Pasithea Therapeutics Corp. 10-Q

Item 1. Financial Statements PASITHEA THERAPEUTICS CORP. CONDENSED CONSOLIDATED BALANCE SHEETS June 30, 2025 December 31, 2024 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 7,217,052 $ 6,922,729 Prepaid expenses 1,301,705 302,641 Other current assets 117,842 142,945 Total current assets 8,636,599 7,368,315 Property and equipment, net 113,564 122,343 Intangibles, net 6,996,068 7,311,150 Goodwill 1,262,911 1,262,911 Total assets $ 17,009,142 $ 16,064,719 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued liabilities $ 1,581,501 $ 1,119,871 Financed director and officer insurance premiums 155,455 - Total current liabilities 1,736,956 1,119,871 Non-current liabilities Warrant liabilities 93,741 162,172 Total non-current liabilities 93,741 162,172 Total liabilities 1,830,697 1,282,043 Stockholders’ equity: Preferred stock, par value $ 0.0001 , 5,000,000 shares authorized; 0 shares issued and outstanding as of June 30, 2025, and December 31, 2024 - - Common stock, par value $ 0.0001 , 100,000,000 shares authorized; 7,443,577 and 1,394,263 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively 743 139 Additional paid-in capital 72,034,244 64,372,486 Accumulated other comprehensive loss 5,631 ( 7,171 ) Accumulated deficit ( 56,862,173 ) ( 49,582,778 ) Total stockholders’ equity 15,178,445 14,782,676 Total liabilities and stockholders’ equity $ 17,009,142 $ 16,064,719 See accompanying notes to the unaudited condensed consolidated financial statements. 1 PASITHEA THERAPEUTICS CORP. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) For the Three Months Ended June 30, For the Six Months Ended June 30, 2025 2024 2025 2024 Operating expenses: General and administrative $ 1,662,223 $ 1,587,060 $ 3,612,551 $ 3,878,706 Research and development 2,148,676 2,357,974 3,878,527 4,107,102 Loss from operations ( 3,810,899 ) ( 3,945,034 ) ( 7,491,078 ) ( 7,985,808 ) Other income (expense): Change in fair value of warrant liabilities ( 8,436 ) ( 35,622 ) 68,431 ( 8,906 ) Realized foreign currency translation loss from dissolution of subsidiaries - - ( 7,171 ) - Foreign currency gain 29,290 - 29,290 - Other income 19,464 - 19,464 - Interest and dividends, net 54,424 114,407 101,669 267,625 Other income, net 94,742 78,785 211,683 258,719 Loss before income taxes ( 3,716,157 ) ( 3,866,249 ) ( 7,279,395 ) ( 7,727,089 ) Provision for income taxes - - - - Net loss $ ( 3,716,157 ) $ ( 3,866,249 ) $ ( 7,279,395 ) $ ( 7,727,089 ) Weighted-average common shares outstanding, basic and diluted 5,641,251 1,043,312 3,935,704 1,042,895 Basic and diluted loss per share $ ( 0.66 ) $ ( 3.71 ) $ ( 1.85 ) $ ( 7.41 ) Comprehensive loss: Net loss $ ( 3,716,157 ) $ ( 3,866,249 ) $ ( 7,279,395 ) $ ( 7,727,089 ) Foreign currency translation 5,631 ( 2,912 ) 5,631 ( 3,532 ) Comprehensive loss $ ( 3,710,526 ) $ ( 3,869,161 ) $ ( 7,273,764 ) $ ( 7,730,621 ) See accompanying notes to the unaudited condensed consolidated financial statements. 2 PASITHEA THERAPEUTICS CORP. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Unaudited) Accumulated Additional Other Total Common Stock Paid-in Comprehensive Accumulated Stockholders’ Shares Amount Capital Loss Deficit Equity Balance at January 1, 2024 1,041,582 $ 104 $ 58,721,538 $ ( 4,652 ) $ ( 35,318,538 ) $ 23,398,452 Stock-based compensation: -restricted stock units 1,666 - 48,088 - - 48,088 -stock options - - 297,602 - - 297,602 -warrants - - 787 - - 787 Foreign currency translation - - - ( 620 ) - ( 620 ) Net loss - - - - ( 3,860,840 ) ( 3,860,840 ) Balance at March 31, 2024 1,043,248 $ 104 $ 59,068,015 $ ( 5,272 ) $ ( 39,179,378 ) $ 19,883,469 Stock-based compensation: -restricted stock units 833 - 23,912 - - 23,912 -stock options - - 134,680 - - 134,680 -warrants - - 2,360 - - 2,360 Foreign currency translation - - - ( 2,912 ) - ( 2,912 ) Net loss - - - - ( 3,866,249 ) ( 3,866,249 ) Balance at June 30, 2024 1,044,081 $ 104 $ 59,228,967 $ ( 8,184 ) $ ( 43,045,627 ) $ 16,175,260 Balance at January 1, 2025 1,394,263 $ 139 $ 64,372,486 $ ( 7,171 ) $ ( 49,582,778 ) $ 14,782,676 Stock-based compensation: -stock options - - 96,985 - - 96,985 -warrants - - 1,573 - - 1,573 Issuance of common stock under ATM agreement, net of offering costs 440,000 44 1,652,701 - - 1,652,745 Issuance of common stock from the exercise of pre-funded warrants, net 871,000 87 784 - - 871 Realized foreign currency translation loss from dissolution of subsidiaries - - - 7,171 - 7,171 Net loss - - - - ( 3,563,238 ) ( 3,563,238 ) Balance at March 31, 2025 2,705,263 $ 270 $ 66,124,529 $ - $ ( 53,146,016 ) $ 12,978,783 Stock-based compensation: -stock options - - 57,645 - - 57,645 Issuance of common stock under ATM agreement, net of offering costs 252,600 25 358,012 - - 358,037 Issuance of common stock in May 2025 public offering, net of offering costs 3,571,428 357 4,214,149 - - 4,214,506 Issuance of common stock from the exercise of warrants, net 914,286 91 1,279,909 - - 1,280,000 Foreign currency translation - - - 5,631 - 5,631 Net loss - - - - ( 3,716,157 ) ( 3,716,157 ) Balance at June 30, 2025 7,443,577 $ 743 $ 72,034,244 $ 5,631 $ ( 56,862,173 ) $ 15,178,445 See accompanying notes to the unaudited condensed consolidated financial statements. 3 PASITHEA THERAPEUTICS CORP. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) For the Six Months Ended June 30, 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ ( 7,279,395 ) $ ( 7,727,089 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 8,370 9,432 Amortization expense 315,082 315,082 Stock-based compensation 156,203 507,429 Change in fair value of warrant liabilities ( 68,431 ) 8,906 Realized foreign currency translation loss from dissolution of subsidiaries 7,171 - Loss on asset write-off 409 - Changes in operating assets and liabilities: Prepaid expenses ( 550,785 ) ( 354,347 ) Other current assets 25,103 40,553 Accounts payable and accrued liabilities 461,630 ( 1,157,508 ) Lease liabilities - ( 2,409 ) Net cash used in operating activities ( 6,924,643 ) ( 8,359,951 ) CASH FLOWS FROM FINANCING ACTIVITIES: Payments on financed director and officer insurance ( 292,824 ) - Proceeds from exercises of pre-funded warrants 871 - Proceeds from sale of common stock under ATM agreement, net 2,010,782 - Proceeds from sale of common stock from public offerings, net 4,214,506 - Proceeds from exercises of warrants 1,280,000 - Net cash provided by financing activities 7,213,335 - Effect of foreign currency translation on cash 5,631 ( 3,532 ) NET CHANGE IN CASH $ 294,323 $ ( 8,363,483 ) Cash - Beginning of period 6,922,729 16,331,052 Cash - End of period $ 7,217,052 $ 7,967,569 Supplemental disclosure of cash flow information: Cash paid for interest $ 13,212 $ - Cash paid for taxes $ - $ - See accompanying notes to the unaudited condensed consolidated financial statements. 4 PASITHEA THERAPEUTICS CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024 NOTE 1 – NATURE OF THE ORGANIZATION AND BUSINESS Pasithea Therapeutics Corp. (“Pasithea” or the “Company”) was incorporated in the State of Delaware on May 12, 2020 and completed an initial public offering (the “Initial Public Offering”) on September 17, 2021. The Company is a clinical-stage biotechnology company primarily focused on the discovery, research and development of innovative treatments for central nervous system (CNS) disorders, RASopathies, MAPK pathway-driven tumors and other diseases. The Company’s primary operations (the “Therapeutics” segment) are focused on developing the Company’s lead product candidate, PAS-004, a next-generation macrocyclic mitogen-activated protein kinase, or MEK inhibitor that the Company believes may address the limitations and liabilities associated with existing drugs targeting a similar mechanism of action. In December 2023, the U.S. 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 its 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 Study”). The Company is currently conducting the FIH Phase 1 Dose Escalation Study at four clinical sites in the United States and three additional sites in Eastern Europe and expects to complete the FIH Phase 1 Dose Escalation Study in 2026. In May 2025, the Company initiated a Phase 1/1b multicenter, open-label, dose escalation trial of PAS-004 in adult patients with neurofibromatosis type 1 (“NF1”) with symptomatic and inoperable, incompletely resected, or recurrent plexiform neurofibromas (“PN”) with the activation of the first clinical trial site in Australia. The Company expects to conduct the trial at a total of five sites in Australia, South Korea and the United States in up to 24 patients in a dose escalation phase followed by 24 patients in an expansion phase. The initial indication the Company plans to seek FDA marketing approval for PAS-004 is the treatment of symptomatic PNs in both adult and pediatric patients with NF1. As such, the Company aims to conduct a Phase 1 trial for pediatric NF1-PN patients and ultimately complete registrational clinical trials in both adult and pediatric NF1-PN populations. Additionally, the Company has two programs that are in the discovery stage, which the Company believes address limitations in the treatment paradigm of the indications the Company plans to address with these programs, which are currently amyotrophic lateral sclerosis (“ALS”) for PAS-003 and schizophrenia for PAS-001. 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. 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. Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). 5 Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period. Liquidity and Capital Resources As of June 30, 2025, the Company had approximately $ 7.2 million of cash and cash equivalents and working capital of approximately $ 6.9 million. 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. 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. 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. Going Concern Uncertainty 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 June 30, 2025, the Company had cash and cash equivalents of approximately $ 7.2 million and an accumulated deficit of approximately $ 56.9 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. NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of 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 are presented in U.S. Dollars. 6 Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statement and the reported amounts of revenues 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; the recoverability of long-lived assets; 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 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 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 clinical activities, costs to acquire drug products 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. 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 June 30, 2025 and 2024, the Company recorded no grant income as a contra expense within research and development. For the six months ended June 30, 2025 and 2024, the Company recorded grant income of approximately $ 43,000 and zero as a contra expense within research and development, respectively. General and Administrative Our general and administrative expenses primarily consist of personnel and related costs, including stock-based compensation, legal fees relating to both intellectual property and corporate matters, accounting and audit related costs, insurance, corporate communications and public company expenses, information technology, office and facility rents and related expenses, including depreciation, amortization and maintenance, and fees for consulting, business development and other professional services. Defined-Contribution Savings Plan In the United States, the Company maintains a defined-contribution savings plan pursuant to Section 401(k) of the Internal Revenue Code of 1986, as amended. The plan is available to employees who meet the minimum age and length of service requirements. The contributions made during the three and six months ended June 30, 2025 and 2024 were immaterial. Grants 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 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. Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents, classified as trading securities. The Company had cash equivalents of $ 6.2 million and $ 6.1 million as of June 30, 2025 and December 31, 2024, respectively. 7 Property and Equipment, net Property and equipment is recorded at cost. 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. Expenditures that enhance the useful lives of the assets are capitalized and depreciated. Maintenance 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. 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. 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. Income Taxes 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. The 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 realized. As of June 30, 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 June 30, 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 return. 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 June 30, 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. The Company is subject to income tax examinations by major taxing authorities since inception. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $ 250,000 . As of June 30, 2025, the Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account. Fair Value of Financial Instruments With the exception of liabilities related to the IPO Warrants, described in the table below, the fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature. 8 Fair Value Measurements Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. U.S. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include: ● 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; and ● 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: Fair value Quoted prices in active markets for identical liabilities (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets: Cash equivalents, June 30, 2025 $ 6,207,926 $ 6,207,926 $ - $ - Cash equivalents, December 31, 2024 $ 6,093,044 $ 6,093,044 $ - $ - Liabilities: Public warrant liabilities, June 30, 2025 $ 88,000 $ 88,000 $ - $ - Representative warrant liabilities, June 30, 2025 $ 5,741 $ - $ - $ 5,741 Liabilities: Public warrant liabilities, December 31, 2024 $ 152,240 $ 152,240 $ - $ - Representative warrant liabilities, December 31, 2024 $ 9,932 $ - $ - $ 9,932 The following tables present a reconciliation of the Level 3 Representative Warrants liabilities: Three Months Ended June 30, 2025 2024 Representative warrant liabilities, April 1 $ 5,224 $ 3,530 Issuances - - Exercises - - Change in fair value 517 2,182 Representative warrant liabilities, June 30 $ 5,741 $ 5,712 Six Months Ended June 30, 2025 2024 Representative warrant liabilities, January 1 $ 9,932 $ 5,166 Issuances - - Exercises - - Change in fair value ( 4,191 ) 546 Representative warrant liabilities, June 30 $ 5,741 $ 5,712 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. 9 The fair value of the cash equivalents is based on the fair value of marketable securities invested in U.S. government money market funds. The fair value of the liability associated with the Public Warrants as of June 30, 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 June 30, 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 fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement. Net Loss Per Share Net loss per share is computed by dividing net loss by the weighted average number of shares of Common Stock outstanding during the reporting period. Diluted earnings per share is computed similarly to the basic earnings per share, except the weighted average number of shares of Common Stock outstanding is increased to include additional shares of Common Stock from the assumed exercise of share options, if dilutive. The following outstanding shares of Common Stock issuable upon exercise of stock options and warrants and vesting of restricted stock units were excluded from the computation of diluted net loss per share for the periods presented because including them would have had an anti-dilutive effect: Six Months Ended June 30, 2025 2024 Stock options 151,318 198,079 Warrants 9,772,262 7,693 Restricted stock units - 1,669 Foreign Currency Translations The Company’s functional and reporting currency is the U.S. dollar. All transactions initiated in other currencies are translated into U.S. dollars using the exchange rate prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currencies are translated into the U.S. dollar at the rate of exchange in effect at the balance sheet date. Unrealized exchange gains and losses arising from such transactions are deferred until realization and are included as a separate component of stockholders’ equity (deficit) as a component of comprehensive income or loss. Upon realization, the amount deferred is recognized in income in the period when it is realized. Translation of Foreign Operations The financial results and position of foreign operations whose functional currency is different from the Company’s presentation currency are translated as follows: ● assets and liabilities are translated at period-end exchange rates prevailing at that reporting date; ● equity is translated at historical exchange rates; and ● income and expenses are translated at average exchange rates for the period. 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 and six months ended June 30, 2025, the Company had one operating subsidiary with a functional currency other than the U.S. dollar, which resulted in a foreign currency translation gain of approximately $ 6,000 . During the three and six months ended June 30, 2024, the Company had one operating subsidiary with a functional currency other than the U.S. dollar, which resulted in foreign currency translation losses of approximately $ 4,000 and approximately $ 3,000 , respectively. Additionally, losses related to the now dissolved subsidiaries which were previously operating in functional currencies not that of the U.S. dollar as the parent were realized in the consolidated statements of operations within other income (expense) in the amount of approximately $ 7,000 for the three and six months ended June 30, 2025. 10 The relevant translation rates are as follows: As of June 30, 2025 As of December 31, 2024 Closing rate, British Pound (GBP) to $USD at period end N/A 1.2529 Average rate, GBP to $USD for the period ended N/A 1.2783 Closing rate, Euro (EUR) to $USD at period end N/A 1.0355 Average rate, EUR to $USD for the period ended N/A 1.0818 Closing rate, Australian Dollar (AUD) to $USD at period end 0.6533 N/A Average rate, AUD to $USD for the period of subsidiary inception to period end 0.6533 N/A N/A - Not applicable due to the Company having no operating subsidiaries with functional currencies other than that of the parent company U.S. Dollar 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. During the three and six months ended June 30, 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 Long-lived and amortizable intangible assets are assessed annually for impairment or sooner should impairment indicators exist. Significant events or changes in business circumstances indicate that the carrying value of the assets may not be recoverable. Such circumstances may include a significant decrease in the market price of an asset, a significant adverse change in the manner in which the asset is being used or in its physical condition or a history of operating or cash flow losses associated with the use of an asset. An impairment loss is recognized when the carrying amount of an asset exceeds the anticipated future undiscounted cash flows expected to result from the use of the asset and its eventual disposition. The amount of the impairment loss is the excess of the asset’s carrying value over its fair value. There were no charges related to impairments of long-lived assets for all periods presented. Goodwill is assessed for impairment annually during the fourth quarter, or more frequently if impairment indicators exist. Impairment exists when the carrying amount of goodwill exceeds its implied fair value. The Company may elect to assess goodwill for impairment using a qualitative or a quantitative approach, to determine whether it is more likely than not that the fair value of goodwill is greater than its carrying value. There were no charges related to goodwill impairment for all periods presented. Leases The Company’s has leases related to office space. 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. 11 Stock-Based Compensation The Company accounts for its stock-based compensation awards to employees and members of its Board of Directors (the “Board”) in accordance with ASC Topic 718, Compensation—Stock Compensation (“ASC 718”). ASC 718 requires all stock-based payments to employees and Board members, including grants of employee stock options, to be recognized in the statements of operations by measuring the fair value of the award on the date of grant and recognizing 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. As of June 30, 2025, the remaining payable balance on the note was approximately $ 155,000 . 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, RASopathies, MAPK pathway-driven tumors and other diseases. See Note 12 Segment Information for further information. Recent Accounting Pronouncements 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 statements. Recently 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: As of June 30, 2025 As of December 31, 2024 Leasehold improvements $ - $ 3,193 Medical equipment 155,363 155,363 Office equipment 6,140 6,140 Property and equipment, gross 161,503 164,696 Less: accumulated depreciation ( 47,939 ) ( 42,353 ) Property and equipment, net $ 113,564 $ 122,343 Depreciation expense was approximately $ 4,000 and approximately $ 5,000 for the three months ended June 30, 2025 and 2024, respectively, and approximately $ 8,000 and approximately $ 9,000 for the six months ended June 30, 2025, respectively. During the six months ended June 30, 2025, the Company wrote off gross leasehold improvements of approximately $ 3,200 and related accumulated amortization of approximately $ 2,500 , resulting in a loss of approximately $ 700 recorded in general and administrative expense in the condensed consolidated statements of operations and comprehensive loss. 12 NOTE 4 – LEASES Laboratory Lease – South San Francisco, California 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. Monthly rent was $ 16,656 during 2024. This lease was accounted for as an operating lease under ASC 842, Leases, which resulted in the recognition of a right of use asset (“ROU asset”) and liability of approximately $ 332,000 at inception. 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 June 30, 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 June 30, Six Months Ended June 30, 2025 2024 2025 2024 Operating lease expense $ - $ 79,587 $ - $ 122,103 Cash paid for amounts included in the measurement of operating lease liabilities $ - $ - $ - $ - There are no additional lease payments as of June 30, 2025. NOTE 5 – INTANGIBLE ASSETS Intangible assets, net consists of the following: June 30, 2025 December 31, 2024 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net In-process research and development $ 2,900,000 $ - $ 2,900,000 $ 2,900,000 $ - $ 2,900,000 Patents and intellectual property 5,671,478 ( 1,575,410 ) 4,096,068 5,671,478 ( 1,260,328 ) 4,411,150 Intangible assets, net $ 8,571,478 $ ( 1,575,410 ) $ 6,996,068 $ 8,571,478 $ ( 1,260,328 ) $ 7,311,150 As of June 30, 2025, future expected amortization expense of Intangible assets was as follows: 2025 (remaining) 315,082 2026 630,164 2027 630,164 2028 630,164 2029 630,164 Thereafter 1,260,330 Remaining future amortization expense $ 4,096,068 There were no changes to goodwill for the three and six months ended June 30, 2025 and 2024. 13 NOTE 6 – STOCKHOLDERS’ EQUITY The Company has an aggregate of 105,000,000 authorized shares. 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. Common Stock The Company had 7,443,577 and 1,394,263 shares of its Common Stock issued and outstanding at June 30, 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 Second Amended and Restated Certificate of Incorporation, as amended (the “Charter”), and Amended and Restated 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 policy of our Board is to retain earnings, if any, for operations and growth. Upon liquidation, dissolution or winding-up, the holders of our Common Stock will be entitled to share ratably in all assets that are legally available for distribution. Holders of our Common Stock have no preemptive, conversion or subscription rights, and there are no redemption or sinking fund provisions applicable to the Common Stock. The rights, preferences and privileges of the holders of Common Stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of our preferred stock that we may designate and issue in the future. Effective January 2, 2024, the Company amended its Charter to effect a one-for-twenty ( 1 : 20 ) reverse stock split of its 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 by an amount 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 of Common Stock 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 June 30, 2025, 264,221 total shares were available under the 2023 Plan, of which 90,068 shares were issued and outstanding and 174,153 shares were available for potential issuances. September 2024 Private Placement On September 26, 2024, the Company entered into a securities purchase agreement (the “September 2024 Private Placement”) with an institutional investor, pursuant to which the Company agreed to sell pre-funded warrants (the “September 2024 Pre-Funded Warrants”) to purchase up to an aggregate of 1,219,513 shares of Common Stock at an exercise price of $ 0.001 per share, Series A warrants (the “Series A Warrants”) to purchase up to an aggregate of 1,219,513 shares of Common Stock at an exercise price of $ 3.85 per share, and Series B warrants (the “Series B Warrants” and, together with the Series A Warrants, the “September 2024 PIPE Warrants”) to purchase up to an aggregate of 1,219,513 shares of Common Stock with an exercise price of $ 3.85 per share. The combined purchase price per September 2024 Pre-Funded Warrant and accompanying September 2024 PIPE Warrants was $ 4.099 . Aggregate gross proceeds from the September 2024 Private Placement were approximately $ 4.5 million and the September 2024 Private Placement closed on September 30, 2024. The September 2024 Pre-Funded Warrants are exercisable immediately upon issuance and expire when exercised in full. The Series A Warrants are exercisable immediately upon issuance and have a term of exercise equal to five ( 5 ) years from the date of issuance. The Series B Warrants are exercisable immediately upon issuance and have a term of exercise equal to eighteen ( 18 ) months from the date of issuance. 14 A holder of the September 2024 Pre-Funded Warrants and the September 2024 PIPE Warrants may not exercise any portion of such holder’s September 2024 Pre-Funded Warrants or September 2024 PIPE Warrants to the extent that the holder, together with its affiliates, would beneficially own more than 4.99 % (or, at the election of the holder, 9.99 %) of the Company’s outstanding shares of Common Stock immediately after exercise, except that upon at least 61 days’ prior notice from the holder to the Company, the holder may increase the beneficial ownership limitation to up to 9.99 % of the number of shares of Common Stock outstanding immediately after giving effect to the exercise. In the event of certain fundamental transactions, holders of the September 2024 PIPE Warrants will have the right to receive the Black Scholes Value of their warrant calculated pursuant to a formula set forth in the warrant, payable either in cash or in the same type or form of consideration that is being offered and being paid to the holders of Common Stock. In connection with the September 2024 Private Placement, the Company entered into a registration rights agreement (the “Registration Rights Agreement”), dated as of September 26, 2024, with the investor, pursuant to which the Company agreed to prepare and file a registration statement with the Securities and Exchange Commission (the “SEC”) registering the resale of the shares of Common Stock underlying the September 2024 Pre-Funded Warrants and the September 2024 PIPE Warrants no later than fifteen (15) days after the date of the Registration Rights Agreement (the “Registration Statement”), and to use its best efforts to have the registration statement declared effective as promptly as practical thereafter, and in any event no later than forty-five (45) days following the date of the Registration Rights Agreement (or ninety (90) days following the date of the Registration Rights Agreement in the event of a “full review” by the SEC). The Registration Statement was declared effective by the SEC on October 11, 2024. The net proceeds to the Company from the September 2024 Private Placement were approximately $ 4.5 million, after deducting placement agent fees and offering expenses payable by the Company. In addition, the Company issued to the placement agent or its designees warrants (the “September 2024 Placement Agent Warrants”) to purchase up to an aggregate of 85,366 shares of Common Stock at an exercise price equal to $ 5.125 per share. The September 2024 Placement Agent Warrants have substantially the same terms as the September 2024 PIPE Warrants, are exercisable immediately upon issuance and have a term of five ( 5 ) years from the date of issuance. The Company intends to use the net proceeds received from the September 2024 Private Placement for working capital and general corporate purposes. The September 2024 PIPE Warrants met the requirement for equity classification. The Company computes the fair value of warrants and options using a Black-Scholes model. The expected term used for warrants is the contractual life. The Company is utilizing an expected volatility figure based on a review of the historical volatilities, over a period of time, equivalent to the expected life of the instrument being valued, of similarly positioned public companies within its industry. The risk-free interest rate was determined from the implied yields from U.S. Treasury zero-coupon bonds with a remaining term consistent with the expected term of the instrument being valued. During the six months ended June 30, 2025, all remaining 871,000 September 2024 Pre-Funded Warrants were exercised resulting in 871,000 shares of Common Stock being issued in the six months ended June 30, 2025, and there are no September 2024 Pre-Funded Warrants outstanding. As of June 30, 2025, all 1,219,153 of the September 2024 Pre-Funded Warrants were paid, issued and exercised. In addition, the September 2024 PIPE Warrants have not been exercised as of June 30, 2025. At The Market Offering Agreement with H.C. Wainwright & Co., LLC 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. On June 20, 2025, the Company increased the maximum aggregate offering price of the shares of Common Stock issuable under the ATM Agreement, from $ 2,076,000 to $ 4,227,000 and filed a prospectus supplement to register an aggregate of $ 2,151,000 of additional shares of Common Stock available to be sold under the ATM Agreement. During the quarter ended June 30, 2025, the Company sold an aggregate of 252,600 shares of Common Stock under the ATM Agreement at a weighted average price of $ 1.47 per share for gross proceeds of $ 370,160 and net proceeds of $ 358,037 . During the six months ended June 30, 2025, the Company sold an aggregate of 692,600 shares of Common Stock under the ATM Agreement at a weighted average price of $ 3.00 per share for gross proceeds of $ 2,075,688 and net proceeds of $ 2,010,782 . 15 May 2025 Public Offering On May 6, 2025, the Company entered into securities purchase agreements with investors (the “May 2025 Purchase Agreements”) pursuant to which the Company agreed to sell an aggregate of (i) 3,094,284 shares (the “May 2025 Shares”) of Common Stock, (ii) 477,144 pre-funded warrants (the “May 2025 Pre-Funded Warrants”) to purchase up to an aggregate of 477,144 shares of Common Stock (the “May 2025 Pre-Funded Warrant Shares”), (iii) 3,571,428 Series C Common Warrants (the “Series C Common Warrants”) to purchase up to an aggregate of 3,571,428 shares of Common Stock, and (iv) 3,571,428 Series D Common Warrants (the “Series D Common Warrants” and, together with the Series C Common Warrants, the “May 2025 Common Warrants”) to purchase up to an aggregate of 3,571,428 shares of Common Stock. Each May 2025 Share, or May 2025 Pre-Funded Warrant in lieu thereof, was sold together with a Series C Common Warrant to purchase one share of Common Stock and a Series D Common Warrant to purchase one share of Common Stock in a best efforts public offering (the “May 2025 Public Offering”). The public offering price for each May 2025 Share and accompanying May 2025 Common Warrants was $ 1.40 , and the public offering price for each May 2025 Pre-Funded Warrant and accompanying May 2025 Common Warrants was $ 1.399 . The May 2025 Pre-Funded Warrants have an exercise price of $ 0.001 per share, are exercisable immediately and will expire when exercised in full. The Series C Common Warrants have an exercise price of $ 1.40 per share, are exercisable upon issuance and will expire five years thereafter. The Series D Common Warrants have an exercise price of $ 1.40 per share, are exercisable upon issuance and will expire 18 months thereafter. Simultaneously with the closing of the May 2025 Public Offering, certain investors exercised Series D Common Warrants to purchase an aggregate of 914,286 shares of Common Stock, resulting in additional gross proceeds of approximately $ 1.3 million. In addition, all May 2025 Pre-Funded Warrants were exercised simultaneously with the closing of the May 2025 Public Offering, resulting in the issuance of 477,144 May 2025 Pre-Funded Warrant Shares. A holder will not have the right to exercise any portion of the May 2025 Common Warrants if the holder (together with its affiliates) would beneficially own in excess of 4.99 % (or, at the election of the holder, 9.99 %) of the number of shares of Common Stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the May 2025 Common Warrants. However, upon notice from the holder to the Company, the holder may increase the beneficial ownership limitation, which may not exceed 9.99 % of the number of shares of Common Stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the May 2025 Common Warrants, provided that any increase in the beneficial ownership limitation will not take effect until 61 days following notice to the Company. The net proceeds of the May 2025 Public Offering, after deducting the placement agent fees and estimated offering expenses payable by the Company and excluding the net proceeds from the exercise of the May 2025 Common Warrants, were approximately $ 4.2 million. The aggregate gross proceeds from the May 2025 Public Offering and the exercise of the Series D Common Warrants were approximately $ 6.3 million. The Company intends to use the net proceeds from the May 2025 Public 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 its technologies, licensing activities related to its current and future product candidates, and 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. The May 2025 Public Offering closed on May 7, 2025. In addition, the Company issued to the placement agent or its designees warrants (the “May 2025 Placement Agent Warrants”) to purchase up to an aggregate of 250,000 shares of Common Stock at an exercise price equal to $ 1.75 per share. The May 2025 Placement Agent Warrants have substantially the same terms as the Series C Common Warrants, are exercisable immediately upon issuance and have a term of five ( 5 ) years from the date of the May 2025 Purchase Agreements. The warrants issued in connection with the May 2025 Public Offering met the requirement for equity classification. The Company computes the fair value of warrants and options using a Black-Scholes model. The expected term used for warrants is the contractual life. The Company is utilizing an expected volatility figure based on a review of the historical volatilities, over a period of time, equivalent to the expected life of the instrument being valued, of similarly positioned public companies within its industry. The risk-free interest rate was determined from the implied yields from U.S. Treasury zero-coupon bonds with a remaining term consistent with the expected term of the instrument being valued. Restricted Stock Units During the three months ended June 30, 2025 and 2024, the Company issued a total of 0 and 833 shares of Common Stock, respectively, pursuant to the vesting of RSUs. The Company recognized approximately $ 0 and $ 24,000 of stock-based compensation expense for the three months ended June 30, 2025 and 2024, respectively, in relation to the vesting of historically granted RSUs. During the six months ended June 30, 2025 and 2024, the Company issued a total of 0 and 2,499 shares of Common Stock, respectively, pursuant to the vesting of RSUs. The Company recognized approximately $ 0 and $ 72,000 of stock-based compensation expense for the six months ended June 30, 2025 and 2024, respectively, in relation to the vesting of historically granted RSUs. During the three and six months ended June 30, 2025 and 2024, the Company did not grant any RSUs or restricted stock awards. As of June 30, 2025, there were no outstanding RSUs and no more remaining unamortized RSU compensation expense. 16 NOTE 7 – STOCK OPTIONS Stock Options Issued, Vested and Cancelled During the three months ended June 30, 2025 , the Company granted no stock options, had forfeitures of 13,528 stock options and stock options to purchase an aggregate of 4,480 shares of Common Stock, subject to time-based milestone vesting conditions, vested. During the three months ended June 30, 2024, the Company granted no stock options, had forfeitures of 5,354 stock options and stock options to purchase an aggregate of 4,771 shares of Common Stock, subject to time-based milestone vesting conditions, vested. During the six months ended June 30, 2025, the Company granted no stock options, had forfeitures of 30,716 stock options and stock options to purchase an aggregate of 27,379 shares of Common Stock, subject to time-based milestone vesting conditions, vested. During the six months ended June 30, 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 . Additionally, during the six months ended June 30, 2024, stock options to purchase an aggregate of 47,538 shares of Common Stock, subject to time-based milestone vesting conditions, vested. Stock-Based Compensation Total stock-based compensation related to the Company’s stock options was approximately $ 58,000 and approximately $ 135,000 for three months ended June 30, 2025 and 2024, respectively. For the three months ended June 30, 2025, the Company recognized approximately $ 56,000 of stock-based compensation related to its stock options within general and administrative expense, and approximately $ 2,000 within research and development expense on the condensed consolidated statements of operations and comprehensive loss. For the three months ended June 30, 2024, the Company recognized approximately $ 107,000 of stock-based compensation related to its stock options within general and administrative expense, and approximately $ 28,000 within research and development expense on the condensed consolidated statements of operations and comprehensive loss. Total stock-based compensation related to the Company’s stock options was approximately $ 155,000 and approximately $ 432,000 for six months ended June 30, 2025 and 2024, respectively. For the six months ended June 30, 2025, the Company recognized approximately $ 149,000 of stock-based compensation related to its stock options within general and administrative expense, and approximately $ 6,000 within research and development expense on the condensed consolidated statements of operations and comprehensive loss. For the six months ended June 30, 2024, the Company recognized approximately $ 290,000 of stock-based compensation related to its stock options within general and administrative expense, and approximately $ 142,000 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 six months ended June 30, 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 - - - - Expired/Cancelled ( 30,716 ) 21.11 - - Exercised - - - - Outstanding, June 30, 2025 151,318 $ 23.58 7.93 - Exercisable, June 30, 2025 105,700 $ 29.43 7.69 $ - As of June 30, 2025 , the remaining unamortized stock-based compensation expense related to the stock options was approximately $ 139,000 with 19 months of amortization remaining. 17 NOTE 8 – WARRANTS As of June 30, 2025 , the fair value of the Public Warrants was approximately $ 0.40 per Public Warrant based on the closing price of the warrants on The Nasdaq Capital Market. The fair value of the Representative Warrants was approximately $ 0.416 per Representative Warrant, which was based on the relative fair value to the Public Warrants. The following table summarizes the Company’s outstanding warrants: Exercise Price Number of warrants Weighted-average remaining contractual term (years) Weighted average exercise price $ 1.40 6,228,570 3.36 $ 1.75 250,000 4.85 $ 3.85 2,439,026 2.51 $ 5.13 85,366 4.26 $ 8.13 1,500 8.67 $ 20.00 433,999 1.40 $ 37.60 100,001 2.13 $ 120.00 13,800 1.21 $ 125.00 220,000 1.21 9,772,262 3.04 $ 6.20 For the three months ended June 30, 2025 and 2024, total stock-based compensation expense related to the Company’s warrants was $ 0 and $ 2,360 , respectively, and $ 1,573 and $ 3,147 for the six months ended June 30, 2025 and 2024, respectively. Stock-based compensation expense related to warrants is recognized within general and administrative expense on the condensed consolidated statements of operations and comprehensive loss . During the three and six months ended June 30, 2025, the Company issued warrants to purchase an aggregate of 7,392,856 shares of Common Stock in connection with the May 2025 Public Offering as described in Note 6 above. This consisted of (i) Series C Common Warrants to purchase 3,571,428 shares of Common Stock, (ii) Series D Common Warrants to purchase 3,571,428 shares of Common Stock, and (iii) May 2025 Placement Agent Warrants to purchase 250,000 shares of Common Stock . During the three and six months ended June 30, 2025, Series D Common Warrants to purchase an aggregate of 914,286 shares of Common Stock were exercised for cash resulting in gross proceeds to the Company of approximately $ 1.28 million. During the three months ended June 30, 2024, the Company issued no warrants. During the six months ended June 30, 2024, the Company issued warrants to purchase an aggregate of 1,500 shares of Common Stock in exchange for consulting services. The warrants were issued on March 1, 2024 and became exercisable in twelve equal monthly installments commencing on April 1, 2024 at $ 8.13 per share. The warrants expire ten years from the date of issuance. No warrants were expired/cancelled or exercised during the six months ended June 30, 2025 and 2024, except as described above . NOTE 9 – COMMITMENTS AND CONTINGENCIES 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. 18 NOTE 10 – RELATED PARTY TRANSACTIONS 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 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. Pursuant to the Steinman Consulting Agreement, Prof. Steinman receives $ 25,000 per quarter for his services. NOTE 11 – INCOME TAXES On July 4, 2025, the One Big Beautiful Bill Act was enacted, introducing significant changes to U.S. federal tax law, including modifications to corporate tax rates, deductions, and tax credit provisions. The Company is currently evaluating the provisions of the new law and assessing the potential impacts on its consolidated financial statements. As of June 30, 2025, the Company has not completed its analysis and has therefore not recorded any material adjustments related to the new legislation. The final impact of the tax law may differ from the Company’s current estimates as the assessment is completed and additional guidance, interpretations, or clarifications become available. NOTE 12 – 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, RASopathies, MAPK pathway-driven tumors and other diseases. 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 and six months ended June 30, 2025 and 2024 is included at the bottom of the table below. Three Months Ended June 30, Six Months Ended June 30, Significant segment expenses 2025 2024 2025 2024 General and administrative (1) 1,460,723 1,300,277 3,157,148 3,197,996 Pre-clinical research (1) 103,343 796,595 165,336 1,226,979 CMC (1) 99,413 420,951 324,010 798,771 Clinical development (1) 1,928,275 1,068,655 3,363,079 1,894,772 Depreciation and amortization 161,746 162,257 323,454 324,514 Share based compensation expense 57,645 160,952 156,203 507,429 Other segment items (2) ( 246 ) 35,347 1,848 35,347 Total operating and segment expenses 3,810,899 3,945,034 7,491,078 7,985,808 Reconciliation of net loss Change in fair value of warrant liabilities ( 8,436 ) ( 35,622 ) 68,431 ( 8,906 ) Realized foreign currency translation loss from dissolution of subsidiaries - - ( 7,171 ) - Foreign currency gain/(loss) 29,290 - 29,290 - Other income 19,464 - 19,464 - Interest and dividends, net 54,424 114,407 101,669 267,625 Segment and consolidated net loss 3,716,157 3,866,249 7,279,395 7,727,089 (1) includes personnel costs and excludes share-based compensation expense (2) includes loss from sale of assets, and loss on asset write offs NOTE 13 – SUBSEQUENT EVENTS The Company has evaluated events and transactions subsequent to June 30, 2025 through the date these condensed consolidated financial statements were included on Form 10-Q and filed with the SEC. During this period, the Company did not have any material reportable subsequent events. 19