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Item 7. Management’s Discussion and Analysis

2025-06-02 compared with 2024-04-11 · 666 added, 632 removed, 107 unchanged (92% of the section changed)

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Condition and Results of Operations.

The following discussion

and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements

and the related notes to those statements included elsewhere in this Annual Report on Form 10-K.

In addition to historical financial information,

the following discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions.

the numbers included herein have been rounded for the convenience of presentation.

Our actual results may differ materially from those

anticipated in these forward-looking statements as a result of many factors, including those discussed under Part I.

Factors” and elsewhere in this Annual Report on Form 10-K.

We are a commercial stage biotechnology

company focused on the research, development, and commercialization of innovative solutions for men’s health and oncology.

our recent acquisition of Proteomedix, we own Proclarix, an in vitro diagnostic test for prostate cancer approved for sale in the European

Union under the In Vitro Diagnostic Regulation (“IVDR”), which is planned to be marketed in the U.S.

as a lab developed test.

We also own ENTADFI, an FDA-approved, once daily pill that combines finasteride and tadalafil for the treatment of BPH, a disorder of

the prostate.

is an easy-to-use next generation protein-based blood test that can be done with the same sample as a patient’s regular

Prostate-Specific Antigen (“PSA”) test.

The PSA test is a well-established prostate specific marker that measures

the concentration of PSA molecules in a blood sample.

The following discussion and analysis of our

financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related

notes to those statements included elsewhere in this Annual Report on Form 10-K.

In addition to historical financial information, the

following discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions.

numbers included herein have been rounded for the convenience of presentation.

Our actual results may differ materially from those anticipated

in these forward-looking statements as a result of many factors, including those discussed under Part I.

Risk Factors”

and elsewhere in this Annual Report on Form 10-K.

We are a commercial stage biotechnology company

focused on the research, development, and commercialization of innovative solutions for men’s health and oncology.

Through our acquisition

of Proteomedix, which closed on December 15, 2023, we own Proclarix, an in vitro diagnostic test for prostate cancer originally developed

by Proteomedix and approved for sale in the European Union under the In Vitro Diagnostic Regulation (“IVDR”), which we anticipate

will be marketed in the U.S.

as a lab developed test through our license agreement with LabCorp.

We also own ENTADFI, an FDA-approved, once daily

pill that combines finasteride and tadalafil for the treatment of BPH, a disorder of the prostate.

However, in light of (i) the time and

resources needed to continue pursuing commercialization of ENTADFI, and (ii) the Company’s cash runway and indebtedness, the Company

has abandoned commercialization of ENTADFI and is working with an investment advisor to assist with the potential sale or other transaction

of the ENTADFI assets.

There is currently no plan to resume commercialization of ENTADFI, and as such, if we are not able to consummate

a sale or other transaction of the ENTADFI assets, we may abandon the assets and destroy our inventory of the product.

In addition, as

part of cost reduction efforts and in connection with our initial pause in commercializing ENTADFI, we terminated three employees involved

with the ENTADFI program, effective April 30, 2024, with such individuals to continue assisting the Company on an as-needed, consulting

Based on the current circumstances surrounding ENTADFI, at June 30, 2024, the ENTADFI assets were fully impaired.

Refer to Note

4 and 5 in the accompanying consolidated financial statements included elsewhere in the Report for further discussion.

The Company continues to search for a permanent

Chief Executive Officer and Chief Financial Officer.

We are currently focusing our efforts on commercializing

Proclarix is an easy-to-use next generation

protein-based blood test that can be done with the same sample as a patient’s regular Prostate-Specific Antigen (“PSA”)

The PSA test is a well-established prostate specific marker that measures the concentration of PSA molecules in a blood sample.

A high level of PSA can be a sign of prostate cancer.

However, PSA levels can also

be elevated for many other reasons including infections, prostate stimulation, vigorous exercise or even certain medications.

can be confusing for many patients and even physicians.

It is estimated over 50% of biopsies with elevated PSA are negative or clinically

insignificant resulting in an overdiagnosis and overtreatment that impacts the physician’s routine, our healthcare system, and

the quality of patients’ lives.

Proclarix helps doctors and patients with unclear PSA test results through the use of our proprietary

Proclarix Risk Score which delivers clear and immediate diagnostic support for further treatment decisions.

No additional intervention

is required, and results are available quickly.

Local diagnostic laboratories can integrate this multiparametric test into their current

workflow because Proclarix assays use the enzyme-linked immunosorbent assay (ELISA) standard, which most diagnostic laboratories are

already equipped to process.

ENTADFI allows men

to receive treatment for their symptoms of BPH without the negative sexual side effects typically seen in patients on finasteride alone.

Following a recent business strategy shift towards the fields of men’s health and oncology and deprioritization of preclinical vaccine

programs, we are building additional assets in therapeutics, diagnostics, and clinician services for men’s health and oncology.

our inception in October 2018 until April 2023, when we acquired ENTADFI, we devoted substantially all of our resources to performing

However, PSA levels can also be elevated for many other reasons including infections,

prostate stimulation, vigorous exercise or even certain medications.

PSA results can be confusing for many patients and even physicians.

It is estimated over 50% of biopsies with elevated PSA are negative or clinically insignificant resulting in an overdiagnosis and overtreatment

that impacts the physician’s routine, our healthcare system, and the quality of patients’ lives.

Approximately 10% of all

men have elevated PSA levels., commonly referred to as the diagnostic “grey zone”, of which only 20 – 40% present clinically

Proclarix is intended for use in diagnosing these patients where it is difficult to decide if a biopsy is necessary to verify

a potential clinically significant cancer diagnosis.

Proclarix helps doctors and patients with unclear PSA test results through the use

of our proprietary Proclarix Risk Score which delivers clear and immediate diagnostic support for further treatment decisions.

No additional

intervention is required, and results are available quickly.

Local diagnostic laboratories can integrate this multiparametric test into

their current workflow because Proclarix assays use the enzyme-linked immunosorbent assay (ELISA) standard, which most diagnostic laboratories

are already equipped to process.

inception in October 2018 until April 2023, when we acquired ENTADFI, we devoted substantially all of our resources to performing

research and development, undertaking preclinical studies and enabling manufacturing activities in support of our product development

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company, performing business planning, establishing our intellectual property portfolio and raising capital to support and expand such

acquisition of ENTADFI, we managed one distinct business segment, which was research and development.

Beginning in the second

quarter of 2023, as a result of the acquisition of ENTADFI, for which we are working towards commercial launch, we operated in two

business segments:

research and development and commercial.

During the third quarter of 2023, we deprioritized our vaccine discovery

and development programs, and accordingly, we now operate in one segment:

Our acquisition during the fourth quarter of

2023 of Proteomedix and its diagnostic product Proclarix was determined to be within our commercial segment.

and development segment was our historical business, and was dedicated to the research and development of various vaccines to

prevent infectious diseases.

The commercial segment was new in the second quarter of 2023 and is dedicated to the commercialization

of our products approved for sale, namely ENTADFI in the U.S.

and Proclarix in Europe.

has not generated any revenue from product sales, and Proclarix has generated only minimal amounts of development revenue since its acquisition.

In light of (i) the time

and resources needed to continue pursuing commercialization of ENTADFI, and (ii) the Company’s cash runway and indebtedness, the

Company has determined to temporarily pause its commercialization of ENTADFI, as it considers strategic alternatives.

The Company expects

to appoint a new Chief Executive Officer in early April 2024, after which the new CEO and the Board will reassess its ENTADFI program

in light of the foregoing and other relevant factors.

We are currently focusing

our efforts on commercializing Proclarix.

Given Proclarix is CE-marked for sale in the European Union, we expect to generate revenue from sales of Proclarix by 2025.

Although we anticipate these sales to offset some expenses relating to commercial scale up and development,

we expect our expenses will increase substantially in connection with our ongoing activities, as we:

● commercialize Proclarix and ENTADFI (if we decide to resume its commercialization),

and other commercial-stage products

During the third quarter of 2023, we halted our

vaccine discovery and development programs, and accordingly, we now operate in one segment:

The commercial segment was new

in the second quarter of 2023 and is currently dedicated to the development and commercialization of Proclarix.

Given Proclarix is CE-marked for sale in

the European Union, we expect to generate revenue from sales of Proclarix by 2027.

Although we anticipate these sales to offset some expenses

relating to commercial scale up and development, we expect our expenses will increase substantially in connection with our ongoing activities,

commercialize Proclarix

hire additional personnel;

● obtain, maintain, expand, and protect our intellectual property

To the extent that we resume

the commercialization of ENTADFI, we also expect to incur significant commercialization expenses related to marketing, manufacturing and

distribution for ENTADFI.

We rely and will continue to rely on third parties for the manufacturing of ENTADFI and Proclarix.

internal manufacturing capabilities, and we will continue to rely on third parties, of which the main suppliers are single-source suppliers,

for commercial products.

operate as a public company;

obtain, maintain, expand, and protect our intellectual property portfolio.

We rely and will continue to rely on third parties

for the manufacturing of Proclarix.

We have no internal manufacturing capabilities, and we will continue to rely on third parties, of

which the main suppliers are single-source suppliers, for commercial product.

We do not have any products approved

for sale, aside from Proclarix, from which we have generated only minimal amounts of development revenue since its acquisition, and ENTADFI,

from which we have not generated any revenue from product sales, and for which we have determined to temporarily pause commercialization

To date, we have financed our operations primarily with proceeds from our sale of preferred securities to seed investors,

the close of the IPO, the close of the 2022 Private Placements, the proceeds received from a warrant exercise in August 2023, and

the proceeds received from the issuance of debt in January 2024.

We will continue to require significant additional capital to commercialize

Proclarix and ENTADFI (if we decide to resume its commercialization), and to fund operations for the foreseeable future.

for sale, aside from Proclarix and ENTADFI, from which we have not generated any revenue from product sales and for which we have determined

to abandon commercialization activities To date, we have financed our operations primarily with proceeds from our sale of preferred securities

to seed investors, the initial public offering (“IPO”), and subsequent offerings of debt and equity securities.

We will continue

to require significant additional capital to commercialize Proclarix, and to fund operations for the foreseeable future.

until such time as we can generate significant revenue, if ever, we expect to finance our cash needs through public or private equity

or debt financings, third-party (including government) funding and to rely on third-party resources for marketing and distribution

arrangements, as well as other collaborations, strategic alliances and licensing arrangements, or any combination of these approaches,

to support our operations.

We have incurred net losses

since inception and expect to continue to incur net losses in the foreseeable future.

Our net losses may fluctuate significantly from

quarter-to-quarter and year-to-year, depending in large part on timing and success of commercialization activities, the timing of clinical

trials and manufacturing activities, and our expenditures on other research and development activities.

As of December 31, 2023, the Company

had a working capital deficit of approximately $11.4 million and an accumulated deficit of approximately $56.8 million.

We will need to

raise additional capital to sustain operations and meet our contractual commitments and obligations within the one-year period following

the issuance of the accompanying consolidated financial statements.

Until we generate revenue

sufficient to support self-sustaining cash flows, if ever, we will need to continue to raise additional capital to fund our continued

operations, including our product development and commercialization activities related to our current and future products.

no assurance that additional capital will be available to us on acceptable terms, or at all, or that we will ever generate revenue sufficient

to provide for self-sustaining cash flows.

These circumstances raise substantial doubt about our ability to continue as a going concern.

The consolidated financial statements incorporated by reference in this Report do not include any adjustment that might be necessary if

the Company is unable to continue as a going concern.

Because of the numerous risks

and uncertainties associated with our business, we are unable to predict the timing or amount of increased expenses or when or if we will

be able to achieve or maintain profitability.

Additionally, even if we are able to generate revenue from Proclarix, or ENTADFI, we may

not become profitable.

If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable

to continue our operations at planned levels andf10.

may be forced to reduce our operations.

or debt financings, third-party (including government) funding and to rely on third-party resources for marketing and distribution arrangements,

as well as other collaborations, strategic alliances and licensing arrangements, or any combination of these approaches, to support our

Some recent key developments affecting our business

include the following:

On January 23, 2024, the Company issued a

non-convertible debenture (the “Altos Debenture”) in the principal sum of $5.0 million, in connection with a Subscription

Agreement, to Altos Ventures, a stockholder of the Company and related party (“Altos”).

The Altos Debenture was originally

payable in full upon the earlier of (i) the closing under the Subscription Agreement and (ii) June 30, 2024.

2024, the Altos Debenture was amended to extend the maturity date to the earlier of (i) the closing under the Subscription Agreement

and (ii) October 31, 2024 (the “Altos Amendment”).

On September 24, 2024, upon obtaining stockholder approval and pursuant

to the Subscription Agreement, dated December 18, 2023, the Company issued an aggregate of 513,424 units (the “Units”) to

Altos, each Unit comprised of (i) one share of Common Stock and (ii) one pre-funded warrant (collectively, the “Altos Warrants”)

to purchase 0.3 shares of Common Stock at an exercise price of $0.04 per share.

The Altos Warrants were immediately exercisable at any

time on or after the date of issuance and had a term of exercise of five (5) years from the date of issuance.

The outstanding debt, as

per the Altos Debenture agreement, is considered settled through the unit issuance.

Additional shares are issuable to Altos to the

extent Altos continues to hold Common Stock included in the Units and if the VWAP during the 270 days following closing is less than $10.00,

as set forth in the Subscription Agreement.

On September 24, 2024, Altos exercised all the

Altos Warrants, and the Company issued to Altos an additional 154,027 shares of Common Stock upon such exercise.

Amended Forbearance Agreement

On September 19, 2024, the Company entered into

an Amended and Restated Forbearance Agreement with Veru (the “Amended and Restated Forbearance Agreement” or “A&R

Forbearance Agreement”), which amends and restates the Original Forbearance Agreement in its entirety.

Pursuant to the A&R Forbearance

Agreement, Veru will forbear from exercising its rights under both April Veru Note and the September Veru note, subject to the terms and

conditions set forth below.

The A&R Forbearance Agreement extends the

due date for the April 2024 and September 2024 Veru Notes until the earlier to occur of (i) June 30, 2025 or (ii) the occurrence of any

Event of Default.

The Amended and Restated Forbearance Agreement also effected certain modifications to the payment terms in the Original

Forbearance Agreement and amended certain terms of the September Veru Note as summarized below.

Pursuant to the A&R Forbearance Agreement,

the Company agreed to make the following required payments (the “Required Payments”) during the April 2024 Forbearance Period

first to accrued and unpaid interest under the April Veru note and then any remainder to the outstanding principal amount of the April

Interest at the rate of 10% per annum shall accrue on any unpaid principal balance of the April Veru Note commencing on April 20, 2024 through the date that the outstanding principal balance under the April Veru Note is paid in full;

Monthly payments equal to 25% (increased from 15% in the Original Forbearance Agreement) of (i) the monthly cash receipts of Proteomedix for the licensing or sale of any products or services, (ii) monthly cash receipts of the Company or any of its subsidiaries for the sales of Proclarix anywhere in the world, and (iii) monthly cash receipts of the Company or any of its subsidiaries for milestone payments or royalties from LabCorp cash receipts of the Company of its subsidiaries from certain sale or licensing revenues or payments (the “Ordinary Cash Revenue”), which increased amount shall begin October 20, 2024 for cash receipts in September 2024;

Payment of 20% (increased from 10% in the Original Forbearance Agreement) of the net proceeds from certain financing or other transactions outside the ordinary course of business completed by the Company or any of its subsidiaries during the April 2024 Forbearance Period, which increased amount will begin for any net proceeds received after September 19, 2024;

The remaining balance of the April Veru Note will be due at the end of the April 2024 Forbearance Period.

and Veru also agreed to the following amendments to the September Veru Note in the A&R Forbearance Agreement:

As noted above, an extension of the maturity date to June 30, 2025;

The accrual of interest at the rate of 10% per annum on any unpaid principal balance of the September Veru Note commencing on October 1, 2024 through the date that the outstanding principal balance under the September Veru Note is paid in full;

Any amounts owed on the September Veru Note, including but not limited to unpaid principal and accrued interest, will be paid in cash or, upon the mutual written consent of Veru and the Company, in shares of the Company’s Common Stock or a combination of cash and the Company’s Common Stock;

Following full repayment of all principal and interest under the April Veru Note, the Company will make the Required Payments first towards accrued and unpaid interest under the September Veru Note and then towards the remaining principal balance payable under the September Veru Note;

November Amended and Restated Forbearance Agreement

On November 26, 2024, the Company entered into

another Amended and Restated Forbearance Agreement with Veru (the “November Amended and Restated Forbearance Agreement” or

“November A&R Forbearance Agreement”), which amends and restates certain terms of the A&R Forbearance Agreement.

to the November A&R Forbearance Agreement, Veru agreed to waive the due date for payment of applicable Cash Receipt Payments (as such

term is defined in the A&R Forbearance Agreement) generated in October 2024 until the Company receives funds of at least $97,000 pursuant

to its equity line of credit facility with Keystone Capital Partners LLC.

In exchange, the Company agreed to increase its payments to

be made to Veru out of future financing and strategic transactions through June 30, 2025, from 20% to 25% of net proceeds generated from

such transactions.

All other terms of the A&R Forbearance Agreement with Veru remain the same.

March 2025 Amended and Restated Forbearance

Agreement with Veru on April 2025

On March 31, 2025, Veru

and the Company entered into a waiver agreement, pursuant to which Veru agreed to waive and extend the date for payment of the April 2024

Promissory Note to April 14, 2025.

On April 23, 2025, Veru

and the Company entered into a limited waiver agreement, pursuant to which Veru agreed to waive and extend the date for payment of the

April 2024 Promissory Note to June 30, 2025.

Warrant Inducement

On July 11, 2024, the Company entered into the

Inducement Letters with certain holders of existing preferred investment options to purchase shares of the Company’s common stock

at the original exercise prices of $101.84 and $43.60 per share, issued on August 11, 2022 and August 2, 2023, respectively, pursuant

to which the holders agreed to exercise for cash their Existing PIOs to purchase an aggregate of 186,466 shares of the Company’s

common stock, at a reduced exercise price of $6.00 per share, in consideration for the Company’s agreement to issue new preferred

investment options (the “Inducement PIOs”) to purchase up to an aggregate of 559,397 shares of the Company’s common

Of the 559,397 PIOs issued, 186,465 have a contractual term of 5 years, while the remaining 372,932 have a contractual term of

Aside from the contractual terms, the Inducement PIOs have substantially the same terms as the Existing PIOs.

On July 11, 2024, the Company consummated the

transaction contemplated by the Inducement Letters upon unanimous written consent of the Board (the “Warrant Inducement”).

The Company received aggregate net proceeds of approximately $0.9 million from the exercise of the Existing PIOs by the holders and the

sale of the Inducement PIOs, after deducting placement agent fees and other offering expenses payable by the Company.

The Company agreed to file a registration statement

covering the resale of the Inducement PIO Shares issued or issuable upon the exercise of the Inducement PIOs (the “Resale Registration

Statement”) within 30 days after the date of the Inducement Letter and to use commercially reasonable efforts to cause such Resale

Registration Statement to be declared effective by the SEC within 60 days following the date of the Inducement Letter (or within 90 days

following the date of the Inducement Letter in the case of full review of the Resale Registration Statement by the SEC).

The Company engaged H.C.

Wainwright & Co.,

LLC (“Wainwright”) to act as its exclusive placement agent in connection with the transactions summarized herein and will

pay Wainwright a cash fee equal to 7.5% of the gross proceeds received form the exercise of the Existing PIOs as well as a management

fee equal to 1.0% of the gross proceeds from the exercise of the Existing PIOs.

The Company also agreed to reimburse Wainwright for its

expenses in connection with the exercise of the Existing PIOs and the issuance of the Inducement PIOS, up to $50,000 for fees and expenses

of legal counsel and other out-of-pocket expenses and agreed to pay Wainwright for non-accountable expenses in the amount of $35,000.

The Company also agreed to issue to Wainwright or its designees warrants (the “Placement Agent Warrants”), and as such shares

of common stock issuable thereunder, (the “Placement Agent Warrant Shares”) to purchase (i) 13,054 shares of common stock

which will have the same terms as the Inducement PIOs except for an exercise price equal to $7.50 per share and a term of five (5) years

following the date of stockholder approval and (ii) upon any exercise for cash of the Inducement PIOs, 7.5% of the aggregate exercise

price and that number of shares of common stock equal to 7.0% of the aggregate number of such shares of common stock underlying the Inducement

PIOs that have not been exercised, which will have substantially the same terms as the Placement Agent Warrants.

The Company evaluated the terms of the Inducement

PIOs and the Wainwright Inducement Warrants (collectively, the “August 2023 Inducement Warrants”), and determined that they

should be classified as equity instruments based upon accounting guidance provided in ASC 480 and ASC 815-40.

The Company also evaluated

the unissued shares held in abeyance, which represent a prepaid forward contract, and determined that it is an equity instrument based

on the guidance provided in ASC 480 and ASC 815-40.

The Warrant Inducement, which resulted in the

lowering of the exercise price of the Existing PIOs and the issuance of the Inducement PIOs, is considered a modification of the Existing

PIOs under the guidance of Accounting Standards Update (“ASU”) No.

2021-04, Issuer’s Accounting for Certain Modifications

or Exchanges of Equity Classified Written Call Options .

The modification is consistent with the “Equity Issuance” classification

under that guidance as the reason for the modification was to induce the holders of the Existing PIOs to cash exercise their warrants,

resulting in the imminent exercise of the Existing PIOs, which raised equity capital and generated net proceeds for the Company of approximately

$0.9 million.

As the Existing PIOs and the Inducement PIOs 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 modification of approximately $1.9

million as an equity issuance cost.

In addition, the change in fair value of the contingent

warrant liability associated with 3,729 of the August 2022 Contingent Warrants and 7,459 of the August 2023 Contingent Warrants was decreased

to $0 upon the agreement with Wainwright that all prior contingent warrants were no longer issuable or due upon the Warrant Inducement

The fair value of the contingent warrant liability of approximately $2,700 was derecognized as of the settlement date, with

the corresponding amount, representing the fair value of the Wainwright Inducement Warrants, was recognized as additional paid-in capital.

The Company evaluated the terms of the 39,158

Inducement Contingent Warrants (equivalent to 7.0% of the aggregate number of such shares of common stock underlying the Inducement PIOs

that have not been exercised), which are issuable upon a future inducement, and determined that they should be classified as a liability

based upon accounting guidance provided in ASC 815-40.

Since the Inducement Contingent Warrants are a form of compensation to Wainwright,

the Company recorded the value of the liability of approximately $158,000 as a reduction of additional paid in capital, with subsequent

changes in the value of the liability recorded in other income (expense) in the accompanying statements of operations.

Reverse Stock Split

On September 24, 2024, the Company effected a

Reverse Stock Split of all shares of its issued and outstanding Common Stock at a ratio of one-for-forty (1:40).

The Company accounted

for the reverse stock split on a retrospective basis pursuant to Accounting Standards Codification

(“ASC”) 260, Earnings Per Share .

All issued and outstanding common stock, common stock warrants, and share-based

awards’ exercise prices and per share data have been adjusted in the consolidated financial statements, on a retrospective basis,

to reflect the reverse stock split for all periods presented.

The number of authorized shares and par value of the

preferred stock and common stock were not adjusted because of the reverse stock split.

Conversion of Series A Preferred Stock

On September 24, 2024, the Company issued an aggregate

of 142,749 shares of Common Stock to Veru Inc., following Veru’s election to convert all the 3,000 shares of Series A preferred

stock (“Series A Preferred Stock”) of the Company issued to it on September 29, 2023.

The Series A Preferred Stock was originally

issued to Veru pursuant to an Amendment to the Asset Purchase Agreement, dated September 29, 2023, between the Company and Veru.

Conversion of Series B Preferred Stock

On September 24, 2024 the Company issued an aggregate

of 6,741,820 shares of Common Stock (the “PMX Converted Shares”) to certain stockholders of the Company who were formerly

holders of outstanding capital stock or convertible securities (the “Sellers”) of PMX, pursuant to the automatic conversion

of all the 2,696,729 shares of Series B preferred stock (“Series B Preferred Stock”) of the Company, which Series B Preferred

Stock was originally issued to the Sellers on December 15, 2023.

The Series B Preferred Stock was originally issued to the Sellers pursuant

to a Share Exchange Agreement, dated December 15, 2023, between the Company, PMX, and the Sellers (the “Share Exchange Agreement”),

and was subject to the automatic conversion following (i) the Company’s receipt of stockholder approval for the issuance of the

PMX Converted Shares and ii) the effectiveness of the Reverse Stock Split, which provided for a sufficient number of authorized shares

to issue the PMX Converted Shares, as contemplated by the Share Exchange Agreement.

Series C Preferred Stock

On October 1, 2024, the Board authorized the Company

to create a series of 10,000 shares of preferred stock designated as “Series C convertible Preferred Stock”, with a par value

of $0.00001, pursuant to the certificate of designations.

At any time after the initial issuance date of Series C convertible Preferred

Stock, each Preferred Share shall be convertible into validly issued, fully paid and non-assessable shares of Common Stock.

of Series C Preferred Stock are entitled to dividends, on an as-if converted basis, equal to and in the same form as dividends actually

paid on shares of Common Stock, when and if actually paid.

Each holder is entitled to convert any portion of the outstanding Preferred

Shares held by such holder into validly issued, fully paid and non-assessable Conversion shares at the Conversion Rate, which can be determined

by dividing (x) the Conversion Amount of such Preferred Share by (y) the Conversion Price, $4.5056, subject to adjustment as provided

in the Certificate of Designations.

As of May 30, 2025, an aggregate of 2,130 Series C Preferred Stock was outstanding, after redemptions

of 1,369 shares for an aggregate of $1.71 million.

An additional amount of $150,531 is due to the PIPE Series C investors for 120 Series

C preferred shares that remain due from the most recent ELOC draw.

These 120 shares remain subject to future redemption.

PIPE Financing and ELOC

On October 1, 2024, the Board authorized the Company

to create a series of 10,000 shares of preferred stock designated as “Series C convertible Preferred Stock”, with a par value

of $0.00001, pursuant to the certificate of designations.

At any time after the initial issuance date of Series C convertible Preferred

Stock, each Preferred Share shall be convertible into validly issued, fully paid and non-assessable shares of Common Stock.

of Series C Preferred Stock are entitled to dividends, on an as-if converted basis, equal to and in the same form as dividends actually

paid on shares of Common Stock, when and if actually paid.

In addition, from and after the occurrence and during the continuance of any

Triggering Event, dividends (“Default Dividends”) will accrue on the Stated Value of each Preferred Share at a rate of fifteen

percent (15.0%) (the “Default Rate”) per annum.

Each holder is entitled to convert any portion of the outstanding Preferred

Shares held by such holder into validly issued, fully paid and non-assessable Conversion shares at the Conversion Rate, which can be determined

by dividing (x) the Conversion Amount of such Preferred Share by (y) the Conversion Price, $4.5056, subject to adjustment as provided

in the Certificate of Designations.

After the Stockholder Approval Date, if a Triggering

Event occurs and is continuing at any time after the earlier of the holders’ receipt of a Triggering Event Notice and such holder

becoming aware of such Triggering Event (such earlier date, the “Alternate Conversion Right Commencement Date”) and ending

on the twentieth (20 th ) Trading Day after the later of (x) the date of such Triggering Event is cured and (y) such holder’s

receipt of a Triggering Event Notice (such ending date, the “Alternate Conversion Right Expiration Date”), and each such period,

an “Alternate Conversion Right Period”), such holder may, at such holder’s option, by delivery of a Conversion Notice

to the Company (the date of any such Conversion Notice, each an “Alternate Conversion Date”), convert all, or any number of

Preferred Shares held by such holder into shares of Common Stock at the Alternate Conversion Price (each, an “Alternate Conversion”).

Alternate Conversion Price means, with respect to any Alternate Conversion that price will be the lowest of (i) the applicable Conversion

Price as in effect on the applicable Conversion Date of the applicable Alternate Conversion, and (ii) the greater of (x) the Floor Price

and (y) 80% of the lowest VWAP of the Common Stock during the five (5) consecutive Trading Day period ending and including the Trading

Day immediately preceding the delivery or deemed delivery of the applicable Conversion Notice (such period, the “Alternate Conversion

Measuring Period”).

At any time, the Company has the right to redeem

in cash all, but not less than all, of the Preferred Shares then outstanding at a price (the “Company Optional Redemption Price”)

equal to 125% of the greater of (i) the Conversion Amount being redeemed and (ii) the product of (1) the Conversion Rate with respect

to the Conversion Amount being redeemed multiplied by (2) the greatest closing sale price of the Company’s Common Stock on any Trading

Day during the period commencing on the date immediately preceding the date the Company notifies the holders of its elections to redeem

and the date the Company makes the entire payment required.

Upon the occurrence of a Bankruptcy Triggering Event, the Company will immediately

redeem, in cash, each of the Preferred Shares then outstanding at a redemption price equal to the greater of (i) the product of (A) the

Conversion Amount to be redeemed multiplied by (B) 125% and (ii) the product of (X) the Conversion Rate with respect to the Conversion

Amount in effect immediately following the date of initial public announcement of such Bankruptcy Triggering Event multiplied by (y) the

product of (1) 125% multiplied by (2) the greatest closing sale price of the Common Stock on any Trading Day during the period commencing

on the date immediately preceding such Bankruptcy Triggering Event and ending on the date the Company pays the entire payment required.

In no event may any Preferred Shares be converted

(or Warrants be exercised) and shares of Common Stock be issued to any holder if after giving effect to the issuance of shares of Common

Stock upon such conversion of the Preferred Shares (or exercise of the Warrants), the holder (together with its affiliates, if any) would

beneficially own more than 4.99% of the outstanding shares of Common Stock, which we refer to herein as the “PIPE Blocker”.

The PIPE Blocker may be raised or lowered to any percentage not in excess of 9.99% at the option of the applicable holder of the Preferred

Shares (or Warrants), except that any raise will only be effective upon 61-days’ prior notice to the Company.

On October 2, 2024, the Company entered into,

and sold, to six institutional investors (collectively, the “PIPE Investors”), pursuant to the securities purchase agreement

an aggregate of 3,499 shares of Series C Preferred Stock which includes an issuance of 840 shares of Series C Preferred Stock to the lead

investor in consideration for the PIPE Investors’ irrevocable commitment to purchase shares of the Series C Preferred Stock, and

warrants to purchase 591,856 shares of Common Stock, (together, the “PIPE Securities”) for aggregate net cash proceeds to

the Company of $1.9 million.

The exercise price of the warrants is $4.38, and the warrants are exercisable six months after the issuance

date and expire on the third anniversary of the initial exercisability date.

On October 2, 2024, the Company entered into a

Common Stock ELOC Purchase Agreement relating to a Committed Equity Facility with an institutional investor (the “ELOC Purchaser”),

whereby the Company may offer and sell, from time to time at its sole discretion, and whereby the ELOC Purchaser has committed to purchase,

up to $25.0 million of the Company’s newly issued Common Stock, subject to certain limitations.

Concurrently with entering into

the ELOC Purchase Agreement, the Company also entered into a registration rights agreement with the ELOC Purchaser, pursuant to which

it agreed to provide the ELOC Purchaser with certain registration rights related to the shares issued under the ELOC Purchase Agreement

(the “ELOC Registration Rights Agreement”).

In no event will the Company issue to the Purchaser under the ELOC Purchase Agreement

more than 1,658,525 shares of Common Stock, representing 19.99% of the total number of shares of Common Stock outstanding immediately

prior to the execution of the Common Stock Purchase Agreement (the “Exchange Cap”), unless (i) the Company obtains the approval

of the issuance of such shares by its stockholders in accordance with the applicable stock exchange rules or (ii) sales of Common Stock

are made at a price equal to or in excess of the lower of (A) the closing price immediately preceding the delivery of the applicable notice

to the Purchaser and (B) the average of the closing prices of the Common Stock for the five business days immediately preceding the delivery

of such notice, such that the sales of such Common Stock to the Purchaser would not count toward the Exchange Cap because they are “at

market” under applicable stock exchange rules.

The Company may not issue or sell any shares of

Common Stock to the ELOC Purchaser under the Common Stock Purchase Agreement, if it would result in the ELOC Purchaser beneficially owning

more than 4.99% of the outstanding shares of Common Stock (the “ELOC Blocker”).

The ELOC Blocker may be raised or lowered

to any other percentage not in excess of 9.99% at the option of the ELOC Purchaser, except that any raise will only be effective upon

61 days’ prior notice to the Company.

Potential Ocuvex Transaction

On April 1, 2025, the

Company and Ocuvex Therapeutics, Inc.

signed a Non-Binding Letter of Intent contemplating a potential business combination transaction

The Company and Ocuvex intend to continue negotiations to enter into a definitive agreement.

Upon closing of the proposed

transaction, the Company will acquire all the issued and outstanding equity interests of Ocuvex in exchange for newly issued shares of

common stock of the Company.

Immediately following the closing of the proposed transaction, the pre-closing Ocuvex equity holders will

own approximately 90% of the equity interests in the combined company.

Certain Significant Relationships

We have entered into grant,

license and collaboration arrangements with various third parties as summarized below.

For further details regarding these and other agreements,

see the section titled “Business - Intellectual Property” and Note 6 to our consolidated financial statements included elsewhere

in this Report.

March 23, 2023, Proteomedix entered into a license agreement with Labcorp pursuant to which Labcorp has the exclusive right to develop

and commercialize Proclarix and other products developed by Labcorp using Proteomedix’s intellectual property covered by the license,

in the United States (“Licensed Products”).

In consideration for granting Labcorp an exclusive license, Proteomedix received

an initial license fee in the mid-six figures upon signing of the contract.

Additionally, Proteomedix is entitled to royalty payments

on the net sales recognized by Labcorp of any Licensed Products plus milestone payments as follows:

the first sale of Proclarix as a laboratory developed test, Labcorp will pay an amount in the mid-six figures;

Labcorp achieves a certain amount in the low seven figures in net sales of the Licensed Products, Labcorp will pay Proteomedix an

amount in the low seven figures;

a certain amount in the mid-seven figures in net sales of Licensed Products, Labcorp will pay Proteomedix an amount in the low seven

is wholly responsible for the cost, if any, of research, development and commercialization of Licensed Products in the United States

but has the right to offset a portion of those costs against future royalty and milestone payments.

Additionally, Labcorp may deduct

royalties or other payments made to third parties related to the manufacture or sale of Licensed Products up to a maximum amount of any

royalty payments due to Proteomedix.

Ology Agreement (which

was later acquired by National Resilience, Inc.)

The Company entered into

a Master Services Agreement (“Ology MSA”), dated July 19, 2019, with Ology, Inc.

(“Ology”) 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.

The Company entered into two

Project Addendums as of December 31, 2023.

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 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%.

2023 and 2022, the Company and Ology entered into contract amendments that resulted in a net decrease in the Company’s obligations

of approximately $137,000.

For additional details regarding

our relationship with Ology, see the section entitled “Business - Manufacturing and Supply” and Note 6 to our consolidated

financial statements included elsewhere in this Report.

Cincinnati Children’s Hospital Medical

Center Agreement

On June 1, 2021, we entered

into an exclusive, worldwide license agreement with Children’s Hospital Medical Center, d/b/a Cincinnati Children’s Hospital

Medical Center, or CHMC, which we refer to as the CHMC Agreement, pursuant to which we obtained the right to develop and commercialize

certain CHMC patents and related technology directed at a virus-like particle (VLP) vaccine platform that utilizes nanoparticle delivery

technology, which may have potential broad application to develop vaccines for multiple infectious diseases.

However, as Onconetix has

now deprioritized its infectious disease vaccine programs based on a change in clinical focus, we are exploring ways in which CHMC’s

VLP platform can be used in therapeutic and diagnostic applications in oncology.

Under the CHMC Agreement,

we agreed to pay CHMC certain license fees, deferred license fees, development milestone fees, and running royalties beginning on the

first net sale (among others).

For additional details regarding our relationship with CHMC, see the section entitled “Business -

Intellectual Property - Exclusive License Agreement with Children’s Hospital Medical Center, d/b/a Cincinnati Children’s Hospital

Medical Center” and Notes 6 and 10 to our consolidated financial statements included elsewhere in this Report.

The CHMC license

includes the following patents:

Application No.

Granted Claim Type

Compositions of the vaccine/vaccine platform

Method of treatment

Compositions of the vaccine platform

Pending applications

in Canada, China,

EU, Hong Kong and

(filed 2/16/2021)

[February 2042] #

(filed 3/17/2021)

[March 2042] #

* Projected expiration if patent

20 years from earliest non-provisional application filing date.

# Non-provisional application

not yet filed.

Expiration projected 21 years from provisional application filing date.

Dependent on timely conversion to non-provisional

application and issuance of patent.

This is a pending application.

Claim type will

be determined after U.S.

prosecution is complete.

The claim type sought includes compositions of the vaccine and vaccine platform.

AbVacc Co-Development

On February 1, 2023, the

Company entered into a co-development agreement with AbVacc, Inc., for the purpose of conducting research aimed at co-development of specific

vaccine candidates, including monkeypox and Marburg virus disease with the potential to expand to others using the Norovirus nanoparticle

platform (“Co-Development Project”), and to govern the sharing of materials and information, as defined in the agreement,

for the Co-Development Project.

Under the agreement, AbVacc and the Company will collaborate, through a joint development committee, to

establish and implement a development plan or statement of work for each Co-Development Project targeted product.

Under the co-development

agreement, either the Company or AbVacc, whichever party is the primary sponsor of any resulting product (as defined in the agreement),

will be obligated to compensate the other party for certain milestone payments that would range between $2.1 million and $4.75 million,

plus royalties of between 2% to 4%.

The term of the agreement is three years from the effective date, unless previously terminated by

either party, in accordance with the agreement.

However, as Onconetix has now deprioritized its infectious disease vaccine programs, this

agreement will have little strategic significance going forward.

We have entered into grant, license and collaboration

arrangements with various third parties as summarized below.

For further details regarding these and other agreements, see the section

titled “Business - Intellectual Property” and Note 6 to our consolidated financial statements included elsewhere in this Report.

Laboratory Corporation of America

On March 23, 2023, Proteomedix entered into a

license agreement with LabCorp pursuant to which LabCorp has the exclusive right to develop and commercialize Proclarix and other products

developed by LabCorp using Proteomedix’s intellectual property covered by the license, in the United States (“Licensed Products”).

In consideration for granting LabCorp an exclusive license, Proteomedix received an initial license fee in the mid-six figures upon signing

of the contract.

Additionally, Proteomedix is entitled to royalty payments between 5% and 10% on the net sales recognized by LabCorp of

any Licensed Products plus milestone payments as follows:

after the first sale of Proclarix as a laboratory developed test, LabCorp will pay an amount in the mid-six figures;

after LabCorp achieves a certain amount in the low seven figures in net sales of the Licensed Products, LabCorp will pay Proteomedix an amount in the low seven figures;

after a certain amount in the mid-seven figures in net sales of Licensed Products, LabCorp will pay Proteomedix an amount in the low seven figures.

A total of $2.5 million in milestone payments

are payable under the license agreement.

An additional $0.5 million was paid to Proteomedix as an initial license fee in 2023.

LabCorp is wholly responsible for the cost, if

any, of research, development and commercialization of Licensed Products in the United States but has the right to offset a portion of

those costs against future royalty and milestone payments.

Additionally, LabCorp may deduct royalties or other payments made to third

parties related to the manufacture or sale of Licensed Products up to a maximum amount of any royalty payments due to Proteomedix.

The license agreement and related royalty payment

provisions expire during 2038, which approximates the expiration of the last patent covered by the license agreement.

LabCorp has the

right to terminate the license agreement for any reason by providing 90 days written notice to Proteomedix.

Either party may terminate

the license agreement due to a material breach of the terms of the license agreement with 30 days’ notice, provided such breach

is not cured within the foregoing 30-day period.

Finally, Proteomedix may terminate the license agreement with 60 days’ notice in

the event LabCorp fails to make any undisputed payment due, provided that LabCorp does not remit the payment within the foregoing 60-day

Services Agreement

On July 21, 2023, the Company,

entered into a Licensing and Services Master Agreement (“Master Services Agreement”) and a related statement of work with

a vendor, pursuant to which the vendor was to provide to the Company commercialization services for the Company’s products, including

recruiting, managing, supervising and evaluating sales personnel and providing sales-related services for such products, for fees totaling

up to $29.1 million over the term of the statement of work.

The statement of work had a term through September 6, 2026, unless earlier

terminated in accordance with the Master Services Agreement and the statement of work.

On July 29, 2023, a second statement of work was

entered into with the same vendor for certain subscription services providing prescription market data access to the Company.

under the second statement of work totaled approximately $800,000, and the term was through July 14, 2025.

On October 12, 2023, the Company

terminated the Master Services Agreement and the statements of work.

The Company recorded approximately $3.1 million in expense related

to this contract during the year ended December 31, 2023, which is included in selling, general and administrative expense in the accompanying

consolidated statements of operations and comprehensive loss.

The Company had approximately $1.8 million recorded in related accounts

payable as of December 31, 2023, which includes amounts due for early termination of the contract.

See Note 6 to our consolidated financial

statements included elsewhere in this Report.

On July 21, 2023, the Company, entered into a

Licensing and Services Master Agreement (“Master Services Agreement”) and a related statement of work with IQVIA, pursuant

to which IQVIA was to provide to the Company commercialization services for the Company’s products, including recruiting, managing,

supervising and evaluating sales personnel and providing sales-related services for such products, for fees totaling up to $29.1 million

over the term of the statement of work.

The statement of work had a term through September 6, 2026, unless earlier terminated in accordance

with the Master Services Agreement and the statement of work.

On July 29, 2023, a second statement of work was entered into with IQVIA

for certain subscription services providing prescription market data access to the Company.

The fees under the second statement of work

totaled approximately $800,000, and the term was through July 14, 2025.

On October 12, 2023, the Company terminated the Master Services

Agreement and the statements of work.

The Company recorded net credits of approximately $0.5 million related to this contract during the

year ended December 31, 2024, which is included in selling, general and administrative expense in the accompanying consolidated statements

of operations and comprehensive loss.

The Company had approximately $1.1 million and $1.8 million recorded in related accounts payable

as of December 31, 2024 and 2023, respectively, which includes amounts due for early termination of the contract.

See Note 6 to our consolidated

financial statements included elsewhere in this Report.

On January 15, 2025, the Company and IQVIA entered

into a Settlement Agreement (the “Settlement Agreement”) concerning potential termination payments under the Master Services

Agreement and statements of work.

Pursuant to the Settlement Agreement, the Company agreed to pay to IQVIA an aggregate of $150,000 in

exchange for a mutual release of all claims in connection with the Master Services Agreement.

As a result of the Settlement Agreement,

the Company will record an adjustment of approximately $(0.9) million in accounts payable.

Components of Results of Operations

Selling, General and Administrative Expenses

Selling, general and administrative

expenses consist principally of commercialization activities , payroll, and personnel expenses,

including salaries and bonuses, benefits and stock-based compensation expenses, professional fees for legal, consulting, accounting and

tax services, information technology costs, costs incurred with respect to acquisitions and potential acquisitions, and other general

operating expenses.

We anticipate that our selling,

general and administrative expenses will continue to increase when compared to historical levels as a result of our dedication to commercialization

of our products approved for sale, which includes.

Proclarix in Europe and ENTADFI in the

U.S (if we decide to resume its commercialization), costs associated with integration of these assets and commercial operations, as well

as expanded infrastructure and higher consulting, legal and accounting services costs associated with complying with the applicable stock

exchange and the SEC requirements, investor relations costs and director and officer insurance premiums associated with being a public

Selling, general and administrative expenses consist

principally of commercialization activities , payroll, and personnel expenses, including salaries

and bonuses, benefits and stock-based compensation expenses, professional fees for legal, consulting, accounting and tax services, information

technology costs, costs incurred with respect to acquisitions and potential acquisitions, and other general operating expenses.

We anticipate that our selling, general and administrative

expenses related to Proteomedix will increase when compared to historical levels as a result of efforts to commercialize Proclarix, and

costs associated with integration of Proteomedix’s operations.

Research and Development Expenses

Substantially all of our

research and development expenses consist of expenses incurred in connection with the development of our product candidates.

These expenses

historically have included fees paid to third parties to conduct certain research and development activities on our behalf, consulting

costs, costs for laboratory supplies, product acquisition and license costs, certain payroll, and personnel-related expenses, including

salaries and bonuses, employee benefit costs and stock-based compensation expenses for our research and product development employees.

We expense both internal and external research and development expenses as they are incurred.

We do not allocate our costs

by product candidate, as a significant amount of research and development expenses include internal costs, such as payroll and other personnel

expenses, laboratory supplies, and external costs, such as fees paid to third parties to conduct research and development activities on

our behalf, that are not tracked by product candidate.

expect our research and development expenses to increase once research and development activities are resumed.

Predicting the timing

or cost to complete our clinical programs for future product candidates, or validation of our commercial manufacturing and supply processes

is difficult and delays may occur because of many factors, including factors outside of our control, such as regulatory approvals.

we are unable to predict when or if our future product candidates will receive regulatory approval with any certainty.

Historically, substantially all of our research

and development expenses consisted of expenses incurred in connection with the development of our product candidates.

These expenses historically

have included fees paid to third parties to conduct certain research and development activities on our behalf, consulting costs, costs

for laboratory supplies, product acquisition and license costs, certain payroll, and personnel-related expenses, including salaries and

bonuses, employee benefit costs and stock-based compensation expenses for our research and product development employees.

We expense both

internal and external research and development expenses as they are incurred.

We do not allocate our costs by product candidate,

as a significant amount of research and development expenses include internal costs, such as payroll and other personnel expenses, laboratory

supplies, and external costs, such as fees paid to third parties to conduct research and development activities on our behalf, that are

not tracked by product candidate.

As discussed above, we have terminated the vaccine

programs that substantially all of our research and development historically related to.

We do not anticipate incurring significant research

and development expenses in the near future, unless we are able to resume such activities.

Predicting the timing or cost to complete our

clinical programs for future product candidates, or validation of our commercial manufacturing and supply processes is difficult and delays

may occur because of many factors, including factors outside of our control, such as regulatory approvals.

Furthermore, we are unable

to predict when or if our future product candidates will receive regulatory approval with any certainty.

Other Income (Expense)

Other income (expense) is

comprised of interest expense on notes payable, the change in fair value of financial instruments that are recorded as liabilities, which

includes the subscription agreement liability, contingent warrant liability, and other financing-related costs.

Other income (expense) is comprised of interest

expense on notes payable, the change in fair value of financial instruments that are recorded as liabilities, which includes the related

party subscription agreement liability and the contingent warrant liability, and other financing-related costs.

Results of Operations

3 unchanged sentences

Cost of revenue

Gross profit (loss)

Operating expenses

2 unchanged sentences

Impairment of ENTADFI assets

(11,156,630 )

Impairment of Goodwill

Impairment of Intangibles

Impairment of deposit on asset purchase agreement

6 unchanged sentences

Loss on extinguishment of note payable

Interest expense – related party

Interest expense

Interest Income

Change in fair value of subscription agreement liability

Change in fair value of contingent warrant liability

Total other income (expense)

Change in fair value of contingent warrant liabilities

Total other (expense)

Loss before income taxes

6 unchanged sentences

(21,281,329 )

Deemed dividend Series C preferred stock

Net loss applicable to common stockholders’

$ (58,897,427 )

$ (37,409,694 )

(21,487,733 )

Revenue, Cost of Revenue, and Gross Margin

For the year ended December

31, 2023, the Company had less than $0.1 million of revenue, which was attributable to Proteomedix revenue recorded from the date of acquisition

through December 31, 2023.

Cost of revenue of approximately $1.2 million, and the resulting negative margin, is attributable to costs

incurred on Proteomedix revenue including amortization of the product rights intangible asset of approximately $31,000, and an impairment

of inventory related to ENTADFI of approximately $1.2 million.

The Company did not have any revenue during the year ended December 31,

For the year ended December 31, 2024, the Company

had $2.5 million in revenue, which was attributable to Proteomedix revenue.

Cost of revenue of approximately $1.5 million, and the resulting

positive margin, is attributable to costs incurred on Proteomedix revenue including amortization of the product rights intangible asset

of approximately $457,000, and standard cost of production and sales of $1.01 million.

Selling, General and Administrative Expenses

For the year ended December

31, 2023, selling, general and administrative expenses increased by approximately $5.4 million compared to 2022.

The increase was mainly

due to approximately $4.7 million in expenses incurred related to commercialization activities and

an increase in professional services of approximately $1.7 million, which is comprised primarily of audit, accounting, and legal

services, a significant portion of which were in support of the Company’s acquisition activities.

In addition, the Company incurred

approximately $1.7 million related to the acquisition of Proteomedix, which consists primarily of transaction costs and Proteomedix’s

selling, general and administrative expenses since the acquisition date.

The Company also recorded an impairment of long-lived assets

of $0.3 million during 2023.

These increases were offset by a decrease in employee and director

compensation and benefits of approximately $1.0 million, primarily due to a decrease in stock-based compensation expense.

Also, the Company

recorded approximately $1.3 million of expense in 2022 related to the settlement agreement with Boustead and approximately $0.3 million

for a non-recurring termination fee to the Company’s former underwriter, for early termination of the agreement with that underwriter,

with no related expenses in 2023.

The remaining decrease is due to a decrease in various business activities that occurred during the

last half of the year related to the Company’s change in business strategy, including decreases in business

advisory services, patent costs, travel related expenses, and rent expense, totaling $0.4 million.

For the year ended December 31, 2024, selling,

general and administrative expenses decreased by approximately $3.5 million to $11.2 million compared to $14.8 million in 2023.

was mainly due to approximately $1.3 million in expense reduction due to the halting of most of operations in late 2023.

the Company incurred approximately $2.2 million related to the acquisition of Proteomedix, which consists primarily of transaction costs

and Proteomedix’s selling, general and administrative expenses since the acquisition date.

Research and Development Expenses

For the year ended December

31, 2023, research and development expenses decreased by approximately $2.2 million compared to 2022.

For the year ended December 31, 2024, research

and development expenses decreased by approximately $1.8 million compared to 2023.

was primarily due to the Company’s decision to deprioritize its vaccine programs and focus on commercialization activities, which

occurred during the third quarter of 2023.

This change in business strategy led to a pause on the Company’s clinical and other research

activities, and a resulting decrease of approximately $2.3 million due to decreased costs for related outside services and reduced compensation

This was slightly offset by an increase related to Proteomedix’s research and development activities since the acquisition

date, of approximately $0.1 million.

The Company recorded an impairment

charge of $14.7 million on the assets acquired as part of the ENTADFI acquisition during the fourth quarter of 2023.

In addition, the

Company recorded an impairment charge of $3.5 million on a deposit that was made as part of the WraSer APA.

No such impairments were recorded

Decrease is also attributable due to the halting of research and development programs in late

2023 and offset by the true up of accrual estimates in Q2 2024.

The Company recorded impairment charge of $3.5

million on a deposit that was made as part of the WraSer APA in 2023.

In addition, the Company recorded an impairment charge of $14.7

million on the assets acquired as part of the ENTADFI acquisition during the fourth quarter of 2023.

The Company recorded an impairment of goodwill

related to the PMX acquisition during the year ended December 31, 2024 totaling $32.3 million.

The Company also recorded an impairment

of intangible assets related to the PMX acquisition during the year ended December 31, 2024 totaling $10.3 million.

Other Income (Expense)

Other expense incurred during

the year ended December 31, 2023 increased by approximately $1.4 million compared to 2022 and relates to the change in fair value of the

subscription agreement liability of approximately $0.1 million, $0.7 million of interest expense, primarily incurred on notes payable

issued in April 2023 related to the acquisition of ENTADFI, a loss on extinguishment of a note payable of $0.5 million in connection with

the Veru APA Amendment, and the change in fair value of the contingent warrant liability of approximately $0.1 million.

recorded during the year ended December 31, 2022, relates to the change in fair value of the contingent warrant liability.

Other expense incurred during the year ended December

31, 2024 increased by approximately $1.9 million compared to 2023 and relates to the change in fair value of the subscription agreement

liability of approximately $3.1 million, $0.7 million of interest expense, $0.2 million that is attributable to transaction exchange rate

gains and losses, and offset by the change in fair value of the contingent warrant liability of approximately $1.3 million.

Income Tax Benefit

The Company recorded an income

tax benefit of approximately $13,000 during the year ended December 31, 2023, in connection with the acquisition accounting for the Proteomedix

There was no income tax benefit or expense recorded during the year ended December 31, 2022.

The Company recorded an income tax benefit of

approximately $1.0 million during the year ended December 31, 2024, in connection with the acquisition accounting for the Proteomedix

Liquidity and Capital Resources

The Company’s operating

activities to date have been primarily devoted to seeking licenses, engaging in research and development activities, potential asset and

business acquisitions, and expenditures associated with the commercial launch of ENTADFI.

The Company has financed its operations since

inception primarily using proceeds received from seed investors and proceeds received from its IPO and subsequent debt and equity offerings.

During the year ended December 31, 2022, the Company received an aggregate of approximately $33.1 million in net cash proceeds from its

IPO and two private placements, and during the year ended December 31, 2023, the Company received net proceeds of approximately $2.3 million

in connection with the exercise by an investor of preferred investment options (see Note 9).

In addition, on January 23, 2024, the Company

received net cash proceeds of $4.6 million in exchange for the issuance of a debenture.

The debenture is repayable in full upon the earlier

of (i) the closing of a subscription agreement, which was entered into in connection with the acquisition of Proteomedix, and (ii) June

30, 2024 (see Note 13).

The Company has incurred

substantial operating losses since inception and expects to continue to incur significant operating losses for the foreseeable future.

As of December 31, 2023, the Company had cash of approximately $4.6 million, a working capital deficit of approximately $11.4 million

and an accumulated deficit of approximately $56.8 million.

These factors, along with the

Company’s forecasted future cash flows, indicate that the Company will be unable to meet its contractual commitments and obligations

as they come due in the ordinary course of business, within one year following the issuance of these consolidated financial statements.

The Company will require significant additional capital in the short-term to fund its continuing operations, satisfy existing and future

obligations and liabilities, including the remaining payments due for the acquisition of the ENTADFI assets, payment due on the Debenture,

in addition to funds needed to support the Company’s working capital needs and business activities.

These business activities include

the commercialization of Proclarix and ENTADFI (if we decide to resume its commercialization), and the development and commercialization

of the Company’s future product candidates.

In addition, as discussed more fully in Note 5, if stockholder approval is not obtained

by January 1, 2025 with respect to the Series B Convertible Redeemable Preferred Stock issued in connection with the acquisition of Proteomedix,

these shares become redeemable for cash, and the Company currently does not have sufficient cash to redeem such shares.

Based on the closing

price of $0.166 for the Company’s stock as of April 5, 2024, the Series B Preferred Stock would be redeemable for approximately

$44.8 million.

Management’s plans

for funding the Company’s operations include generating product revenue from sales of Proclarix, which may still be subject to

further successful commercialization activities within certain jurisdictions, and ENTADFI, which is subject to further successful commercialization

activities which we have temporarily paused as discussed above.

Certain of the commercialization activities are outside of the Company’s

control, including but not limited to, securing contracts with wholesalers and third-party payers, securing contracts with third-party

logistics providers, and obtaining required licensure in various jurisdictions, as well as attempting to secure additional required funding

through equity or debt financings if available.

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.

This creates significant uncertainty

that the Company will have the funds available to be able to successfully launch ENTADFI and expand commercialization of Proclarix.

the Company is unable to secure additional capital, it may be required to curtail any future clinical trials, development and/or commercialization

of products and product candidates, and it may take additional measures to reduce expenses in order to conserve its cash in amounts sufficient

to sustain operations and meet its obligations.

Because of historical and

expected operating losses and net operating cash flow deficits, there is substantial doubt about the Company’s ability to continue

The Company’s operating activities to date

have been primarily devoted to seeking licenses, engaging in research and development activities, potential asset and business acquisitions,

and expenditures associated with the now halted commercial launch of ENTADFI and the commercialization of Proclarix.

The Company has incurred substantial operating

losses since inception and expects to continue to incur significant operating losses for the foreseeable future.

As of December 31, 2024,

the Company had cash of approximately $0.6 million, a working capital deficit of approximately $17.3 million and an accumulated

deficit of approximately $115.7 million.

During the year ended December 31, 2024, the Company used approximately $10.5 million in cash

for operating activities.

The Company’s current cash balance is not sufficient to fund its operations through the end of December

In December 2024, the Company began drawing on the Equity Financing Line of Credit (“ELOC”), which it entered into on

October 2, 2024, referred herein as the ELOC Purchase Agreement.

These conditions raise substantial doubt about the Company’s ability

to continue as a going concern within one year from the date of the issuance of these consolidated financial statements.

The Company’s

projections are also indicative that it is currently unable to meet its contractual commitments and obligations as they come due in the

ordinary course of business.

The Company will require significant additional capital in the short-term to fund its continuing operations,

satisfy existing and future obligations and liabilities, including the remaining payments due for the acquisition of the ENTADFI assets,

and funds needed to support the Company’s working capital needs and business activities.

These business activities include the development

and commercialization of Proclarix, and the development and commercialization of the Company’s future product candidates.

Management’s plans for funding the Company’s

operations include generating product revenue from sales of Proclarix, which is still subject to further successful commercialization

activities within certain jurisdictions.

Management also intends to secure additional funding through equity or debt financings if available,

and to utilize the ELOC entered into in October 2024 (see Note 9) on an as-needed basis to assist with the paydown of the notes and to

fund current operating needs, subject to certain restrictions and beneficial ownership constraints.

However, based on the terms of the

ELOC and the current maximum availability, management determined that the funds readily available under the ELOC will not be sufficient

to sustain operations.

In addition, there are currently no other commitments in place for further financing nor is there any assurance

that such financing will be available to sustain its operations and expand commercialization of Proclarix.

If the Company is unable to

secure additional capital, it may be required to curtail any future clinical trials, development and/or commercialization of Proclarix

and any future product candidates, and it may take additional measures to reduce expenses in order to conserve its cash in amounts sufficient

to sustain operations and meet its obligations, or, if it is required to, file for bankruptcy.

Because of historical and expected operating losses,

net operating cash flow deficits, and debts due within one year, there is substantial doubt about the Company’s ability to continue

as a going concern for one year from the issuance of the consolidated financial statements, which is not alleviated by management’s

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Future Funding Requirements

Our primary uses of cash

to date have been to fund our operations, which consist primarily of research and development expenditures related to our programs, costs

related to acquisitions and potential acquisitions, commercializing ENTADFI and other selling, general and administrative expenditures.

We anticipate that we will continue to incur significant expenses for the foreseeable future as we continue to commercialize Proclarix

and ENTADFI, if we proceed with its commercialization, and expand our corporate infrastructure, including the costs associated with being

a public company.

We are subject to all of the risks typically related to the development of new drug candidates, and we may encounter

unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business.

We will require significant amounts

of additional capital in the short-term, to continue to fund our continuing operations, satisfy existing and future obligations and liabilities,

including the remaining payments due under the Veru APA and other contracts entered into in support of the Company’s commercialization

plans, in addition to funds needed to support our working capital needs and business activities, including the commercialization of Proclarix

and ENTADFI (if we decide to resume its commercialization), and the development and commercialization of our future product candidates.

Until we can generate a sufficient amount of revenue from sales of Proclarix or ENTADFI, we expect to finance our future cash needs through

public or private equity or debt financings, third-party (including government) funding and marketing and distribution arrangements, as

well as other collaborations, strategic alliances and licensing arrangements, or any combination of these approaches.

The future sale

of equity or convertible debt securities may result in dilution to our stockholders, and, in the case of preferred equity securities or

convertible debt, those securities could provide for rights, preferences or privileges senior to those of our common stock.

Debt financing

may subject us to covenant limitations or restrictions on our ability to take specific actions, such as incurring additional debt, making

capital expenditures, or declaring dividends.

There can be no assurance that we will be successful in acquiring additional funding at

levels sufficient to fund our operations or on terms favorable or acceptable to us.

If we are unable to obtain adequate financing when

needed or on terms favorable or acceptable to us, we may be forced to delay, reduce the scope of our business activities.

Our future capital requirements will depend on

many factors, including:

the costs of future commercialization activities, including product manufacturing, marketing, sales, royalties, and distribution, for Proclarix and ENTADFI (if we decide to resume its commercialization), and other products for which we may receive marketing approval;

We anticipate that we will continue to incur significant

expenses for the foreseeable future as we continue to commercialize Proclarix.

We will require significant amounts of additional

capital in the short-term, to continue to fund our continuing operations, satisfy existing and future obligations and liabilities, including

the remaining payments due under the Veru APA and other contracts entered into in support of the Company’s commercialization plans,

in addition to funds needed to support our working capital needs and business activities, including the development and commercialization

of Proclarix, and the development and commercialization of our future product candidates.

Until we can generate a sufficient amount of

revenue from sales of Proclarix if at all, we expect to finance our future cash needs through public or private equity or debt financings,

third-party funding and marketing and distribution arrangements, as well as other collaborations, strategic alliances and licensing arrangements,

or any combination of these approaches.

The future sale of equity or convertible debt securities may result in dilution to our stockholders,

and, in the case of preferred equity securities or convertible debt, those securities could provide for rights, preferences or privileges

senior to those of our common stock.

Debt financing may subject us to covenant limitations or restrictions on our ability to take specific

actions, such as incurring additional debt, making capital expenditures, or declaring dividends.

There can be no assurance that we will

be successful in acquiring additional funding at levels sufficient to fund our operations or on terms favorable or acceptable to us.

we are unable to obtain adequate financing when needed or on terms favorable or acceptable to us, we may be forced to delay, reduce the

scope of our business activities.

Our future capital requirements will depend on many factors, including:

the costs of future commercialization activities, including product manufacturing, marketing, sales, royalties, and distribution, for Proclarix, and other products for which we may receive marketing approval;

the timing, scope, progress, results and costs of research and development, testing, screening, manufacturing, preclinical and non-clinical studies and clinical trials;

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our ability to maintain existing, and establish new, strategic collaborations, licensing or other arrangements and the financial terms of any such agreements, including the timing and amount of any future milestone, royalty or other payments due under any such agreement;

any product liability or other lawsuits related to our products;

any product liability or other lawsuits related to our product;

the expenses needed to attract, hire and retain skilled personnel;

the revenue, if any, received from commercial sales of Proclarix or ENTADFI (if we decide to resume its commercialization), or other products for which we may have received or will receive marketing approval;

the revenue, if any, received from commercial sales of Proclarix, or other products for which we may have received or will receive marketing approval;

the costs to establish, maintain, expand, enforce and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with licensing, preparing, filing, prosecuting, defending and enforcing our patents or other intellectual property rights;

the costs of operating as a public company.

The following table summarizes our cash flows

for the periods indicated:

A change in the outcome of any of these or other variables could significantly

change the costs and timing associated with our business activities.

Furthermore, our operating plans may change in the future, and we

may need additional funds to meet operational needs and capital requirements associated with such change.

The following table summarizes our cash flows for the periods indicated:

Net cash used in operating activities

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Effect of exchange rate changes on cash

Net increase (decrease) in cash

Net (decrease) in cash

$ (3,907,835 )

$ (21,198,324 )

Cash Flows from Operating Activities

Net cash used in operating

activities for the year ended December 31, 2023 was $13.6 million, which primarily resulted from a net loss of $37.4 million.

offset by impairment losses of $19.3 million related to the ENTADFI assets and the WraSer APA, the fair value of the subscription liability

agreement of $0.7 million, non-cash interest expense of $0.7 million, a loss on the extinguishment of a note payable of $0.5 million,

noncash stock-based compensation expense of $0.3 million, a $0.3 million loss on impairment of long-lived assets, other non-cash items

of $0.4 million, and a net change in our operating assets and liabilities of $1.6 million.

Net cash used in operating

activities for the year ended December 31, 2022, was $8.7 million, which primarily resulted from a net loss of $13.4 million, which was

partially offset by noncash stock-based compensation of approximately $2.0 million, the fair value of restricted common stock that was

issued of approximately $0.3 million, and a net change in our operating assets and liabilities of $2.4 million.

Net cash used in operating activities for the

year ended December 31, 2024 was approximately $10.5 million, which primarily resulted from the net loss of $58.7 million.

This was offset

by impairment losses of goodwill of $32.3 million related to the acquisition of Proteomedix, loss on impairment of ENTADFI assets of $3.5

million, impairment of cash the fair value of the subscription liability agreement of $3.3 million, impairment of intangibles related

to the acquisition of Proteomedix of $10.3 million, depreciation and amortization of $0.7 million noncash stock-based compensation expense

$0.4 million, change in the fair value of contingent warrant liability of $1.3 million, and a net change in our operating assets and liabilities

of $1.5 million.

Net cash used in operating activities for the

year ended December 31, 2023 was $13.6 million, which primarily resulted from a net loss of $37.4 million.

This was offset by impairment

losses of $19.3 million related to the ENTADFI assets and the WraSer APA, the fair value of the subscription liability agreement of $0.7

million, non-cash interest expense of $0.7 million, a loss on the extinguishment of a note payable of $0.5 million, noncash stock-based

compensation expense of $0.3 million, $0.3 million loss on impairment of long-lived assets, other non-cash items of $0.4 million, and

a net change in our operating assets and liabilities of $1.6 million.

Cash Flows from Investing Activities

Net cash used in investing activities

for the year ended December 31, 2023 was approximately $8.6 million, of which approximately $6.1 million was used for the acquisition

of ENTADFI, $3.5 million was used for the deposit in connection with the potential WraSer APA, and $0.1 million is the net change in the

receivable from related parties and purchases of long-lived assets.

This was offset by approximately $1.1 million in cash acquired in

connection with the acquisition of Proteomedix.

Net cash used in investing

activities for the year ended December 31, 2022, was approximately $33,000, which resulted from purchases of property and equipment

and the net change in the receivable from related parties.

Net cash used in investing activities for the

year ended December 31, 2024 was approximately $30,000, of which all was due to the purchase of property and equipment.

Net cash used in investing activities for the year

ended December 31, 2023 was approximately $8.6 million, of which approximately $6.1 million was used for the acquisition of ENTADFI,

$3.5 million was used for the deposit in connection with the potential WraSer APA, and $0.1 million is the net change in the receivable

from related parties and purchases of long-lived assets.

This was offset by approximately $1.1 million in cash acquired in connection

with the acquisition of Proteomedix.

Cash Flows from Financing Activities

cash provided by financing activities for the year ended December 31, 2023 was approximately $1.0 million, and resulted from net proceeds

from the exercise of preferred investment options in connection with the warrant inducement transaction of $2.3 million offset by $1.0

million in principal payments on a note payable, $59,000 in purchases of treasury shares, and $205,000 of payment in deferred offering

Net cash provided by financing

activities for the year ended December 31, 2022, was approximately $32.5 million, and resulted primarily from the close of our IPO and

the Private Placements, which resulted in net proceeds of approximately $33.1 million, offset by approximately $0.6 million in treasury

share repurchases.

Net cash provided by financing activities for

the year ended December 31, 2024 was approximately $6.7 million, which resulted from proceeds from issuance of notes payable for related

parties of $5.0 million, net proceeds from the exercise of preferred investment options of $0.9 million, proceeds from the purchase of

series C preferred stock of $1.9 million, and proceeds from purchases of common stock of $0.7 million.

These proceeds from investing activities

was offset by payments in deferred financing costs and payments of note payable totaling $1.7 million.

provided by financing activities for the year ended December 31, 2023 was approximately $1.0 million, and resulted from net proceeds from

the exercise of preferred investment options in connection with the warrant inducement transaction of $2.3 million offset by $1.0 million

in principal payments on a note payable, $59,000 in purchases of treasury shares, and $205,000 of payment in deferred offering costs.

Legal Contingencies

From time to time, we may

become involved in legal proceedings arising from the ordinary course of business.

We record a liability for such matters when it is probable

that future losses will be incurred and that such losses can be reasonably estimated.

From time to time, we may become involved in legal

proceedings arising from the ordinary course of business.

We record a liability for such matters when it is probable that future losses

will be incurred and that such losses can be reasonably estimated.

Off-Balance Sheet Arrangements

During the periods presented

we did not have, nor do we currently have, any off-balance sheet arrangements as defined in the rules and regulations of the SEC.

During the periods presented we did not have,

nor do we currently have, any off-balance sheet arrangements as defined in the rules and regulations of the SEC.

Recent Accounting Pronouncements Not Yet Adopted

See Note 3 to our consolidated

financial statements included elsewhere in this Report for more information.

See Note 3 to our consolidated financial statements

included elsewhere in this Report for more information.

Critical Accounting Policies and Estimates

Our consolidated financial

statements have been prepared in accordance with U.S.

Our consolidated financial statements have been

prepared in accordance with U.S.

generally accepted accounting principles (“U.S.

The preparation

of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities,

and expenses and the disclosure of contingent assets and liabilities in our consolidated financial statements.

On an ongoing basis, we

evaluate our estimates and judgments.

We base our estimates on historical experience, known trends and events and various other factors

that are 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 that are not readily apparent from other sources.

Actual results may differ from these estimates under

different assumptions or conditions.

While our significant accounting

policies are described in more detail in Note 3 to our consolidated financial statements included elsewhere in this Report, we believe

the following accounting policies and estimates to be most critical to the judgments and estimates used in the preparation of our consolidated

financial statements.

The Company evaluates acquisitions to

first determine whether a set of assets acquired constitutes a business and should be accounted for as a business combination.

assets acquired are not a business, the transaction is accounted as an asset acquisition in accordance with Accounting Standards Codification

The preparation of these consolidated

financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses

and the disclosure of contingent assets and liabilities in our consolidated financial statements.

On an ongoing basis, we evaluate our

estimates and judgments.

We base our estimates on historical experience, known trends and events and various other factors that are 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 that are not readily apparent from other sources.

Actual results may differ from these estimates under different assumptions

or conditions.

While our significant accounting policies are

described in more detail in Note 3 to our consolidated financial statements included elsewhere in this Report, we believe the following

accounting policies and estimates to be most critical to the judgments and estimates used in the preparation of our consolidated financial

The Company evaluates acquisitions to first

determine whether a set of assets acquired constitutes a business and should be accounted for as a business combination.

If the assets

acquired are not a business, the transaction is accounted as an asset acquisition in accordance with Accounting Standards Codification

(“ASC”) 805-50, Asset Acquisitions (“ASC 805-50”), which requires the acquiring entity to recognize

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Goodwill and Other Intangible Assets

Goodwill represents

the excess of the cost of a business combination over the fair value of the net assets acquired.

Goodwill and intangible

assets deemed to have indefinite lives are not amortized but are subject to impairment tests on an annual basis, and whenever events

or changes in circumstances indicate that the carrying value may not be recoverable.

Goodwill is allocated to the reporting

unit from which it was created.

A reporting unit is an operating segment or sub-segment to which goodwill is assigned when initially

The Company tests indefinite lived intangible assets for impairment, on an annual basis in the fourth quarter, or more frequently

if an event occurs or circumstances indicate that the indefinite lived assets may be impaired.

The Company may perform a qualitative assessment

to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount.

Goodwill represents the excess of the cost

of a business combination over the fair value of the net assets acquired.

Goodwill and intangible assets deemed to have

indefinite lives are not amortized but are subject to impairment tests on an annual basis, and whenever events or changes in circumstances

indicate that the carrying value may not be recoverable.

Goodwill is allocated to the reporting unit from which it was

A reporting unit is an operating segment or sub-segment to which goodwill is assigned when initially recorded.

Company tests indefinite lived intangible assets for impairment, on an annual basis in the fourth quarter, or more frequently if an event

occurs or circumstances indicate that the indefinite lived assets may be impaired.

The Company may perform a qualitative assessment to

determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount.

If the Company

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The Company did not test

its goodwill or indefinite lived assets for impairment during the year ended December 31, 2023, given that the acquisition date occurred after the annual testing date,

and given that there were no impairment indicators from the date of acquisition through the end of the reporting period.

The Company has

determined that no impairment of its goodwill or indefinite lived intangible assets occurred as of December 31, 2023.

Intangible assets with finite

lives are reported at cost, less accumulated amortization, and are amortized over their estimated useful lives, starting when sales for

the related product begin.

Amortization is calculated using the straight-line method, and recorded within selling, general, and administrative

expenses, or cost of revenue, depending on the nature and use of the asset.

During the ordinary course

of business, the Company has entered into certain license and asset purchase agreements.

Potential milestone payments for development,

regulatory, and commercial milestones are recorded when the milestone is probable of achievement.

Upon a milestone being achieved, the

associated milestone payment is capitalized and amortized over the remaining useful life for approved products, or expensed as research

and development expense for milestones relating to products whose FDA approval has not yet been obtained.

its goodwill or indefinite lived assets for impairment during the year ended December 31, 2023, given that the acquisition date occurred

after the annual testing date and given that there were no impairment indicators from the date of acquisition through the end of the reporting

The Company performed an evaluation of goodwill and indefinitely lived assets for impairment during the year ended December 31,

2024 and has determined that impairment of its goodwill and indefinite lived intangible assets occurred as of December 31, 2024.

Intangible assets with finite lives are reported

at cost, less accumulated amortization, and are amortized over their estimated useful lives, starting when sales for the related product

Amortization is calculated using the straight-line method, and recorded within selling, general, and administrative expenses, or

cost of revenue, depending on the nature and use of the asset.

During the ordinary course of business, the Company

has entered into certain license and asset purchase agreements.

Potential milestone payments for development, regulatory, and commercial

milestones are recorded when the milestone is probable of achievement.

Upon a milestone being achieved, the associated milestone payment

is capitalized and amortized over the remaining useful life for approved products, or expensed as research and development expense for

milestones relating to products whose FDA approval has not yet been obtained.

Impairment of Long-Lived Assets

The Company reviews long-lived

assets, including intangible assets with finite useful lives, for impairment whenever events or changes in business circumstances indicate

that the carrying amount of the assets may not be fully recoverable (a “triggering event”).

Factors that the Company considers

in deciding when to perform an impairment review include significant underperformance of the long-lived asset in relation to expectations,

significant negative industry or economic trends, and significant changes or planned changes in the use of the assets.

If an impairment

review is performed to evaluate a long-lived asset for recoverability, the Company compares forecasts of undiscounted cash flows expected

to result from the use and eventual disposition of the long-lived asset to its carrying value.

An impairment loss would be recognized

when estimated undiscounted future cash flows expected to result from the use of an asset are less than its carrying amount.

The impairment

loss would be based on the excess of the carrying value of the impaired asset over its fair value.

During the fourth quarter of 2023,

the Company determined that there were certain triggering events that indicated that the carrying amount of the assets recorded in connection

with the ENTADFI acquisition may not be fully recoverable.

A related impairment loss of $14.7 million was recorded during the year ended

December 31, 2023.

The Company also recorded an impairment loss of approximately $267,000 during the year ended December 31, 2023, related

to implementation costs incurred under cloud computing hosting arrangements that were capitalized during the year.

There were no other

impairment losses on long-lived assets for the years ended December 31, 2023 and 2022.

Accrued Research and Development Expenses

We have entered into various

agreements with CMOs and may enter into contracts with CROs in the future.

As part of the process of preparing our financial statements,

we are required to estimate our accrued research and development expenses as of each balance sheet date.

This process involves reviewing

open contracts and purchase orders, communicating with our personnel and third parties to identify services that have been performed on

our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced

or otherwise notified of the actual cost.

We make estimates of our accrued research and development expenses as of each balance sheet

date based on facts and circumstances known to us at that time.

We periodically confirm the accuracy of our estimates with the service

providers and make adjustments, if necessary.

The significant estimates in our accrued research and development expenses include the costs

incurred for services performed by our vendors in connection with research and development activities for which we have not yet been invoiced.

We accrue for costs related

to research and development activities based on our estimates of the services received and efforts expended pursuant to quotes and contracts

with vendors, including CMOs, that conduct research and development on our behalf.

The financial terms of these agreements are subject

to negotiation, vary from contract to contract and may result in uneven payment flows.

There may be instances in which payments made to

our vendors will exceed the level of services provided and result in a prepayment of the research and development expense.

Advance payments

for goods and services that will be used in future research and development activities are expensed when the activity has been performed

or when the goods have been received.

We make significant judgments and estimates in determining accrued research and development liabilities

as of each reporting period based on the estimated time period over which services will be performed and the level of effort to be expended.

If the actual timing of the performance of services or the level of effort varies from our estimate, we adjust the accrual or prepaid

expense accordingly.

Although we do not expect

our estimates to be materially different from amounts actually incurred, if our estimates of the status and timing of services performed

differ from the actual status and timing of services performed, it could result in us reporting amounts that are too high or too low in

any particular period.

To date, there have been no material differences between our estimates of such expenses and the amounts actually

Financial instruments

The Company determines the

accounting classification of financial instruments that are issued, including its warrants and a subscription agreement, as either liability

or equity, by first assessing whether the financial instruments are freestanding financial instruments, and if they meet liability classification

in accordance with ASC 480, Distinguishing Liabilities from Equity , (“ASC 480”), and then in accordance with ASC 815-40,

Derivatives and Hedging – Contracts in Entity’s Own Equity (“ASC 815-40”).

Under ASC 480-10, financial

instruments are considered liability-classified if the instruments are mandatorily redeemable, obligate the issuer to settle the instruments

or the underlying shares by paying cash or other assets, or must or may require settlement by issuing a variable number of shares.

If the instruments do not

meet liability classification under ASC 480, 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 financial instruments do not require liability classification

under ASC 815-40, in order to conclude equity classification, the Company assesses whether the instruments are indexed to the Company’s

common stock and whether the instruments are classified as equity under ASC 815-40 or other applicable GAAP.

After all relevant assessments

are made, the Company concludes whether the instruments are classified as liability or equity.

Liability-classified instruments 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 consolidated statements of operations and

comprehensive loss.

Equity-classified instruments are accounted for at fair value on the issuance date with no changes in fair value recognized

after the issuance date.

Preferred Stock

The Company applies the guidance

enumerated in ASC 480, when determining the classification and measurement of preferred stock.

Preferred stock subject to mandatory redemption,

if any, is classified as a liability and is measured at fair value.

The Company classifies conditionally redeemable preferred stock, which

includes preferred stock that features redemption rights that are either within the control of the holder or subject to redemption upon

the occurrence of uncertain events not solely within the Company’s control, as temporary equity.

At all other times, the

Company classifies its preferred stock in stockholders’ equity.

Stock-Based Compensation

The 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.

Stock-based awards to employees with graded-vesting schedules are recognized, using the accelerated attribution method, on a straight-line

basis over the requisite service period for each separately vesting portion of the award.

The 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

Expected 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.

The simplified method is used as the Company has insufficient

historical information to provide a basis for an estimate of the expected term.

Expected 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.

For these analyses, the Company has selected

companies with comparable characteristics, including enterprise value, risk profiles, and position within the industry.

Common Stock Fair Value —

The fair value of the common stock underlying the Company’s stock options 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.

Risk-Free 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.

Expected 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.

The Company recognizes forfeitures of equity awards

as they occur.

The Company reviews long-lived assets, including

intangible assets with finite useful lives, for impairment whenever events or changes in business circumstances indicate that the carrying

amount of the assets may not be fully recoverable (a “triggering event”).

Factors that the Company considers in deciding when

to perform an impairment review include significant underperformance of the long-lived asset in relation to expectations, significant

negative industry or economic trends, and significant changes or planned changes in the use of the assets.

If an impairment review is

performed to evaluate a long-lived asset for recoverability, the Company compares forecasts of undiscounted cash flows expected to result

from the use and eventual disposition of the long-lived asset to its carrying value.

An impairment loss would be recognized when estimated

undiscounted future cash flows expected to result from the use of an asset are less than its carrying amount.

Subscription Agreement

The Subscription Agreement is accounted for as

a liability in accordance with ASC 480, Distinguishing Liabilities from Equity, (“ASC 480”), as the make-whole provision

could result in a variable number of shares being issued upon settlement.

The related party subscription agreement liability is measured

at fair value at the commitment date and at each subsequent reporting period, with changes in fair value recorded as a component of other

income (expense), net in the consolidated statements of operations and comprehensive loss.

Quantitative and Qualitative Disclosures About

We are a smaller reporting

company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.

Section 107 of the JOBS Act

also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B)

of the Securities Act for complying with new or revised accounting standards.

In other words, an “emerging growth company”

can delay the adoption of new or revised accounting standards until those standards would otherwise apply to private companies.

elected to avail ourselves of this extended transition period.

For as long as we remain

an “emerging growth company” under the recently enacted JOBS Act, we will, among other things:

● be exempt from the provisions

of Section 404(b) of the Sarbanes-Oxley Act, which requires that our independent registered public accounting firm provide an attestation

report on the effectiveness of our internal control over financial reporting;

● be permitted to omit the detailed

compensation discussion and analysis from proxy statements and reports filed under the Exchange Act and instead provide a reduced level

of disclosure concerning executive compensation;

● be exempt from any rules that

may be adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotation or a supplement to the auditor’s

report on the financial statements.

Although we are still evaluating

the JOBS Act, we currently intend to take advantage of some or all of the reduced regulatory and reporting requirements that will be available

to us so long as we qualify as an “emerging growth company,” including the extension of time to comply with new or revised

financial accounting standards available under Section 102(b) of the JOBS Act.

Among other things, this means that our independent registered

public accounting firm will not be required to provide an attestation report on the effectiveness of our internal control over financial

reporting so long as we qualify as an emerging growth company, which may increase the risk that weaknesses or deficiencies in our internal

control over financial reporting go undetected.

Likewise, so long as we qualify as an emerging growth company, we may elect not to provide

you with certain information, including certain financial information and certain information regarding compensation of our executive

officers, that we would otherwise have been required to provide in filings we make with the SEC, which may make it more difficult for

investors and securities analysts to evaluate our company.

As a result, investor confidence in our company and the market price of our

common stock may be materially and adversely affected.

We are a smaller reporting company as defined

by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.

Section 107 of the JOBS Act also provides that

an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities

Act for complying with new or revised accounting standards.

In other words, an “emerging growth company” can delay the adoption

of new or revised accounting standards until those standards would otherwise apply to private companies.

We have elected to avail ourselves

of this extended transition period.

For as long as we remain an “emerging growth

company” under the recently enacted JOBS Act, we will, among other things:

be exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act, which requires that our independent registered public accounting firm provide an attestation report on the effectiveness of our internal control over financial reporting;

be permitted to omit the detailed compensation discussion and analysis from proxy statements and reports filed under the Exchange Act and instead provide a reduced level of disclosure concerning executive compensation;

be exempt from any rules that may be adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotation or a supplement to the auditor’s report on the financial statements.

We currently intend to take advantage of some

or all of the reduced regulatory and reporting requirements that will be available to us so long as we qualify as an “emerging growth

company,” including the extension of time to comply with new or revised financial accounting standards available under Section 102(b)

of the JOBS Act.

Among other things, this means that our independent registered public accounting firm will not be required to provide

an attestation report on the effectiveness of our internal control over financial reporting so long as we qualify as an emerging growth

company, which may increase the risk that weaknesses or deficiencies in our internal control over financial reporting go undetected.

so long as we qualify as an emerging growth company, we may elect not to provide you with certain information, including certain financial

information and certain information regarding compensation of our executive officers, that we would otherwise have been required to provide

in filings we make with the SEC, which may make it more difficult for investors and securities analysts to evaluate our company.

result, investor confidence in our company and the market price of our common stock may be materially and adversely affected.

Quantitative and Qualitative Disclosures About Market Risk

As a smaller reporting company, we are not required to provide

the information required by this item.

As a smaller reporting company, we are not required

to provide the information required by this item.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis