businesses and working capital.

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-Q

Item 1. Financial Statements