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Item 9A. Controls and Procedures

2023-03-09 compared with 2022-03-31 · 2472 added, 1906 removed, 651 unchanged (87% of the section changed)

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to the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely discussions regarding required disclosure.

We, under the supervision of and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer,

have evaluated the effectiveness of our disclosure controls and procedures.

Based on that evaluation, our Chief Executive Officer and

Chief Financial Officer concluded that the design and operation of our disclosure controls and procedures were not effective because of

material weaknesses in our internal control over financial reporting, which are further described below in Material Weaknesses in Internal

Control Over Financial Reporting .

Material Weaknesses in Internal Control Over

Financial Reporting

In connection with the audit

of our financial statements for the year ended December 31, 2021 and 2020, we and our independent registered public accounting firm identified

material weaknesses in our internal control over financial reporting.

A material weakness is a deficiency, or a combination of deficiencies,

in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or

interim financial statements will not be prevented or detected on a timely basis.

Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible

for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act).

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2022.

In making this assessment,

our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”)

in Internal Control—Integrated Framework (2013 framework).

Based on our assessment

under the framework in Internal Control—Integrated Framework (2013 framework), our management concluded that our internal control

over financial reporting was not effective as of December 31, 2022 due to the existence of material weaknesses described below.

A material weakness in

internal control is a deficiency in internal control, or combination of control deficiencies, that adversely affects the Company’s

ability to initiate, authorize, record, process, or report external financial data reliably in accordance with GAAP such that there is

more than a remote likelihood that a material misstatement of the Company’s annual or interim financial statements will not be prevented

Material Weaknesses in Internal Control Over Financial Reporting

In connection with the audit of our financial statements

for the year ended December 31, 2022 and 2021, we and our independent registered public accounting firm identified material weaknesses

in our internal control over financial reporting.

The material weaknesses identified are as follows:

failed to employ a sufficient number of staff to maintain optimal segregation of duties and to provide optimal levels of oversight in

order to process financial information in a timely manner, analyze and account for complex, non-routine transactions, and prepare financial

do not yet have adequate internal controls in place for the timely identification, approval or reporting of related party transactions.

above material weaknesses did not result in a material misstatement of our previously issued financial statements, however, it could result

We failed to employ a sufficient number of staff to maintain optimal segregation of duties and to provide optimal levels of oversight in order to process financial information in a timely manner, analyze and account for complex, non-routine transactions, and prepare financial statements.

We do not yet have adequate internal controls in place for the timely identification, approval or reporting of related party transactions.

material weaknesses did not result in a material misstatement of our previously issued financial statements, however, it could result

in a misstatement of our account balances or disclosures that would result in a material misstatement of our annual or interim financial

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Remediation of Material Weaknesses

We are committed to maintaining

a strong internal control environment and implementing measures designed to help ensure that the material weaknesses are remediated as

soon as possible.

We believe we have made progress towards remediation and continue to implement our remediation plan for the material

weaknesses, which includes steps to increase dedicated qualified personnel including financial consultants, improve reporting processes,

and design and implement new controls.

Further, we have designed an approval policy and certain controls surrounding the identification,

approval and reporting of related party transactions, that we expect to implement during 2022.

We will consider the material weaknesses

remediated after the applicable controls operate for a sufficient period of time, and management has concluded, through testing, that

the controls are operating effectively.

The process of designing

and implementing an effective accounting and financial reporting system is a continuous effort that requires us to anticipate and react

to changes in our business and the economic and regulatory environments and to expend significant resources to maintain an accounting

and financial reporting system that is adequate to satisfy our reporting obligations.

As we continue to evaluate and take actions to improve

our internal control over financial reporting, we may determine to take additional actions to address control deficiencies or determine

to modify certain of the remediation measures described above.

We cannot assure you that the measures we have taken to date, or any measures

we may take in the future, will be sufficient to remediate the material weakness we have identified or avoid potential future material

We are committed to maintaining a strong internal control environment

and implementing measures designed to help ensure that the material weaknesses are remediated as soon as possible.

We believe we have

made progress towards remediation and continue to implement our remediation plan for the material weaknesses, which includes steps to

increase dedicated qualified personnel including financial consultants, improve reporting processes, and design and implement new controls.

We have also implemented a related party transactions approval policy which our Board of Directors approved on June 24, 2022.

we have designed certain controls surrounding the identification, approval and reporting of related party transactions, which we expect

to implement in 2023.

We will consider the material weaknesses remediated after the applicable controls operate for a sufficient period

of time, and management has concluded, through testing, that the controls are operating effectively.

The process of designing and implementing an effective

accounting and financial reporting system is a continuous effort that requires us to anticipate and react to changes in our business and

the economic and regulatory environments and to expend significant resources to maintain an accounting and financial reporting system

that is adequate to satisfy our reporting obligations.

As we continue to evaluate and take actions to improve our internal control over

financial reporting, we may determine to take additional actions to address control deficiencies or determine to modify certain of the

remediation measures described above.

We cannot assure you that the measures we have taken to date, or any measures we may take in the

future, will be sufficient to remediate the material weakness we have identified or avoid potential future material weaknesses.

Inherent Limitation

on the Effectiveness of Internal Control Processes

Our management,

including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls or our internal control

over financial reporting will prevent all errors and all fraud.

A control system, no matter how well designed and operated, can provide

only reasonable, not absolute, assurance that the objectives of the control system are met.

Because of the inherent limitations in all

control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have

been detected.

These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns

can occur because of a simple error or mistake.

Additionally, controls can be circumvented by the individual acts of some persons, by

collusion of two or more people or by management override of the controls.

The design of any system of controls is also based in part

upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving

its stated goals under all potential future conditions;

over time, controls may become inadequate because of changes in conditions, or

the degree of compliance with policies or procedures may deteriorate.

Because of the inherent limitations in a cost-effective control

system, misstatements due to error or fraud may occur and not be detected.

Management’s Report on Internal Control

over Financial Reporting

This Annual Report on Form

10-K does not include a report of management’s assessment regarding internal control over financial reporting or an attestation

report of our independent registered public accounting firm due to a transition period established by rules of the SEC for newly public

Additionally, our auditors will not be required to formally opine on the effectiveness of our internal control over financial

reporting pursuant to Section 404 until we are no longer an “emerging growth company”

as defined in the JOBS Act.

Our management, including our Chief Executive Officer

and Chief Financial Officer, does not expect that our disclosure controls or our internal control over financial reporting will prevent

all errors and all fraud.

A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance

that the objectives of the control system are met.

Because of the inherent limitations in all control systems, no evaluation of controls

can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.

These inherent limitations

include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake.

Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management

override of the controls.

The design of any system of controls is also based in part upon certain assumptions about the likelihood of

future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions;

over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may

Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and

not be detected.

Management’s Report on Internal Control over Financial Reporting

This Annual Report on Form 10-K does not include

an attestation report of our registered public accounting firm regarding internal control over financial reporting.

Our auditors will

not be required to formally opine on the effectiveness of our internal control over financial reporting pursuant to Section 404 until

we are no longer an “emerging growth company” as defined in the JOBS Act.

Changes in Internal Control over Financial

There was no change in

our internal control over financial reporting during the three months ended December 31, 2021 that has materially affected, or is reasonably

likely to materially affect, our internal control over financial reporting.

There was no change in our internal control over

financial reporting during the three months ended December 31, 2022 that has materially affected, or is reasonably likely to materially

affect, our internal control over financial reporting.

Other Information.

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that Prevent Inspections.

Not applicable.

Directors, Executive Officers and

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Directors and Executive Officers

The following table provides information regarding

our executive officers and directors as of March 15, 2022:

The following table provides information regarding our executive officers

and directors as of March 6, 2023:

Executive Officers and Directors

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Non-Employee Directors

Kimberly Murphy

James Sapirstein

Michael Venerable

Timothy Ramdeen

Executive Officers and Directors

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Joseph Hernandez

Joseph Hernandez has been the Chief Executive Officer &

Chairman for Blue Water Vaccines Inc.

since October 2018.

He has a background in company creation, early stage technology development,

as well as private and public market financing.

He brings leadership to the team, backed by a strong educational foundation in biology,

medicine, molecular genetics, microbiology, epidemiology, marketing, and finance.

Over the course of his career, he has founded or led

eight entrepreneurial companies in cutting edge areas of healthcare and pharmaceuticals.

After years of building his career at Merck &

(NYSE:MRK) from December 1998 to January 2001 and Digene from 2005 to 2009 (acquired by Qiagen (NYSE:QGEN)) from 2005 to

Joseph Hernandez founded Blue Water Vaccines, Inc.

in October 2018 and has been the Chief Executive Officer & Executive Chairman of the Company since inception.

He has a background

in company creation, early stage technology development, as well as private and public market financing.

He brings leadership to the team,

backed by a strong educational foundation in biology, medicine, molecular genetics, microbiology, epidemiology, marketing, and finance.

Over the course of his career, he has founded or led eight entrepreneurial companies in cutting edge areas of healthcare and pharmaceuticals.

After years of building his career at Merck & Co.

(NYSE:MRK) from December 1998 to January 2001 and Digene from 2005 to 2009 (acquired

by Qiagen (NYSE:QGEN)) from 2005 to 2009, Mr.

Hernandez founded and became the President and CEO of Innovative Biosensors from 2004 to

served as the Founder and Chairman of Microlin Bio Inc.

from August 2013 to January 2017 and as Chairman of the Board of Ember

Therapeutics (OTCMKTS:EMBT) from April 2014 to January 2019.

Hernandez served as the Founder and Chairman of Microlin Bio Inc.

from August 2013 to January 2017 and as Chairman of

the Board of Ember Therapeutics (OTCMKTS:EMBT) from April 2014 to January 2019.

He was also the Chairman of Sydys Corporation from May

2016 to January 2019.

Hernandez founded Blue Water Vaccines Inc.

He has served as Chairman of Blue Water Vaccines Inc.

Most recently, in January 2020, he founded and in May 2020 sold Noachis Terra, Inc.

(acquired by Oragenics (NYSE:OGEN))

a company developing a vaccine for COVID-19.

From May, 2020 to September 2021, Mr.

Hernandez was also the chairman and chief

executive officer of Blue Water Acquisition Corp.

(“BWAC”), a special purpose acquisition company which completed its initial

public offering in December 2020.

On September 9, 2021, Blue Water Acquisition Corp.

consummated a business combination with

Clarus Therapeutics Holdings Inc.

(Nasdaq:CRXT) (“Clarus”).

Hernandez currently serves as a director of the post-combination

entity, Clarus, where he serves as a member of the Audit and Compensation Committees.

He completed his undergraduate studies in Neuroscience,

in Molecular Genetics and Microbiology, M.B.A.

Hernandez founded Blue Water Vaccines, an early stage biotechnology company focused on manufacturing

a universal influenza vaccine in partnership with the University of Oxford in England.

Additionally, in January 2020, he founded and in

May 2020 sold Noachis Terra, Inc.

(acquired by Oragenics (NYSE:OGEN)), a company developing a vaccine for COVID-19.

From May 2020 to September

Hernandez was also the chairman and chief executive officer of Blue Water Acquisition Corp.

(“BWAC”), a special

purpose acquisition company which completed its initial public offering in December 2020.

On September 9, 2021, BWAC consummated a business

combination with Clarus Therapeutics Holdings Inc.

(OTCPink:CRXT) (“Clarus”).

Hernandez served as a director of the post-combination

entity, Clarus, until August 2022.

He completed his undergraduate studies in Neuroscience, M.Sc.

in Molecular Genetics and Microbiology,

all at the University of Florida and is completing his M.Sc.

in Chronic Disease Epidemiology

and Biostatistics at Yale University.

In addition to his extensive experience developing early-stage biotechnology companies, Mr.

brings strong leadership to the Company, which will be invaluable to the Company’s asset development and success.

Jon Garfield served as our

interim Chief Financial Officer since September 2021 until the consummation of our initial public offering, February 2022,

upon which he became our full-time Chief Financial Officer.

Garfield has over 20 years of financial leadership

experience, including with healthcare companies.

Garfield regularly provides consulting services to private equity funds

and privately held companies.

Garfield has served as the CEO of Unity MSK since February 2021.

He has served as a

consultant of Bay State Physical Therapy from June 2018 to February 2019 and also as a director beginning in

February 2019.

in Chronic Disease Epidemiology and Biostatistics at Yale University.

Jon Garfield served as our interim Chief Financial

Officer since September 2021 until the consummation of our initial public offering, in February 2022, upon which he became our full-time

Chief Financial Officer.

Garfield has over 20 years of financial leadership experience, including with healthcare companies.

regularly provides consulting services to private equity funds and privately held companies.

Garfield served as the CEO of Unity MSK

from February 2021 to January 2023.

He has served as a consultant of Bay State Physical Therapy from June 2018 to February 2019 and also

as a director beginning in February 2019.

From 2016 to 2017, Mr.

Garfield was the CFO of Pyramid Healthcare, also a private equity based healthcare

Garfield was the CFO of Pyramid Healthcare, also a private equity based

healthcare company.

Prior to Pyramid Healthcare, Mr.

Garfield joined Monte Nido as CFO in 2012 until 2016.

Before Monte Nido, he served as

CFO of Clearant, Inc., a publicly-traded medical device company, and Network IP and Simplified Development, where he oversaw the

finance and treasury functions, implemented systems upgrades, and pursued a number of growth initiatives.

previously a Co-Founder and Vice President of Acquisitions for Coach USA, a consolidator of ground transportation entities

throughout North America, and was heavily involved in over 50 acquisitions and the eventual IPO of the company.

Earlier in his

career, he held positions with PricewaterhouseCoopers and Arthur Andersen.

Garfield was the Chief Financial Officer of BWAC

from December 2020 until it completed a business combination with Clarus in September 2021.

Garfield received a

Before Monte Nido, he served

as CFO of Clearant, Inc., a publicly-traded medical device company, and Network IP and Simplified Development, where he oversaw the finance

and treasury functions, implemented systems upgrades, and pursued a number of growth initiatives.

Garfield was previously a Co-Founder

and Vice President of Acquisitions for Coach USA, a consolidator of ground transportation entities throughout North America, and was heavily

involved in over 50 acquisitions and the eventual IPO of the company.

Earlier in his career, he held positions with PricewaterhouseCoopers

and Arthur Andersen.

Garfield was the Chief Financial Officer of BWAC from December 2020 until it completed a business combination

with Clarus in September 2021.

Garfield received a B.B.A.

in accounting from the University of Texas.

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for Blue Water Vaccines, Inc.

since September 2020 and our Corporate Secretary since the closing of our initial public offering, and

has extensive experience in program and project management, business operational management, marketing, fundraising and public-private

partnership development and implementation.

since September 2020 and has extensive experience in program and project management, business operational

management, marketing, fundraising and public-private partnership development and implementation.

She joined the company in September

Prior to joining Blue Water Vaccines Inc.,

since 2010, Ms.

Henderson was the Founder and Managing Partner for The Aetos Group, a management consulting company working with public,

private, governmental and non-governmental organizations focused on operational efficiency, Lean Six Sigma implementation, revenue development

strategy and real estate acquisition strategy.

Erin began her career at Lockwood Greene Engineers, followed by The Facility Group.

led local, state and federal governmental relations for the University of West Georgia and was responsible for identifying and securing

financial support from both the public and private sector.

Erin completed her undergraduate studies in Chemical Engineering from Auburn

Erin serves on the Board of the Greater Gainesville Chamber of Commerce and the Board of Danscompany of Gainesville.

Prior to joining Blue Water Vaccines, since 2010, Ms.

Henderson was the Founder and Managing Principal at The Aetos Group, a management

consulting company working with public, private, governmental and non-governmental organizations focused on operational efficiency, Lean

Six Sigma implementation, revenue development strategy and real estate acquisition strategy.

Erin began her career at Lockwood Greene

Engineers, followed by The Facility Group.

She led local, state and federal governmental relations for the University of West Georgia

and was responsible for identifying and securing financial support from both the public and private sector.

Erin completed her undergraduate

studies in Chemical Engineering from Auburn University.

Erin serves on the Board of the Greater Gainesville Chamber of Commerce and the

Board of Danscompany of Gainesville.

Significant Employees and Consultants

Ron Cobb, Head of Science and Discovery for Blue

Water Vaccines Inc.

since August 2021, is a Geneticist and Molecular Biologist with 25 years of pharmaceutical R&D and manufacturing

Cobb began his career at Research Triangle Institute in 1985 where he had the unique opportunity to work with Drs.

Wall and Wani, who discovered Camptothecin and Taxol.

At Tanabe Research Laboratories, Dr.

Cobb initiated discovery programs seeking

small molecule inhibitors of inflammatory diseases both while supporting all internal drug discovery screening efforts with protein expression

Cobb was recruited to Berlex Biosciences (US Division of Schering AG) to head up the protein expression section

of the Protein Expression and Gene Therapy Group, where he supported gene expression for both research and clinical development phase

project and was a member of the Scientific Advisory Committee and Worldwide Antibody Development Committee for Schering.

At the end of

Cobb joined the Research and Development Group at RTI Biologics where he was named the Director of Research, then to the

Director of Research and Development.

Under his guidance, 21 new products were released in 2009.

Cobb joined Nanotherapeutics,

(now National Resilience) as Vice President of Biologics in January 2011 and was Chief Scientific Officer in 2014 through 2021

and was PI for over $200M in drug development contracts.

He has co-authored over 60 peer-reviewed manuscripts and is currently working

with BioDeals, LLC as Managing Director.

Cobb received a BA in Biology at Wake Forest University and a Ph.D.

in Biochemistry

from the Medical College of Georgia.

Ali Fattom, Ph.D.

Ali Fattom, Head of Science and Discovery since

September 2022, is a vaccinologist and microbiologist with nearly 40 years of experience in vaccine programs ranging from preclinical

to late-stage clinical development.

Fattom is an author of over 70 peer-reviewed publications and holds over 20 patents in the field

of vaccinology.

Currently, since March 2012, Dr.

Fattom has been an Adjunct Professor at the University of Michigan and since September

2022, has served as an independent consultant for Blue Water Vaccines, providing expertise to advance BWV’s vaccine pipeline and

progress towards clinical development of vaccine candidates.

Fattom joined NanoBio Corporation, which was eventually renamed

Bluewillow Biologics Inc, and he was ultimately named Chief Scientific Officer, where he led their efforts to develop viral vaccines for

various infectious diseases, including HSV, RSV, and influenza.

In 1991, he moved to industry and joined Nabi Biopharmaceuticals and ultimately

became Vice President for Research and Development in 2007.

While at Nabi, he was responsible for advancing vaccine programs from discovery

stage to advanced clinical stages, including Staphylococcal pentavalent vaccine and NicVAX, a vaccine to treat nicotine addiction and

aid in smoking cessation.

During the period of 1982 and 1986 he was an Assistant Professor in microbiology at Beir-Zeit University, West

Bank, Palestine.

In 1986, he joined the NIH and worked on a conjugate vaccine against bacterial infectious diseases, with a focus on pneumococcal

and staphylococcal vaccines, under Dr John Robbins of the Eunice Kennedy Shriver National Institute of Child Health and Human Development.

Prior to this, Dr.

Fattom spent 5 years at John Robbins lab at the National Institutes of Health (“NIH”) working on polysaccharide

conjugate pneumococcal vaccines, providing him with a strong background and expertise in pneumococcal disease

Andrew Skibo, Ph.D.

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and Head of Biologics Operations at Astra Zeneca for eleven years.

He retired from that full time role in April 2019, but continues

to serve as Technical Advisor to EVP Operations, AstraZeneca.

In his role, he was responsible for the development and improvement of AstraZeneca’s

He retired from that full time role in April 2019, but continues to

serve as Technical Advisor to EVP Operations, AstraZeneca.

In his role, he was responsible for the development and improvement of AstraZeneca’s

mono-clonal antibody operations and influenza seasonal and pandemic LAIV Flu operations.

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challenging regulatory quality environment (warning letter) to best in class status.

He oversaw the development of four BLA’s and

biologics product launches in 2017 to 2019, and has held related roles for nine product launches in his career.

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his role on the Board of ISPE, Mr.

Skibo routinely interfaced with leadership levels of major international regulatory agencies,

especially the FDA.

He was instrumental in resolving a dead-locked product approval/cGMP regulatory issue, involving multiple firms,

with the FDA associated with the recent launch of one of AstraZeneca’s most significant oncology products.

Skibo routinely interfaced with leadership levels of major international regulatory agencies, especially

He was instrumental in resolving a dead-locked product approval/cGMP regulatory issue, involving multiple firms, with the FDA

associated with the recent launch of one of AstraZeneca’s most significant oncology products.

Skibo received his B.S.

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He holds patents in polymer film extrusion from his original career at Monsanto.

He has served as a member of the Mayor’s Fiscal Advisory Committee in San Francisco and has been a member and chairman of the Board

of Supervisors in Birmingham/Chester County, PA.

Brian Price, Ph.D.

Brian Price has been Blue Water Vaccines Inc.’s

Head of Technology Strategy since September 2020 after being the Chief Compliance Officer from August 2019 to September 2020.

Price is an experienced professional in FDA-regulated industries with a focus in CMC Development, regulatory compliance and QC

analytical method development and validation.

He has a successful track record of Business Development Growth with Government and Commercial

funded toxicology, therapeutic and vaccine development, and analytical clientele.

Brian’s expertise is with molecular biology, microbiology,

infectious disease, immunology, vaccines and drug discovery and development, and FDA compliance.

His prior experience includes, from August 2018

to March 2019, as Vice-President of Pharmaceutical Development at Myonexus Therapeutics, Inc.

and multiple positions with Battelle

from November 2011 to August 2018, including his most recent role as Vice President of Business Development for the Health Business

At Battelle, Brian supported sales for, directed and oversaw basic and applied research projects for a number of commercial and

government clients in the areas of toxicology, vaccine and therapeutic efficacy evaluation, medical device development, environmental

microbiology, assay development and validation, and vaccine production, including participating in the development of pre-clinical trial

material for the next generation Anthrax vaccine based on recombinant Protective Antigen for VaxGen, Inc.

Price completed is

undergraduate studies in Microbiology and Ph.D.

in Microbiology at The Ohio State University.

Non-Executive Directors

Shaw , one of our directors since January 2020, brings more than two decades of public company financial, operational, and strategic

global business leadership.

Shaw is a highly regarded biopharma executive and board member with extensive senior global strategic,

financial, M&A, operational, capital markets and governance experience.

Shaw’s notable accomplishments include raising more

than $4 billion in public/private financings (including 2 IPOs), scaling a company from $20 million to $750 million in revenue as well

as being involved with the sourcing/development/commercialization of various drug products in numerous therapeutic areas.

been the chief financial officer of Portage Biotech Inc.

OTC Markets) since May 2020.

Shaw is the founder and

since 2005, has served as senior managing director, of Shaw Strategic Capital LLC, an international financial advisory firm focused on

providing strategic financial counsel on a wide variety of issues such as general corporate finance, mergers and acquisitions, capital

structuring, licensing and capital markets, and serving as financial consultant to private and public companies.

Shaw was the Chief

Financial Officer and Treasurer of Syndax Pharmaceuticals, Inc.

from January 2016 to February 2017 and from December 2011 to September

2015, was Managing Director of Alvarez & Marsal LLC, a global professional services firm, where he led their biopharmaceutical consulting

Shaw has served on five public boards including chairing two audit committees, two compensation committees, and is currently

involved with a portfolio of healthcare-related business endeavors.

Shaw served as the Chief Financial Officer of Serono S.A.

November 2002 to May 2004;

NewLead Holdings Ltd from October 2009 to July 2011;

and Viatel, Inc.

from November 1994 to June 2002.

serves on the board of directors of Edith & Carl Marks JCH of Bensonhurst, a non-profit organization, and chairs their finance committee.

Shaw is a certified public accountant in the State of New York as well as a Chartered Global Management Accountant (CGMA).

received a B.S.

from the State University of New York at Oswego College.

Shaw brings to our Board over twenty-five years

of experience in the finance and accounting fields.

In addition, Mr.

Shaw also has experience serving as a director of public companies.

Murphy , one of our directors since January 2020, has more than 25 years of experience at leading pharmaceutical companies

including Novartis (NYSE:

NVS) and Merck & Co (NYSE:

In her distinguished career at Merck, she rose through various

public affairs and business roles to leadership positions as Region Marketer for U.S.

Commercial Operations, U.S.

Leader for Adult Vaccines and Director of the HPV/Gardasil Franchise.

Most recently, Ms.

Murphy served as currently the Vice President

of Global Vaccines Commercialization Leader, Influenza Franchise, at GlaxoSmithKline (NYSE:

Murphy has been with GSK since

2011, initially serving as VP of US Vaccines Customer Strategy from October 2012 to June 2014, then VP of the North America

Vaccines Integration Planning from June 2014 to May 2015, followed by VP and Global Marketing Head for the Shingles Vaccines

from May 2015 to February 2016, before transitioning to the Global Vaccines Commercialization Leader for the Influenza Franchise.

Kim has Board and Advisory experience that includes serving on the boards of Oragenics, Inc.

OGEN) as well as the GSK Representative

to the Biotechnology Industry Organization’s Biodefense Advisory Council, and on the St.

Joseph’s University Pharmaceutical &

Healthcare Marketing MBA Program’s Advisory Board.

Additionally, Ms.

Murphy was a director of BWAC from December 2020 to September 2021,

and since BWAC’s business combination with Clarus Therapeutics Holdings Inc.

(Nasdaq:CRXT), has continued to serve as chair of the

post-combination entity’s board of directors, and also she serves as a member of the Compensation and Nominating and Corporate Governance

Murphy received a B.A.

in English from Old Dominion University, a M.B.A.

in Marketing from St.

Joseph’s University,

and the Marketing Excellence Program from the Wharton School of University of Pennsylvania.

She is well qualified to serve on our Board

due to her extensive experience in the healthcare industry.

Murphy brings to the Company’s

Board a wealth of experience in the commercialization and marketing of development-stage vaccine candidates, particularly those created

by public companies.

Murphy’s skill will be vital to the Company’s development of all of our vaccines candidates .

Venerable has been one of Blue Water Vaccines Inc.’s directors since April 2020.

As CEO and managing director of CincyTech,

Mike Venerable leads with experience from both sides of the table:

as a software industry entrepreneur and executive, and a seasoned investment

and venture capital professional.

Mike joined CincyTech in 2006, helping to raise its inaugural fund.

He served as managing director for

a decade, evaluating investment opportunities, advising startup companies, and helping to build a network of investors and strategic partners

and raise CincyTech Funds II- IV.

Previously, Mike was co-founder and CEO of Talus, a leading data warehouse consultancy,

which was acquired by Sagent Technology.

Mike led the company’s services organization through the company’s successful IPO

He has specific experience in raising angel and venture capital, software business design and operation, software product management,

business valuation, financial analysis and intellectual property.

As an industry practitioner, Mike is an expert on data warehouse design,

business intelligence and analytic applications and software development processes.

He has consulted on strategic product development

initiatives for leading technology companies, including Siebel, Advent and Micros.

Mike served in the US Army as a Korean linguist after

graduating from the University of Dayton.

Venerable brings to our Board an extensive array of business and industry experience

as well as experience as a director of private and public companies.

Mr Venerable’s background provides a foundation for leadership

and consensus-building.

James Sapirstein ,

who has been one of Blue Water Vaccines Inc.’s directors since February 2022, has over 35 years of experience leading,

founding, growing, and selling healthcare companies, specifically in the pharmaceutical space.

Sapirstein is currently the President

and CEO of AzurRx BioPharma (Nasdaq:

AZRX), where he has been since October 2019.

His career began in sales at Eli Lilly, eventually

rising to Director of International Marketing at Bristol Myers Squibb from July 1996 to June 2000, and later led the launch

of Viread (tenofovir) at Gilead Sciences, Inc.

GILD), where he served as Global Marketing Lead from June 2020 to June 2002.

From November 2006 to January 2011, he served as founding CEO of Tobira Therapeutics (Nasdaq:

TBRA), then a private company,

and later acquired by Allergan (NYSE:

Since then, he has served as CEO of Alliqua Biomedical (Nasdaq:

ALQA) from September 2012

to February 2014 and CEO of Contravir Pharmaceuticals (Nasdaq:

James Sapirstein , one of our directors since

February 2022, has over 35 years of experience leading, founding, growing, and selling healthcare companies, specifically in the pharmaceutical

Sapirstein is currently the President, CEO and Chairman of First Wave BioPharma, Inc.

FWBI), where he has been since

October 2019.

His career began in sales at Eli Lilly, eventually rising to Director of International Marketing at Bristol Myers Squibb

from July 1996 to June 2000, and later led the launch of Viread (tenofovir) at Gilead Sciences, Inc.

GILD), where he served as

Global Marketing Lead from June 2020 to June 2002.

From November 2006 to January 2011, he served as founding CEO of Tobira Therapeutics

TBRA), then a private company, and later acquired by Allergan (NYSE:

Since then, he has served as CEO of Alliqua Biomedical

ALQA) from September 2012 to February 2014 and CEO of Contravir Pharmaceuticals (Nasdaq:

CTRV) from March 2014 to October 2018.

part of almost two dozen drug product launches and specifically either led or has been a key member of several HIV product launches into

different new classes of therapeutics at the time.

He has been part of almost two dozen drug product launches and specifically either led or has been a key member of several HIV product

launches into different new classes of therapeutics at the time.

Additionally, Mr.

Sapirstein holds board positions on Marizyme (OTCMKTS:MRZM)

(Executive Chairman) since December 2018 Enochian Biosciences (Nasdaq:

ENOB) since April 2018 and Leading Biosciences since

He previously served as a director of BioNJ from February 2017 to February 2019, an association of biopharma

industries in New Jersey, from February 2017 to February 2019, RespireRX (OTCBB:RSPI) from April 2014 to January 2020,

NanoViricides Inc.

NNVC) from November 2018 to January 2020 and BWAC from December 2020 until its business

combination with Clarus in September 2021.

He is also a Board Director for BIO, the leading Biopharma Industries Organization promoting

public policy and networking in the healthcare space, where he sits on both the Health Section and Emerging Companies Section Governing

Sapirstein received a B.S.

Sapirstein has held board positions on ZyVersa Therapeitics,

ZVSA) since January 2023 and Enochian Biosciences (Nasdaq:

ENOB) since April 2018.

He previously served as a director of

Marizyme (OTCMKTS:MRZM) (Executive Chairman) from December 2018 to June 2021, Leading Biosciences from 2016 to 2021, BioNJ, an association

of biopharma industries in New Jersey, from February 2017 to February 2019, RespireRX (OTCBB:RSPI) from April 2014 to January 2020, NanoViricides

NNVC) from November 2018 to January 2020, and BWAC from December 2020 until its business combination with Clarus in September

He is also a Board Director for BIO, the leading Biopharma Industries Organization promoting public policy and networking in the

healthcare space, where he sits on both the Health Section and Emerging Companies Section Governing Boards.

Sapirstein received a

in Pharmacy from Rutgers University and his MBA from Fairleigh Dickinson University.

well qualified to serve on our Board due to his extensive network from decades in the healthcare industry.

Sapirstein brings to our Board a significant depth of experience in the pharmaceutical and biotechnology industries that will be invaluable

to the Company as we continue to develop biotechnology assets .

He is well qualified to serve on our Board due

to his extensive network from decades in the healthcare industry.

Sapirstein brings to our Board a significant depth of experience

in the pharmaceutical and biotechnology industries that will be invaluable to the Company as we continue to develop biotechnology assets.

Simon Tarsh , one of our directors since August 2022, has more

than 40 years of financial experience, working in both the UK and the USA.

He has recently retired from Deloitte Consulting LLP, where

he was a Senior Managing Director in the Finance and Enterprise Performance Practice, where he had served global clients since 2007.

led a growing global practice focused around Operational Transformation, including supporting Carve Out transactions, joint ventures and

hybrid structures, both in the US and in international locations, such as India, China, Eastern Europe and Latin America.

high growth companies with their finance operations as they globalized, and was able to advise them on their expansion, while balancing

growth with appropriate controls.

Prior to moving to the United States in 2007, Mr.

Tarsh’s consulting career began with PA Consulting

Group, London in 1988, where he was elected as a Partner in 1997, and he built ISG’s business process outsourcing advisory practice

in Europe between 2001 and 2006.

Tarsh’s early career was in finance, working with Marathon Oil and Dow Chemical, and during

this period, he qualified as a Chartered Accountant.

Tarsh received a Bachelor of Science undergraduate degree in Business and Administration

from the University of Salford, Manchester, UK in 1981, and an MBA from City University Business School, London, UK in 1988.

He is a Fellow

of the Chartered Institute of Management Accountants (1984), which is considered as a CPA equivalent.

Tarsh’s deep financial

experience at Deloitte Consulting LLP for fifteen years offers valuable insights to our Board, particularly given the enhanced accounting

rules and regulations affecting public companies.

Vuk Jeremić , one of our Directors

since November 2022, brings decades of experience in operational and strategy advisement on a global scale for both private and public

Currently, Mr.

Jeremić is the President of the Center for International Relations and Sustainable Development (CIRSD),

a global public policy think-tank, and Editor-in-Chief of the quarterly magazine “Horizons – Journal of International Relations

and Sustainable Development.” Since 2013, Mr.

Jeremić has operated Vuk Jeremić ent Consulting Agency Belgrade, through

which he currently serves as a senior advisor to a leading global private equity firm and to one of the largest cryptocurrency exchanges.

He also serves on the Advisory Board of the NYSE-listed technology special purpose acquisition company, Adit Edtech Acquisition Corp.

In addition, he has lectured around the world at major universities, think-tanks, and institutes, as well as published opinion

pieces in leading outlets including The New York Times, The Washington Post, The Wall Street Journal, The Financial Times, and Le Monde.

Prior to his experience in company advisement, Mr.

Jeremić held multiple key positions in global public policy development nationally

and internationally.

In 2007, he chaired the Council of Europe’s Committee of Ministers and, from 2007 to 2012, he served as Serbia’s

Minister of Foreign Affairs.

In June 2012, Mr.

Jeremić was directly elected by the majority of world’s nations to be the

President of the 67th session of the United Nations (UN) General Assembly.

During his term in office, he played a leading role in steering

the UN towards the establishment of the Sustainable Development Goals (SDGs).

Jeremić was named a Young Global Leader by the

World Economic Forum in 2013 and appointed to the Leadership Council of the UN Sustainable Development Solutions Network (UN SDSN) in

Jeremić served as the President of the Serbian Tennis Federation from 2011 to 2015.

Jeremić holds a bachelor’s

degree in Theoretical and Experimental Physics from Cambridge University and a master’s degree in Public Administration in International

Development from Harvard University’s John F.

Kennedy School of Government.

Jeremić’s impressive resume, operational

advisement experience and global public policy development offer a unique prospective to our Board in as we continue to grow the Company

and progress our vaccine candidates towards commercialization.

Timothy Ramdeen , one of our directors since

January 2023 nearly a decade of experience in private equity and hedge fund investing, capital markets, and company formation.

Ramdeen has been founder and managing partner of Dharma Capital Advisors, an investment and advisory firm focused on early-stage

private and public companies.

From March 2021 to March 2022, Mr.

Ramdeen was co-founder, chief investment officer, and portfolio manager

at Sixth Borough Capital Management, a multi-stage, event-driven hedge fund focused on both private and public equities.

Since 2022, Mr.

Ramdeen has been the co-founder of Amplexd Therapeutics, which is a women’s health/biotechnology company focused on providing low-cost,

effective, safe and accessible treatments for early cervical and HPV-related cancers worldwide.

Ramdeen also serves as a corporate

advisor/board member to multiple early-stage companies and investment funds.

Previously, Mr.

Ramdeen was the fifth hire at Altium Capital

Management (“Altium”), a healthcare-focused investment firm, where from July 2019 to March 2021 he served as the sole investment

analyst on the private capital markets/special situations desk (privately-negotiated financings, direct investments, event-driven long/short,

and private to public investments in micro and small-cap companies).

During his tenure at Altium, Mr.

Ramdeen was instrumental in co-creating

the firm’s SPAC and reverse merger investment efforts and establishing extensive relationships with sell-side constituents, buy-side

counterparts, and hundreds of private and publicly traded companies across biotechnology, therapeutics, healthcare services, medical devices

From 2017 to 2018, Mr.

Ramdeen worked for Brio Capital Management, an event-driven hedge fund focused on small and micro

cap equities.

Ramdeen received his B.S.

in Biology from Temple University, where he conducted scientific research across neurology,

oncology, and developmental biology.

In addition, Mr.

Ramdeen earned his MBA in Finance from NYU Stern School of Business.

brings to our Board extensive experience in capital advisement and company development, specifically within the life science industry

and for publicly traded companies.

Board of Directors and Corporate Governance

Our business and affairs are organized under the

direction of our board of directors (“ Board ”), which currently consists of five members.

Our Board is divided into

three classes, Class I, Class II and Class III, with members of each class serving staggered three-year terms.

Our directors are divided

among the three classes as follows:

● the Class I directors are Simon Tarsh and Vuk Jeremić,

and their terms will expire at our 2023 annual meeting of stockholders;

● the Class II director is James Sapirstein, and his term will

expire at our 2024 annual meeting of stockholders;

● the Class III directors are Joseph Hernandez and Timothy

Ramdeen, and their terms will expire at our 2025 annual meeting of stockholders.

Our Amended and Restated Certificate of Incorporation

and our Amended and Restated Bylaws provide that the authorized number of directors may be changed only by resolution of the Board.

directors hold office until the earlier of their death, resignation, removal or disqualification, or until their successors have been

elected and qualified.

Our board of directors does not have a formal policy on whether the roles of Chief Executive Officer and Chairman

of our Board should be separate.

The primary responsibilities of our Board are to provide oversight, strategic guidance, counselling and

direction to our management.

We have no formal policy regarding board diversity.

Our priority in selection of board members is identification of members who will further the interests of our stockholders through his

or her established record of professional accomplishment, the ability to contribute positively to the collaborative culture among board

members, knowledge of our business and understanding of the competitive landscape.

Directors and Executive Officers Qualifications

Although we have not formally

established any specific minimum qualifications that must be met by each of our officers, we generally evaluate the following qualities:

educational background, diversity of professional experience, including whether the person is a current or was a former chief executive

officer or chief financial officer of a public company or the head of a division of a prominent international organization, knowledge

of our business, integrity, professional reputation, independence, wisdom, and ability to represent the best interests of our shareholders.

The nominating and corporate

governance committee of the board of directors prepare policies regarding director qualification requirements and the process for identifying

and evaluating director candidates for adoption by the board of directors.

The above-mentioned attributes, along with the leadership skills

and other experiences of our officers and board of directors members described above, provide us with a diverse range of perspectives

and judgment necessary to facilitate our goals of shareholder value appreciation through organic and acquisition growth.

We believe that the collective skills, experiences

and qualifications of our directors provide our Board with the expertise and experience necessary to advance the interests of our stockholders.

In selecting directors, the Board considers candidates that possess qualifications and expertise that will enhance the composition of

Nominees for director will be selected on the basis of, among other things, leadership experience, knowledge, skills, expertise,

integrity, diversity, ability to make independent analytical inquiries, understanding of the Company’s business environment and willingness

to devote adequate time and effort to Board responsibilities.

The Nominating & Corporate Governance Committee may require certain

skills or attributes, such as financial or accounting experience, to meet specific board needs that arise from time to time and will also

consider the overall experience and makeup of its members to obtain a broad and diverse mix of board members.

We believe that our directors

should have the highest professional and personal ethics and values, consistent with our longstanding values and standards.

have broad experience at the policy-making level in business, exhibit commitment to enhancing stockholder value and have sufficient time

to carry out their duties and to provide insight and practical wisdom based on their past experience.

Director Independence

Our board of directors has

reviewed the composition of our board of directors and its committees and the independence of each director.

Based upon information requested

from and provided by each director concerning his background, employment and affiliations, including family relationships, our board of

directors has determined that each of Messrs.

Allan Shaw and James Sapirstein as well as Ms.

Kimberly Murphy, is an “independent

director”

as defined under Rule 5605(a)(2) of the Nasdaq Marketplace Rules.

Our board of directors also determined that Messrs.

Allan Shaw and James Sapirstein as well as Ms.

Kimberly Murphy, who comprise our audit committee and our compensation committee, and Messrs.

Allan Shaw and James Sapirstein as well as Ms.

Kimberly Murphy, members of our nominating and corporate governance committee, satisfy

the independence standards for such committees established by the SEC and the Nasdaq Marketplace Rules, as applicable.

In making such

determinations, our board of directors considered the relationships that each such non-employee director has with our company and all

other facts and circumstances our board of directors deemed relevant in determining independence, including the beneficial ownership of

our capital stock by each non-employee director.

Board Leadership Structure

Our board of directors is free to select the Chairman

of the board of directors and the Chief Executive Officer in a manner that it considers to be in the best interests of our company at

the time of selection.

Currently, Mr.

Joseph Hernandez serves as our Chief Executive Officer and executive chairman.

our five members of our board of directors have been deemed to be “independent”

by the board of directors, which we believe

provides sufficient independent oversight of our management.

Our board of directors, as a whole and also at the

committee level, plays an active role overseeing the overall management of our risks.

Our Audit Committee reviews risks related to financial

and operational items with our management and our independent registered public accounting firm.

Our board of directors is in regular

contact with our Chief Executive Officer, who reports directly to the board of directors and who supervise day-to-day risk management.

Role of Board in Risk Oversight Process

We face a number of risks, including those described

under the caption “Risk Factors”

contained elsewhere in this Report.

Our board of directors believes that risk management

is an important part of establishing, updating and executing on our business strategy.

Our board of directors has oversight responsibility

relating to risks that could affect the corporate strategy, business objectives, compliance, operations, and the financial condition and

performance of our company.

Our board of directors focuses its oversight on the most significant risks facing us and on our processes

to identify, prioritize, assess, manage and mitigate those risks.

Our board of directors receives regular reports from members of our

senior management on areas of material risk to us, including strategic, operational, financial, legal and regulatory risks.

board of directors has an oversight role, management is principally tasked with direct responsibility for management and assessment of

risks and the implementation of processes and controls to mitigate their effects on us.

Our board is generally responsible

for the oversight of corporate risk in its review and deliberations relating to our activities.

Our principal source of risk falls into

two categories, financial and product commercialization.

Our Audit Committee oversees management of financial risks;

our board regularly

reviews information regarding our cash position, liquidity and operations, as well as the risks associated with each.

The board regularly

reviews plans, results and potential risks related to our product offerings, growth, and strategies.

Our Compensation Committee oversees

risk management as it relates to our compensation plans, policies and practices for all employees including executives and directors,

particularly whether our compensation programs may create incentives for our employees to take excessive or inappropriate risks which

could have a material adverse effect on our company.

Committees of the Board of Directors

Our board of directors has established three standing

committees —

audit, compensation and nominating and corporate governance —

each of which operates under

a charter that has been adopted by our board of directors.

Copies of each committee’s charter are posted on the Investor Relations

section of our website, which is located at www.bluewatervaccines.com .

The Board has evaluated each of its directors’

independence from the Company based on the definition of “independence” established by Nasdaq and has determined that each

of Vuk Jeremić, Simon Tarsh, Timothy Ramdeen and James Sapirstein are independent directors, constituting a majority of the Board.

The Board has further determined that each member of our audit committee, compensation committee and nominating and corporate governance

committee is “independent” under applicable Nasdaq rules.

The Board has also determined that each member of

our audit committee is “independent” for purposes of Section 10A(m)(3) of the Securities Exchange Act of 1934, as amended

(“ Exchange Act ”).

In its evaluation of each director’s or nominee’s

independence from the Company, the Board reviewed whether any transactions or relationships currently exist or existed during the past

year between each director or nominee and the Company and its subsidiaries, affiliates, equity investors, or independent registered public

accounting firm, and whether there were any transactions or relationships between each director or nominee and members of the senior management

of the Company or their affiliates.

Committees of the Board

Our Board has established three standing committees

— audit, compensation and nominating and corporate governance — each of which operates under a charter that has been adopted

by our Board.

Copies of each committee’s charter are posted on the Investor Relations section of our website, which is located at

https://ir.bluewatervaccines.com/corporate-governance/governance-overview .

Each committee has the composition and responsibilities

described below.

Our board of directors may from time to time establish other committees.

Our Board may from time to time establish other committees.

Audit Committee

Our audit committee consists of Allan Shaw, who

is the chair of the committee, Kimberly Murphy and James Sapirstein.

Our board of directors has determined that each of the members of

our audit committee satisfies the Nasdaq Marketplace Rules and SEC independence requirements.

The functions of this committee include,

among other things:

Our audit committee (“ Audit Committee ”)

consists of Simon Tarsh, who is the chair of the committee, Timothy Ramdeen and James Sapirstein.

Our Board has determined that each of

the members of our audit committee satisfies the Nasdaq Marketplace Rules and SEC independence requirements.

The functions of this committee

include, among other things:

● evaluating the performance, independence and qualifications

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● reviewing our annual and quarterly financial statements and

reports, including the disclosures contained under the caption “Management’s Discussion and Analysis of Financial Condition

and Results of Operations,”

and discussing the statements and reports with our independent auditors and management;

reports, including the disclosures contained under the caption “Management’s Discussion and Analysis of Financial Condition

and Results of Operations,” and discussing the statements and reports with our independent auditors and management;

● reviewing with our independent auditors and management significant

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effectiveness of our financial controls;

● reviewing and approving, in accordance with the Company’s

policies, any related party transaction as defined by applicable rules and regulations

● reviewing our major financial risk exposures, including the

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of the audit committee, including compliance of the audit committee with its charter.

Our board of directors has determined that Allan

Shaw qualifies as an “audit committee financial expert”

within the meaning of applicable SEC regulations and meets the financial

sophistication requirements of the Nasdaq Marketplace Rules.

In making this determination, our board has considered Mr.

Shaw’s extensive

financial experience and business background.

Both our independent registered public accounting firm and management periodically meet

privately with our audit committee.

During the fiscal year ended December 31, 2021, our audit committee had not yet been established and

as such our audit committee members did not attend any audit committee meetings.

Our audit committee was formed upon the consummation

of our initial public offering.

The Board has determined that Simon Tarsh qualifies

as an “audit committee financial expert” within the meaning of applicable SEC regulations and meets the financial sophistication

requirements of the Nasdaq Marketplace Rules.

In making this determination, the Board has considered Mr.

Tarsh’s extensive financial

experience and business background.

Both our independent registered public accounting firm and management periodically meet privately

with our Audit Committee.

Compensation Committee

Our compensation committee consists of James Sapirstein,

who is the chair of the committee, Kimberly Murphy and Allan Shaw.

Our board of directors has determined that each of the members of our

compensation committee is an outside director, as defined pursuant to Section 162(m) of the Internal Revenue Code of 1986, as

amended, or the Code, and satisfies the Nasdaq Marketplace Rules independence requirements.

The functions of this committee include, among

other things:

Our compensation committee (“ Compensation

Committee ”) consists of James Sapirstein, who is the chair of the committee, Simon Tarsh, Vuk Jeremić and Timothy Ramdeen.

Our board of directors has determined that each of the members of our Compensation Committee is an outside director, as defined pursuant

to Section 162(m) of the Internal Revenue Code of 1986, as amended, or the Code, and satisfies the Nasdaq Marketplace Rules independence

requirements.

The functions of this committee include, among other things:

● reviewing, modifying and approving (or if it deems appropriate,

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● reviewing with management and approving our disclosures under

the caption “Compensation Discussion and Analysis”

in our periodic reports or proxy statements to be filed with the SEC;

the caption “Compensation Discussion and Analysis” in our periodic reports or proxy statements to be filed with the SEC;

● preparing the report that the SEC requires in our annual

proxy statement.

During the fiscal year ended December 31, 2021,

our compensation committee had not yet been established and as such our audit committee members did not attend any compensation committee

Our compensation committee was formed upon the consummation of our initial public offering.

Nominating and Corporate Governance Committee

Our nominating and corporate governance committee

consists of Kimberly Murphy, who is the chair of the committee, Allan Shaw and James Sapirstein.

Our board of directors has determined

that each of the members of this committee satisfies the Nasdaq Marketplace Rules independence requirements.

The functions of this committee

include, among other things:

(“ Nominating Committee ”) consists of Timothy Ramdeen, who is the chair of the committee, James Sapirstein, Simon Tarsh

and Vuk Jeremić.

Our Board has determined that each of the members of this committee satisfies the Nasdaq Marketplace Rules independence

requirements.

The functions of this committee include, among other things:

● identifying, reviewing and evaluating candidates to serve

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election to our board of directors.

During the fiscal year ended December 31, 2021,

our nominating and corporate governance committee had not yet been established and as such our audit committee members did not attend

any nominating and corporate governance committee meetings.

Our nominating and corporate governance committee was formed upon the consummation

of our initial public offering.

Board Leadership Structure

Our board of directors is free to select the Chairman

of the board of directors and the Chief Executive Officer in a manner that it considers to be in the best interests of our company at

the time of selection.

Currently, Mr.

Joseph Hernandez serves as our Chief Executive Officer and executive chairman.

Four of our five

members of our board of directors have been deemed to be “independent” by the board of directors, which we believe provides

sufficient independent oversight of our management.

Our board of directors, as a whole and also at the

committee level, plays an active role overseeing the overall management of our risks.

Our Audit Committee reviews risks related to financial

and operational items with our management and our independent registered public accounting firm.

Our board of directors is in regular

contact with our Chief Executive Officer, who reports directly to the board of directors and who supervise day-to-day risk management.

Role of Board in Risk Oversight Process

We face a number of risks, including those described

under the caption “Risk Factors” contained elsewhere in this Report.

Our board of directors believes that risk management

is an important part of establishing, updating and executing on our business strategy.

Our board of directors has oversight responsibility

relating to risks that could affect the corporate strategy, business objectives, compliance, operations, and the financial condition and

performance of our company.

Our board of directors focuses its oversight on the most significant risks facing us and on our processes

to identify, prioritize, assess, manage and mitigate those risks.

Our board of directors receives regular reports from members of our

senior management on areas of material risk to us, including strategic, operational, financial, legal and regulatory risks.

board of directors has an oversight role, management is principally tasked with direct responsibility for management and assessment of

risks and the implementation of processes and controls to mitigate their effects on us.

Our board is generally responsible for the oversight

of corporate risk in its review and deliberations relating to our activities.

Our principal source of risk falls into two categories,

financial and product commercialization.

Our Audit Committee oversees management of financial risks;

our board regularly reviews information

regarding our cash position, liquidity and operations, as well as the risks associated with each.

The board regularly reviews plans, results

and potential risks related to our product offerings, growth, and strategies.

Our Compensation Committee oversees risk management as it

relates to our compensation plans, policies and practices for all employees including executives and directors, particularly whether our

compensation programs may create incentives for our employees to take excessive or inappropriate risks which could have a material adverse

effect on our company.

Scientific Advisory Board

In January 2020, we formally established a

Scientific Advisory Board to advise our management regarding our clinical and regulatory development programs and other customary matters.

Our scientific advisors are experts in various areas of medicine including theoretical epidemiology, vaccine research and development,

and biotechnology.

In January 2020, we formally established a Scientific

Advisory Board to advise our management regarding our clinical and regulatory development programs and other customary matters.

Our scientific

advisors are experts in various areas of medicine including theoretical epidemiology, vaccine research and development, and biotechnology.

Our Scientific Advisory Board is comprised of the following individuals:

Sunetra Gupta, Ph.D.

Professor of Theoretical Epidemiology

at The University of Oxford, a leading voice in infectious disease globally;

● David Zarley, Ph.D., with more than 30 years of experience

in vaccine research and development, including former leadership roles at Pfizer and Wyeth;

● John Rice, Ph.D., Managing Director at CincyTech with more

than 30 years of biotechnology advising experience.

Compensation Committee Interlocks and Insider

Participation

None of the members of our

Compensation Committee, at any time, has been one of our officers or employees, or, during the last fiscal year, was a participant in

a related-party transaction that is required to be disclosed.

None of our executive officers currently serves, or in the past year has

served, as a member of the Board of Directors or Compensation Committee of any entity that has one or more executive officers on our Board

of Directors or Compensation Committee.

Professor of Theoretical Epidemiology at The University of Oxford, a leading voice in infectious disease globally;

John Rice, Ph.D., Managing Director at CincyTech with more than 30 years of biotechnology advising experience.

Code of Business Conduct and Ethics

have adopted a written code of business conduct and ethics that applies

to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting

officer or controller, or persons performing similar functions.

The code of business conduct and ethics is posted on our website at www.bluewatervaccines.com .

We expect that any amendments or waivers to the code that are required by law or Nasdaq Marketplace Rules will be disclosed on our website.

We have adopted a written code of business conduct

and ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial officer,

principal accounting officer or controller, or persons performing similar functions.

The code of business conduct and ethics is posted

on our website at www.bluewatervaccines.com .

We expect that any amendments or waivers to the code that are required by law or Nasdaq

Marketplace Rules will be disclosed on our website.

Meetings Attended by Directors

the fiscal year ended December 31, 2022, the Board held a total of 10 meetings, our Audit Committee held a total of 6 meetings, our Compensation

Committee held a total of 7 meetings and our Nominating Committee held a total of 6 meeting.

Each of our incumbent directors attended

at least 75% of the aggregate of the total number of meetings of the Board and the total number of meetings held by the committees of

the Board on which such director served during the period in which such director served.

Although we do not maintain a formal policy regarding

director attendance at the annual meeting of stockholders, director attendance at stockholder meetings is encouraged, and in 2022, all

directors and Simon Tarsh, director nominee, attended the 2022 annual meeting of stockholders in person or via teleconference.

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires the Company’s directors

and executive officers, and persons who own more than 10% of a registered class of the Company’s equity securities, to file with

the SEC reports of beneficial ownership and reports of changes in beneficial ownership in the Company’s securities.

upon a review of Forms 3, 4 and 5, and amendments thereto, filed electronically with the SEC during the year ended December 31, 2022,

the Company believes that all Section 16(a) filings applicable to its directors, officers, and 10% stockholders were filed on a timely

basis during the year ended December 31, 2022, except that James Sapirstein, Jon Garfield, Joseph Hernandez, Erin Henderson, Allan Shaw,

Michael Venerable and Kimberly Murphy each filed one late Form 4.

Executive Compensation.

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paid to our named executive officers for the years ended December 31, 2022 and 2021.

Individuals we refer to as our “named

executive officers”

include our Chief Executive Officer and our one additional most highly compensated executive officer whose salary

and bonus for services rendered in all capacities exceeded $100,000 during the fiscal year ended December 31, 2021.

Name and Principal Position

Individuals we refer to as our “named executive

officers” include our Chief Executive Officer and our two additional most highly compensated executive officers whose salary and

bonus for services rendered in all capacities exceeded $100,000 during the fiscal year ended December 31, 2022 and our one additional

most highly compensated executive officer whose salary and bonus for services rendered in all capacities exceeded $100,000 during the

fiscal year ended December 31, 2021.

and Principal Position

Plan Compensation

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Chief Executive Officer

Chief Financial Officer

Erin Henderson

Chief Business Officer and Corporate Secretary

(1) This figure represents the aggregate grant date fair value

of stock options granted in the fiscal year, computed in accordance with the provisions of FASB ASC 718.

Assumptions used in the

calculation of these amounts are included in the notes to our financial statements included elsewhere in this Report.

As required by

SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions.

Chief Business Officer and Corporate

This figure represents the aggregate grant date fair value of stock options granted in the fiscal year, computed in accordance with the provisions of FASB ASC 718.

Assumptions used in the calculation of these amounts are included in the notes to our financial statements included elsewhere in this Report.

As required by SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions.

Employment Agreements of Executive Officers

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of the Company, which superseded Mr.

Hernandez’s prior consulting agreement with the Company.

The employment agreement provides

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Pursuant to the employment agreement, following the completion of our initial public offering, Mr.

Hernandez’s base

salary is $595,000.

The annual performance bonus will be up to 50% of annual base salary (the “Target Annual Bonus”), with

the actual bonus being based upon the level of achievement of annual Company and individual performance objectives for such fiscal year,

as determined by our compensation committee.

Hernandez’s base salary

The annual performance bonus will be up to 50% of annual base salary (the “Target Annual Bonus”), with the actual

bonus being based upon the level of achievement of annual Company and individual performance objectives for such fiscal year, as determined

by our compensation committee.

In the event that Mr.

Hernandez’s employment

is terminated by the Company without cause (as defined in the employment agreement), or if Mr.

Hernandez terminates his employment

for “Good Reason”

(as defined in the employment agreement), in addition to accrued unpaid salary, reimbursements and vacation days,

he will be entitled to certain severance payments and benefits, including:

Hernandez terminates his employment for

“Good Reason” (as defined in the employment agreement), in addition to accrued unpaid salary, reimbursements and vacation

days, he will be entitled to certain severance payments and benefits, including:

(i) any unpaid annual bonus in respect of any completed

fiscal year that has ended prior to the date of such termination;

(ii) subject to certain conditions set forth in the employment

agreement, an amount equal to (A) the Target Annual Bonus otherwise for the fiscal year in which such termination occurred, assuming

Hernandez had remained employed through the applicable payment date, multiplied by (B) a fraction, the numerator of which

is the number of days elapsed from the commencement of such fiscal year through the date of such termination and the denominator

of which is 365 (or 366, as applicable);

(iii) a payment equal to twelve (12) months of his base salary;

and (iv) payment

of an amount equal to the difference between the monthly COBRA premium cost and the monthly contribution paid by active employees for

the same coverage for eighteen months following his termination.

The employment agreement also provides that if a change in control

(as defined in the employment agreement) occurs, and during the period commencing three months prior to a change in control and ending

on the eighteen (18)-month anniversary of the change in control, Mr.

Hernandez is terminated without cause or he resigns for good

Hernandez will be entitled to (i) any unpaid annual bonus in respect of any completed fiscal year that has ended

prior to the date of such termination;

(ii) subject to certain conditions set forth in the employment agreement, an amount equal

to (A) the Target Annual Bonus otherwise for the fiscal year in which such termination occurred, assuming Mr.

Hernandez had

remained employed through the applicable payment date, multiplied by (B) a fraction, the numerator of which is the number of days

(ii) subject to certain conditions set forth in the employment agreement,

an amount equal to (A) the Target Annual Bonus otherwise for the fiscal year in which such termination occurred, assuming Mr.

had remained employed through the applicable payment date, multiplied by (B) a fraction, the numerator of which is the number of days

elapsed from the commencement of such fiscal year through the date of such termination and the denominator of which is 365 (or 366, as

(iii) severance of 18 months’

(iii) a payment equal to twelve (12) months of his base salary;

and (iv) payment of an amount equal to the difference between

1 unchanged sentence

his termination.

The employment agreement also provides that if a change in control (as defined in the employment agreement) occurs, and

during the period commencing three months prior to a change in control and ending on the eighteen (18)-month anniversary of the change

in control, Mr.

Hernandez is terminated without cause or he resigns for good reason, Mr.

Hernandez will be entitled to (i) any unpaid

annual bonus in respect of any completed fiscal year that has ended prior to the date of such termination;

(ii) subject to certain conditions

set forth in the employment agreement, an amount equal to (A) the Target Annual Bonus otherwise for the fiscal year in which such termination

occurred, assuming Mr.

Hernandez had remained employed through the applicable payment date, multiplied by (B) a fraction, the numerator

of which is the number of days elapsed from the commencement of such fiscal year through the date of such termination and the denominator

of which is 365 (or 366, as applicable);

(iii) severance of 18 months’ salary;

and (iv) payment of an amount equal to the difference

between the monthly COBRA premium cost and the monthly contribution paid by active employees for the same coverage for eighteen months

following his termination.

Additionally, any unvested portion of the equity awards held subject to time-vesting held by Mr.

Hernandez will

automatically vest.

will automatically vest.

The employment agreement is governed by the laws

of the State of Ohio and contains non-solicitation and non-competition covenants (each of which remains in effect during the term of employment

and for six months following termination of employment) and confidentiality, trade secrets and assignment of intellectual property

and for six months following termination of employment) and confidentiality, trade secrets and assignment of intellectual property clauses.

Pursuant to the non-solicitation and non-competition

6 unchanged sentences

During the term of employment and for a period of

six months after termination (“the Post-Termination Restricted Period”), Mr.

Hernandez is prohibited from recruiting,

encouraging, soliciting, or inducing, or in any manner attempting to recruit, encourage, solicit, or induce, any person employed by or

engaged by Blue Water Vaccines Inc.

or its subsidiaries to terminate such Person’s employment or services (or in the case of a consultant,

materially reducing such services) with Blue Water Vaccines Inc.

or its subsidiaries, hiring, or engaging any individual who was employed

by or providing services to Blue Water Vaccines Inc.

or its subsidiaries within the six (6) month period prior to the date of such

hiring or engagement, or encouraging, soliciting, or inducing, or in any manner attempting to encourage, solicit, or induce, any current

or prospective client, customer, licensee, supplier, or other business relation of Blue Water Vaccines Inc.

or its subsidiaries, or any

such relation that was a client, customer, licensee or other business relationship within the prior six (6) month period to cease

doing business with or reduce the amount of business conducted with Blue Water Vaccines Inc.

or its subsidiaries, or in any way interfering

with the relationship between any such party and Blue Water Vaccines Inc.

six months after termination (“the Post-Termination Restricted Period”), Mr.

Hernandez is prohibited from recruiting, encouraging,

soliciting, or inducing, or in any manner attempting to recruit, encourage, solicit, or induce, any person employed by or engaged by Blue

Water Vaccines Inc.

or its subsidiaries to terminate such Person’s employment or services (or in the case of a consultant, materially

reducing such services) with Blue Water Vaccines Inc.

or its subsidiaries, hiring, or engaging any individual who was employed by or providing

services to Blue Water Vaccines Inc.

or its subsidiaries within the six (6) month period prior to the date of such hiring or engagement,

or encouraging, soliciting, or inducing, or in any manner attempting to encourage, solicit, or induce, any current or prospective client,

customer, licensee, supplier, or other business relation of Blue Water Vaccines Inc.

or its subsidiaries, or any such relation that was

a client, customer, licensee or other business relationship within the prior six (6) month period to cease doing business with or reduce

the amount of business conducted with Blue Water Vaccines Inc.

or its subsidiaries, or in any way interfering with the relationship between

any such party and Blue Water Vaccines Inc.

or its subsidiaries.

1 unchanged sentence

offering, we entered into an employment agreement with Mr.

Garfield, pursuant to which he is employed as the Chief Financial Officer

of the Company.

Garfield, pursuant to which he is employed as the Chief Financial Officer of

The employment agreement provides for an annual base salary, subject to annual increases in the discretion of our compensation

2 unchanged sentences

public offering, Mr.

Garfield’s base salary is $435,000.

The annual performance bonus will be up to 50% of annual base salary

(the “Target Annual Bonus”), with the actual bonus being based upon the level of achievement of annual Company and individual

performance objectives for such fiscal year, as determined by our compensation committee.

Garfield’s base salary is $435,000.

The annual performance bonus will be up to 50% of annual base salary (the

“Target Annual Bonus”), with the actual bonus being based upon the level of achievement of annual Company and individual performance

objectives for such fiscal year, as determined by our compensation committee.

In the event that Mr.

Garfield’s employment

is terminated by the Company without cause (as defined in the employment agreement), or if Mr.

Garfield terminates his employment

for “Good Reason”

(as defined in the employment agreement), in addition to accrued unpaid salary, reimbursements and vacation days,

he will be entitled to certain severance payments and benefits, including:

Garfield terminates his employment for

“Good Reason” (as defined in the employment agreement), in addition to accrued unpaid salary, reimbursements and vacation

days, he will be entitled to certain severance payments and benefits, including:

(i) any unpaid annual bonus in respect of any completed

fiscal year that has ended prior to the date of such termination;

(ii) subject to certain conditions set forth in the employment

agreement, an amount equal to (A) the Target Annual Bonus otherwise for the fiscal year in which such termination occurred, assuming

Garfield had remained employed through the applicable payment date, multiplied by (B) a fraction, the numerator of which

is the number of days elapsed from the commencement of such fiscal year through the date of such termination and the denominator

of which is 365 (or 366, as applicable);

(ii) subject to certain conditions set forth in the employment agreement,

an amount equal to (A) the Target Annual Bonus otherwise for the fiscal year in which such termination occurred, assuming Mr.

had remained employed through the applicable payment date, multiplied by (B) a fraction, the numerator of which is the number of days

elapsed from the commencement of such fiscal year through the date of such termination and the denominator of which is 365 (or 366, as

(iii) a payment equal to twelve (12) months of his base salary;

and (iv) payment

of an amount equal to the difference between the monthly COBRA premium cost and the monthly contribution paid by active employees for

the same coverage for eighteen months following his termination.

The employment agreement also provides that if a change in control

(as defined in the employment agreement) occurs, and during the period commencing three months prior to a change in control and ending

on the eighteen (18)-month anniversary of the change in control, Mr.

Garfield is terminated without cause or he resigns for good

Garfield will be entitled to (i) any unpaid annual bonus in respect of any completed fiscal year that has ended

prior to the date of such termination;

(ii) subject to certain conditions set forth in the employment agreement, an amount equal

to (A) the Target Annual Bonus otherwise for the fiscal year in which such termination occurred, assuming Mr.

Garfield had remained

employed through the applicable payment date, multiplied by (B) a fraction, the numerator of which is the number of days elapsed

from the commencement of such fiscal year through the date of such termination and the denominator of which is 365 (or 366, as applicable);

(iii) severance of 18 months’

and (iv) payment of an amount equal to the difference between the monthly COBRA

premium cost and the monthly contribution paid by active employees for the same coverage for eighteen months following his termination.

and (iv) payment of an amount equal to the difference between

the monthly COBRA premium cost and the monthly contribution paid by active employees for the same coverage for eighteen months following

his termination.

The employment agreement also provides that if a change in control (as defined in the employment agreement) occurs, and

during the period commencing three months prior to a change in control and ending on the eighteen (18)-month anniversary of the change

in control, Mr.

Garfield is terminated without cause or he resigns for good reason, Mr.

Garfield will be entitled to (i) any unpaid annual

bonus in respect of any completed fiscal year that has ended prior to the date of such termination;

(ii) subject to certain conditions

set forth in the employment agreement, an amount equal to (A) the Target Annual Bonus otherwise for the fiscal year in which such termination

occurred, assuming Mr.

Garfield had remained employed through the applicable payment date, multiplied by (B) a fraction, the numerator

of which is the number of days elapsed from the commencement of such fiscal year through the date of such termination and the denominator

of which is 365 (or 366, as applicable);

(iii) severance of 18 months’ salary;

and (iv) payment of an amount equal to the difference

between the monthly COBRA premium cost and the monthly contribution paid by active employees for the same coverage for eighteen months

following his termination.

Additionally, any unvested portion of the equity awards held subject to time-vesting held by Mr.

Garfield will automatically vest.

Garfield will

automatically vest.

The employment agreement is governed by the laws

of the State of Ohio and contains non-solicitation and non-competition covenants (each of which remains in effect during the term of employment

and for six months following termination of employment) and confidentiality, trade secrets and assignment of intellectual property

and for six months following termination of employment) and confidentiality, trade secrets and assignment of intellectual property clauses.

Pursuant to the non-solicitation and non-competition

covenants, Mr.

Garfield has agreed to not directly or indirectly solicit any comparable business from a broad category of customers,

request or advise customers to curtail, cancel, or withdraw its business from Blue Water Vaccines Inc., aid any other entity in obtaining

business from customers that is comparable or similar to any products or services provided by Blue Water Vaccines Inc.

or otherwise interfere

with any transaction, agreement, business relationship, and/or business opportunity between Blue Water Vaccines Inc.

and any customer

or potential customer of the Company.

Garfield has agreed to not directly or indirectly solicit any comparable business from a broad category of customers, request

or advise customers to curtail, cancel, or withdraw its business from Blue Water Vaccines Inc., aid any other entity in obtaining business

from customers that is comparable or similar to any products or services provided by Blue Water Vaccines Inc.

or otherwise interfere with

any transaction, agreement, business relationship, and/or business opportunity between Blue Water Vaccines Inc.

and any customer or potential

customer of the Company.

During the term of employment and for a period of

six months after termination (“the Post-Termination Restricted Period”), Mr.

Garfield is prohibited from recruiting,

encouraging, soliciting, or inducing, or in any manner attempting to recruit, encourage, solicit, or induce, any person employed by or

engaged by Blue Water Vaccines Inc.

or its subsidiaries to terminate such Person’s employment or services (or in the case of a consultant,

materially reducing such services) with Blue Water Vaccines Inc.

or its subsidiaries, hiring, or engaging any individual who was employed

by or providing services to Blue Water Vaccines Inc.

or its subsidiaries within the six (6) month period prior to the date of such

hiring or engagement, or encouraging, soliciting, or inducing, or in any manner attempting to encourage, solicit, or induce, any current

or prospective client, customer, licensee, supplier, or other business relation of Blue Water Vaccines Inc.

or its subsidiaries, or any

such relation that was a client, customer, licensee or other business relationship within the prior six (6) month period to cease

doing business with or reduce the amount of business conducted with Blue Water Vaccines Inc.

or its subsidiaries, or in any way interfering

with the relationship between any such party and Blue Water Vaccines Inc.

six months after termination (“the Post-Termination Restricted Period”), Mr.

Garfield is prohibited from recruiting, encouraging,

soliciting, or inducing, or in any manner attempting to recruit, encourage, solicit, or induce, any person employed by or engaged by Blue

Water Vaccines Inc.

or its subsidiaries to terminate such Person’s employment or services (or in the case of a consultant, materially

reducing such services) with Blue Water Vaccines Inc.

or its subsidiaries, hiring, or engaging any individual who was employed by or providing

services to Blue Water Vaccines Inc.

or its subsidiaries within the six (6) month period prior to the date of such hiring or engagement,

or encouraging, soliciting, or inducing, or in any manner attempting to encourage, solicit, or induce, any current or prospective client,

customer, licensee, supplier, or other business relation of Blue Water Vaccines Inc.

or its subsidiaries, or any such relation that was

a client, customer, licensee or other business relationship within the prior six (6) month period to cease doing business with or reduce

the amount of business conducted with Blue Water Vaccines Inc.

or its subsidiaries, or in any way interfering with the relationship between

any such party and Blue Water Vaccines Inc.

or its subsidiaries.

Erin Henderson —

Employment Agreement

Erin Henderson

Effective upon the closing of our initial public

6 unchanged sentences

public offering, Ms.

Henderson’s base salary is $325,000.

The annual performance bonus will be up to 40% of annual base salary (the

“Target Annual Bonus”), with the actual bonus being based upon the level of achievement of annual Company and individual performance

objectives for such fiscal year, as determined by our compensation committee.

In the event that Ms.

Henderson’s employment

is terminated by the Company without cause (as defined in the employment agreement), or if Ms.

Henderson’s terminates her employment

for “Good Reason”

(as defined in the employment agreement), in addition to accrued unpaid salary, reimbursements and vacation days,

she will be entitled to certain severance payments and benefits, including:

Henderson’s terminates her employment

for “Good Reason” (as defined in the employment agreement), in addition to accrued unpaid salary, reimbursements and vacation

days, she will be entitled to certain severance payments and benefits, including:

(i) any unpaid annual bonus in respect of any completed

fiscal year that has ended prior to the date of such termination;

(ii) subject to certain conditions set forth in the employment

agreement, an amount equal to (A) the Target Annual Bonus otherwise for the fiscal year in which such termination occurred, assuming

Henderson had remained employed through the applicable payment date, multiplied by (B) a fraction, the numerator of which is

the number of days elapsed from the commencement of such fiscal year through the date of such termination and the denominator of

which is 365 (or 366, as applicable);

(ii) subject to certain conditions set forth in the employment agreement,

an amount equal to (A) the Target Annual Bonus otherwise for the fiscal year in which such termination occurred, assuming Ms.

had remained employed through the applicable payment date, multiplied by (B) a fraction, the numerator of which is the number of days

elapsed from the commencement of such fiscal year through the date of such termination and the denominator of which is 365 (or 366, as

(iii) a payment equal to nine (9) months of her base salary;

and (iv) payment of

an amount equal to the difference between the monthly COBRA premium cost and the monthly contribution paid by active employees for the

same coverage for eighteen months following her termination.

The employment agreement also provides that if a change in control (as

defined in the employment agreement) occurs, and during the period commencing three months prior to a change in control and ending

on the eighteen (18)-month anniversary of the change in control, Ms.

Henderson is terminated without cause or resigns for good reason,

Henderson will be entitled to (i) any unpaid annual bonus in respect of any completed fiscal year that has ended prior to the

date of such termination;

(ii) subject to certain conditions set forth in the employment agreement, an amount equal to (A) the

Target Annual Bonus otherwise for the fiscal year in which such termination occurred, assuming Ms.

Henderson had remained employed through

the applicable payment date, multiplied by (B) a fraction, the numerator of which is the number of days elapsed from the commencement

of such fiscal year through the date of such termination and the denominator of which is 365 (or 366, as applicable);

(iii) severance

of 12 months’

and (iv) payment of an amount equal to the difference between the monthly COBRA premium cost and

the monthly contribution paid by active employees for the same coverage for nine months following her termination.

Additionally,

any unvested portion of the equity awards held subject to time-vesting held by Ms.

Henderson will automatically vest.

and (iv) payment of an amount equal to the difference between

the monthly COBRA premium cost and the monthly contribution paid by active employees for the same coverage for eighteen months following

her termination.

The employment agreement also provides that if a change in control (as defined in the employment agreement) occurs, and

during the period commencing three months prior to a change in control and ending on the eighteen (18)-month anniversary of the change

in control, Ms.

Henderson is terminated without cause or resigns for good reason, Ms.

Henderson will be entitled to (i) any unpaid annual

bonus in respect of any completed fiscal year that has ended prior to the date of such termination;

(ii) subject to certain conditions

set forth in the employment agreement, an amount equal to (A) the Target Annual Bonus otherwise for the fiscal year in which such termination

occurred, assuming Ms.

Henderson had remained employed through the applicable payment date, multiplied by (B) a fraction, the numerator

of which is the number of days elapsed from the commencement of such fiscal year through the date of such termination and the denominator

of which is 365 (or 366, as applicable);

(iii) severance of 12 months’ salary;

and (iv) payment of an amount equal to the difference

between the monthly COBRA premium cost and the monthly contribution paid by active employees for the same coverage for nine months following

her termination.

Additionally, any unvested portion of the equity awards held subject to time-vesting held by Ms.

Henderson will automatically

The employment agreement is governed by the laws

of the State of Ohio and contains non-solicitation and non-competition covenants (each of which remains in effect during the term of employment

and for six months following termination of employment) and confidentiality, trade secrets and assignment of intellectual property

and for six months following termination of employment) and confidentiality, trade secrets and assignment of intellectual property clauses.

Pursuant to the non-solicitation and non-competition

7 unchanged sentences

or potential customer of the Company.

During the term of employment and for a period of

six months after termination (“the Post-Termination Restricted Period”), Ms.

During the term of employment and for a period

of six months after termination (“the Post-Termination Restricted Period”), Ms.

Henderson is prohibited from recruiting,

1 unchanged sentence

engaged by Blue Water Vaccines Inc.

or its subsidiaries to terminate such Person’s employment or services (or in the case of a consultant,

materially reducing such services) with Blue Water Vaccines Inc.

or its subsidiaries, hiring, or engaging any individual who was employed

by or providing services to Blue Water Vaccines Inc.

or its subsidiaries within the six (6) month period prior to the date of such

hiring or engagement, or encouraging, soliciting, or inducing, or in any manner attempting to encourage, solicit, or induce, any current

or prospective client, customer, licensee, supplier, or other business relation of Blue Water Vaccines Inc.

or its subsidiaries, or any

such relation that was a client, customer, licensee or other business relationship within the prior six (6) month period to cease

or its subsidiaries to terminate such Person’s employment or services (or in the case of a

consultant, materially reducing such services) with Blue Water Vaccines Inc.

or its subsidiaries, hiring, or engaging any individual

who was employed by or providing services to Blue Water Vaccines Inc.

or its subsidiaries within the six (6) month period prior to the

date of such hiring or engagement, or encouraging, soliciting, or inducing, or in any manner attempting to encourage, solicit, or induce,

any current or prospective client, customer, licensee, supplier, or other business relation of Blue Water Vaccines Inc.

or its subsidiaries,

or any such relation that was a client, customer, licensee or other business relationship within the prior six (6) month period to cease

doing business with or reduce the amount of business conducted with Blue Water Vaccines Inc.

3 unchanged sentences

Potential Payments Upon Termination or Change-in-Control

See “Employment Agreements of Named Executive

Officers”

See “Employment Agreements of Named Executive

Officers” above.

Outstanding Equity Awards at Fiscal Year-End

The following table summarizes

the number of shares of common stock underlying outstanding equity incentive plan awards for each named executive officer as of December

Unexercisable

The following table summarizes the number of shares

of common stock underlying outstanding equity incentive plan awards for each named executive officer as of December 31, 2022.

the awards set forth in the table below was granted under our 2019 Equity Incentive Plan or our 2022 Equity Incentive Plan.

Number of Securities Underlying Unexercised Options (#) Exercisable

Number of Securities Underlying Unexercised Options (#) Unexercisable

Option Exercise Price ($)

Option Expiration Date

Joseph Hernandez

Erin Henderson

(1) This option vests over 45 months from the vesting commencement

date, with 1/4 vesting December 31, 2020, and the remainder vesting in 36 equal monthly installments, subject to continued service through

each such vesting date.

These options vested and became exercisable as follows (i) 174,972 options vested immediately upon grant;

(ii) 4,171 options vested at the end of each calendar month from the date of issuance through September 30, 2022 and (iii) the remaining 4,173 options vested on October 31, 2022.

These incentive and non-qualified options vest and

become exercisable as follows:

23,041 of the options vested on September 15, 2022 and the remainder of the options vest in equal monthly

installments commencing on January 15, 2023 through September 15, 2025, subject to continued service through each such vesting date.

These non-qualified options vest and become exercisable as follows:

1,959 on September 15, 2022, 2,083 on October 15, 2022, 2,083 on November 15, 2022, 2,084 on December 15, 2022, 1,959 on December 15, 2023, and 1,959 on December 15, 2024, subject to continued service through each such vesting date.

These incentive options vests and become exercisable as follows:

14,267 of the options vested on December 31, 2020, and the remainder vest monthly thereafter in equal monthly installments through December 31, 2023, subject to continued service through each such vesting date.

These incentive and non-qualified options vest and become exercisable as follows:

(i) 15,693 options vested immediately upon grant;

(ii) 1,306 options vest at the end of each calendar month from January 1, 2023 through December 31, 2023 and (iii) 1,920 options vest at the end of each calendar month thereafter through December 31, 2025.

These non-qualified options vest and become exercisable as follows:

112,107 options vested immediately upon grant and 1,306 options vest at the end of each calendar month commencing on May 31, 2022 through December 31, 2022.

Director Compensation

Historically, our directors

have not received cash compensation for their service.

We plan to adopt a new director compensation program recommended by our corporate

governance committee and/or compensation committee pursuant to which we pay cash compensation or equity compensation or both.

Our corporate

governance committee will continue to review and make recommendations to the board regarding compensation of directors, including equity-based

We will reimburse our non-employee directors for reasonable travel expenses incurred in attending board and committee meetings.

We also intend to allow our non-employee directors to participate in our equity compensation plans.

Prior to April 2022, our directors have not received

cash compensation for their service except for option grants.

However, in April 2022, after a review of non-employee director compensation

at comparable companies, the Board approved cash and equity compensation of directors, such that we will pay each of our non-employee

directors an annual cash retainer for service on the Board and for service on each committee on which the director is a member.

of each committee receive an additional annual retainer for such service.

All retainers are payable in arrears in four equal quarterly

installments.

The retainers paid to non-employee directors for service on the Board and for service on each committee of the Board on

which the director is a member are as follows:

Annual Board Service Retainer

All non-employee directors

Annual Committee Member Service Retainer

Member of the Audit Committee

Member of the Compensation Committee

Member of the Nominating and Corporate Governance Committee

Annual Committee Chair Service Retainer

(in addition to Committee Member Service Retainer above):

Chair of the Audit Committee

Chair of the Compensation Committee

Chair of the Nominating and Corporate Governance Committee

Additionally, each non-director will receive an

annual grant of nonqualified stock options to purchase 0.04% of the shares of Common Stock outstanding as of the date of the Company’s

annual meeting, such options vesting monthly over a one-year period and fully vesting upon the director’s death or disability or

upon a change of control of the Company.

Our Nominating Committee will continue to review

and make recommendations to the Board regarding compensation of directors, including equity-based plans.

We will reimburse our non-employee

directors for reasonable travel expenses incurred in attending board and committee meetings.

Director Compensation Table

The following table sets forth

information concerning the compensation of our directors for the fiscal year ended December 31, 2021:

Kimberly Murphy (2)

The following table sets forth information concerning

the compensation of our directors for the fiscal year ended December 31, 2022:

Fees Earned or Paid In Cash

Option Awards

All Other Compensation

James Sapirstein

Allan Shaw (3)

Timothy Ramdeen (14)

Kimberly Murphy

63,437.50 (8)

67,812.50 (10)

$ 38,750 (15)

Michael Venerable

This figure represents the aggregate grant date fair value of stock options granted in the fiscal year, computed in accordance with the provisions of FASB ASC 718.

Assumptions used in the calculation of these amounts are included in the notes to our financial statements included elsewhere in this Report.

As required by SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions.

Murphy has 45,920 outstanding stock options as of December 31, 2021.

Shaw has 45,920 outstanding stock options as of December 31, 2021.

This figure represents the aggregate grant date fair value of

stock options granted in the fiscal year, computed in accordance with the provisions of FASB ASC 718.

Assumptions used in the calculation

of these amounts are included in the notes to our financial statements included elsewhere in this Report.

As required by SEC rules, the

amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions.

Represents fees earned by Mr.

Tarsh since his addition to the Board on August 22, 2022.

Such pro-rated fees consist of $22,500 for serving on the Board, $5,000 for serving on the Audit Committee (and an additional $5,000 for serving as chair of the Audit Committee), $3,750 for serving on the Compensation Committee and $2,500 for serving on the Nominating Committee.

Tarsh was granted 4,073 stock options

in fiscal year ended December 31, 2022, all of which were outstanding as of December 31, 2022, and of which 1,810 have vested as of such

date and the remainder of which will vest in equal monthly installments through May 2023.

Represents pro-rated fees earned by Mr.

Sapirstein, consisting of $39,375 for serving on the Board, $8,750 for serving on the Audit Committee, $6,562.50 for serving on the for serving on the Compensation Committee (and an additional $6,562.50 for serving as chair of the Compensation Committee) and $4,375 for serving on the Nominating Committee.

Sapirstein was granted 4,655 ($16,372 fair value)

in fiscal year ended December 31, 2022 along with the other directors and 45,372 ($165,946 fair value)) in fiscal year ended

December 31, 2022 as a joining bonus equal to the options the other independent directors received pre-IPO.

stock options were outstanding as of December 31, 2022.

3,590 of the 4,655 options have vested as December 31, 2022, and the

remainder of which will vest in equal monthly installments through March 2023.

9,560 of the 45,372 options

have vested as December 31, 2022 and the remainder of which will vest in equal monthly installments through February

Represents pro-rated fees earned by Mr.

Jeremić since his addition to the Board on November 22, 2022.

Such fees consist of $11,250 for serving on the Board, $1,875 for serving on the Compensation Committee and $1,250 for serving on the Nominating Committee.

Jeremić was granted 3,610 stock options in fiscal year ended December 31, 2022, all of which were outstanding as of December 31, 2022, and of which 516 have vested as of such date and the remainder of which will vest in equal monthly installments through May 2023.

Represents pro-rated fees earned by Ms.

Murphy, consisting of $39,375 for serving on the Board, $8,750 for serving on the Audit Committee, $6,562.50 for serving on the for serving on the Compensation Committee and $4,375 for serving on the Nominating Committee (and an additional $4,375 for serving as chair of the Nominating Committee).

Murphy resigned from the Board of Directors effective January 13, 2023.

Murphy was granted 4,655 stock options in fiscal year ended December 31,

Murphy had 50,575 outstanding stock options as of December 31, 2022, of which 38,006 have vested as of such date.

vesting of 11,505 options were accelerated as of January 13, 2023 and 1,065 unvested options were terminated on January 13, 2023, Ms.

Murphy’s date of resignation from Board.

Represents pro-rated fees earned by Mr.

Shaw, consisting of $39,375 for serving on the Board, $8,750 for serving on the Audit Committee (and an additional $8,750 for serving as chair of the Audit Committee), $6,562.50 for serving on the for serving on the Compensation Committee and $4,375 for serving on the Nominating Committee.

Shaw did not stand for reelection at the Company’s 2022 annual meeting of stockholders and as such ceased to be a director as of August 22, 2022.

Shaw was granted 4,655 stock option in fiscal year ended December 31, 2022.

Shaw had no outstanding stock options as of December 31, 2022.

Represents pro-rated fees earned by Mr.

Venerable, consisting of $39,375 for serving on the Board.

Venerable resigned from the Board of Directors effective November 4, 2022.

Venerable was granted 4,655 stock options in fiscal year ended December 31, 2022.

Venerable had 2,886 outstanding stock options as of December 31, 2022, of which all were vested as of such date.

1,769 unvested options were terminated on November 4, 2022, the date of Mr.

Venerable’s resignation from the Board,

Ramdeen joined the Board on January 13, 2023 and as such, did not earn any fees in the fiscal year ended December 31, 2022.

Represents transitional fees in connection with Mr.

Shaw’s departure as a director.

Securities Authorized for Issuance under Equity

Compensation Plans

The following table provides

information as of December 31, 2021, regarding our common stock that may be issued under the Company’s 2019 equity incentive plan

(the “2019 Plan”).

The following table provides information as of

December 31, 2022, regarding our common stock that may be issued under the Company’s 2019 equity incentive plan (the “2019

Plan”) and the Company’s 2022 Equity Incentive Plan (the “2022 Plan”).

Plan category:

Securities to be

Warrants, and

Exercise Price

of Outstanding

Available for

Future Issuance

column (a)) (c)

Number of Securities to be issued Upon Exercise of Outstanding Options, Warrants, and Rights (a)

Weighted Average Exercise Price of Outstanding Options (b)

Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in column (a)) (c)

Equity compensation plans approved by stockholders

2019 Plan (1)

2022 Plan (3)

The 2019 Plan permits grants of equity awards to employees, directors, consultants and other independent contractors.

Our board of directors and stockholders have approved a total reserve of 1,400,000 shares for issuance under the 2019 Plan.

Once the 2022 Plan became effective, no further grants were made under the 2019 Plan and all shares that remained available for the issuance of awards under our 2019 Plan as of immediately prior to the time our 2022 Plan became effective were rolled over into the 2022 Plan.

The 2022 Plan permits grants of equity awards to employees, directors, consultants and other independent contractors.

Our board of directors and stockholders have approved a total reserve of 2,600,000 shares for issuance under the 2022 Plan.

2022 Equity Incentive Plan

Our board of directors adopted our 2022 Plan effective

upon the completion of our initial public offering, and our stockholders approved our 2022 Plan effective upon the completion of the initial

public offering.

Our 2022 Plan is a successor to and continuation of our 2019 Plan.

Our 2022 Plan will become effective on the date of

the completion of our initial public.

Once the 2022 Plan became effective, no further grants will be made under the 2019 Plan.

Our 2022 Plan

provides for the grant of incentive stock options, or ISOs, within the meaning of Section 422 of the Internal Revenue Code, or the

Code, to employees, including employees of any parent or subsidiary, and for the grant of nonstatutory stock options, or NSOs, stock appreciation

rights, restricted stock awards, restricted stock unit awards, performance awards and other forms of awards to employees, directors and

consultants, including employees and consultants of our affiliates.

Our board of directors adopted, and our stockholders

approved, our 2022 Plan effective upon the completion of our initial public offering.

Our 2022 Plan is a successor to and continuation

of our 2019 Plan.

Our 2022 Plan became effective on the date of the completion of our initial public offering.

Once the 2022 Plan became

effective, no further grants will be made under the 2019 Plan.

Our 2022 Plan provides for the

grant of incentive stock options, or ISOs, within the meaning of Section 422 of the Internal Revenue Code, or the Code, to employees,

including employees of any parent or subsidiary, and for the grant of nonstatutory stock options, or NSOs, stock appreciation rights,

restricted stock awards, restricted stock unit awards, performance awards and other forms of awards to employees, directors and consultants,

including employees and consultants of our affiliates.

Authorized Shares.

the maximum number of shares of our common stock that may be issued under our 2022 Plan after it becomes effective will not exceed 1,600,000 shares

of our common stock, which is the sum of (i) 200,000 new shares, plus (ii) an additional number of shares not to exceed 1,400,000

(calculated after giving effect to the Pre-IPO Stock Split), consisting of (A) shares that remain available for the issuance

of awards under our 2019 Plan as of immediately prior to the time our 2022 Plan becomes effective and (B) shares of our common stock

subject to outstanding stock options or other stock awards granted under our 2019 Plan that, on or after the 2022 Plan becomes effective,

terminate or expire prior to exercise or settlement;

are not issued because the award is settled in cash;

are forfeited because of the

failure to vest;

or are reacquired or withheld (or not issued) to satisfy a tax withholding obligation or the purchase or exercise price,

if any, as such shares become available from time to time.

The number of shares of common stock available for issuance under our 2022

Plan will be reduced by:

one share for each share of common stock issued pursuant to a stock option or stock appreciation right with respect

to which the exercise or strike price is at least 100% of the Fair Market Value of the Common Stock subject to the stock option or appreciation

right on the grant date;

and (ii) 1.20 shares for each share of common stock issued pursuant to any restricted stock unit or other

“full value award.”

The maximum number of shares of our common stock that may be issued on the exercise of ISOs under our

2022 Plan is 250,000 shares.

Initially, the maximum

number of shares of our common stock that may be issued under our 2022 Plan was 1,600,000 shares of our common stock, which is the sum

of (i) 200,000 new shares, plus (ii) an additional number of shares not to exceed 1,400,000 (calculated after giving effect to the Pre-IPO

Stock Split), consisting of (A) shares that remain available for the issuance of awards under our 2019 Plan as of immediately prior to

the time our 2022 Plan becomes effective and (B) shares of our common stock subject to outstanding stock options or other stock awards

granted under our 2019 Plan that, on or after the 2022 Plan becomes effective, terminate or expire prior to exercise or settlement;

not issued because the award is settled in cash;

are forfeited because of the failure to vest;

or are reacquired or withheld (or not issued)

to satisfy a tax withholding obligation or the purchase or exercise price, if any, as such shares become available from time to time.

On August 22, 2022, at the Company’s 2022

annual meeting of stockholders, the Company’s stockholders approved an additional 1,000,000 shares of common stock that may be issued

under the 2022 Plan.

The number of shares of common stock available

for issuance under our 2022 Plan will be reduced by:

one share for each share of common stock issued pursuant to a stock option or stock

appreciation right with respect to which the exercise or strike price is at least 100% of the Fair Market Value of the Common Stock subject

to the stock option or appreciation right on the grant date;

and (ii) 1.20 shares for each share of common stock issued pursuant to any

restricted stock unit or other “full value award.” The maximum number of shares of our common stock that may be issued on

the exercise of ISOs under our 2022 Plan is equal to the number of shares reserved under the 2022 Plan at any time.

Shares subject to stock awards granted under our

4 unchanged sentences

If any shares of our common stock issued pursuant to a stock award are forfeited back to or repurchased or reacquired by us

(i) because of a failure to meet a contingency or condition required for the vesting of such shares, (ii) to satisfy the exercise,

strike or purchase price of an award or (iii) to satisfy a tax withholding obligation in connection with an award, the shares that

are forfeited or repurchased or reacquired will revert to and again become available for issuance under the 2022 Plan.

Any shares previously

issued which are reacquired in satisfaction of tax withholding obligations or as consideration for the exercise or purchase price of a

stock award will again become available for issuance under the 2022 Plan.

The number of shares available for issuance under our 2022 Plan

will increase by 1.20 shares for each share subject to restricted stock units or other full value awards (not including stock options

or stock appreciation rights) which are forfeited or reacquired for the reasons described in the preceding two sentences.

(i) because of a failure to meet a contingency or condition required for the vesting of such shares, (ii) to satisfy the exercise, strike

or purchase price of an award or (iii) to satisfy a tax withholding obligation in connection with an award, the shares that are forfeited

or repurchased or reacquired will revert to and again become available for issuance under the 2022 Plan.

Any shares previously issued

which are reacquired in satisfaction of tax withholding obligations or as consideration for the exercise or purchase price of a stock

award will again become available for issuance under the 2022 Plan.

The number of shares available for issuance under our 2022 Plan will

increase by 1.20 shares for each share subject to restricted stock units or other full value awards (not including stock options or stock

appreciation rights) which are forfeited or reacquired for the reasons described in the preceding two sentences.

Plan Administration.

Board of Directors has assigned the authority to administer the 2022 Plan to our Compensation Committee, but may, at any time, re-vest in

itself some or all of the power delegated to our Compensation Committee.

The Compensation Committee may delegate to one or more of our

officers the authority to (i) designate employees (other than officers) to receive specified stock awards and (ii) determine

the number of shares subject to such stock awards.

Under our 2022 Plan, our Compensation Committee has the authority to determine award

recipients, grant dates, the numbers and types of stock awards to be granted, the applicable fair market value, and the provisions of

each stock award, including the period of exercisability and the vesting schedule applicable to a stock award.

Our Board of Directors

has assigned the authority to administer the 2022 Plan to our Compensation Committee, but may, at any time, re-vest in itself some or

all of the power delegated to our Compensation Committee.

The Compensation Committee may delegate to one or more of our officers the authority

to (i) designate employees (other than officers) to receive specified stock awards and (ii) determine the number of shares subject to

such stock awards.

Under our 2022 Plan, our Compensation Committee has the authority to determine award recipients, grant dates, the numbers

and types of stock awards to be granted, the applicable fair market value, and the provisions of each stock award, including the period

of exercisability and the vesting schedule applicable to a stock award.

Stock Options.

and NSOs are granted under stock option agreements in a form approved by the Compensation Committee.

The Compensation Committee determines

the exercise price for stock options, within the terms and conditions of the 2022 Plan, provided that the exercise price of a stock option

generally cannot be less than 100% of the fair market value of our common stock on the date of grant.

Options granted under the 2022 Plan

vest at the rate specified in the stock option agreement as determined by the Compensation Committee.

The Compensation Committee determines the term of

stock options granted under the 2022 Plan, up to a maximum of 10 years.

Unless the terms of an option holder’s stock option

agreement, or other written agreement between us and the recipient approved by the Compensation Committee, provide otherwise, if an option

holder’s service relationship with us or any of our affiliates ceases for any reason other than disability, death or cause, the

option holder may generally exercise any vested options for a period of three months following the cessation of service.

This period may

be extended in the event that exercise of the option is prohibited by applicable securities laws.

If an option holder’s service

relationship with us or any of our affiliates ceases due to death, or an option holder dies within a certain period following cessation

of service, the option holder or a beneficiary may generally exercise any vested options for a period of 18 months following the

date of death.

If an option holder’s service relationship with us or any of our affiliates ceases due to disability, the option

holder may generally exercise any vested options for a period of 12 months following the cessation of service.

In the event of a

termination for cause, options generally terminate upon the termination date.

In no event may an option be exercised beyond the expiration

ISOs and NSOs are granted

under stock option agreements in a form approved by the Compensation Committee.

The Compensation Committee determines the exercise price

for stock options, within the terms and conditions of the 2022 Plan, provided that the exercise price of a stock option generally cannot

be less than 100% of the fair market value of our common stock on the date of grant.

Options granted under the 2022 Plan vest at the rate

specified in the stock option agreement as determined by the Compensation Committee.

The Compensation Committee determines the term

of stock options granted under the 2022 Plan, up to a maximum of 10 years.

Unless the terms of an option holder’s stock option agreement,

or other written agreement between us and the recipient approved by the Compensation Committee, provide otherwise, if an option holder’s

service relationship with us or any of our affiliates ceases for any reason other than disability, death or cause, the option holder may

generally exercise any vested options for a period of three months following the cessation of service.

This period may be extended in

the event that exercise of the option is prohibited by applicable securities laws.

If an option holder’s service relationship with

us or any of our affiliates ceases due to death, or an option holder dies within a certain period following cessation of service, the

option holder or a beneficiary may generally exercise any vested options for a period of 18 months following the date of death.

option holder’s service relationship with us or any of our affiliates ceases due to disability, the option holder may generally

exercise any vested options for a period of 12 months following the cessation of service.

In the event of a termination for cause, options

generally terminate upon the termination date.

In no event may an option be exercised beyond the expiration of its term.

Acceptable consideration for the purchase of common

stock issued upon the exercise of a stock option will be determined by the Compensation Committee and may include (i) cash, check,

bank draft or money order, (ii) a broker-assisted cashless exercise, (iii) the tender of shares of our common stock previously

owned by the option holder, (iv) a net exercise of the option if it is an NSO or (v) other legal consideration approved by the

Board of Directors.

stock issued upon the exercise of a stock option will be determined by the Compensation Committee and may include (i) cash, check, bank

draft or money order, (ii) a broker-assisted cashless exercise, (iii) the tender of shares of our common stock previously owned by the

option holder, (iv) a net exercise of the option if it is an NSO or (v) other legal consideration approved by the Board of Directors.

Unless the Compensation Committee provides otherwise,

3 unchanged sentences

Tax Limitations on ISOs.

aggregate fair market value, determined at the time of grant, of our common stock with respect to ISOs that are exercisable for the first

time by an award holder during any calendar year under all of our stock plans may not exceed $100,000.

Options or portions thereof that

exceed such limit will generally be treated as NSOs.

No ISO may be granted to any person who, at the time of the grant, owns or is deemed

to own stock possessing more than 10% of our total combined voting power or that of any of our parent or subsidiary corporations unless

(i) the option exercise price is at least 110% of the fair market value of the stock subject to the option on the date of grant and

(ii) the term of the ISO does not exceed five years from the date of grant.

The aggregate

fair market value, determined at the time of grant, of our common stock with respect to ISOs that are exercisable for the first time by

an award holder during any calendar year under all of our stock plans may not exceed $100,000.

Options or portions thereof that exceed

such limit will generally be treated as NSOs.

No ISO may be granted to any person who, at the time of the grant, owns or is deemed to

own stock possessing more than 10% of our total combined voting power or that of any of our parent or subsidiary corporations unless (i)

the option exercise price is at least 110% of the fair market value of the stock subject to the option on the date of grant and (ii) the

term of the ISO does not exceed five years from the date of grant.

Restricted Stock Unit Awards.

7 unchanged sentences

as otherwise provided in the applicable award agreement, or other written agreement between us and the recipient approved by the Compensation

Committee, restricted stock unit awards that have not vested will be forfeited once the participant’s continuous service ends for

Restricted Stock Awards.

stock awards are granted under restricted stock award agreements in a form approved by the Compensation Committee.

A restricted stock

award may be awarded in consideration for cash, check, bank draft or money order, past or future services to us or any other form of legal

consideration that may be acceptable to our board of directors and permissible under applicable law.

The Compensation Committee determines

the terms and conditions of restricted stock awards, including vesting and forfeiture terms.

If a participant’s service relationship

with us ends for any reason, we may receive any or all of the shares of common stock held by the participant that have not vested as of

the date the participant terminates service with us through a forfeiture condition or a repurchase right.

Restricted stock

awards are granted under restricted stock award agreements in a form approved by the Compensation Committee.

A restricted stock award

may be awarded in consideration for cash, check, bank draft or money order, past or future services to us or any other form of legal consideration

that may be acceptable to our board of directors and permissible under applicable law.

The Compensation Committee determines the terms

and conditions of restricted stock awards, including vesting and forfeiture terms.

If a participant’s service relationship with

us ends for any reason, we may receive any or all of the shares of common stock held by the participant that have not vested as of the

date the participant terminates service with us through a forfeiture condition or a repurchase right.

Stock Appreciation Rights.

appreciation rights are granted under stock appreciation right agreements in a form approved by the Compensation Committee.

The Compensation

Committee determines the strike price for a stock appreciation right, which generally cannot be less than 100% of the fair market value

of our common stock on the date of grant.

A stock appreciation right granted under the 2022 Plan vests at the rate specified in the stock

appreciation right agreement as determined by the Compensation Committee.

Stock appreciation rights may be settled in cash or shares of

common stock or in any other form of payment as determined by the Board and specified in the stock appreciation right agreement.

The Compensation Committee determines the term of

stock appreciation rights granted under the 2022 Plan, up to a maximum of 10 years.

If a participant’s service relationship

with us or any of our affiliates ceases for any reason other than cause, disability or death, the participant may generally exercise any

vested stock appreciation right for a period of three months following the cessation of service.

This period may be further extended in

the event that exercise of the stock appreciation right following such a termination of service is prohibited by applicable securities

If a participant’s service relationship with us, or any of our affiliates, ceases due to disability or death, or a participant

dies within a certain period following cessation of service, the participant or a beneficiary may generally exercise any vested stock

appreciation right for a period of 12 months in the event of disability and 18 months in the event of death.

In the event of

a termination for cause, stock appreciation rights generally terminate immediately upon the occurrence of the event giving rise to the

termination of the individual for cause.

Stock appreciation

rights are granted under stock appreciation right agreements in a form approved by the Compensation Committee.

The Compensation Committee

determines the strike price for a stock appreciation right, which generally cannot be less than 100% of the fair market value of our common

stock on the date of grant.

A stock appreciation right granted under the 2022 Plan vests at the rate specified in the stock appreciation

right agreement as determined by the Compensation Committee.

Stock appreciation rights may be settled in cash or shares of common stock

or in any other form of payment as determined by the Board and specified in the stock appreciation right agreement.

The Compensation Committee determines the term

of stock appreciation rights granted under the 2022 Plan, up to a maximum of 10 years.

If a participant’s service relationship with

us or any of our affiliates ceases for any reason other than cause, disability or death, the participant may generally exercise any vested

stock appreciation right for a period of three months following the cessation of service.

This period may be further extended in the event

that exercise of the stock appreciation right following such a termination of service is prohibited by applicable securities laws.

a participant’s service relationship with us, or any of our affiliates, ceases due to disability or death, or a participant dies

within a certain period following cessation of service, the participant or a beneficiary may generally exercise any vested stock appreciation

right for a period of 12 months in the event of disability and 18 months in the event of death.

In the event of a termination for cause,

stock appreciation rights generally terminate immediately upon the occurrence of the event giving rise to the termination of the individual

In no event may a stock appreciation right be exercised beyond the expiration of its term.

Performance Awards.

2022 Plan permits the grant of performance awards that may be settled in stock, cash or other property.

Performance awards may be structured

so that the stock or cash will be issued or paid only following the achievement of certain pre-established performance goals

during a designated performance period.

Performance awards that are settled in cash or other property are not required to be valued in

whole or in part by reference to, or otherwise based on, the common stock.

performance goals may be based on any measure of performance selected by the board of directors or the Compensation Committee.

The performance

goals may be based on company-wide performance or performance of one or more business units, divisions, affiliates or business segments,

and may be either absolute or relative to the performance of one or more comparable companies or the performance of one or more relevant

Unless specified otherwise by the board of directors at the time the performance award is granted, the board or Compensation

Committee will appropriately make adjustments in the method of calculating the attainment of performance goals as follows:

exclude restructuring and/or other nonrecurring charges;

The 2022 Plan permits

the grant of performance awards that may be settled in stock, cash or other property.

Performance awards may be structured so that the

stock or cash will be issued or paid only following the achievement of certain pre-established performance goals during a designated performance

Performance awards that are settled in cash or other property are not required to be valued in whole or in part by reference to,

or otherwise based on, the common stock.

The performance goals may be based on any measure

of performance selected by the board of directors or the Compensation Committee.

The performance goals may be based on company-wide performance

or performance of one or more business units, divisions, affiliates or business segments, and may be either absolute or relative to the

performance of one or more comparable companies or the performance of one or more relevant indices.

Unless specified otherwise by the

board of directors at the time the performance award is granted, the board or Compensation Committee will appropriately make adjustments

in the method of calculating the attainment of performance goals as follows:

(i) to exclude restructuring and/or other nonrecurring charges;

(ii) to exclude exchange rate effects;

(iii) to exclude the effects

of changes to generally accepted accounting principles;

(iv) to exclude the effects of any statutory adjustments to corporate tax

(v) to exclude the effects of items that are “unusual”

in nature or occur “infrequently”

as determined

under generally accepted accounting principles;

(vi) to exclude the dilutive effects of acquisitions or joint ventures;

assume that any portion of our business which is divested achieved performance objectives at targeted levels during the balance of a

performance period following such divestiture;

(viii) to exclude the effect of any change in the outstanding shares of our common

stock by reason of any stock dividend or split, stock repurchase, reorganization, recapitalization, merger, consolidation, spin-off, combination

or exchange of shares or other similar corporate change or any distributions to common stockholders other than regular cash dividends;

(iii) to exclude the effects of changes to generally accepted accounting principles;

(iv) to exclude

the effects of any statutory adjustments to corporate tax rates;

(v) to exclude the effects of items that are “unusual” in

nature or occur “infrequently” as determined under generally accepted accounting principles;

(vi) to exclude the dilutive

effects of acquisitions or joint ventures;

(vii) to assume that any portion of our business which is divested achieved performance objectives

at targeted levels during the balance of a performance period following such divestiture;

(viii) to exclude the effect of any change in

the outstanding shares of our common stock by reason of any stock dividend or split, stock repurchase, reorganization, recapitalization,

merger, consolidation, spin-off, combination or exchange of shares or other similar corporate change or any distributions to common stockholders

other than regular cash dividends;

(ix) to exclude the effects of stock based compensation and the award of bonuses under our bonus plans;

(x) to exclude costs

incurred in connection with potential acquisitions or divestitures that are required to be expensed under generally accepted accounting

(xi) to exclude the goodwill and intangible asset impairment charges that are required to be recorded under generally

(x) to exclude costs incurred in connection with potential acquisitions or divestitures that are required to be expensed under generally

accepted accounting principles;

and (xi) to exclude the effects of the timing of acceptance for review and/or approval of submissions

(xi) to exclude the goodwill and intangible asset impairment charges that are required to be recorded

under generally accepted accounting principles;

and (xi) to exclude the effects of the timing of acceptance for review and/or approval

of submissions to the U.S.

Food and Drug Administration or any other regulatory body.

Stock Awards.

The Compensation Committee may grant other awards based in whole or in part by reference to

our common stock.

The Compensation Committee will set the number of shares under the stock award (or cash equivalent) and all other terms

and conditions of such awards.

Non-Employee Director

Compensation Limit.

The aggregate value of all compensation granted or paid to any non-employee director

with respect to any calendar year, including awards granted and cash fees paid by us to such non-employee director, will not

exceed $150,000 in total value;

provided that such amount will increase to $200,000 for the first year for newly appointed or elected non-employee directors.

to Capital Structure.

In the event there is a specified type of change in our capital structure, such as a

stock split, reverse stock split or recapitalization, appropriate adjustments will be made to (i) the class and maximum number of

shares reserved for issuance under the 2022 Plan, (ii) the class and maximum number of shares by which the share reserve may increase

automatically each year, (iii) the class and maximum number of shares that may be issued on the exercise of ISOs and (iv) the

class and number of shares and exercise price, strike price or purchase price, if applicable, of all outstanding stock awards.

Transactions.

The following applies to stock awards under the 2022 Plan in the event of a corporate transaction

(as defined in the 2022 Plan), unless otherwise provided in a participant’s stock award agreement or other written agreement with

us or one of our affiliates or unless otherwise expressly provided by the Board of Directors or Compensation Committee at the time of

the event of a corporate transaction, any stock awards outstanding under the 2022 Plan may be assumed, continued or substituted for by

any surviving or acquiring corporation (or its parent company), and any reacquisition or repurchase rights held by us with respect to

the stock award may be assigned to the successor (or its parent company).

If the surviving or acquiring corporation (or its parent company)

does not assume, continue or substitute for such stock awards, then (i) with respect to any such stock awards that are held by participants

whose continuous service has not terminated prior to the effective time of the corporate transaction, or current participants, the vesting

(and exercisability, if applicable) of such stock awards will be accelerated in full to a date prior to the effective time of the corporate

transaction (contingent upon the effectiveness of the corporate transaction), and such stock awards will terminate if not exercised (if

applicable) at or prior to the effective time of the corporate transaction, and any reacquisition or repurchase rights held by us with

respect to such stock awards will lapse (contingent upon the effectiveness of the corporate transaction), and (ii) any such stock

awards that are held by persons other than current participants will terminate if not exercised (if applicable) prior to the effective

time of the corporate transaction, except that any reacquisition or repurchase rights held by us with respect to such stock awards will

not terminate and may continue to be exercised notwithstanding the corporate transaction.

the event a stock award will terminate if not exercised prior to the effective time of a corporate transaction, the board of directors

may provide, in its sole discretion, that the holder of such stock award may not exercise such stock award but instead will receive a

payment equal in value to the excess (if any) of (i) the per share amount payable to holders of common stock in connection with

the corporate transaction over (ii) any per share exercise price payable by such holder, if applicable.

In addition, any escrow,

holdback, earn out or similar provisions in the definitive agreement for the corporate transaction may apply to such payment to the same

extent and in the same manner as such provisions apply to the holders of common stock.

Amendment or Termination.

Our board of directors has the authority to amend, suspend or terminate our 2022

Plan, provided that such action does not materially impair the existing rights of any participant without such participant’s written

Certain material amendments also require the approval of our stockholders.

No ISOs may be granted after the tenth anniversary

of the date our board of directors adopts our 2022 Plan.

No stock awards may be granted under our 2022 Plan while it is suspended or

after it is terminated.

Other Stock Awards.

The Compensation Committee

may grant other awards based in whole or in part by reference to our common stock.

The Compensation Committee will set the number of shares

under the stock award (or cash equivalent) and all other terms and conditions of such awards.

Non-Employee Director Compensation Limit.

aggregate value of all compensation granted or paid to any non-employee director with respect to any calendar year, including awards granted

and cash fees paid by us to such non-employee director, will not exceed $150,000 in total value;

provided that such amount will increase

to $200,000 for the first year for newly appointed or elected non-employee directors.

Changes to Capital Structure.

there is a specified type of change in our capital structure, such as a stock split, reverse stock split or recapitalization, appropriate

adjustments will be made to (i) the class and maximum number of shares reserved for issuance under the 2022 Plan, (ii) the class and maximum

number of shares by which the share reserve may increase automatically each year, (iii) the class and maximum number of shares that may

be issued on the exercise of ISOs and (iv) the class and number of shares and exercise price, strike price or purchase price, if applicable,

of all outstanding stock awards.

Corporate Transactions.

The following applies

to stock awards under the 2022 Plan in the event of a corporate transaction (as defined in the 2022 Plan), unless otherwise provided in

a participant’s stock award agreement or other written agreement with us or one of our affiliates or unless otherwise expressly

provided by the Board of Directors or Compensation Committee at the time of grant.

In the event of a corporate transaction, any stock

awards outstanding under the 2022 Plan may be assumed, continued or substituted for by any surviving or acquiring corporation (or its

parent company), and any reacquisition or repurchase rights held by us with respect to the stock award may be assigned to the successor

(or its parent company).

If the surviving or acquiring corporation (or its parent company) does not assume, continue or substitute for

such stock awards, then (i) with respect to any such stock awards that are held by participants whose continuous service has not terminated

prior to the effective time of the corporate transaction, or current participants, the vesting (and exercisability, if applicable) of

such stock awards will be accelerated in full to a date prior to the effective time of the corporate transaction (contingent upon the

effectiveness of the corporate transaction), and such stock awards will terminate if not exercised (if applicable) at or prior to the

effective time of the corporate transaction, and any reacquisition or repurchase rights held by us with respect to such stock awards will

lapse (contingent upon the effectiveness of the corporate transaction), and (ii) any such stock awards that are held by persons other

than current participants will terminate if not exercised (if applicable) prior to the effective time of the corporate transaction, except

that any reacquisition or repurchase rights held by us with respect to such stock awards will not terminate and may continue to be exercised

notwithstanding the corporate transaction.

In the event a stock award will terminate if not

exercised prior to the effective time of a corporate transaction, the board of directors may provide, in its sole discretion, that the

holder of such stock award may not exercise such stock award but instead will receive a payment equal in value to the excess (if any)

of (i) the per share amount payable to holders of common stock in connection with the corporate transaction over (ii) any per share exercise

price payable by such holder, if applicable.

In addition, any escrow, holdback, earn out or similar provisions in the definitive agreement

for the corporate transaction may apply to such payment to the same extent and in the same manner as such provisions apply to the holders

of common stock.

Plan Amendment or Termination.

of directors has the authority to amend, suspend or terminate our 2022 Plan, provided that such action does not materially impair the

existing rights of any participant without such participant’s written consent.

Certain material amendments also require the approval

of our stockholders.

No ISOs may be granted after the tenth anniversary of the date our board of directors adopts our 2022 Plan.

awards may be granted under our 2022 Plan while it is suspended or after it is terminated.

2019 Equity Incentive Plan

board of directors adopted and our stockholders approved our 2019 Equity Incentive Plan (the “2019 Plan”) in July 2019 for

grants of awards to employees, directors, officers and consultants of us or any of our subsidiaries.

Once the 2022 Plan became effective,

no further grants will be made under the 2019 Plan.

However, the 2019 Plan will continue to govern the terms and conditions of the outstanding

awards previously granted under the 2019 Plan.

2019 Plan provides for the grant of stock awards (collectively, “Stock Awards”) to employees, directors, officers and consultants

of us or any of our subsidiaries, consisting of (i) incentive stock options, (“ISOs”), within the meaning of Section 422

of the Internal Revenue Code (the “Code”);

(ii) nonstatutory stock options (“NSOs”);

(iii) stock appreciation

(iv) restricted stock awards;

Our board of directors adopted and our stockholders

approved our 2019 Equity Incentive Plan (the “2019 Plan”) in July 2019 for grants of awards to employees, directors, officers

and consultants of us or any of our subsidiaries.

Once the 2022 Plan became effective, no further grants will be made under the 2019 Plan.

However, the 2019 Plan will continue to govern the terms and conditions of the outstanding awards previously granted under the 2019 Plan.

Our 2019 Plan provides for the

grant of stock awards (collectively, “Stock Awards”) to employees, directors, officers and consultants of us or any of our

subsidiaries, consisting of (i) incentive stock options, (“ISOs”), within the meaning of Section 422 of the Internal Revenue

Code (the “Code”);

(ii) nonstatutory stock options (“NSOs”);

(iii) stock appreciation rights;

(iv) restricted

stock awards;

(v) restricted stock unit awards, and (vi) other forms of awards.

As of March 1, 2022, stock options covering 780,640 shares, each with an exercise price of $0.01

per share were the only outstanding Stock Awards outstanding under our 2019 Plan, and 619,360 shares of our common stock remained available

for the future grant of awards under our 2019 Plan, which upon the adoption of the 2022 Plan, became issuable under the 2022 Plan.

Administration.

The 2019 Plan may be administered by our board of directors, and our board of directors may

delegate such administration to a committee of the board of directors (as applicable, the “Administrator”).

The Administrator,

in its discretion, selects the individuals to whom awards may be granted, the time or times at which such awards are granted and the

terms and conditions of such awards.

Stock options entitle the holder to purchase a specified number of shares of common stock at a specified

price (the exercise price), subject to the terms and conditions of the stock option grant.

Our board of directors may grant either incentive

stock options, which must comply with Code Section 422, or nonqualified stock options.

ISO’s may only be granted to employees

of the Company or a “parent corporation”

or “subsidiary corporation”

thereof (as such terms are defined in Sections

424(e) and 424(f) of the Code).

Our Administrator sets exercise prices and terms and conditions, except that stock options

must be granted with an exercise price not less than 100% of the fair market value of our common stock on the date of grant.

Administrator determines otherwise, fair market value means, as of a given date, the closing price of our common stock.

At the time of

grant, our board of directors determines the terms and conditions of stock options, including the quantity, exercise price, vesting periods,

term (which may not exceed 10 years) and other conditions on exercise.

Pursuant to the 2019 Plan, we may only issue 1,400,000 ISO’s.

may be granted under the 2019 Plan to officers, employees, directors, officers and of us and our subsidiaries.

Incentive stock options

may be granted only to employees of us or our subsidiaries.

Stock, Restricted Stock Units and Other Stock-Based Awards.

Our board of directors may grant awards of restricted stock, which

are shares of common stock subject to specified restrictions, and restricted stock units, or RSUs, which represent the right to receive

shares of our common stock in the future.

These awards may be made subject to repurchase, forfeiture or vesting restrictions at the discretion

of our board of directors discretion.

The restrictions may be based on continuous service with us or the attainment of specified performance

goals, as determined by the board of directors.

Stock units may be paid in stock or cash or a combination of stock and cash, as determined

by the board of directors.

Other stock awards valued in whole or in part by reference to, or otherwise based on, Common Stock, including

the appreciation in value thereof (e.g., options or stock rights with an exercise price or strike price less than one hundred percent

(100%) of the fair market value of the common stock at the time of grant) may be granted either alone or in addition to stock awards

provided for under the 2019 Plan.

Appreciation Rights.

Upon exercise, SARs entitle the holder to receive payment per share in stock or cash,

or in a combination of stock and cash, equal to the excess of the share’s fair market value on the date of exercise over the aggregate

strike price of the number of Common Stock equivalents with respect to which the Participant is exercising the SAR on such date (the

“grant price”.

Exercise of a SAR issued in tandem with a stock option will reduce the number of shares underlying the related

stock option to the extent of the SAR exercised.

The term of a SAR cannot exceed 10 years.

to Capital Structure.

In the event there is a specified type of change in our capital structure, such as a

stock split, reverse stock split or recapitalization, appropriate adjustments will be made to (i) the class and maximum number of

shares subject to the 2019 Plan, (ii) the class and maximum number of shares that may be issued on the exercise of ISOs and (iii) the

class and number of shares and exercise price, strike price or purchase price, if applicable, of all outstanding stock awards.

Transactions.

The following applies to Stock Awards under the 2019 Plan in the event of a corporate transaction

(as defined in the 2019 Plan), unless otherwise provided in a participant’s stock award agreement or other written agreement with

us or one of our affiliates or unless otherwise expressly provided by the Board of Directors at the time of grant.

the event of a corporate transaction, the board of directors may take one of the following actions, contingent on the completion of the

corporate transaction:

(i) arrange for the surviving or acquiring corporation (or its parent company) to assume, continue or substitute

the Stock Award for a similar stock award;

(ii) arrange for the assignment of any reacquisition or repurchase rights held by the

Company in respect of common stock issued pursuant to the Stock Award to the surviving or acquiring corporation (or its parent company);

(iii) accelerate the vesting (in whole or in part) of the Stock Award;

(iv) arrange for the lapse, in whole or in part, of

any reacquisition or repurchase rights held by the Company with respect to the Stock Award;

(v) cancel or arrange for the cancellation

of the Stock Award, to the extent not vested or not exercised prior to the effective time of the corporate transaction, in exchange for

such cash consideration that the Board of Directors;

and (vi) make a payment equal to the excess, if any, of (A) the value

of the property the participant would have received upon the exercise of the Stock Award immediately prior to the effective time of the

corporate transaction, over (B) any exercise price payable by such holder in connection with such exercise The Board of Directors

need not take the same action or actions with respect to all Stock Awards or portions thereof or with respect to all participants.

Board of Directors may also take different actions with respect to the vested and unvested portions of a Stock Award.

Additionally,

under the 2019 Plan, a Stock Award may be subject to additional acceleration of vesting and exercisability upon or after a Change in

Control (as defined in the 2019 Plan) as may be provided in the Grant Agreement for such Stock Award or as may be provided in any other

written agreement between the participant and the Company or any of its subsidiaries which may employ the participant, but in the absence

of such provision, no such acceleration will occur.

Amendment or Termination.

Our board of directors has the authority to amend, suspend or terminate our 2019

Plan, subject to certain conditions, including that such action does not materially impair the existing rights of any participant without

such participant’s written consent.

Certain material amendments also require the approval of our stockholders.

No ISOs may be granted

after the tenth anniversary of the date our board of directors adopted our 2019 Plan.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

following table sets forth certain information concerning the ownership of our common stock, with respect to:

(i) each person, or

group of affiliated persons, known to us to be the beneficial owner of more than five percent of our common stock;

our directors;

Authorized Shares.

As of March 6, 2023,

stock options covering 615,188 shares, each with an exercise price of $0.01 per share were the only outstanding Stock Awards outstanding

under our 2019 Plan, and 619,360 shares of our common stock remained available for the future grant of awards under our 2019 Plan, which

upon the adoption of the 2022 Plan, became issuable under the 2022 Plan.

Plan Administration.

The 2019 Plan may

be administered by our board of directors, and our board of directors may delegate such administration to a committee of the board of

directors (as applicable, the “Administrator”).

The Administrator, in its discretion, selects the individuals to whom awards

may be granted, the time or times at which such awards are granted and the terms and conditions of such awards.

Stock Options.

Stock options entitle the

holder to purchase a specified number of shares of common stock at a specified price (the exercise price), subject to the terms and conditions

of the stock option grant.

Our board of directors may grant either incentive stock options, which must comply with Code Section 422, or

nonqualified stock options.

ISO’s may only be granted to employees of the Company or a “parent corporation” or “subsidiary

corporation” thereof (as such terms are defined in Sections 424(e) and 424(f) of the Code).

Our Administrator sets exercise prices

and terms and conditions, except that stock options must be granted with an exercise price not less than 100% of the fair market value

of our common stock on the date of grant.

Unless our Administrator determines otherwise, fair market value means, as of a given date,

the closing price of our common stock.

At the time of grant, our board of directors determines the terms and conditions of stock options,

including the quantity, exercise price, vesting periods, term (which may not exceed 10 years) and other conditions on exercise.

to the 2019 Plan, we may only issue 1,400,000 ISO’s.

Awards may be granted under

the 2019 Plan to officers, employees, directors, officers and of us and our subsidiaries.

Incentive stock options may be granted only

to employees of us or our subsidiaries.

Restricted Stock, Restricted Stock Units and Other

Stock-Based Awards.

Our board of directors may grant awards of restricted stock, which are shares of common stock subject to specified

restrictions, and restricted stock units, or RSUs, which represent the right to receive shares of our common stock in the future.

awards may be made subject to repurchase, forfeiture or vesting restrictions at the discretion of our board of directors discretion.

restrictions may be based on continuous service with us or the attainment of specified performance goals, as determined by the board of

Stock units may be paid in stock or cash or a combination of stock and cash, as determined by the board of directors.

stock awards valued in whole or in part by reference to, or otherwise based on, Common Stock, including the appreciation in value thereof

(e.g., options or stock rights with an exercise price or strike price less than one hundred percent (100%) of the fair market value of

the common stock at the time of grant) may be granted either alone or in addition to stock awards provided for under the 2019 Plan.

Stock Appreciation Rights.

Upon exercise,

SARs entitle the holder to receive payment per share in stock or cash, or in a combination of stock and cash, equal to the excess of the

share’s fair market value on the date of exercise over the aggregate strike price of the number of Common Stock equivalents with

respect to which the Participant is exercising the SAR on such date (the “grant price”.

Exercise of a SAR issued in tandem

with a stock option will reduce the number of shares underlying the related stock option to the extent of the SAR exercised.

of a SAR cannot exceed 10 years.

Changes to Capital Structure.

there is a specified type of change in our capital structure, such as a stock split, reverse stock split or recapitalization, appropriate

adjustments will be made to (i) the class and maximum number of shares subject to the 2019 Plan, (ii) the class and maximum number of

shares that may be issued on the exercise of ISOs and (iii) the class and number of shares and exercise price, strike price or purchase

price, if applicable, of all outstanding stock awards.

Corporate Transactions.

The following applies

to Stock Awards under the 2019 Plan in the event of a corporate transaction (as defined in the 2019 Plan), unless otherwise provided in

a participant’s stock award agreement or other written agreement with us or one of our affiliates or unless otherwise expressly

provided by the Board of Directors at the time of grant.

In the event of a corporate transaction, the board

of directors may take one of the following actions, contingent on the completion of the corporate transaction:

(i) arrange for the surviving

or acquiring corporation (or its parent company) to assume, continue or substitute the Stock Award for a similar stock award;

for the assignment of any reacquisition or repurchase rights held by the Company in respect of common stock issued pursuant to the Stock

Award to the surviving or acquiring corporation (or its parent company);

(iii) accelerate the vesting (in whole or in part) of the Stock

(iv) arrange for the lapse, in whole or in part, of any reacquisition or repurchase rights held by the Company with respect to

the Stock Award;

(v) cancel or arrange for the cancellation of the Stock Award, to the extent not vested or not exercised prior to the

effective time of the corporate transaction, in exchange for such cash consideration that the Board of Directors;

and (vi) make a payment

equal to the excess, if any, of (A) the value of the property the participant would have received upon the exercise of the Stock Award

immediately prior to the effective time of the corporate transaction, over (B) any exercise price payable by such holder in connection

with such exercise The Board of Directors need not take the same action or actions with respect to all Stock Awards or portions thereof

or with respect to all participants.

The Board of Directors may also take different actions with respect to the vested and unvested portions

of a Stock Award.

Additionally, under the 2019 Plan, a Stock Award

may be subject to additional acceleration of vesting and exercisability upon or after a Change in Control (as defined in the 2019 Plan)

as may be provided in the Grant Agreement for such Stock Award or as may be provided in any other written agreement between the participant

and the Company or any of its subsidiaries which may employ the participant, but in the absence of such provision, no such acceleration

Plan Amendment or Termination.

of directors has the authority to amend, suspend or terminate our 2019 Plan, subject to certain conditions, including that such action

does not materially impair the existing rights of any participant without such participant’s written consent.

Certain material amendments

also require the approval of our stockholders.

No ISOs may be granted after the tenth anniversary of the date our board of directors adopted

our 2019 Plan.

Security Ownership of Certain Beneficial Owners and Management

and Related Stockholder Matters.

The following table sets forth certain information

concerning the ownership of our common stock, with respect to:

(i) each person, or group of affiliated persons, known to us to be the

beneficial owner of more than five percent of our common stock;

(ii) each of our directors;

(iii) each of our named executive officers;

and (iv) all of our current directors and executive officers as

percentage ownership is based on 11,048,587 shares of common stock outstanding as of March 1, 2022.

have determined beneficial ownership in accordance with the rules of the SEC.

These rules generally attribute beneficial ownership

of securities to persons who possess sole or shared voting or investment power with respect to such securities.

In addition, pursuant

to such rules, we deemed outstanding shares of common stock subject to options or warrants held by that person that are currently exercisable

or exercisable within 60 days of March 1, 2022.

We did not deem such shares outstanding, however, for the purpose of computing

the percentage ownership of any other person.

Except as indicated by the footnotes below, we believe, based on the information furnished

to us, that the beneficial owners named in the table below have sole voting and investment power with respect to all shares of our common

stock that they beneficially own, subject to applicable community property laws.

and (iv) all of our current directors and executive officers as a group.

Applicable percentage ownership is based on 15,911,868

shares of common stock outstanding as of March 6, 2023.

We have determined beneficial ownership in accordance

with the rules of the SEC.

These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting

or investment power with respect to such securities.

In addition, pursuant to such rules, we deemed outstanding shares of common stock

subject to options or warrants held by that person that are currently exercisable or exercisable within 60 days of March 6, 2023.

not deem such shares outstanding, however, for the purpose of computing the percentage ownership of any other person.

Except as indicated

by the footnotes below, we believe, based on the information furnished to us, that the beneficial owners named in the table below have

sole voting and investment power with respect to all shares of our common stock that they beneficially own, subject to applicable community

property laws.

Shares of Common Stock Owned

Name and Address of Beneficial Owner (1)

and Address of Beneficial Owner (1)

Number of Shares

5% Stockholders

Cincinnati Cornerstone Investors BWV I, LLC

3,611,201 (1)

CincyTech Fund IV, LLC

Named Executive Officers and Directors

Joseph Hernandez

Kimberly Murphy

Michael Venerable

Timothy Ramdeen

James Sapirstein

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All directors and named executive officers as a group (7 persons)

beneficial ownership of less than 1%.

of 3,611,201 shares of common stock (following the conversion of the preferred stock) held of record by Cincinnati Cornerstone Investors

Cincinnati Cornerstone Capital, LLC holds voting and dispositive power with respect to the shares of common stock held

by Cincinnati Cornerstone Investors BWV I.

5% Stockholders

Cincinnati Cornerstone Investors BWV I, LLC

2,361,201 (8)

CincyTech Fund IV, LLC

American Financial Group, Inc.

Sabby Parties

1,210,686 (11)

Represents beneficial ownership of less than 1%.

Unless otherwise noted, the business address of each of the following entities or individuals is c/o Blue Water Vaccines, 201 E.

Fifth Street, Suite 1900, Cincinnati, Ohio 45202.

Consists of 2,580 shares of common stock underlying options that are currently exercisable within 60 days of March 6, 2023.

Consists of 3,620 shares of common stock underlying options that are currently exercisable within 60 days of March 6, 2023.

Consists of 1,790 shares of common stock underlying options that are currently exercisable within 60 days of March 6, 2023.

Consists of 18,039 shares of common stock underlying options that are currently exercisable within 60 days of March 6, 2023.

Consists of (i) 24,752 shares of common stock and (ii) 152,076 shares of common stock underlying options that are currently exercisable within 60 days of March 6, 2023.

Consists of 39,585 shares of common stock underlying options that are currently exercisable within 60 days of March 6, 2023.

Based on a Schedule 13G/A filed with the SEC on November 21, 2022, consists of 2,361,201 held of record by Cincinnati Cornerstone Investors BWV I.

Cincinnati Cornerstone Capital, LLC holds voting and dispositive power with respect to the shares of common stock held by Cincinnati Cornerstone Investors BWV I.

The address for these entities is 2900 Reading Rd., Suite 410, Cincinnati, OH 45206.

of (i) 806,068 shares of common stock (following the conversion of preferred stock) held of record by CincyTech Fund IV, LLC

and (ii) 26,768 shares of common stock underlying options that are currently exercisable within 60 days of March 1, 2022.

Based on a Schedule 13G/A filed with the SEC on November 21, 2022, consists of (i) 806,068 shares of common stock (following the conversion of preferred stock) held of record by CincyTech Fund IV, LLC and (ii) 38,240 shares of common stock underlying options that are currently exercisable within 60 days of March 6, 2023.

CincyTech, LLC holds voting and dispositive power with respect to the shares of common stock held by CincyTech Fund IV, LLC.

address for these entities is 2900 Reading Rd., Suite 410, Cincinnati, OH 45206.

of 26,768 shares of common stock underlying options that are currently exercisable within 60 days of March 1, 2022.

of 26,776 shares of common stock underlying options that are currently exercisable within 60 days of March 1, 2022.

Certain Relationships and Related Transactions, and Director Independence.

following is a description of transactions since January 1, 2020 to which we were a party in which (i) the amount involved

exceeded or will exceed the lesser of $120,000 of one percent (1%) of our average total assets at year-end for the last two completed

fiscal years and (ii) any of our directors, executive officers or holders of more than 5% of our capital stock, or any member

of the immediate family of, or person sharing the household with, any of the foregoing persons, who had or will have a direct or indirect

material interest, other than equity and other compensation, termination, change in control and other similar arrangements, which are

described under “Executive and Director Compensation.”

with Blue Water Real Estate Holdings

We leased office space in November 28, 2018

from an affiliate of our chief executive officer, Blue Water Real Estate Holdings, Inc.

Rental expense recorded for the years ended

December 31, 2020 and 2021 was approximately $66,000, and $26,000, respectively.

The address for these entities is 2900 Reading Rd., Suite 410, Cincinnati, OH 45206.

Based on a Schedule 13G/A filed with the SEC on January 31, 2023, filed by American Financial Group, Inc.

(“AFG”), with respect to 940,762 shares owned by AFG.

The principal business address for AFG is 301 East Fourth Street, Cincinnati, Ohio 45202.

Based on a Schedule 13G filed with the SEC on January 4, 2023, Sabby Volatility Warrant Master Fund, Ltd., Sabby Management, LLC and Hal Mintz (collectively, the “Sabby Parties”), share dispositive power over 1,210,686 shares:

(i) Sabby Volatility Warrant Master Fund, Ltd.

beneficially owns 1,210,686 shares and (ii) Sabby Management, LLC and Hal Mintz each beneficially own 1,210,686 shares.

Sabby Management, LLC and Hal Mintz do not directly own any shares, but each indirectly owns 1,210,686 shares.

Sabby Management, LLC, a Delaware limited liability company, indirectly owns 1,210,686 shares of Common Stock because it serves as the investment manager of Sabby Volatility Warrant Master Fund, Ltd.

Mintz indirectly owns 1,210,686 shares of Common Stock in his capacity as manager of Sabby Management, LLC.

The principal business address for the Sabby Parties is 2041 Courtland Avenue, Cincinnati, Ohio 45212.

Certain Relationships and Related Transactions, and Director

Independence.

The following is a description of transactions

since January 1, 2021 to which we were a party in which (i) the amount involved exceeded or will exceed the lesser of $120,000 of one

percent (1%) of our average total assets at year-end for the last two completed fiscal years and (ii) any of our directors, executive

officers or holders of more than 5% of our capital stock, or any member of the immediate family of, or person sharing the household with,

any of the foregoing persons, who had or will have a direct or indirect material interest, other than equity and other compensation, termination,

change in control and other similar arrangements, which are described under “Executive and Director Compensation.”

Agreement with Blue Water Real Estate Holdings

We leased office space in November 28, 2018 from

an affiliate of our chief executive officer, Blue Water Real Estate Holdings, Inc.

Rental expense recorded for the year ended December

31, 2021 was approximately $26,000.

This lease was terminated on March 31, 2021;

however, the company did not vacate the premises until May 26, 2021.

As of the date hereof, we have no outstanding obligations under

this agreement.

Agreement with Joseph Hernandez

October 22, 2018, we entered into a Consulting Agreement with Joseph Hernandez, the Chief Executive Officer of Blue Water Vaccines

Consulting expense recorded for the years ended December 31, 2021 and 2020, was $420,000.

Pursuant to the Consulting Agreement,

Joseph Hernandez provides us with consulting services, and we are required to pay him an aggregate amount of $1.68 million during

the term of the agreement, in monthly payments of $35,000.

The Consulting Agreement was to be effective through November 1, 2022

and cancellable by either party with 90 days written notice.

As of December 31, 2021, we have prepaid $140,000 on this Consulting

Agreement and the remaining monthly payments through the end of the contract term total $210,000.

The Consulting Agreement became null

and void upon the consummation of our initial public offering.

Indemnification

of Officers and Directors

Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws provide that we will indemnify each of our directors

and officers to the fullest extent permitted by the DGCL.

Further, we have entered into indemnification agreements with each of

our directors and officers, and we have purchased a policy of directors’

and officers’

liability insurance that insures our

directors and officers against the cost of defense, settlement or payment of a judgment under certain circumstances.

For further information,

see “Executive and Director Compensation —

Limitations of Liability and Indemnification Matters.”

and Procedures for Related Party Transactions

future transactions between us and our officers, directors or five percent stockholders, and respective affiliates will be on terms no

less favorable than could be obtained from unaffiliated third parties and will be approved by a majority of our independent directors

however, the Company did not vacate the premises until

May 26, 2021.

As of the date hereof, we have no outstanding obligations under this agreement.

Consulting Agreement with Joseph Hernandez

On October 22, 2018, we entered into a Consulting

Agreement with Joseph Hernandez, the Chief Executive Officer of Blue Water Vaccines Inc.

Consulting expense recorded for the year ended

December 31, 2021 was $420,000.

Pursuant to the Consulting Agreement, Joseph Hernandez provides us with consulting services, and we are

required to pay him an aggregate amount of $1.68 million during the term of the agreement, in monthly payments of $35,000.

The Consulting

Agreement was to be effective through November 1, 2022 and cancellable by either party with 90 days written notice.

As of December 31,

2021, we had prepaid $140,000 on this Consulting Agreement.

The Consulting Agreement became null and void upon the consummation of our

initial public offering.

Lease Agreement

On February 28, 2022, the Company entered into

a short-term lease in Palm Beach, Florida with an unrelated party, with a commencement date of May 1, 2022, for approximately $14,000

The lease term ends on April 30, 2023 and is personally guaranteed by Joe Hernandez, the Company’s Chief Executive Officer.

During the year ended December 31, 2022, the Company incurred rent expense on this lease of approximately $129,000, and variable lease

expense of approximately $12,000.

Indemnification of Officers and Directors

Our Amended and Restated Certificate of Incorporation

and Amended and Restated Bylaws provide that we will indemnify each of our directors and officers to the fullest extent permitted by the

Further, we have entered into indemnification agreements with each of our directors and officers, and we have purchased a policy

of directors’ and officers’ liability insurance that insures our directors and officers against the cost of defense, settlement

or payment of a judgment under certain circumstances.

For further information, see “Executive and Director Compensation —

Limitations of Liability and Indemnification Matters.”

Policies and Procedures for Related Party Transactions

All transactions since our initial public offering

between us and our officers, directors or five percent stockholders, and respective affiliates have been and will be on terms no less

favorable than could be obtained from unaffiliated third parties and have been and will be approved by a majority of our independent directors

who do not have an interest in the transactions and who had access, at our expense, to our legal counsel or independent legal counsel.

the best of our knowledge, during the past two fiscal years, other than as set forth above, there were no material transactions,

or series of similar transactions, or any currently proposed transactions, or series of similar transactions, to which we were or are

to be a party, in which the amount involved exceeds $120,000, and in which any director or executive officer, or any security holder

who is known by us to own of record or beneficially more than 5% of any class of our common stock, or any member of the immediate family

of any of the foregoing persons, has an interest (other than compensation to our officers and directors in the ordinary course of business).

Anti-Takeover

Provisions of Delaware Law and Our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws

of the Delaware General Corporation Law

are subject to Section 203 of the DGCL, which prohibits a Delaware corporation from engaging in any business combination with any

interested stockholder for a period of three years after the date that such stockholder became an interested stockholder, with the

following exceptions:

To the best of our knowledge, during the past

two fiscal years, other than as set forth above, there were no material transactions, or series of similar transactions, or any currently

proposed transactions, or series of similar transactions, to which we were or are to be a party, in which the amount involved exceeds

$120,000, and in which any director or executive officer, or any security holder who is known by us to own of record or beneficially more

than 5% of any class of our common stock, or any member of the immediate family of any of the foregoing persons, has an interest (other

than compensation to our officers and directors in the ordinary course of business).

Anti-Takeover Provisions of Delaware Law and Our Amended and Restated

Certificate of Incorporation and Amended and Restated Bylaws

Section 203 of the Delaware General Corporation Law

We are subject to Section 203 of the DGCL, which

prohibits a Delaware corporation from engaging in any business combination with any interested stockholder for a period of three years

after the date that such stockholder became an interested stockholder, with the following exceptions:

such date, the board of directors of the corporation approved either the business combination or the transaction that resulted in the

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least 85% of the voting stock of the corporation outstanding at the time the transaction began, excluding for purposes of determining

the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned (i) by

persons who are directors and also officers and (ii) employee stock plans in which employee participants do not have the right to

determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer;

the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned (i) by persons

who are directors and also officers and (ii) employee stock plans in which employee participants do not have the right to determine confidentially

whether shares held subject to the plan will be tendered in a tender or exchange offer;

or after such date, the business combination is approved by the board of directors and authorized at an annual or special meeting of

1 unchanged sentence

stock that is not owned by the interested stockholder.

defines a “business combination”

Section 203 defines a “business combination”

to include the following:

7 unchanged sentences

the corporation.

general, Section 203 defines an “interested stockholder”

as an entity or person who, together with the person’s

affiliates and associates, beneficially owns, or within three years prior to the time of determination of interested stockholder

status did own, 15% or more of the outstanding voting stock of the corporation.

statute could prohibit or delay mergers or other takeover or change in control attempts and, accordingly, may discourage attempts to

acquire us even though such a transaction may offer our stockholders the opportunity to sell their stock at a price above the prevailing

market price.

and Restated Certificate of Incorporation and Amended and Restated Bylaws

other things, our Amended and Restated Certificate of Incorporation and our Amended and Restated Bylaws:

our board of directors to issue up to 10,000,000 shares of preferred stock, with any rights, preferences and privileges as

they may designate, including the right to approve an acquisition or other change in control;

In general, Section 203 defines an “interested

stockholder” as an entity or person who, together with the person’s affiliates and associates, beneficially owns, or within

three years prior to the time of determination of interested stockholder status did own, 15% or more of the outstanding voting stock of

the corporation.

The statute could prohibit or delay mergers or

other takeover or change in control attempts and, accordingly, may discourage attempts to acquire us even though such a transaction may

offer our stockholders the opportunity to sell their stock at a price above the prevailing market price.

Amended and Restated Certificate of Incorporation and Amended

and Restated Bylaws

Among other things, our Amended and Restated Certificate

of Incorporation and our Amended and Restated Bylaws:

our board of directors to issue up to 10,000,000 shares of preferred stock, with any rights, preferences and privileges as they may designate,

including the right to approve an acquisition or other change in control;

that the authorized number of directors may be changed only by resolution of our board of directors;

8 unchanged sentences

that stockholders seeking to present proposals before a meeting of stockholders or to nominate candidates for election as directors at

a meeting of stockholders must provide advance notice in writing, and also specify requirements as to the form and content of a stockholder’s

that special meetings of our stockholders may be called only by the chairman of our board of directors, our chief executive officer or

3 unchanged sentences

any election of directors to elect all of the directors standing for election, if they should so choose.

amendment of any of these provisions would require approval by the holders of at least 66 2 / 3 % of the voting power

of all of our then-outstanding common stock entitled to vote generally in the election of directors, voting together as a single class.

combination of these provisions will make it more difficult for our existing stockholders to replace our board of directors as well as

for another party to obtain control of us by replacing our board of directors.

Because our board of directors has the power to retain

and discharge our officers, these provisions could also make it more difficult for existing stockholders or another party to effect a

change in management.

In addition, the authorization of undesignated preferred stock makes it possible for our board of directors to

issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to change our control.

provisions are intended to enhance the likelihood of continued stability in the composition of our board of directors and its policies

and to discourage coercive takeover practices and inadequate takeover bids.

These provisions are also designed to reduce our vulnerability

to hostile takeovers and to discourage certain tactics that may be used in proxy fights.

However, such provisions could have the effect

of discouraging others from making tender offers for our shares and may have the effect of delaying changes in our control or management.

As a consequence, these provisions may also inhibit fluctuations in the market price of our stock that could result from actual or rumored

takeover attempts.

We believe that the benefits of these provisions, including increased protection of our potential ability to negotiate

with the proponent of an unfriendly or unsolicited proposal to acquire or restructure our company, outweigh the disadvantages of discouraging

takeover proposals, because negotiation of takeover proposals could result in an improvement of their terms.

Amended and Restated Certificate of Incorporation requires, to the fullest extent permitted by law, that derivative actions brought in

our name, actions against directors, officers and employees for breach of fiduciary duty and certain other actions may be brought only

in the Court of Chancery in the State of Delaware, except any action (A) as to which the Court of Chancery in the State of Delaware

determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party

does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (B) which

is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery or (C) for which the Court of Chancery

does not have subject matter jurisdiction.

If an action is brought outside of Delaware, the stockholder bringing the suit will be deemed

to have consented to service of process on such stockholder’s counsel.

Although we believe this provision benefits us by providing

increased consistency in the application of law in the types of lawsuits to which it applies, a court may determine that this provision

is unenforceable, and to the extent it is enforceable, the provision may have the effect of discouraging lawsuits against our directors

and officers.

Amended and Restated Certificate of Incorporation provides that the exclusive forum provision will be applicable to the fullest extent

permitted by applicable law, subject to certain exceptions.

Section 27 of the Exchange Act creates exclusive federal jurisdiction

over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder.

a result, the exclusive forum provision will not apply to suits brought to enforce any duty or liability created by the Exchange Act

or any other claim for which the federal courts have exclusive jurisdiction.

In addition, our Amended and Restated Certificate of Incorporation

provides that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States

of America shall, to the fullest extent permitted by law, be the exclusive forum for the resolution of any complaint asserting a

cause of action arising under the Securities Act or the rules and regulations promulgated thereunder.

We note, however, that there is

uncertainty as to whether a court would enforce this provision and that investors cannot waive compliance with the federal securities

laws and the rules and regulations thereunder.

Section 22 of the Securities Act creates concurrent jurisdiction for state and federal

courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder.

on Liability and Indemnification

the section titled “Management —

Limitation on Liability and Indemnification Matters.”

common stock is listed on The Nasdaq Capital Market under the trading symbol “BWV.”

Agent and Registrar

transfer agent and registrar for our common stock is Continental Stock Transfer & Trust Company.

The Transfer Agent’s

address is 1 State Street, 30 th Floor, New York, New York 10004.

The amendment of any of these provisions would

require approval by the holders of at least 66 2 / 3 % of the voting power of all of our then-outstanding common stock

entitled to vote generally in the election of directors, voting together as a single class.

The combination of these provisions will make

it more difficult for our existing stockholders to replace our board of directors as well as for another party to obtain control of us

by replacing our board of directors.

Because our board of directors has the power to retain and discharge our officers, these provisions

could also make it more difficult for existing stockholders or another party to effect a change in management.

In addition, the authorization

of undesignated preferred stock makes it possible for our board of directors to issue preferred stock with voting or other rights or preferences

that could impede the success of any attempt to change our control.

These provisions are intended to enhance the likelihood

of continued stability in the composition of our board of directors and its policies and to discourage coercive takeover practices and

inadequate takeover bids.

These provisions are also designed to reduce our vulnerability to hostile takeovers and to discourage certain

tactics that may be used in proxy fights.

However, such provisions could have the effect of discouraging others from making tender offers

for our shares and may have the effect of delaying changes in our control or management.

As a consequence, these provisions may also inhibit

fluctuations in the market price of our stock that could result from actual or rumored takeover attempts.

We believe that the benefits

of these provisions, including increased protection of our potential ability to negotiate with the proponent of an unfriendly or unsolicited

proposal to acquire or restructure our company, outweigh the disadvantages of discouraging takeover proposals, because negotiation of

takeover proposals could result in an improvement of their terms.

Choice of Forum

Our Amended and Restated Certificate of Incorporation

requires, to the fullest extent permitted by law, that derivative actions brought in our name, actions against directors, officers and

employees for breach of fiduciary duty and certain other actions may be brought only in the Court of Chancery in the State of Delaware,

except any action (A) as to which the Court of Chancery in the State of Delaware determines that there is an indispensable party not subject

to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of

Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than

the Court of Chancery or (C) for which the Court of Chancery does not have subject matter jurisdiction.

If an action is brought outside

of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel.

Although we believe this provision benefits us by providing increased consistency in the application of law in the types of lawsuits to

which it applies, a court may determine that this provision is unenforceable, and to the extent it is enforceable, the provision may have

the effect of discouraging lawsuits against our directors and officers.

Our Amended and Restated Certificate of Incorporation

provides that the exclusive forum provision will be applicable to the fullest extent permitted by applicable law, subject to certain exceptions.

Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created

by the Exchange Act or the rules and regulations thereunder.

As a result, the exclusive forum provision will not apply to suits brought

to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction.

In addition, our Amended and Restated Certificate of Incorporation provides that, unless we consent in writing to the selection of an

alternative forum, the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the exclusive

forum for the resolution of any complaint asserting a cause of action arising under the Securities Act or the rules and regulations promulgated

We note, however, that there is uncertainty as to whether a court would enforce this provision and that investors cannot waive

compliance with the federal securities laws and the rules and regulations thereunder.

Section 22 of the Securities Act creates concurrent

jurisdiction for state and federal courts over all suits brought to enforce any duty or liability created by the Securities Act or the

rules and regulations thereunder.

Limitation on Liability and Indemnification

See the section titled “Management —

Limitation on Liability and Indemnification Matters.”

Our common stock is listed on The Nasdaq Capital

Market under the trading symbol “BWV.”

Transfer Agent and Registrar

The transfer agent and registrar for our common

stock is Continental Stock Transfer & Trust Company.

The Transfer Agent’s address is 1 State Street, 30 th Floor,

New York, New York 10004.

Principal Accounting Fees and Services.

and Non-Audit Fees

Hoffman McCann P.C.

(“MHM”) served as the independent registered public accounting firm to audit our books and accounts for

the fiscal years ending December 31, 2021 and 2020.

Substantially all of MHM’s personnel, who work under the control of MHM shareholders,

are employees of wholly-owned subsidiaries of CBIZ, Inc., which provides personnel and various services to MHM in an alternative practice

table below presents the aggregate fees billed for professional services rendered by MHM for the years ended December 31, 2021 and 2020.

Audit and Non-Audit Fees

Mayer Hoffman McCann P.C.

served as the independent registered public accounting firm to audit our books and accounts for the fiscal years ending December 31, 2022

Substantially all of MHM’s personnel, who work under the control of MHM shareholders, are employees of wholly-owned subsidiaries

of CBIZ, Inc., which provides personnel and various services to MHM in an alternative practice structure.

The table below presents the aggregate fees billed

for professional services rendered by MHM for the years ended December 31, 2022 and 2021.

Audit-related fees

All other fees

the above table, “audit fees”

are fees billed for services provided related to the audit of our annual financial statements,

quarterly reviews of our interim financial statements, and services normally provided by the independent accountant in connection with

regulatory filings or engagements for those fiscal periods.

“Audit-related fees”

are fees not included in audit fees that

are billed by the independent accountant for assurance and related services that are reasonably related to the performance of the audit

or review of our financial statements.

“All other fees”

are fees billed by the independent accountant for products and services

In the above table, “audit fees” are

fees billed for services provided related to the audit of our annual financial statements, quarterly reviews of our interim financial

statements, and services normally provided by the independent accountant in connection with regulatory filings or engagements for those

fiscal periods.

“Audit-related fees” are fees not included in audit fees that are billed by the independent accountant for

assurance and related services that are reasonably related to the performance of the audit or review of our financial statements.

fees” consist of amounts billed by an associated entity of our independent auditors for services in connection with the preparation

of our federal and state tax returns.

“All other fees” are fees billed by the independent accountant for products and services

not included in the foregoing categories.

For the year ended December 31, 2021, the audit fees included professional services rendered

related to our initial public offering.

is the Audit Committee’s policy to approve in advance the types and amounts of audit, audit-related, tax, and any other services

to be provided by our independent registered public accounting firm.

In situations where it is not practicable to obtain full Audit Committee

approval, the Audit Committee has delegated authority to the Chair of the Audit Committee to grant pre-approval of audit and permissible

non-audit services and any associated fees,.

Any pre-approved decisions by the Chair are required to be reviewed with the Audit Committee

at its next scheduled meeting.

Audit Committee was formed upon the consummation of our initial public offering.

As a result, the audit committee did not pre-approve

all of the foregoing services, although any services rendered prior to the formation of our audit committee were approved by our board

of directors.

Since the formation of our Audit Committee, and on a going-forward basis, the Audit Committee has and will pre-approve

all auditing services and permitted non-audit services to be performed for us by our auditors, including the fees and terms thereof (subject

to the de minimis exceptions for non-audit services described in the Exchange Act which are approved by the audit committee prior to

the completion of the audit).

For the years ended December 31, 2022 and 2021, the audit fees included professional services

rendered related to our initial public offering.

Pre-Approval Policy

It is the Audit Committee’s policy to approve

in advance the types and amounts of audit, audit-related, tax, and any other services to be provided by our independent registered public

accounting firm.

In situations where it is not practicable to obtain full Audit Committee approval, the Audit Committee has delegated

authority to the Chair of the Audit Committee to grant pre-approval of audit and permissible non-audit services and any associated fees.

Any pre-approved decisions by the Chair are required to be reviewed with the Audit Committee at its next scheduled meeting.

Our Audit Committee was formed upon the consummation

of our initial public offering.

As a result, the audit committee did not pre-approve all of the foregoing services, although any services

rendered prior to the formation of our audit committee were approved by our board of directors.

Since the formation of our Audit Committee,

and on a going-forward basis, the Audit Committee has and will pre-approve all auditing services and permitted non-audit services to be

performed for us by our auditors, including the fees and terms thereof (subject to the de minimis exceptions for non-audit services described

in the Exchange Act which are approved by the audit committee prior to the completion of the audit).

Exhibit and Financial Statement Schedules.

List of documents filed as part of this Annual Report on Form 10-K:

Financial Statements

Report of Independent Registered Public Accounting Firm

Balance Sheets as of December 31, 2021 and 2020

Statements of Operations for the years ended December 31, 2021 and 2020

Statements of Stockholders’

Equity for the years ended December 31, 2021 and 2020

Statements of Cash Flows for the years ended December 31, 2021 and 2020

Notes to Financial Statements

Financial Statement Schedules

financial statement schedules are omitted because they are not applicable or the amounts are immaterial or the required information is

presented in the financial statements and notes thereto beginning on page F-2 of this Report.

hereby file as part of this Report the exhibits listed in the attached Exhibit Index.

Exhibits which are incorporated herein by reference

can be accessed on the SEC website at www.sec.gov.

Form 10-K Summary.

have elected not to include a summary pursuant to this Item 16.

WATER VACCINES INC.

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Financial Statements

Report of Independent Registered Public Accounting Firm

Balance Sheets as of December 31, 2021 and 2020

Statements of Operations for the years ended December 31, 2021 and 2020

Statements of Stockholders’

Equity for the years ended December 31, 2021 and 2020

Statements of Cash Flows for the years ended December 31, 2021 and 2020

Notes to Financial Statements

Report of Independent Registered Public Accounting Firm (PCAOB ID 199 ) F-2

Balance Sheets as of December 31, 2022 and 2021 F-3

Statements of Operations for the years ended December 31, 2022 and 2021 F-4

Statements of Stockholders’ Equity for the years ended December 31, 2022 and 2021 F-5

Statements of Cash Flows for the years ended December 31, 2022 and 2021 F-6

Notes to Financial Statements F-7

of Independent Registered Public Accounting Firm

the Board of Directors and Stockholders of

Blue Water Vaccines Inc.

on the Financial Statements

have audited the accompanying balance sheets of Blue Water Vaccines Inc.

(the “Company”) as of December 31, 2021

and 2020, and the related statements of operations, stockholders’

equity, and cash flows for each of the two years in the

period ended December 31, 2021, and the related notes (collectively referred to as the “financial statements”).

opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31,

2021 and 2020, and the results of its operations and its cash flows for each of the two years in the period ended December 31,

2021, in conformity with accounting principles generally accepted in the United States of America.

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

Our responsibility is to express an opinion on the Company’s

financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

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

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

Those standards require that we plan and perform the audits

to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

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

an opinion on the effectiveness of the Company’s internal control over financial reporting.

To the Board of Directors

and Stockholders of Blue Water Vaccines Inc.

Opinion on the Financial Statements

We have audited the accompanying balance sheets

of Blue Water Vaccines Inc.

(“Company”) as of December 31, 2022 and 2021, and the related statements of operations, stockholders’

equity, and cash flows for each of the two years in the period ended December 31, 2022, and the related notes (collectively referred to

as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial

position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the two years

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

Basis for Opinion

These financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”)

and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the

standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial

statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged

to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding

of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s

internal control over financial reporting.

Accordingly, we express no such opinion.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error

or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits

provide a reasonable basis for our opinion.

have served as the Company’s auditor since 2021.

Mayer Hoffman McCann P.C.

Angeles, California

Our audits included performing procedures to assess

the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond

to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating

the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

We have served as the Company’s auditor

/s/ Mayer Hoffman McCann P.C.

Los Angeles, California

March 8, 2023

1 unchanged sentence

Balance Sheets

offering costs

from related parties

December 31, 2022

December 31, 2021

Current assets

expenses, long-term

and equipment, net

AND STOCKHOLDERS’

Prepaid expenses and other current assets

Deferred offering costs

Receivable from related parties

Total current assets

Prepaid expenses, long-term

Property and equipment, net

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities

and Contingencies (see Note 7)

Stockholders’

stock, $0.00001 par value, 10,000,000 and 1,150,000 shares authorized at December 31, 2021 and 2020, respectively;

1,150,000 shares designated;

1,146,138 shares issued and outstanding at December 31, 2021 and December 31, 2020;

$15.4 million

and $7.8 million aggregate liquidation preference of Series Seed cumulative preferred stock at December 31, 2021

December 31, 2020, respectively

stock, $0.00001 par value, 250,000,000 and 2,300,000 shares authorized at December 31, 2021 and 2020, respectively;

shares outstanding at December 31, 2021 and 2020

paid-in-capital

stockholders’

liabilities and stockholders’

Accounts payable

Accrued expenses

Contingent warrant liability

Total current liabilities

Total liabilities

Commitments and Contingencies (see Note 7)

Stockholders’ equity

Preferred stock, $ 0.00001 par value, 10,000,000 shares authorized at December 31, 2022 and 2021

0 and 1,150,000 shares designated at December 31, 2022 and 2021, respectively;

0 and 1,146,138 shares issued and outstanding at December 31, 2022 and 2021, respectively;

$0 and $15.4 million aggregate liquidation preference at December 31, 2022 and 2021, respectively

Common stock, $ 0.00001 par value, 250,000,000 shares authorized at December 31, 2022 and 2021;

15,724,957 and 3,200,000 shares issued at December 31, 2022 and 2021, respectively;

15,265,228 and 3,200,000 shares outstanding at December 31, 2022 and 2021, respectively

Additional paid-in-capital

Treasury stock, at cost;

459,729 and 0 shares of common stock at December 31, 2022 and 2021, respectively

Accumulated deficit

( 19,376,500 )

( 5,956,670 )

Total stockholders’ equity

Total liabilities and stockholders’ equity

accompanying notes are an integral part of these financial statements.

1 unchanged sentence

Statements of Operations

Ended December 31, 2021

Ended December 31, 2020

Operating costs and expenses

General and administrative

and development

Year Ended December 31, 2022

Year Ended December 31, 2021

Operating expenses

from operations

General and administrative

Research and development

Total operating expenses

Loss from operations

( 13,481,240 )

( 3,417,334 )

preferred stock dividends

applicable to common stockholder

Net loss per share attributable

to common stockholder, basic and diluted

Weighted average number of

common shares outstanding, basic and diluted

Change in fair value of contingent warrant liability

Total other income

$ ( 13,419,830 )

$ ( 3,417,334 )

Cumulative preferred stock dividends

Net loss applicable to common stockholders

$ ( 13,516,189 )

$ ( 4,044,725 )

Net loss per share attributable to common stockholders, basic and diluted

Weighted average number of common shares outstanding, basic and diluted

accompanying notes are an integral part of these financial statements.

WATER VACCINES INC.

Statements of Stockholders’

Statements of Stockholders’ Equity

the Years Ended December 31, 2022 and 2021

Stockholders’

at December 31, 2019

at December 31, 2020

Preferred Stock

Treasury Stock

Stockholders’

Balance at December 31, 2020

$ ( 2,539,336 )

at December 31, 2021

Stock-based compensation

( 3,417,334 )

Balance at December 31, 2021

$ ( 5,956,670 )

Issuance of common stock in initial public offering, net of $ 2.9 million of offering costs

Conversion of convertible preferred stock to common stock upon initial public offering

( 1,146,138 )

Issuance of common stock and warrants in April private placement, net of $ 1.1 million of offering costs

Issuance of common stock and warrants in August private placement, net of $ 2.2 million of offering costs

Exercise of stock options

Exercise of pre-funded warrants

Issuance of restricted common stock

Stock-based compensation

Purchase of treasury shares

( 13,419,830 )

Balance at December 31, 2022

$ ( 566,810 )

$ ( 19,376,500 )

accompanying notes are an integral part of these financial statements.

1 unchanged sentence

Statements of Cash Flows

Cash flows from operating

Cash flows from operating activities

$ ( 13,419,830 )

$ ( 3,417,334 )

Adjustments to reconcile net

loss to net cash used in operating activities:

Depreciation expense

Adjustments to reconcile net loss to net cash used in operating activities:

Stock-based compensation

Write off of receivable from

related party

Loss on disposal of property

and equipment

Changes in assets and liabilities:

from related parties

expenses, long-term

cash used in operating activities

from investing activities

of property and equipment

cash used in investing activities

from financing activities

of deferred offering costs

cash used in financing activities

Net decrease in cash

Issuance of restricted common stock

Change in fair value of contingent warrant liability

Depreciation expense

Write off of receivable from related party

Loss on disposal of property and equipment

Changes in operating assets and liabilities:

Prepaid expenses and other current assets

Receivable from related parties

Prepaid expenses, long-term

Accounts payable

Accrued expenses

Deferred rent

Net cash used in operating activities

( 8,698,860 )

( 2,044,235 )

Cash flows from investing activities

Purchase of property and equipment

Net cash used in investing activities

Cash flows from financing activities

Payment of deferred offering costs

Proceeds from issuance of common stock in initial public offering, net of underwriting discount

Payments of initial public offering costs

Proceeds from issuance of common stock and warrants in private placements, net of placement agent discount

Payments of private placement issuance costs

Purchase of treasury shares

Proceeds from exercise of stock options

Proceeds from exercise of pre-funded warrants

Net cash provided by (used in) financing activities

Net increase (decrease) in cash

( 2,380,347 )

Cash, beginning of period

Cash, end of period

investing and financing activities:

Deferred offering costs included

in accounts payable and accrued expenses

Noncash investing and financing activities:

Deferred offering costs included in accounts payable and accrued expenses

Conversion of convertible preferred stock to common stock upon initial public offering

Recognition of contingent warrant liability upon issuance of common stock in private placements

Incremental fair value of preferred investment options exchanged in connection with August private placement

Payment of accrued bonus through related party receivable

Exercise of pre-funded warrants

accompanying notes are an integral part of these financial statements.

1 unchanged sentence

Notes to Financial Statements

Organization, Plan of Business Operations

1 — Organization and Basis of Presentation

and Nature of Operations

Water Vaccines Inc.

(the “Company”) was formed on October 26, 2018, to focus on the research and development of transformational

vaccines to prevent infectious diseases worldwide.

The Company’s lead vaccine candidates, BWV-101 and BWV-102, are being investigated

as a universal influenza vaccine with the potential against all influenza strains and may provide a first-in-class long-term global vaccine

that protects millions.

The Company’s proprietary, immunogenic, multi-purpose platform enables the Company to bioengineer viral

nanoparticles to deliver antigens, enhancing immunity, in an array of infectious disease agents, including influenza.

All of the Company’s

vaccine candidates are in the pre-clinical developmental stage.

The Company’s lead vaccine candidate, BWV-201, is a live attenuated, intranasally

delivered, serotype independent Streptococcus pneumoniae vaccine targeting S.

pneumo-induced acute otitis media and pneumococcal pneumonia.

BWV’s influenza vaccine candidates, BWV-101 and BWV-102, are being investigated as a universal influenza vaccine with the potential

to protect against all influenza strains and a pre-pandemic H1 influenza vaccine, respectively.

In addition to exploratory analysis for

applications in flu vaccines, the Company’s virus-like particle platform is being utilized to investigate and develop vaccine candidates

against norovirus, rotavirus, malaria, monkeypox, and Marburg virus disease.

Finally, the Company is developing a live attenuated, orally

delivered Chlamydia vaccine.

All of the Company’s vaccine candidates are in the pre-clinical developmental stage.

November 24, 2021, the Company effected a 4-for-1 (4:1) stock split (the “Stock Split”) of the Company’s common stock

without any change to its par value, which became effective on November 24, 2021.

All references to share and per share amounts for all

periods presented in these financial statements have been retrospectively restated to reflect the Stock Split and proportional adjustment

of the preferred stock conversion ratio.

Public Offering

February 23, 2022, the Company completed its initial public offering (“IPO”) in which the Company issued and sold 2,222,222

shares of its common stock, at a price to the public of $ 9.00 per share.

Proceeds from the IPO, net of underwriting discounts, commissions,

and offering costs of $2.9 million, were $17.1 million.

In connection with the completion of the IPO, all outstanding shares of convertible

preferred stock were converted into 5,626,365 shares of common stock.

of Presentation

Company’s financial statements have been prepared in conformity with accounting principles generally accepted in the United States

of America (“U.S.

2 — Liquidity and Financial Condition

Company has had limited operating activities to date, substantially all of which have been devoted to seeking licenses and engaging in

research and development activities.

The Company’s product candidates currently under development will require significant additional

research and development efforts prior to commercialization.

The Company has financed its operations since inception primarily using

proceeds received from seed investors.

Company’s operating activities to date have been devoted to seeking licenses and engaging in research and development activities.

The Company’s product candidates currently under development will require significant additional research and development efforts

prior to commercialization.

The Company has financed its operations since inception primarily using proceeds received from seed investors,

and proceeds received from its IPO and two private placement issuances (the “Private Placements”).

During 2022, the Company

completed its IPO and the Private Placements in which the Company received an aggregate of approximately $ 33.1 million in net cash proceeds,

after deducting placement agent fees and other offering expenses, see Note 6.

Company has incurred substantial operating losses since inception and expects to continue to incur significant operating losses for the

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million and an accumulated deficit of approximately $ 19.4 million.

February 23, 2022, the Company completed its initial public offering (“IPO”) in which the Company received approximately

$17.2 million in net proceeds, after deducting the underwriting discount, and estimated offering expenses, see Note 10.

Company believes the existing cash at December 31, 2021, together with the net proceeds received upon the close of its IPO, will

be sufficient to continue operations, satisfy its obligations and fund the future expenditures that will be required to conduct the clinical

and regulatory work to develop its product candidates into the second quarter of 2023.

As such, the Company determined that it is not

probable based on projected cash flows that substantial doubt about the Company’s ability to continue as a going concern exists

for the one-year period following the date that the financial statements for the year ended December 31, 2021 were issued.

Company will require significant additional capital to make the investments it needs to execute its longer-term business plan.

Company believes the existing cash at December 31, 2022 will be sufficient to continue operations, satisfy its obligations and fund the

future expenditures that will be required to conduct the clinical and regulatory work to develop its product candidates for at least

one year following the date that these financial statements were issued.

Company will require significant additional capital to make the investments it needs to execute its long-term business plan.

expects a significant increase in cash outflows as compared to its historical spend for its planned pre-clinical development and clinical

trial activities, and as such, it will need to raise additional capital to sustain operations and meet its long-term operating requirements

beyond the one year period following the issuance of these financial statements.

The Company expects to seek additional funding through

additional debt or equity financings;

however, there are currently no commitments in place for further financing nor is there any assurance

that such financing will be available to the Company on favorable terms, if at all.

If the Company is unable to secure additional capital,

it may be required to curtail any clinical trials and development of products and take additional measures to reduce expenses in order

to conserve its cash in amounts sufficient to sustain operations and meet its obligations in the long-term.

Summary of Significant Accounting Policies

of Presentation

Company’s financial statements have been prepared in conformity with accounting principles generally accepted in the United States

of America (“U.S.

GAAP”).

beyond the one-year period following the date that these financial statements were issued.

The Company expects to seek additional funding

through additional debt or equity financings;

however, there are currently no commitments in place for further financing nor is there

any assurance that such financing will be available to the Company on favorable terms, if at all.

If the Company is unable to secure

additional capital, it may be required to curtail any clinical trials and development of products and take additional measures to reduce

expenses in order to conserve its cash in amounts sufficient to sustain operations and meet its obligations in the long-term.

WATER VACCINES INC.

to Financial Statements

Summary of Significant Accounting Policies (cont.)

November 24, 2021, the Company’s board of directors approved a 4-for-1 (4:1) stock split (the “Stock Split”) of

the Company’s common stock without any change to its par value, which became effective on November 24, 2021, see Note 6.

All references to share and per share amounts for all periods presented in these financial statements have been retrospectively restated

to reflect the Stock Split and proportional adjustment of the preferred stock conversion ratio.

Par values were not adjusted.

Correction to Previously Issued Financial Statements

the preparation of the financial statements for the nine months ended September 30, 2021, the Company identified an error in

the disclosures related to the Series Seed liquidation preference, see Note 6 for related disclosures and defined terms.

previously issued financial statements, the Liquidation Preference Amount was incorrectly calculated and disclosed in the balance sheet

at one times the Original Issue Price per share, plus unpaid cumulative dividends.

As discussed in Note 6, the Liquidation Preference

Amount has been two times the Original Issue Price per share, plus unpaid cumulative dividends.

The Company evaluated this disclosure

error based on the guidance provided by the SEC’s Staff Accounting Bulletin 99, Materiality , and determined that its impact

was not material to its previously issued annual and interim financial statements, and accordingly, no prior period financial statements

have been restated.

The Company corrected the disclosure amount prospectively in the balance sheet as of September 30, 2021, and

corrected the related disclosure in Note 6, to accurately describe the existing liquidation preference.

3 — Summary of Significant Accounting Policies

preparation of financial statements in conformity with U.S.

GAAP requires 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 statements

GAAP requires 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 statements

and the reported amounts of expenses during the reporting periods.

The most significant estimates in the Company’s financial statements

relate to the valuation of common stock, stock-based compensation, accrued research and development expenses and the valuation allowance

of deferred tax assets resulting from net operating losses.

These estimates and assumptions are based on current facts, historical experience

and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments

about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources.

results may differ materially and adversely from these estimates.

To the extent there are material differences between the estimates

and actual results, the Company’s future results of operations will be affected.

The most significant estimates in the Company’s financial statements

relate to the valuation of common stock (for transactions incurred prior to the consummation of the IPO), stock-based compensation, accrued

research and development expenses and the valuation allowance of deferred tax assets resulting from net operating losses.

These estimates

and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances,

the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses

that are not readily apparent from other sources.

Actual results may differ materially and adversely from these estimates.

To the extent

there are material differences between the estimates and actual results, the Company’s future results of operations will be affected.

Concentration

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the straight-line method over the respective useful lives of the assets ranging from three to seven years .

Long-lived assets are

reviewed for impairment whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable.

Long-lived assets are reviewed

for impairment whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable.

WATER VACCINES INC.

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3 — Summary of Significant Accounting Policies (cont.)

Value of Financial Instruments

instruments, including cash, accounts payable and accrued liabilities are carried at cost, which management believes approximates fair

value due to the short-term nature of these instruments.

The fair value of the Company’s assets and liabilities, which qualify

as financial instruments under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)

Topic 820, Fair Value Measurements , approximates the carrying amounts represented in the balance sheet.

Value Measurements

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between market participants at the measurement date.

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).

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:

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.

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.

some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy.

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that is significant to the fair value measurement.

Financial instruments, including cash, prepaid expenses, deferred offering costs,

receivables from related party, accounts payable and accrued liabilities are carried at cost, which management believes approximates

fair value due to the short-term nature of these instruments.

As of December 31, 2022, the contingent warrant liability that became issuable

upon the closing of the Private Placements is valued on a recurring basis utilizing a Monte Carlo simulation which includes Level 3 inputs.

As of December 31, 2022 and 2021, none of the Company’s non-financial assets or liabilities were recorded at fair value

on a non-recurring basis.

No transfers between levels have occurred during the periods presented.

following assumptions were used for the valuation of the contingent warrant liability upon the various commitment dates, as discussed

in Note 6, and at December 31, 2022:

Exercise price

Expected stock price volatility

Risk-free rate of interest

fair value of financial instruments measured on a recurring basis is as follows:

As of December 31, 2022

Contingent warrant liability

WATER VACCINES INC.

to Financial Statements

3 — Summary of Significant Accounting Policies (cont.)

following table summarizes the change in fair value, as determined by Level 3 inputs, for the contingent warrant liability using unobservable

Level 3 inputs for the year ended December 31, 2022:

Balance at December 31, 2021

Fair value at issuance

Change in fair value

Balance at December 31, 2022

Offering Costs

offering costs consist of legal, accounting, and other costs incurred through the balance sheet date that are directly related to the

Company’s initial public offering and that will be charged to stockholders’

equity upon the completion of the IPO.

Company capitalizes certain legal, professional accounting and other third-party fees that are directly associated with in-process equity

financings as deferred offering costs until such financings are consummated.

After consummation of the equity financing, these costs

are recorded in stockholders’ equity as a reduction of proceeds generated as a result of the offering.

Should the in-process equity

financing be abandoned, the deferred offering costs will be expensed immediately as a charge to operating expenses in the statements

of operations.

As of December 31, 2022, all previously deferred offering costs related to the IPO, totaling approximately $ 0.8 million,

and of which $ 0.3 million were paid during 2021, were netted against the proceeds received upon the closing of the IPO, which occurred

on February 23, 2022.

and Development

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Upfront and milestone payments due to third parties that perform research and development services

on the Company’s behalf will be expensed as services are rendered or when the milestone is achieved.

When billing terms under research

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outstanding obligations as of period end to those third parties.

Accrual estimates are based on several factors, including the Company’s

knowledge of the progress towards completion of the research and development activities, invoicing to date under the contracts, communication

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3 — Summary of Significant Accounting Policies (cont.)

accordance with FASB ASC Topic 730-10-25-1, Research and Development, costs incurred in obtaining licenses and patent

rights are charged to research and development expense if the technology licensed has not reached commercial feasibility and has no alternative

The licenses purchased by the Company (see Note 5) require substantial completion of research and development, regulatory

and marketing approval efforts to reach commercial feasibility and have no alternative future use.

Accordingly, the total purchase price

for the licenses acquired is reflected as research and development on the Company’s statements of operations.

Company expensed stock-based compensation to employees and non-employees over the requisite service period based on the estimated grant-date

accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic

730-10-25-1, Research and Development, costs incurred in obtaining licenses and patent rights are charged to research and development

expense if the technology licensed has not reached commercial feasibility and has no alternative future use.

The licenses purchased by

the Company (see Note 5) require substantial completion of research and development, regulatory and marketing approval efforts to reach

commercial feasibility and have no alternative future use.

Accordingly, the total purchase price for the licenses acquired is reflected

as research and development on the Company’s statements of operations.

Contingencies

are recorded for loss contingencies when it is probable that a liability has been incurred and the amount of the related loss can be

reasonably estimated.

The Company evaluates, on a quarterly basis, developments in legal proceedings and other matters that could cause

an increase or decrease in the amount of the liability that has been accrued previously.

Considering facts known at the time of the assessment,

the Company determines whether potential losses are considered reasonably possible or probable and whether they are estimable.

upon this assessment, the Company carries out an evaluation of disclosure requirements and considers possible accruals in the financial

Company expenses stock-based compensation to employees and non-employees over the requisite service period based on the estimated grant-date

fair value of the awards.

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Company estimates the fair value of stock option grants using the Black-Scholes option pricing model and the assumptions used in calculating

the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application

of management’s judgment.

The expected term of options represents the period that the Company’s stock-based awards are expected

to be outstanding based on the simplified method, which is the half-life from vesting to the end of its contractual term.

Volatility —

The Company computes stock price volatility over expected terms based on comparable companies historical

common stock trading prices.

Stock Fair Value —

The fair value of the common stock underlying the Company’s stock options was estimated

at each grant date and was determined with the assistance of an independent third-party valuation expert.

The assumptions underlying

these valuations represented management’s best estimates, which involved inherent uncertainties and the application of significant

levels of management judgment.

Interest Rate —

The Company bases the risk-free interest rate on the implied yield available on U.S.

securities with a remaining term commensurate with the estimated expected term.

Dividend —

The Company has never declared or paid any cash dividends on its common shares and does not plan to pay

the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application

of management’s judgment.

Term — The expected term of options represents the period that the Company’s stock-based awards are expected to be outstanding

based on the simplified method, which is the half-life from vesting to the end of its contractual term.

Volatility — Volatility is a measure of the amount by which the Company’s share price has historically fluctuated or

is expected to fluctuate (i.e., expected volatility) during a period.

Due to the lack of an adequate history of a public market for the

trading of the Company’s common stock and a lack of adequate company-specific historical and implied volatility data, the Company

computes stock price volatility over expected terms based on comparable companies’ historical common stock trading prices.

these analyses, the Company has selected companies with comparable characteristics, including enterprise value, risk profiles, and position

within the industry.

Stock Fair Value — Due to the absence of an active market for the Company’s common stock prior to the IPO, the fair value

of the common stock underlying the Company’s stock options granted prior to the IPO was estimated at each grant date and was determined

with the assistance of an independent third-party valuation expert.

The assumptions underlying these valuations represented management’s

best estimates, which involved inherent uncertainties and the application of significant levels of management judgment.

After the completion

of the IPO, the fair value of each share of common stock is based on the closing price of the Company’s common stock, as reported

by the Nasdaq Capital Market, on the grant date of the award.

Interest Rate — The Company bases the risk-free interest rate on the implied yield available on U.S.

Treasury securities with

a remaining term commensurate with the estimated expected term.

Dividend — The Company has never declared or paid any cash dividends on its shares of common stock and does not plan to pay

cash dividends in the foreseeable future, and, therefore, uses an expected dividend yield of zero in its valuation models.

Company recognizes forfeitures of equity awards as they occur.

Value of Common Stock

order to determine the fair value of shares of common stock of the Company when issuing stock options and computing their estimated stock-based

compensation expense, its board of directors considered with input from third party valuations, among other things, contemporaneous valuations

of the Company’s common stock.

Given the absence of a public trading market of the Company’s capital stock to date, its board

of directors has exercised reasonable judgment and considered a number of objective and subjective factors to determine the best estimate

of the fair value of the Company common and preferred stock, including:

prices, rights, preferences and privileges of our preferred stock relative to our common stock;

business, financial condition and results of operations, including related industry trends affecting our operations;

WATER VACCINES INC.

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3 — Summary of Significant Accounting Policies (cont.)

likelihood of achieving a liquidity event, such as an IPO, or sale of our company, given prevailing market conditions;

lack of marketability of our common stock;

Value of Common Stock

order to determine the fair value of shares of common stock of the Company when issuing stock options prior to the IPO, the Company’s

board of directors considered with input from third party valuations, among other things, contemporaneous valuations of the Company’s

common stock.

Given the absence of a public trading market of the Company’s capital stock prior to the IPO, the Company’s

board of directors exercised reasonable judgment and considered a number of objective and subjective factors to determine the best estimate

of the fair value of the Company common stock, including:

prices, rights, preferences and privileges of the Company’s preferred stock relative to the Company’s common stock;

Company’s business, financial condition and results of operations, including related industry trends affecting the Company’s

likelihood of achieving a liquidity event, such as an IPO, or sale of the Company, given prevailing market conditions;

lack of marketability of the Company’s common stock;

market performance of comparable publicly traded companies;

global economic and capital market conditions and outlook;

and global economic and capital market conditions and outlook;

stock valuation methodology.

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using accepted valuation methods.

Company engaged a third-party valuation specialist to conduct a valuation, which used its recent preferred stock financing as a starting

point and determined the equity value of the Company based on the Backsolve method using an Option Pricing Method (OPM) to calculate

Company engaged a third-party valuation specialist to conduct a valuation, which used its most recent preferred stock financing as a

starting point and determined the equity value of the Company based on the Backsolve method using an Option Pricing Method (OPM) to calculate

the implied value based on a market approach.

The Company’s equity value was allocated using OPM to estimate the fair market value

of the Company’s classes of equity.

The Company’s equity value was allocated using OPM to estimate the fair market value

of the Company’s classes of equity.

the completion of the IPO, the fair value of each share of common stock is based on the closing price of the Company’s common stock

on the grant date of the award, as reported by the Nasdaq Capital Market.

taxes are accounted for under the asset and liability method.

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tax bases and operating loss and tax credit carryforwards.

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 rate

is recognized in operations in the period that includes the enactment date.

Deferred tax assets are reduced to estimated amounts expected

to be realized by the use of a valuation allowance.

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 rate is recognized

in operations in the period that includes the enactment date.

Deferred tax assets are reduced to estimated amounts expected to be realized

by the use of a valuation allowance.

WATER VACCINES INC.

to Financial Statements

3 — Summary of Significant Accounting Policies (cont.)

Comprehensive

6 unchanged sentences

Net loss and comprehensive loss were the same for all periods presented.

Company determines the accounting classification of warrants that are issued, as either liability or equity, by first assessing whether

the warrants meet liability classification in accordance with ASC 480-10, Distinguishing Liabilities from Equity , (“ASC

480-10”), and then in accordance with ASC 815-40, Derivatives and Hedging - Contracts in Entity’s Own Equity (“ASC

Under ASC 480-10, warrants are considered liability-classified if the warrants are mandatorily redeemable, obligate the

issuer to settle the warrants or the underlying shares by paying cash or other assets, or must or may require settlement by issuing a

variable number of shares.

the warrants do not meet liability classification under ASC 480-10, the Company assesses the requirements under ASC 815-40, which states

that contracts that require or may require the issuer to settle the contract for cash are liabilities recorded at fair value, irrespective

of the likelihood of the transaction occurring that triggers the net cash settlement feature.

If the warrants do not require liability

classification under ASC 815-40, in order to conclude equity classification, the Company assesses whether the warrants are indexed to

its common stock and whether the warrants are classified as equity under ASC 815-40 or other applicable GAAP.

After all relevant assessments

are made, the Company concludes whether the warrants are classified as liability or equity.

Liability-classified warrants are required

to be accounted for at fair value both on the date of issuance and on subsequent accounting period ending dates, with all changes in

fair value after the issuance date recorded as a component of other income (expense), net in the statements of operations.

Equity-classified

warrants are accounted for at fair value on the issuance date with no changes in fair value recognized after the issuance date.

December 31, 2022, all of the Company’s outstanding warrants are equity-classified warrants, except for the contingent warrants

that became issuable upon the close of the Private Placements.

Company records treasury stock activities under the cost method whereby the cost of the acquired stock is recorded as treasury stock.

Loss Per Share

loss per share is computed by dividing the net income or loss applicable to common shares by the weighted average number of common shares

outstanding during the period.

Diluted earnings per share is computed using the weighted average number of common shares and, if dilutive,

potential common shares outstanding during the period.

Potential common shares consist of the Company’s preferred stock and options.

Diluted loss per share excludes the shares issuable upon the conversion of preferred stock, as well as common stock options, from the

calculation of net loss per share if their effect would be anti-dilutive.

outstanding during the period, including pre-funded warrants because their exercise requires only nominal consideration for delivery

Diluted earnings per share is computed using the weighted average number of common shares and, if dilutive, potential common

shares outstanding during the period.

Potential common shares consist of the Company’s preferred stock, warrants, and options.

Diluted loss per share excludes the shares issuable upon the conversion of preferred stock, as well as common stock options and warrants,

from the calculation of net loss per share if their effect would be anti-dilutive.

WATER VACCINES INC.

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Each preferred stock that includes rights to participate in distributed earnings is considered a participating security and

the Company uses the two-class method to calculate net income available to the Company’s common stockholder per common share —

following were excluded from the computation of diluted shares outstanding due to the losses since inception, as they would have had

an anti-dilutive impact on the Company’s net loss:

the Company uses the two-class method to calculate net income available to the Company’s common stockholders per common share —

basic and diluted.

following securities were excluded from the computation of diluted shares outstanding for the periods presented, as they would have had

an anti-dilutive impact on the Company’s net loss:

Options to purchase shares of common stock

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Accounting Pronouncement s

April 2012, the Jump-Start Our Business Startups Act (the “JOBS Act”) was signed into law.

The JOBS Act contains provisions

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standards on the relevant dates on which adoption of such standards is required for non-public companies.

February 2016, the FASB issued Accounting Standards Update (“ASU”) No.

2016-02, Leases (Topic 842) .

Under the new guidance, lessees will be required to recognize all leases (with the exception of short-term leases) on the balance sheet

as a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis

and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset

for the lease term.

This guidance was effective for public business entities for fiscal years beginning after December 15,

2018, including interim periods within those fiscal years.

For all other entities, after certain effective date deferrals, this

guidance is effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning

after December 15, 2022.

Early adoption was permitted.

On January 1, 2021, the Company adopted ASU No.

2016-02, and the

adoption of this standard did not have an impact on the Company’s financial statements as the Company is currently not subject

to any lease agreements with terms in excess of 12 months.

December 2019, the FASB issued ASU No.

2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes

(“ASU 2019-12”), which is intended to simplify various aspects related to accounting for income taxes.

removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent

This guidance is effective for public business entities for fiscal years, and interim periods within those fiscal years,

beginning after December 15, 2020.

For all other entities, the standard will be effective for fiscal years beginning after

December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022.

Early adoption is permitted.

The Company adopted ASU 2019-12 on January 1, 2021 on a prospective basis.

Adoption of the ASU did not impact the Company’s

financial position, results of operations or cash flows.

August 2020, the FASB issued ASU No.

2020-06, Debt —

Debt with Conversion and Other Options (Subtopic 470-20)

and Derivatives and Hedging —

Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible

Instruments and Contracts in an Entity’s Own Equity , which simplifies accounting for convertible instruments by removing major

separation models required under current GAAP.

The ASU also removes certain

WATER VACCINES INC.

to Financial Statements

Summary of Significant Accounting Policies (cont.)

August 2020, the FASB issued Accounting Standards Update (“ASU”) No.

2020-06, Debt — Debt with Conversion and Other

Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for

Convertible Instruments and Contracts in an Entity’s Own Equity , which simplifies accounting for convertible instruments by

removing major separation models required under current GAAP.

The ASU also removes certain settlement

conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings

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for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2021.

For all other entities, the standard

will be effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years.

Early adoption

is permitted.

The Company early adopted ASU 2020-06 on January 1, 2022, using the modified retrospective method, and the adoption of

the ASU did not impact the Company’s financial position, results of operations, cash flows or net loss per share.

WATER VACCINES INC.

to Financial Statements

3 — Summary of Significant Accounting Policies (cont.)

October 2020, the FASB issued ASU 2020-10, Codification Improvements , which updates various codification topics by clarifying

or improving disclosure requirements to align with the SEC’s regulations.

The Company adopted ASU 2020-10 as of the reporting period

beginning January 1, 2022.

The adoption of this update did not have a material effect on the Company’s financial statements.

May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt — Modifications and Extinguishments (Subtopic 470-50),

Compensation — Stock Compensation (Topic 718), and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic

Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (a consensus

of the FASB Emerging Issues Task Force).

The ASU clarifies and reduces diversity in an issuer’s accounting for modifications or

exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification

The ASU provides guidance that will clarify whether an issuer should account for a modification or an exchange of a freestanding

equity-classified written call option that remains equity classified after modification or exchange as (1) an adjustment to equity and,

if so, the related earnings per share (EPS) effects, if any, or (2) an expense and, if so, the manner and pattern of recognition.

new guidance is effective for all entities for annual and interim periods beginning after December 15, 2021, and early adoption is permitted,

including adoption in an interim period.

The Company adopted ASU 2021-04 on January 1, 2022, and the adoption of the ASU did not impact

the Company’s financial position, results of operations, cash flows or net loss per share.

June 2022, the FASB issued ASU No.

2022-03, Fair Value Measurement (Topic 820):

Fair Value Measurement of Equity Securities Subject

to Contractual Sale Restrictions (“ASU 2022-03”), which applies to all equity securities measured at fair value that

are subject to contractual sale restrictions.

This change prohibits entities from taking into account contractual restrictions on the

sale of equity securities when estimating fair value and introduces required disclosures for such transactions.

This guidance is effective

for public business entities beginning after December 15, 2023, including interim periods within those fiscal years.

For all other entities,

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Early adoption is permitted.

The Company adopted ASU 2020-06 on January 1, 2022, and the adoption of the ASU did not impact

the Company’s financial position, results of operations or cash flows.

May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt —

Modifications and Extinguishments

(Subtopic 470-50), Compensation —

Stock Compensation (Topic 718), and Derivatives and Hedging —

in Entity’s Own Equity (Subtopic 815-40):

Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding

Equity-Classified Written Call Options (a consensus of the FASB Emerging Issues Task Force).

The ASU clarifies and reduces diversity

in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants)

that remain equity classified after modification or exchange.

The ASU provides guidance that will clarify whether an issuer should account

for a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification

or exchange as (1) an adjustment to equity and, if so, the related earnings per share (EPS) effects, if any, or (2) an expense

and, if so, the manner and pattern of recognition.

The new guidance is effective for all entities for annual and interim periods beginning

after December 15, 2021, and early adoption is permitted, including adoption in an interim period.

The Company is currently evaluating

the impact that this new guidance will have on its financial statements.

Company’s management does not believe that any other recently issued, but not yet effective, accounting standards if currently

The Company early adopted ASU 2022-03 effective July 1, 2022, and the adoption of the ASU did not impact

the Company’s financial position, results of operations, cash flows, or net loss per share.

Company’s management does not believe that any other recently issued, but not yet effective, accounting standards if currently

adopted would have a material effect on the accompanying financial statements.

Reclassification

amounts in the accompanying financial statements have been reclassified to conform to the current period’s presentation.

reclassified were those related to consulting fee prepayments to our Chief Executive Officer (see Note 8), which were previously

included in prepaid expenses in the historical balance sheet as of December 31, 2020, and were reclassified to receivable from related

parties in the accompanying financial statements.

The reclassification did not have any effect on the prior period net loss or cash flows

from operations.

4 — Balance Sheet Details

expenses consisted of the following as of December 31, 2021 and 2020:

Expenses and Other Current Assets

expenses and other current assets consisted of the following as of December 31, 2022 and 2021:

Prepaid research and development

9 unchanged sentences

Accrued compensation

Accrued franchise taxes

Accrued director fees

Accrued other

1 unchanged sentence

University Innovation Limited

December 2018, the Company entered into an option agreement Oxford University Innovation (“OUI”), which was a precursor

to a license agreement (the “OUI Agreement”), dated July 16, 2019.

Under the terms of the OUI Agreement, the Company

holds an exclusive, worldwide license to certain specified patent rights and biological materials relating to the use of epitopes of

limited variability and virus-like particle products and practice processes that are covered by the licensed patent rights and biological

materials for the purpose of developing and commercializing a vaccine product candidate for influenza.

The Company is obligated to use

its best efforts to develop and market Licensed Products, as defined in the OUI Agreement, in accordance with its development plan, report

to OUI on progress, achieve the following milestones and must pay OUI nonrefundable milestone fees when it achieves them:

of first Phase I study;

December 2018, the Company entered into an option agreement with Oxford University Innovation (“OUI”), which was a precursor

to a license agreement (the “OUI Agreement”), dated July 16, 2019.

Under the terms of the OUI Agreement, the Company holds

an exclusive, worldwide license to certain specified patent rights and biological materials relating to the use of epitopes of limited

variability and virus-like particle products and practice processes that are covered by the licensed patent rights and biological materials

for the purpose of developing and commercializing a vaccine product candidate for influenza.

The Company is obligated to use its best

efforts to develop and market Licensed Products, as defined in the OUI Agreement, in accordance with its development plan, report to

OUI on progress, achieve the following milestones and must pay OUI nonrefundable milestone fees when it achieves them:

initiation of

first Phase I study;

initiation of first Phase II study;

initiation of first Phase III/pivotal registration studies;

first submission of application for regulatory approval (BLA/NDA);

first submission

of application for regulatory approval (BLA/NDA);

marketing authorization in the United States;

marketing authorization

in any EU country;

marketing authorization in any EU country;

marketing authorization in Japan;

1 unchanged sentence

first commercial sale in Japan;

first commercial sale in any ROW country;

first commercial

sale in any ROW country;

first year that annual sales equal or exceed certain thresholds.

See Note 7 for additional

information on the milestone payments as well as royalty obligations required under the OUI Agreement.

The OUI Agreement will expire

upon ten (10) years from the expiration of the last patent contained in the licensed patent rights, unless terminated earlier.

of the applications included in the OUI licensed patent rights have been issued as of December 31, 2020.

See Note 7 for additional information on the

milestone payments as well as royalty obligations required under the OUI Agreement.

The OUI Agreement will expire upon ten (10) years

from the expiration of the last patent contained in the licensed patent rights, unless terminated earlier.

During the year ended December

2 unchanged sentences

This patent expires in August 2037.

party may terminate the OUI Agreement for an uncured material breach.

The Company may terminate the OUI Agreement for any reason at any

time upon six months’

written notice expiring after the third anniversary of the OUI Agreement.

OUI may terminate immediately

if the Company has a petition presented for its winding-up or passes a resolution for winding up other than for a bona fide amalgamation

or reconstruction or compounds with its creditors or has a receiver or administrator appointed.

OUI may also terminate if the Company

opposes or challenges the validity of any of the patents or applications in the Licensed Technology, as defined in the OUI Agreement;

raises the claim that the know-how of the Licensed Technology is not necessary to develop and market Licensed Products;

or in OUI’s

reasonable opinion, is taking inadequate or insufficient steps to develop or market Licensed Products and does not take any further steps

that OUI requests by written notice within a reasonable time.

the years ended December 31, 2021 and 2020, the Company did not incur any licensing fee payments for intellectual property

No additional patents

have been issued as of December 31, 2022.

Either party may terminate the OUI Agreement for an uncured material breach.

The Company was

able to terminate the OUI Agreement for any reason at any time upon six months’ written notice until July 16, 2022, which was the

third anniversary of the OUI Agreement.

OUI may terminate immediately if the Company has a petition presented for its winding-up or passes

a resolution for winding up other than for a bona fide amalgamation or reconstruction or compounds with its creditors or has a receiver

or administrator appointed.

OUI may also terminate if the Company opposes or challenges the validity of any of the patents or applications

in the Licensed Technology, as defined in the OUI Agreement;

raises the claim that the know-how of the Licensed Technology is not necessary

to develop and market Licensed Products;

or in OUI’s reasonable opinion, is taking inadequate or insufficient steps to develop

or market Licensed Products and does not take any further steps that OUI requests by written notice within a reasonable time.

the years ended December 31, 2022 and 2021, the Company did not incur any licensing fee payments for intellectual property licenses.

WATER VACCINES INC.

1 unchanged sentence

5 — Significant Agreements (cont.)

Jude Children’s Hospital

Company entered into a license agreement (the “St.

Jude Agreement”), dated January 27, 2020, with St.

Jude Children’s

Research Hospital (“St.

Jude”).

Jude Children’s Hospital

Company entered into a license agreement (the “St.

Jude Agreement”), dated January 27, 2020, with St.

Jude Children’s

Research Hospital (“St.

Under the terms of the St.

9 unchanged sentences

(i) complete IND enabling study;

(ii) initiate animal toxicology study;

initiate animal toxicology study;

(iii) file IND;

(iv) complete Phase I Clinical Trial;

(v) commence Phase II

Clinical Trial;

(vi) commence Phase III Clinical Trial;

(v) commence Phase II Clinical Trial;

(vi) commence

Phase III Clinical Trial;

and (vii) regulatory approval, U.S.

or foreign equivalent.

If the Company fails to achieve the development milestones contained in the St.

If the Company fails to achieve the development

milestones contained in the St.

Jude Agreement, and if the Company and St.

to agree upon a mutually satisfactory revised timeline, St.

Jude fail to agree upon a mutually satisfactory revised timeline,

Jude will have the right to terminate the St.

Jude Agreement.

may terminate the St.

Jude Agreement in the event the other party (a) files or has filed against it a petition under the Bankruptcy

Act (among other things) or (b) fails to perform or otherwise breaches its obligations under the St.

Jude Agreement, and has not

cured such failure or breach within sixty (60) days.

The Company may terminate for any reason on thirty (30) days written notice.

the years ended December 31, 2021 and 2020, the Company recognized $11,000 and $15,000, respectively, for intellectual property

licenses, which is recorded as research and development expenses.

See Note 7 for additional information on the milestone payments

as well as royalty obligations required under the St.

Either party may terminate the St.

Jude Agreement in the event the

other party (a) files or has filed against it a petition under the Bankruptcy Act (among other things) or (b) fails to perform or otherwise

breaches its obligations under the St.

Jude Agreement, and has not cured such failure or breach within sixty (60) days.

The Company may

terminate for any reason on thirty (30) days written notice.

On May 11, 2022, the Company entered into an amendment to the St.

Jude Agreement,

Children’s Hospital Medical Center

Company entered into a license agreement (the “CHMC Agreement”), dated June 1, 2021, with Children’s Hospital

Medical Center, d/b/a Cincinnati Children’s Hospital Medical Center (“CHMC”).

Under the terms of the CHMC

Agreement, the Company holds an exclusive, worldwide license (other than the excluded field of immunization against, and prevention,

control, or reduction in the severity of gastroenteritis caused by rotavirus and norovirus in China and Hong Kong) to certain

specified patent and biological materials relating to the use of norovirus nanoparticles and practice processes that are covered by

the licensed patent rights and biological materials for the purpose of developing and commercializing CHMC patents and related

technology directed to a virus-like particle vaccine platform that utilizes nanoparticle delivery technology that may have potential

broad application to develop vaccines for multiple infectious diseases.

The term of the CHMC Agreement begins on the effective date

and extends on a jurisdiction by jurisdiction and product by product basis until the later of:

(i) the last to expire licensed

whereby the royalty terms, milestone payments and licensing fees were amended, and a revised development milestone timeline was agreed

See Note 7 for more information on this amendment.

the years ended December 31, 2022 and 2021, the Company recognized $ 15,000 and $ 11,000 , respectively, for intellectual property licenses,

which is recorded as research and development expenses.

See Note 7 for additional information on the milestone payments as well as royalty

obligations required under the St.

Jude Agreement.

Children’s Hospital Medical Center

Company entered into a license agreement (the “CHMC Agreement”), dated June 1, 2021, with Children’s Hospital Medical

Center, d/b/a Cincinnati Children’s Hospital Medical Center (“CHMC”).

Under the terms of the CHMC Agreement, the Company

holds an exclusive, worldwide license (other than the excluded field of immunization against, and prevention, control, or reduction in

the severity of gastroenteritis caused by rotavirus and norovirus in China and Hong Kong) to certain specified patent and biological

materials relating to the use of norovirus nanoparticles and practice processes that are covered by the licensed patent rights and biological

materials for the purpose of developing and commercializing CHMC patents and related technology directed to a virus-like particle vaccine

platform that utilizes nanoparticle delivery technology that may have potential broad application to develop vaccines for multiple infectious

The term of the CHMC Agreement begins on the effective date and extends on a jurisdiction by jurisdiction and product by product

basis until the later of:

(i) the last to expire licensed patent;

(ii) ten (10) years after the first commercial sale;

or, (iii) entrance onto the market of a biosimilar or

interchangeable product.

The Company is obligated to use commercially reasonable efforts to bring licensed products to market

through diligent research and development, testing, manufacturing and commercialization, to use best efforts to make all necessary

regulatory filings and obtain all necessary regulatory approvals, to achieve milestones relating to development and sales, and

report to CHMC on progress.

The Company will also be obligated to pay the agreed upon development milestone payments to CHMC, as

well as royalty payments, see Note 7 for additional information.

or, (iii) entrance

onto the market of a biosimilar or interchangeable product.

The Company is obligated to use commercially reasonable efforts to bring

licensed products to market through diligent research and development, testing, manufacturing and commercialization, to use best efforts

to make all necessary regulatory filings and obtain all necessary regulatory approvals, to achieve milestones relating to development

and sales, and report to CHMC on progress.

The Company will also be obligated to pay the agreed upon development milestone payments to

CHMC, as well as royalty payments, see Note 7 for additional information.

The Company may terminate the CHMC Agreement for convenience,

at any time prior to first commercial sale of a product or process by providing one hundred and eighty (180) days’

written notice to CHMC.

at any time prior to first commercial sale of a product or process by providing one hundred and eighty (180) days’ written notice

It may also terminate for a CHMC uncured material breach.

CHMC may terminate the CHMC Agreement for an

uncured Company material breach or insolvency or bankruptcy.

Pursuant to the terms of the CHMC Agreement, if the Company fails to

achieve the milestones, and cannot mutually agree with CHMC on an amendment to the milestones, then CHMC will have the option of

converting any and all of such exclusive licenses to nonexclusive licenses, to continue developing indications that have already

entered development at any stage or in which the Company has invested in developing.

CHMC may also terminate the CHMC Agreement to

the fullest extent permitted by law in the countries of the worldwide territory, in the event the Company or its affiliates challenge

or induce others set up challenges to the validity or enforceability of any of the Licensed Patents, as defined in the CHMC Agreement,

and the Company will be obligated reimburse CHMC for its costs, including reasonable attorneys’

CHMC may terminate the CHMC Agreement for an uncured Company material

breach or insolvency or bankruptcy.

Pursuant to the terms of the CHMC Agreement, if the Company fails to achieve the milestones, and

cannot mutually agree with CHMC on an amendment to the milestones, then CHMC will have the option of converting any and all of such exclusive

licenses to nonexclusive licenses, to continue developing indications that have already entered development at any stage or in which

the Company has invested in developing.

CHMC may also terminate the CHMC Agreement to the fullest extent permitted by law in the countries

of the worldwide territory, in the event the Company or its affiliates challenge or induce others set up challenges to the validity or

enforceability of any of the Licensed Patents, as defined in the CHMC Agreement, and the Company will be obligated to reimburse CHMC

for its costs, including reasonable attorneys’ fees.

WATER VACCINES INC.

1 unchanged sentence

5 — Significant Agreements (cont.)

the year ended December 31, 2021, the Company accrued licensing fee payments for intellectual property licenses and patent reimbursements,

which are recorded as research and development expenses, in aggregate of $402,104.

See Notes 4 and 7.

the years ended December 31, 2022 and 2021, the Company recognized an aggregate of approximately $ 38,000 and $ 402,000 , respectively,

for intellectual property licenses and patent reimbursements, which are recorded as research and development expenses and included in

accounts payable as of December 31, 2022 and accrued expenses as of December 31, 2021.

Bioservices, Inc.

(which was later acquired by National Resilience, Inc.)

Company entered into a Master Services Agreement (“Ology MSA”), dated July 19, 2019, with Ology, Inc.

(“Ology”)

Company entered into a Master Services Agreement (“Ology MSA”), dated July 19, 2019, with Ology, Inc.

to provide services from time to time, including but not limited to technology transfer, process development, analytical method optimization,

cGMP manufacture, regulatory affairs, and stability studies of biologic products.

Pursuant to the Ology MSA, the Company and Ology shall enter

into a Project Addendum for each project to be governed by the terms and conditions of the Ology MSA.

has entered into two Project Addendums as of December 31, 2021.

Pursuant to the Ology MSA, the Company and Ology shall

enter into a Project Addendum for each project to be governed by the terms and conditions of the Ology MSA.

Company has entered into two Project Addendums as of December 31, 2022.

The initial Project Addendum was executed on October 18, 2019

and the Company was required to pay Ology an aggregate of approximately $ 4 million.

Due to unforeseen

delays associated with COVID-19, the Company and Ology entered into a letter agreement dated January 9, 2020 to stop work on the

The Company paid Ology $100,000 for services, of which $48,600 remained as a prepaid expense as of December 31, 2020.

second Project Addendum was executed on May 21, 2021 and the Company is obligated to pay Ology an aggregate amount

of approximately $2.8 million, plus reimbursement for materials and outsourced testing, which will be billed at cost plus 15%.

project began during the year ended December 31, 2021, and the Company has incurred related research and development expenses of

approximately $328,000 of which approximately $164,000 and $115,000 was recorded as accounts payable and accrued expenses, respectively,

Due to unforeseen delays associated with COVID-19,

the Company and Ology entered into a letter agreement dated January 9, 2020 to stop work on the project, at which point the Company had

paid Ology $ 100,000 for services to be provided.

The second Project Addendum was executed on May 21, 2021 and the Company is obligated

to pay Ology an aggregate amount of approximately $ 2.8 million, plus reimbursement for materials and outsourced testing, which will be

billed at cost plus 15 %.

2022, the Company entered into three amendments to the Ology MSA, to adjust the scope of work defined in the second Project Addendum.

The amendments resulted in a net increase to the Company’s obligations under the second Project Addendum of $154,000.

the years ended December 31, 2022 and 2021, the Company incurred related research and development expenses of approximately $ 1,329,000

and $ 328,000 , respectively, and had approximately $ 476,000 and $ 669,000 recorded as related accounts payable and accrued expenses, respectively,

at December 31, 2022, and approximately $ 164,000 and $ 115,000 recorded as related accounts payable and accrued expenses, respectively,

at December 31, 2021.

Stockholders’

Capital and Stock Split

November 24, 2021, in connection with the filing of the amended registration statement for an IPO, the Company’s board of

directors approved a 4-for-1 (4:1) stock split of the Company’s common stock without any change to its par value, which became

effective on November 24, 2021.

No fractional shares will be issued in connection with the Stock Split as all fractional shares

will be rounded down to the next whole share.

All references to share and per share amounts for all periods presented in these financial

statements have been retrospectively restated to reflect the Stock Split and proportional adjustment of the preferred stock conversion

Par values were not adjusted.

Additionally, the Company’s board of directors approved for the increase in authorized shares

of common stock and preferred stock to 250,000,000 shares and 10,000,000 shares, respectively.

There was no change to the number of shares

designated as Series Seed Preferred Stock, which is 1,150,000.

Prior to this amendment, the Company was authorized to issue up to

2,300,000 shares of common stock and 1,150,000 shares of preferred stock, both with par value $0.00001 per share.

of December 31, 2021 and 2020, there were 3,200,000 shares of common stock issued and outstanding.

holder of the Company’s common stock is entitled to one vote for each share held of record, and is entitled upon liquidation of

the Company to share ratably in the net assets of the Company available for distribution after payment of all obligations of the Company

of Texas Health Science Center at San Antonio

Company entered into a patent and technology license agreement (the “UT Health Agreement”), dated November 18, 2022, with

the University of Texas Health Science Center at San Antonio (“UT Health”).

Under the terms of the UT Health Agreement, the

Company holds an exclusive, worldwide license (other than the excluded field of vectors, as defined in the UT Health Agreement) to certain

specified patent rights relating to the development of a live attenuated, oral Chlamydia vaccine candidate.

An initial non-refundable

license fee of $100,000 was due upon execution of the agreement and subsequent annual license fees of $20,000 per year for each of the

four years ending on December 31, 2026;

$40,000 per year for each of the two years ending on December 31, 2028, and $60,000 per year

for the year ending December 31, 2029 and each year thereafter until expiration or termination of the UT Health agreement.

for information on milestone payments as well as royalty obligations required under the UT Health Agreement.

The UT Health Agreement

will expire upon the expiration of the last date of expiration or termination of the patent rights, unless terminated earlier.

may terminate the UT Health Agreement for convenience, by providing 90 days’ written notice to UT Health.

UT Health may terminate

the UT Health Agreement in the event the Company (a) becomes arrears in payment due and does not make payment within 30 days after notification

from UT Health or (b) is in breach of any non-payment provision and does not cure such breach within 60 days after notification from

UT Health or (c) UT Health delivers notice to the Company of three or more actual material breaches of the UT Health Agreement in any

12-month period or (d) in the event the Company or its affiliates initiates any proceeding or action to challenge the validity, enforceability,

or scope of any of the licensed patents.

the year ended December 31, 2022, the Company recognized an aggregate of $ 100,000 for intellectual property licenses, which are recorded

as research and development expenses and included in accounts payable as of December 31, 2022.

WATER VACCINES INC.

to Financial Statements

6 — Stockholders’ Equity

February 23, 2022, in connection with the closing of the IPO, the Company filed with the Secretary of State of the State of Delaware

an amended and restated certificate of incorporation (the “A&R COI”), which became effective immediately.

change to the Company’s authorized shares of common stock and preferred stock of 250,000,000 shares and 10,000,000 shares, respectively,

or the par value, which is $ 0.00001 for both common and preferred stock.

Prior to this amendment, the Company had designated 1,150,000

shares of preferred stock, with par value $ 0.00001 per share.

In addition, on February 23, 2022 and in connection with the closing of

the IPO, the Company’s board of directors adopted Amended and Restated Bylaws.

of December 31, 2022 and 2021, there were 15,724,957 and 3,200,000 shares of common stock issued, respectively, and 15,265,228 and 3,200,000

shares of common stock outstanding, respectively.

of the Company’s common stock are entitled to one vote for each share held of record, and are entitled upon liquidation of the

Company to share ratably in the net assets of the Company available for distribution after payment of all obligations of the Company

and after provision has been made with respect to each class of stock, if any, having preference over the common stock, currently including

the Company’s preferred stock.

The shares of common stock are not redeemable and have no preemptive or similar rights.

February 17, 2022, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Boustead Securities,

LLC, acting as representative of the underwriters (“Boustead”), in relation to the Company’s IPO, pursuant to which

the Company agreed to sell to the underwriters an aggregate of 2,222,222 shares of the Company’s common stock, at a price of $ 9.00

The IPO closed on February 23, 2022, and resulted in net proceeds to the Company, after deducting the 8 % underwriting discount,

and other offering costs, of approximately $ 17.1 million.

Pursuant to the Underwriting Agreement, the Company issued to Boustead warrants

to purchase 111,111 shares of common stock, exercisable for five years at the option of the holder, at a per share exercise price equal

Company evaluated the terms of the warrants issued at the close of the IPO and determined that they should be classified as equity instruments

based upon accounting guidance provided in ASC 480 and ASC 815-40.

Since the Company determined that the warrants were equity-classified,

the Company recorded the proceeds from the IPO, net of issuance costs, within common stock at par value and the balance of the net proceeds

to additional paid in capital.

October 2022, in connection with a settlement agreement that was entered into with Boustead, these warrants were exchanged for 93,466

shares of restricted common stock (“the Warrant Exchange”).

The Warrant Exchange was accounted for as a modification

of the warrant, with an incremental fair value of approximately $ 10,000 , which was recorded as general and administrative expense in

the accompanying statements of operations.

In addition, 200,000 restricted shares of common stock were issued to Boustead upon execution

of an advisory agreement, which was entered into concurrent with the settlement agreement.

The fair value of the restricted shares of

common stock, which had no vesting provisions, was valued at $ 254,000 , and was recorded as general and administrative expense in the

accompanying statements of operations.

restricted shares of common stock issued under the settlement and advisory agreements was valued based on the closing trading price on

the date the agreements were executed, adjusted to reflect the effect of the restriction on the sale of the common stock.

the restriction was measured using the Black-Scholes model to measure the discount for lack of marketability, using the following assumptions:

expected term of 0.5 years, expected volatility of 96.36 %, risk-free interest rate of 4.09 % and dividend yield of 0.0 %.

November 10, 2022, the board of directors approved a stock repurchase program (the “Repurchase Program”) to allow the Company

to repurchase up to 5 million shares of common stock with a maximum price of $ 1.00 per share, with discretion to management to make purchases

subject to market conditions.

On November 18, 2022, the board of directors approved an increase to the maximum price to $ 2.00 per share.

There is no expiration date for this program.

2022, the Company repurchased 459,729 shares of common stock at an average price of $ 1.23 per share, for approximately $ 0.6 million.

Shares that are repurchased are classified as treasury stock pending future use and reduce the number of shares outstanding used in calculating

earnings per share.

As of December 31, 2022, there are approximately 4.5 million shares remaining, that can be repurchased under the

Repurchase Program.

WATER VACCINES INC.

to Financial Statements

Stockholders’

Equity (cont.)

Company has authorized 1,150,000 shares of preferred stock as Series Seed Preferred Stock (“Series Seed”), with

an original issue price of $6.09 per share (the “Original Issue Price”).

As of December 31, 2021 and 2020, there were

1,146,138 shares issued and outstanding.

share of the Series Seed is convertible, at the option of the holder, at any time and from time to time, and without the payment

of additional consideration by the holder, at a conversion price of $1.52 per share, subject to certain adjustments for stock splits,

stock dividends, recapitalizations, and similar corporate transactions, into fully paid and non-assessable shares of the Company’s

common stock.

Each Series Seed is automatically converted into common stock of the Company, at the then-effective conversion price,

upon the closing of a firmly underwritten public offering netting proceeds of at least $50 million with an offering price of at

least three hundred percent (300%) of the Original Issue Price of the Series Seed.

On October 7, 2021, the majority of the

holders of the Series Seed approved the automatic conversion of the outstanding shares of the Series Seed and all related accrued

and unpaid dividends, upon the close of the IPO.

The number of conversion shares to be issued upon the close of the IPO will be

calculated in accordance with the original conversion terms provided by the Company’s Amended and Restated Certificate of Incorporation

(“COI”) dated July 1, 2019.

This conversion occurred on February 23, 2022, upon the close of the Company’s

IPO, see Note 10.

of the Series Seed are entitled to receive cumulative dividends at a per share rate of 8% per annum, compounded annually, on the

initial investment amount commencing on the date of issue.

Dividends are payable only when, as, and if declared by the Board of Directors

or upon a Liquidation Event, as described below.

Dividends on Series Seed are in preference to any dividend on the Company’s

6 — Stockholders’ Equity (cont.)

Investments in Public Equity

Private Placement

April 19, 2022, the Company consummated the closing of a private placement (the “April Private Placement”), pursuant to

the terms and conditions of a securities purchase agreement, dated as of April 13, 2022.

At the closing of the April Private

Placement, the Company issued 590,406 shares of common stock, pre-funded warrants to purchase an aggregate of 590,406 shares of

common stock and preferred investment options to purchase up to an aggregate of 1,180,812 shares of common stock.

The purchase price

of each share of common stock together with the associated preferred investment option was $ 6.775 , and the purchase price of each

pre-funded warrant together with the associated preferred investment option was $ 6.774 .

The aggregate net cash proceeds to the

Company from the April Private Placement were approximately $ 6.9 million, after deducting placement agent fees and other offering

The pre-funded warrants had an exercise price of $ 0.001 per share, were exercisable on or after April 19, 2022, and were

exercisable until the pre-funded warrants were exercised in full.

The pre-funded warrants were exercised in full on May 24, 2022,

and as such the Company issued 590,406 shares of common stock on that date.

The preferred investment options were exercisable at any

time on or after April 19, 2022 through April 20, 2026, at an exercise price of $ 6.65 per share, subject to certain adjustments as

set forth in the agreement.

Wainwright & Co., LLC (“Wainwright”) acted as the exclusive placement agent for the April Private Placement.

agreed to pay Wainwright a placement agent fee and management fee equal to 7.5 % and 1.0 %, respectively, of the aggregate gross proceeds

from the April Private Placement and reimburse certain out-of-pocket expenses up to an aggregate of $ 85,000 .

In addition, the Company

issued warrants to Wainwright (the “April Wainwright Warrants”) to purchase up to 70,849 shares of common stock.

The Wainwright

Warrants are in substantially the same form as the preferred investment options, except that the exercise price is $ 8.46875 .

of the preferred investment options is a warrant, and as such the preferred investment options, the pre-funded warrants, and the Wainwright

Warrants are collectively referred to as the “April Private Placement Warrants”.

Further, upon any exercise for cash of any

preferred investment options, the Company agreed to issue to Wainwright additional warrants to purchase the number of shares of common

stock equal to 6.0 % of the aggregate number of shares of common stock underlying the preferred investment options that have been exercised,

also with an exercise price of $ 8.46875 (the “April Contingent Warrants”).

The maximum number of April Contingent Warrants

issuable under this provision is 70,849 .

connection with the April Private Placement, the Company entered into a Registration Rights Agreement with the purchasers, dated as of

April 13, 2022 (the “April Registration Rights Agreement”).

The April Registration Rights Agreement provides that the Company

shall file a registration statement covering the resale of all of the registrable securities (as defined in the April Registration Rights

Agreement) with the Securities and Exchange Commission (the “SEC”) no later than the 20th calendar day following the date

of the April Registration Rights Agreement and have the registration statement declared effective by the SEC as promptly as possible

after the filing thereof, but in any event no later than the 45th calendar day following April 13, 2022 or, in the event of a full review

by the SEC, the 75th day following April 13, 2022.

The registration statement on Form S-1 required under the April Registration Rights

Agreement was filed with the SEC on May 3, 2022, and became effective on May 20, 2022.

the occurrence of any Event (as defined in the April Registration Rights Agreement), which, among others, prohibits the purchasers from

reselling the securities for more than ten consecutive calendar days or more than an aggregate of fifteen calendar days during any 12-month

period, and should the registration statement cease to remain continuously effective, the Company would be obligated to pay to each purchaser,

on each monthly anniversary of each such Event, an amount in cash, as partial liquidated damages and not as a penalty, equal to the product

of 2.0 % multiplied by the aggregate subscription amount paid by such purchaser in the April Private Placement.

As of December 31, 2022,

the Company determined that the likelihood of the Company incurring liquidated damages pursuant to the April Registration Rights Agreement

is remote, and as such, no accrual of these payments is required as of December 31, 2022.

WATER VACCINES INC.

to Financial Statements

6 — Stockholders’ Equity (cont.)

Company evaluated the terms of the April Private Placement Warrants and determined that they should be classified as equity instruments

based upon accounting guidance provided in ASC 480 and ASC 815-40.

Since the Company determined that the April Private Placement Warrants

were equity-classified, the Company recorded the proceeds from the April Private Placement, net of issuance costs, within common stock

at par value and the balance of the net proceeds to additional paid in capital.

Company evaluated the terms of the April Contingent Warrants and determined that they should be classified as a liability based upon

accounting guidance provided in ASC 815-40.

Since the April Contingent Warrants are a form of compensation to Wainwright, the Company

recorded the value of the liability of approximately $ 36,000 , as a reduction of additional paid in capital, with subsequent changes in

the value of the liability recorded in other income in the accompanying statements of operations.

The Company measured the liability

upon the close of the April Private Placement using a Monte Carlo simulation.

August 11, 2022, the investors in the April Private Placement agreed to cancel the aggregate of 1,180,812 preferred investment options

issued in the April Private Placement, as part of their participation in the August Private Placement.

Concurrent with the cancellation

of the April preferred investment options, which was accounted for as an exchange of equity-linked financial instruments, the April Contingent

Warrants, which were issuable only upon exercise of the preferred investment options, were also modified.

See ‘August Private Placement’

below for further detail.

Private Placement

August 11, 2022, the Company consummated the closing of a private placement (the “August Private Placement”), pursuant to

the terms and conditions of a securities purchase agreement, dated as of August 9, 2022.

At the closing of the August Private Placement,

the Company issued 1,350,000 shares of common stock, pre-funded warrants to purchase an aggregate of 2,333,280 shares of common stock

and preferred investment options to purchase up to an aggregate of 4,972,428 shares of common stock.

The purchase price of each share

of common stock together with the associated preferred investment option was $ 2.715 , and the purchase price of each pre-funded warrant

together with the associated preferred investment option was $ 2.714 .

The aggregate net cash proceeds to the Company from the August Private

Placement were approximately $ 8.7 million, after deducting placement agent fees and other offering expenses.

In addition, the investors

in the August Private Placement, who are the same investors from the April Private Placement, agreed to cancel preferred investment options

to purchase up to an aggregate of 1,180,812 shares of the Company’s common stock issued in April 2022.

The pre-funded warrants

have an exercise price of $ 0.001 per share, are exercisable on or after August 11, 2022, and are exercisable until the pre-funded warrants

are exercised in full.

The preferred investment options are exercisable at any time on or after August 11, 2022 through August 12, 2027,

at an exercise price of $ 2.546 per share, subject to certain adjustments as defined in the agreement.

During 2022, an aggregate of 1,686,640

of the pre-funded warrants were exercised, and as such the Company issued 1,686,640 shares of common stock.

The remaining 646,640 of

pre-funded warrants were exercised subsequent to December 31, 2022.

acted as the exclusive placement agent for the August Private Placement.

The Company agreed to pay Wainwright a placement agent fee and

management fee equal to 7.5 % and 1.0 %, respectively, of the aggregate gross proceeds from the August Private Placement and reimburse

certain out-of-pocket expenses up to an aggregate of $ 85,000 .

In addition, the Company issued warrants to Wainwright (the “August

Wainwright Warrants”) to purchase up to 220,997 shares of common stock.

The August Wainwright Warrants are in substantially the

same form as the preferred investment options, except that the exercise price is $ 3.3938 .

The form of the preferred investment options

is a warrant, and as such the preferred investment options, the pre-funded warrants, and the August Wainwright Warrants are collectively

referred to as the “August Private Placement Warrants”.

Further, upon any exercise for cash of any preferred investment options,

the Company agreed to issue to Wainwright additional warrants to purchase the number of shares of common stock equal to 6.0 % of the aggregate

number of shares of common stock underlying the preferred investment options that have been exercised, also with an exercise price of

$ 3.3938 (the “August Contingent Warrants”).

The maximum number of August Contingent Warrants issuable under this provision

is 298,346 , which includes 70,849 of April Contingent Warrants that were modified in connection with the August Private Placement.

WATER VACCINES INC.

to Financial Statements

6 — Stockholders’ Equity (cont.)

connection with the August Private Placement, the Company entered into a Registration Rights Agreement with the purchasers, dated as

of August 9, 2022 (the “August Registration Rights Agreement”).

The August Registration Rights Agreement provides that the

Company shall file a registration statement covering the resale of all of the registrable securities (as defined in the August Registration

Rights Agreement) with the SEC no later than the 30th calendar day following the date of the August Registration Rights Agreement and

have the registration statement declared effective by the SEC as promptly as possible after the filing thereof, but in any event no later

than the 45th calendar day following August 9, 2022 or, in the event of a full review by the SEC, the 80th day following August 9, 2022.

The registration statement on Form S-1 required under the Registration Rights Agreement was filed with the SEC on August 29, 2022, and

became effective on September 19, 2022.

the occurrence of any Event (as defined in the August Registration Rights Agreement), which, among others, prohibits the purchasers from

reselling the securities for more than ten consecutive calendar days or more than an aggregate of fifteen calendar days during any 12-month

period, and should the registration statement cease to remain continuously effective, the Company would be obligated to pay to each purchaser,

on each monthly anniversary of each such Event, an amount in cash, as partial liquidated damages and not as a penalty, equal to the product

of 2.0 % multiplied by the aggregate subscription amount paid by such purchaser in the August Private Placement.

As of December 31, 2022,

the Company determined that the likelihood of the Company incurring liquidated damages pursuant to the August Registration Rights Agreement

is remote, and as such, no accrual of these payments is required as of December 31, 2022.

Company evaluated the terms of the August Private Placement Warrants and determined that they should be classified as equity instruments

based upon accounting guidance provided in ASC 480 and ASC 815-40.

Since the Company determined that the August Private Placement Warrants

were equity-classified, the Company recorded the proceeds from the August Private Placement, net of issuance costs, within common stock

at par value and the balance of the net proceeds to additional paid in capital.

discussed above, the investors in the Private Placements agreed to cancel the aggregate of 1,180,812 preferred investment options issued

in the April Private Placement, as part of their participation in the August Private Placement.

The preferred investment options that

were cancelled were effectively exchanged for 1,289,148 new preferred investment options in the August Private Placement, and accordingly

have been accounted for as a modification or exchange of equity-linked instruments.

In accordance with ASC 815-40, as the preferred investment

options were classified as equity instruments before and after the exchange, and as the exchange is directly attributable to an equity

offering, the Company recognized the effect of the exchange as an equity issuance cost.

The increase in the fair value of the preferred

investment options as a result of the exchange was approximately $ 860,000 , and was determined using the Black-Scholes option pricing

model, with the following assumptions:

Exercise price

Expected stock price volatility

Risk-free rate of interest

Company evaluated the terms of the August Contingent Warrants and determined that they should be classified as a liability based upon

accounting guidance provided in ASC 815-40.

As a result of the exchange of the preferred investment options issued in the April Private

Placement, the underlying equity-linked instruments that would trigger issuance of the April Contingent Warrants was replaced, and therefore

the 70,849 of April Contingent Warrants were exchanged for 70,849 of the August Contingent Warrants.

The value of the April Contingent

Warrant liability was adjusted to fair value on the date of modification, using a Monte Carlo simulation, with the change in fair value

of approximately $ 8,000 recognized in the accompanying statements of operations.

The remaining 227,497 August Contingent Warrants were

measured as a liability upon the close of the August Private Placement.

Since the Contingent Warrants are a form of compensation to the

placement agent, the Company recorded the value of the liability of approximately $ 39,000 , as a reduction of additional paid in capital.

The entire 298,346 of August Contingent Warrants were remeasured at December 31, 2022, using a Monte Carlo simulation, with the change

in the value of the liability recorded in other income (expense) in the accompanying statements of operations.

WATER VACCINES INC.

to Financial Statements

6 — Stockholders’ Equity (cont.)

following summarizes activity related to the Company’s outstanding warrants as discussed above, excluding contingent warrants issuable

upon exercise of the preferred investment options, for the year ended December 31, 2022:

Outstanding as of December 31, 2021

( 2,277,046 )

( 1,291,923 )

Outstanding as of December 31, 2022

Warrants vested and exercisable as of December 31, 2022

of December 31, 2022, the outstanding warrants include 70,849 April Private Placement Warrants and 5,840,065 August Private Placement

Warrants, which are exercisable into 5,910,914 shares of common stock which had a fair value of $ 1.10 per share, based on the closing

trading price on that day.

Additionally,

as of December 31, 2022, the value of the April Contingent Warrants and the August Contingent Warrants (collectively the “Contingent

Warrants”) was approximately $ 14,000 , and none of the Contingent Warrants have been issued, as no preferred investment options

have been exercised.

to the close of the IPO, the Company had designated 1,150,000 shares of preferred stock as Series Seed Preferred Stock (“Series

Seed”), with an original issue price of $ 6.09 per share (the “Original Issue Price”).

As of December 31, 2022 and 2021,

there were 0 and 1,146,138 shares of Series Seed issued and outstanding, respectively.

share of the Series Seed was convertible, at the option of the holder, at any time and from time to time, and without the payment of

additional consideration by the holder, at a conversion price of $ 1.52 per share, subject to certain adjustments for stock splits, stock

dividends, recapitalizations, and similar corporate transactions, into fully paid and non-assessable shares of the Company’s common

Each Series Seed share was automatically convertible into common stock of the Company, at the then-effective conversion price,

upon the closing of a firmly underwritten public offering netting proceeds of at least $ 50 million with an offering price of at least

three hundred percent ( 300 %) of the Original Issue Price of the Series Seed.

On February 18, 2022, the majority of the holders of the

Series Seed approved the automatic conversion of the outstanding shares of the Series Seed and all related accrued and unpaid dividends,

upon the closing of the IPO.

The number of shares of Common Stock to be issued upon the closing of the IPO pursuant to the conversion

were to be calculated in accordance with the original conversion terms provided by the Company’s Amended and Restated Certificate

of Incorporation (“COI”) dated July 1, 2019.

This conversion occurred on February 23, 2022, upon the closing of the Company’s

WATER VACCINES INC.

to Financial Statements

6 — Stockholders’ Equity (cont.)

of the Series Seed were entitled to receive cumulative dividends at a per share rate of 8 % per annum, compounded annually, on the initial

investment amount commencing on the date of issue.

Dividends were payable only when, as, and if declared by the board of directors or

upon a Liquidation Event (as defined below).

Dividends on Series Seed shares were in preference to any dividend on the Company’s

common stock.

As of December 31, 2021, aggregate cumulative dividends total $1,489,803 or $1.30 per Series Seed share.

As of December 31, 2021, aggregate cumulative dividends totaled $ 1,489,803 , or $ 1.30 per Series Seed share, and upon the

close of the IPO in 2022, aggregate cumulative dividends of $ 1,586,162 , or $ 1.38 per Series Seed share, were automatically converted

into shares of common stock.

the event of certain voluntary or involuntary acquisition or sale transactions or upon the liquidation, dissolution or winding up of

the Company (each, a “Liquidation Event”), the holders of Series Seed shall be entitled to receive out of the proceeds

or assets of the Company legally available for distribution to its stockholders (the “Proceeds”), prior and in preference

to any distribution of the Proceeds of such Liquidation Event to the holders of common shares by reason of their ownership thereof, an

amount (“the Liquidation Preference Amount”) determined based on the provisions of the Company’s COI.

provides that the Liquidation Preference Amount be calculated upon the occurrence of a Liquidation Event, based on the Company’s

achievement of a Pre-Clinical Milestone and a Qualified Financing, both as defined in the COI.

Per the provisions of the COI, if

a Liquidation Event occurs before a Pre-Clinical Milestone is achieved, the Liquidation Preference Amount would be equal to two times

the Series Seed Original Issue price per share, plus unpaid cumulative dividends.

If a Liquidation Event occurs after a Pre-Clinical

Milestone is achieved, and after a Qualified Financing is completed, then the Liquidation Preference Amount would be equal to one times

the Series Seed Original Issue price, plus unpaid cumulative dividends.

If a Liquidation Event occurs after a Pre-Clinical Milestone

is achieved and before a Qualified Financing is completed, the Liquidation Preference Amount would be equal to the greater of (a) such

amount per share as such holder would have been entitled to receive after a Qualified Financing or (b) two times the Series Seed

Original Issue price, plus unpaid cumulative dividends.

of December 31, 2021, and all other historical periods, the Liquidation Preference Amount is equal to two times the Series Seed

the Company (each, a “Liquidation Event”), the holders of Series Seed were entitled to receive out of the

proceeds or assets of the Company legally available for distribution to its stockholders (the “Proceeds”), prior and in

preference to any distribution of the Proceeds of such Liquidation Event to the holders of shares of common stock by reason of their

ownership thereof, an amount (“the Liquidation Preference Amount”) determined based on the provisions of the

Company’s COI.

The COI provided that the Liquidation Preference Amount be calculated upon the occurrence of a Liquidation

Event, based on the Company’s achievement of a Pre-Clinical Milestone and a Qualified Financing, both as defined in the COI.

Per the provisions of the COI, if a Liquidation Event occurred before a Pre-Clinical Milestone was achieved, the Liquidation

Preference Amount would be equal to two times the Series Seed Original Issue price per share, plus unpaid cumulative dividends.

Liquidation Event occurred after a Pre-Clinical Milestone was achieved, and after a Qualified Financing was completed, then the

Liquidation Preference Amount would be equal to one times the Series Seed Original Issue price, plus unpaid cumulative dividends.

a Liquidation Event occurred after a Pre-Clinical Milestone was achieved and before a Qualified Financing was completed, the

Liquidation Preference Amount would be equal to the greater of (a) such amount per share as such holder would have been entitled to

receive after a Qualified Financing or (b) two times the Series Seed Original Issue price, plus unpaid cumulative dividends.

of December 31, 2021, and all other prior historical periods, the Liquidation Preference Amount was equal to two times the Series Seed

Original Issue Price per share, plus unpaid cumulative dividends.

In the event that the Proceeds shall be insufficient to enable the

distribution in full of the Liquidation Preference Amount to the holders of the Series Seed for all of the preferred shares held

by them, all of the Proceeds shall be distributed among the

In the event that the Proceeds were insufficient to enable the distribution

in full of the Liquidation Preference Amount to the holders of the Series Seed for all of the preferred shares held by them, all of the

Proceeds were to be distributed among the holders

of Series Seed on a pro rata basis.

Upon completion of the distribution required to the holders of Series Seed, all of the remaining

Proceeds available for distribution to stockholders were to be distributed among the holders of common shares and preferred shares, on

an as-converted basis, pro rata based on the number of common shares held by each such holder.

However, if upon the occurrence of a Liquidation

Event, the Liquidation Preference Amount the Series Seed stockholders were entitled to receive is two times the Original Issue Price

per share, plus unpaid cumulative dividends, after such distribution is made, then the remaining Proceeds available for distribution

to stockholders were to be distributed among the holders of common shares, pro rata based on the number of common shares held by each

WATER VACCINES INC.

to Financial Statements

Stockholders’

Equity (cont.)

of Series Seed on a pro rata basis.

Upon completion of the distribution required to the holders of Series Seed, all of the

remaining Proceeds available for distribution to stockholders shall be distributed among the holders of common shares and preferred shares,

on an as-converted basis, pro rata based on the number of common shares held by each such holder.

However, if upon the occurrence of

a Liquidation Event, the Liquidation Preference Amount the Series Seed stockholders are entitled to receive is two times the Original

Issue Price per share, plus unpaid cumulative dividends, after such distribution is made, then the remaining Proceeds available for distribution

to stockholders shall be distributed among the holders of common shares, pro rata based on the number of common shares held by each such

6 — Stockholders’ Equity (cont.)

any matter presented to the stockholders of the Company for their action or consideration at any meeting of stockholders of the Company

(or by written consent of stockholders in lieu of meeting), each holder of outstanding shares of Series Seed will be entitled to

cast the number of votes equal to the number of whole shares of common stock into which the shares of Series Seed held by such holder

are convertible as of the record date for determining stockholders entitled to vote on such matter.

Holders of Series Seed will

vote together with the holder of common stock as a single class.

Holders of Series Seed are entitled to nominate two out of five

of the Company’s directors.

July 1, 2019, the Company entered into a Series Seed Preferred Stock Purchase Agreement (“Purchase Agreement”)

with five qualified investors.

The investors agreed to purchase and the Company agreed to sell and issue to investors a total of 1,146,138

shares of Series Seed Preferred Stock, $0.00001 par value per share, at a purchase price of $6.09 per share.

On July 1, 2019,

the Company received approximately $6.9 million (net of offering costs of approximately $45,000) in cash from investors in

exchange for the issuance of 1,146,138 shares of Series Seed Preferred Stock.

Equity Incentive Plan

Company’s 2019 Equity Incentive Plan (the “2019 Plan”) was adopted by its board of directors and by its stockholders

(or by written consent of stockholders in lieu of meeting), each holder of outstanding shares of Series Seed was entitled to cast the

number of votes equal to the number of whole shares of common stock into which the shares of Series Seed held by such holder were convertible

as of the record date for determining stockholders entitled to vote on such matter.

Holders of Series Seed were to vote together with

the holder of common stock as a single class.

Holders of Series Seed shares were entitled to nominate two out of five of the Company’s

Incentive Plans

Company’s 2019 Equity Incentive Plan (the “2019 Plan”) was adopted by its board of directors and by its stockholders

on July 1, 2019.

The Company has reserved 1,400,000 shares of common stock for issuance pursuant to the 2019 Plan.

the year ended December 31, 2020, the Company granted options to purchase up to 688,800 shares of the Company’s common stock

to its board members and employees pursuant to the 2019 Plan.

The aggregate grant date fair value of these options was approximately

$0.5 million.

No stock options have been granted during the year ended December 31, 2021.

There were no share-based

awards granted under the 2019 Plan during the years ended December 31, 2022 and 2021.

addition, on February 23, 2022 and in connection with the closing of the IPO, the Company’s board of directors adopted the Company’s

2022 Equity Incentive Plan (the “2022 Plan”), which is the successor and continuation of the Company’s 2019 Plan.

the 2022 Plan, the Company may grant stock options, restricted stock, restricted stock units, stock appreciation rights, and other forms

of awards to employees, directors and consultants of the Company.

Upon its effectiveness, a total of 1,600,000 shares of common stock

were reserved for issuance under the 2022 Plan.

In August 2022, the number of shares of common stock reserved for issuance under the

2022 Plan was increased to 2,600,000 .

The stock options granted during the year ended December 31, 2022 were all granted under the 2022

As of December 31, 2022, there were 1,041,894 options available for issuance under the 2022 Plan.

following summarizes activity related to the Company’s stock options under the 2019 Plan and the 2022 Plan for the year ended December

Outstanding as of December 31, 2021

Forfeited / cancelled

Outstanding as of December 31, 2022

Options vested and exercisable as of December 31, 2022

WATER VACCINES INC.

to Financial Statements

6 — Stockholders’ Equity (cont.)

fair value of options granted in 2022 was estimated using the following assumptions:

Ended December 31,

Exercise price

$ 1.06 – 6.45

Expected stock price volatility

112.2% –

112.6 % – 121.2 %

Risk-free rate of interest

0.37% –

2.9 % – 4.3 %

weighted average grant date fair value of stock options granted during the year ended December 31, 2022 was $ 3.40 .

The aggregate fair

value of stock options that vested during the years ended December 31, 2022 and 2021 was approximately $ 2.1 million and $ 0.1 million,

respectively.

the total stock options granted during the year ended December 31, 2022, 200,000 stock options were granted to the Company’s Chief

Executive Officer (“CEO”), Chairman, and significant stockholder, 200,000 stock options were granted to the Company’s

Chief Business Officer (“CBO”), and 100,000 stock options were granted to the Company’s Chief Financial Officer (“CFO”).

The aggregate grant-date fair value of the stock options granted to the CEO, CBO, and CFO was approximately $ 1.8 million, of which approximately

$ 1.5 million was recognized as stock-based compensation expense during the year ended December 31, 2022.

Additionally, during the year

ended December 31, 2022, the Company granted an aggregate of 72,223 stock options to non-executive directors.

The grant-date fair value

of the stock options granted to the non-executive directors was approximately $ 0.2 million, of which approximately $ 0.2 million was recognized

as stock-based compensation expense during the year ended December 31, 2022.

the year ended December 31, 2022, the Company’s board of directors approved the accelerated vesting of an aggregate of 32,517 stock

options to a former director and a former advisor, in connection with their separation from the Company.

The Company recognized stock-based

compensation expense of approximately $ 0.1 million related to these modifications during the year ended December 31, 2022.

WATER VACCINES INC.

to Financial Statements

Stockholders’

Equity (cont.)

summary of stock option information for the year ended December 31, 2021 is presented below:

Outstanding as of December 31, 2020

Outstanding as of December 31, 2021

Options vested and exercisable as of December 31, 2021

6 — Stockholders’ Equity (cont.)

compensation expense for the years ended December 31, 2022 and 2021 was as follows:

2 unchanged sentences

Research and development

of December 31, 2021, future stock-based compensation expense relating to outstanding stock options is approximately $68,000 and

will be recorded through December 2023.

of December 31, 2022, unrecognized stock-based compensation expense relating to outstanding stock options is approximately $ 0.7 million,

which is expected to be recognized over a weighted-average period of 1.89 years.

7 — Commitments and Contingencies

Company leased office space for approximately $5,500 a month from a related party.

The Company paid a $15,000 rental deposit and rent

expense for the years ended December 31, 2021 and 2020 was approximately $26,000 and $66,000, respectively.

The Company terminated

the related party lease in May 2021 and entered into a new lease with an unrelated party in April 2021.

The Company is not

a party to a lease with a term in excess of 12 months and has a month-to-month lease as of December 31, 2021.

in 2018, the Company leased office space for approximately $ 5,500 a month from a related party.

The Company was required to pay a $ 15,000

rental deposit.

The Company terminated the related party lease in May 2021.

Rent expense related to this lease for the years ended December

31, 2022 and 2021 was approximately $ 0 and $26,000, respectively.

The Company entered into a month-to-month lease in Cincinnati, Ohio,

with an unrelated party in April 2021 with monthly payments of approximately $ 500 per month.

Company entered into a short-term lease in Palm Beach, Florida with an unrelated party, with a commencement date of May 1, 2022, for

approximately $ 14,000 per month.

The lease term ends on April 30, 2023 and is personally guaranteed by the Company’s CEO.

the year ended December 31, 2022, the Company incurred rent expense on this lease of approximately $ 129,000 , and variable lease expense

of approximately $ 12,000 .

time to time, the Company may be subject to various legal proceedings and claims that arise in the ordinary course of its business activities.

The Company is not a party to any material legal proceedings and is not aware of any pending or threatened claims.

As of December 31, 2022, the Company is not a party to any material legal proceedings and is not aware of any pending or threatened claims.

April 15, 2022, the Company received a demand letter (the “Demand Letter”) from Boustead.

The Demand Letter alleged that

the Company breached the Underwriting Agreement entered into between Boustead and the Company, dated February 17, 2022, in connection

with the Company’s initial public offering.

The Demand Letter alleged that, by engaging Wainwright as placement agent in the April

Private Placement, the Company breached Boustead’s right of first refusal (“ROFR”) to act as placement agent granted

to Boustead under the Underwriting Agreement and, as a result of selling securities in the April Private Placement, breached the Company’s

obligation under the Underwriting Agreement not to offer, sell, issue, agree or contract to sell or issue or grant or modify the terms

of any option for the sale of, any securities prior to February 17, 2023 (the “Standstill”).

WATER VACCINES INC.

to Financial Statements

7 — Commitments and Contingencies (cont.)

October 9, 2022, the Company and Boustead entered into a Settlement Agreement and Release (the “Settlement Agreement”), pursuant

to which Boustead agreed to waive the ROFR and the Standstill, and to release the Company from certain claims with respect to the April

Private Placement, the August Private Placement, and all future private, public equity or debt offerings of the Company.

As consideration

for such waiver and termination of the Underwriting Agreement, the Company paid Boustead a cash fee of $ 1,000,000 , $ 50,000 in legal expenses,

and released Boustead from all claims, subject to certain exceptions.

In addition, the Company issued to Boustead 93,466 shares of restricted

common stock in exchange for the cancellation of 111,111 warrants issued to Boustead in connection with the IPO (see Note 6).

with the execution of the Settlement Agreement, the Company and Boustead Capital Markets, LLP (“Boustead Capital”) entered

into a three-month Advisory Agreement (the “Advisory Agreement”) for which consideration equal to 200,000 shares of restricted

common stock, with no vesting provisions, was issued to Boustead Capital upon execution of the Advisory Agreement.

The restricted common

stock issued in connection with these agreements had an aggregate fair value of approximately $ 264,000 .

Company determined that all consideration due by the Company under the Settlement Agreement and the Advisory Agreement relates to the

settlement of a liability that was incurred in 2022, and accordingly, recorded a related expense of approximately $ 1.3 million for the

year ended December 31, 2022, which is included in general and administrative expenses in the accompanying statements of operations.

Rights Agreements

Note 6, Private Investments in Public Equity .

University Innovation Limited

to the OUI Agreement, as disclosed in Note 5, the Company is obligated to pay certain milestone and royalty payments in the future,

as the related contingent events occur.

to the OUI Agreement, as disclosed in Note 5, the Company is obligated to pay certain milestone and royalty payments in the future, as

the related contingent events occur.

Specifically, the Company is obligated to pay a 6 % royalty on all net sales of licensed products,

1 unchanged sentence

of the OUI Agreement or revocation of the last valid claim covering a licensed product, at which point a royalty rate of 3 % will apply.

An annual maintenance fee of $10,000 and $20,000 is required in the pre-phase III year and Phase III year, respectively, and

as defined in the OUI Agreement.

The Company is also obligated to pay a 25% royalty on any sums received by the Company

WATER VACCINES INC.

to Financial Statements

Commitments and Contingencies (cont.)

An annual maintenance fee of $10,000 and $20,000 is required in the pre-phase III year and Phase III year, respectively, and as defined

in the OUI Agreement.

The Company is also obligated to pay a 25 % royalty on any sums received by the Company from

any sublicensee (including all up-front, milestone and other one-off payments received by the Company from any sub-licenses or other

4 unchanged sentences

$ 2.25 million, regulatory milestones of approximately $ 9.5 million, and commercial milestones of approximately $ 39.5 million.

The annual maintenance fee and milestone fees are indexed to the RPI (Retail Prices index for all items which is published in the United

Kingdom by the Office for National Statistics, or any replacement of it) and will be increased or decreased as appropriate as set forth

in the OUI Agreement.

As of December 31, 2021, the Company evaluated the likelihood of the Company achieving the specified milestones

and generating product sales, and determined the likelihood is not yet probable and as such no accrual of these payments is required

as of December 31, 2021.

maintenance fee and milestone fees are indexed to the RPI (Retail Prices index for all items which is published in the United Kingdom

by the Office for National Statistics, or any replacement of it) and will be increased or decreased as appropriate as set forth in the

OUI Agreement.

As of December 31, 2022, the Company evaluated the likelihood of the Company achieving the specified milestones and generating

product sales, and determined the likelihood is not yet probable and as such, no accrual of these payments is required as of December

WATER VACCINES INC.

to Financial Statements

7 — Commitments and Contingencies (cont.)

University Research Agreement

to the terms of the OUI Agreement, as disclosed in Note 5, the Company entered into a sponsored research agreement dated December 18,

2019 with Oxford University for research related to the OUI Agreement for a period of three years for a total of £420,000.

The Company prepaid the full amount to Oxford of $554,802 for the services in January 2020, of which approximately $0.2 million

and $0.4 million remains as a prepaid expense as of December 31, 2021 and 2020, respectively.

Jude Children’s Hospital

Jude Agreement, as disclosed in Note 5, the Company is obligated to pay certain milestone and royalty payments in the

future, as the related contingent events occur.

Specifically, the Company is obligated to make 4% royalty payments for each licensed

product(s) sold by the Company or its affiliates, based on the net sales for the duration of the St.

Jude Agreement, and also pay

15% of consideration received for any sublicenses.

The Company is required to pay an annual maintenance fee of $10,000 beginning on the

first anniversary of the Effective Date (which is waived if all of the developmental milestones scheduled for completion before such

annual fee is due have been achieved).

2019 with Oxford University for research related to the OUI Agreement for a period of three years for a total of £ 420,000 .

Company prepaid the full amount to Oxford of $ 554,802 for the services in January 2020, of which approximately $ 0.1 and $ 0.2 million

remains as a prepaid expense as of December 31, 2022 and 2021, respectively.

On May 16, 2022, the Company entered into an amendment to

the Oxford University Research Agreement, whereby the Oxford University Research Agreement was extended until June 30, 2024, with an

option to extend another 12 months, for a fee of £ 53,500 (or approximately $ 56,000 ).

the years ended December 31, 2022 and 2021, the Company incurred research and development expenses related to the sponsored research

agreement with Oxford of approximately $ 51,000 and $ 185,000 , respectively.

Jude Children’s Hospital

Jude Agreement, as disclosed in Note 5, the Company is obligated to pay certain milestone and royalty payments in the future,

as the related contingent events occur.

On May 11, 2022, the Company entered into an amendment to the St.

Jude Agreement, whereby the

royalty terms, milestones payments and licensing fees were amended.

Specifically, pursuant to the terms of the St.

Jude Agreement, as

amended, the Company is obligated to make 5 % royalty payments for each licensed product(s) sold by the Company or its affiliates, based

on the net sales for the duration of the St.

Jude Agreement, and also pay 15 % of consideration received for any sublicenses.

is also required to pay an additional one-time $ 5,000 license fee, and an annual maintenance fee of $ 10,000 beginning on the first anniversary

of the Effective Date (which is waived if all of the developmental milestones scheduled for completion before such annual fee is due

have been achieved).

In addition, the Company is required to pay St.

Jude milestone payments of up to an aggregate

Jude milestone payments of up to an aggregate of $ 1.9 million;

specifically,

upon the achievement of specified development milestones of $ 0.3 million, regulatory milestones of $ 0.6 million, and commercial milestones

of $ 1.0 million.

specifically, upon the achievement of specified development milestones of approximately $0.2 million, regulatory

milestones of approximately $0.3 million, and commercial milestones of approximately $0.5 million.

As of December 31,

2021, the Company evaluated the likelihood of the Company achieving the specified milestones and generating product sales, and determined

the likelihood is not yet probable and as such no accrual of these payments is required as of December 31, 2021.

Jude Children’s Sponsored Research Agreement

As of December 31, 2022, the Company evaluated the likelihood of the Company achieving the specified milestones and

generating product sales, and determined the likelihood is not yet probable and as such, no accrual of these payments is required as

of December 31, 2022.

Jude Children’s Sponsored Research Agreement

addition to the St.

Jude Agreement, the Company also entered into a sponsored research agreement dated May 3, 2021 with St.

for research related to the St.

Jude Agreement.

Pursuant to this research agreement, the Company is obligated to pay St.

Jude an aggregate

amount of $73,073 in two parts, Phase I for $57,624 and Phase II for $15,449.

This sponsored research project began during

the year ended December 31, 2021, and the Company has incurred related research and development expenses of approximately $65,000

of which approximately $8,000 was recorded as accrued expenses at December 31, 2021.

Children’s Hospital Medical Center

research related to the St.

Jude Agreement (the “St.

Pursuant to the St.

Jude SRA, the Company is obligated to

Jude an aggregate amount of $ 73,073 in two parts, Phase I for $ 57,624 and Phase II for $ 15,449 .

This sponsored research project

began during 2021.

Company entered into a second sponsored research agreement with St.

Jude, dated August 29, 2022, pursuant to which the Company is obligated

Jude an amount of $ 75,603 which is due within 30 days of the effective date of the agreement.

the years ended December 31, 2022 and 2021, the Company incurred related research and development expenses related to the sponsored research

agreements with St.

Jude of approximately $27,000 and $65,000, respectively.

Children’s Hospital Medical Center

to the CHMC Agreement, as disclosed in Note 5, the Company is obligated to pay certain milestone and royalty payments in the future,

3 unchanged sentences

decrease by 50%.

The Company is also

WATER VACCINES INC.

to Financial Statements

Commitments and Contingencies (cont.)

The Company is also obligated

to pay up to a 25% royalty on any non-royalty sublicense revenue paid to the Company by any sublicensee.

1 unchanged sentence

the Company with an option to license any CHMC or jointly patented modification, alteration or improvement of any invention claimed in

a Licensed Patent (“CHMC Improvement”

and “Joint Improvement, respectively”), with a $50,000 option fee for each

a Licensed Patent (“CHMC Improvement” and “Joint Improvement, respectively”), with a $ 50,000 option fee for each

Improvement that the Company elects to include in the license grant of the CHMC Agreement.

2 unchanged sentences

specifically, upon the achievement of specified development milestones

of approximately $0.5 million, regulatory milestones of approximately $1.25 million, and commercial milestones of approximately

As of December 31, 2021, the Company evaluated the likelihood of the Company achieving the specified milestones

and generating product sales, and determined the likelihood is not yet probable and as such no accrual of these payments is required

as of December 31, 2021.

of approximately $ 0.5 million, regulatory milestones of approximately $ 1.25 million, and commercial milestones of approximately $ 58 million.

As of December 31, 2022, the Company evaluated the likelihood of the Company achieving the specified milestones and generating product

sales, and determined the likelihood is not yet probable and as such, no accrual of these payments is required as of December 31, 2022.

WATER VACCINES INC.

to Financial Statements

7 — Commitments and Contingencies (cont.)

What changed 10-K

Item 9A. Controls and Procedures