What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-13 compared with 2025-06-02 · 565 added, 534 removed, 239 unchanged (82% of the section changed)

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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.

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.

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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.

abandoned commercialization of ENTADFI and no longer holds remaining inventory of the product as of December 31, 2025.

In addition, as

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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.

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

We are currently focusing our efforts on commercializing

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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

efforts, hiring personnel, acquiring and developing our technology and now deprioritized vaccine candidates, organizing and staffing our

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

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,

Since our 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 efforts, hiring personnel, acquiring

and developing our technology and now halted vaccine candidates, organizing and staffing our company, performing business planning, establishing

our intellectual property portfolio and raising capital to support and expand such activities.

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.

Proclarix is CE-marked and for sale in Europe.

We continue our sales efforts and expect growing revenues from sales of Proclarix in 2026 and beyond.

We anticipate these sales to offset

some expenses relating to commercial scale up and development, but we expect our expenses also to increase in connection with our ongoing

activities, as we:

commercialize Proclarix

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

We do not have any products approved

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

We do not have any products approved for sale, aside

from (i) Proclarix and (ii) ENTADFI, which has not generated any revenue from product sales;

we have determined to abandon commercialization

of ENTADFI and no longer holds inventory of the product, 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.

Accordingly, 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.

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

Realbotix Corp.

Share Exchange Agreement

On February 11, 2026,

we entered into a Share Exchange Agreement (the “Share Exchange Agreement”), by and among (i) Onconetix, (ii) Realbotix Corp.,

a company existing under the laws of the Province of Ontario (“Parent”), (iii) Simulacra Corporation, a Delaware corporation

and a wholly-owned subsidiary of Parent (the “Seller”) and (iv) Realbotix, LLC, a Delaware limited liability company and wholly

owned subsidiary of the Seller (the “Realbotix”).

Pursuant to the Share

Exchange Agreement, subject to the terms and conditions set forth therein, the Seller agreed to contribute and transfer to us, and we

agreed to acquire and accept, all of the issued and outstanding equity interests of Realbotix (the “Realbotix Interests”)

in exchange for newly issued shares of Common Stock.

(the “Share Exchange” and the other transactions contemplated by the

Share Exchange Agreement, the “Realbotix Transactions”).

For more information

about the Realbotix Transaction, see “ Realbotix Corp.

Share Exchange Agreement ” in Item 1.

February 2026 Special Meeting of Stockholders

On February 3, 2026, the Company held a special meeting of stockholders

(the “Special Meeting”), whereby its stockholders approved an amendment to the Company’s Amended and Restated Certificate

of Incorporation to effect a reverse stock split of all of the outstanding shares of Common Stock at a ratio in the range of 1-for-2 to

1-for-50, at any time prior to the one-year anniversary date of the Special Meeting, with such ratio to be determined by the Board or

without further approval or authorization of the Company’s stockholders.

Series E PIPE Financing

On October 1, 2025, the Company entered into

a securities purchase agreement (the “Series E Securities Purchase Agreement”) with institutional investor(s) and sold to

such institutional investors(s)(collectively, the “Series E PIPE Investors”), an aggregate of 7,813 shares of Series E convertible

preferred stock, par value $0.00001 per share (“Series E Preferred Stock”), which are convertible into common stock of the

Company, $0.00001 par value per share and warrants (the “Series E Warrants”) to purchase 2,025,223 shares of Common Stock,

for an aggregate purchase price of approximately $6.25 million, which was also equal to the net cash proceeds.

The exercise price of

the Series E Warrants is $3.8576, and the Series E Warrants are exercisable beginning on the issuance date and expire on the third anniversary

of the issuance date.

Concurrently with entering into the Series E

Securities Purchase Agreement, the Company also entered into a registration rights agreement with the Series E PIPE Investors, pursuant

to which it has agreed to provide the Series E PIPE Investors with certain registration rights related to the shares of Common Stock

underlying the shares of Series E Preferred Stock and Series E Warrants.

Termination of Ocuvex

Business Combination Agreement:

On July 16, 2025, the

Company entered into an Agreement and Plan of Merger with (i) Onconetix Merger Sub, Inc., a Delaware corporation and a direct, wholly

owned subsidiary of the Company, and (ii) Ocuvex Therapeutics, Inc., a Delaware corporation (“Ocuvex”, and such agreement,

the “Ocuvex Merger Agreement”).

Pursuant to the Merger Agreement, Merger Sub will merge with and into Ocuvex, with Ocuvex

surviving the merger as a direct, wholly owned subsidiary of the Company (the “Ocuvex Merger” and the other transactions

contemplated by the Merger Agreement, the “Ocuvex Transactions”).

Effective September

24, 2025, pursuant to Section 9.01(a) of the Ocuvex Merger Agreement, the Company and Ocuvex entered into a Termination and Release Agreement

(the “Termination Agreement”) pursuant to which they agreed to terminate the Merger Agreement and the transactions contemplated

The Termination Agreement also terminates and makes void the ancillary documents entered into in connection with the Ocuvex

Merger Agreement.

The Termination Agreement also provides for a mutual release of claims among Company and Ocuvex and their affiliates

and in consideration of the foregoing, the Company agreed to pay to Ocuvex, an amount equal to $ 302,343.55 (the “Termination

Payment”), which represents all amounts payable by the Company to Ocuvex pursuant to Section 6.02(f) of the Ocuvex Merger Agreement.

As of September 24,

2025, Ocuvex confirmed receipt of the Termination Payment, and as a result the Merger Agreement is of no further force and effect.

Series D PIPE Financing

On September 22, 2025, 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.

a securities purchase agreement (the “Series D Securities Purchase Agreement”) with eleven institutional investors, and sold

or exchanged debt, to such investors (collectively, the “Series D PIPE Investors”) an aggregate of 16,099 shares of Series

D convertible preferred stock, par value $0.00001 per share (“Series D Preferred Stock”), which includes an issuance of 500

shares of Series D Preferred Stock to the lead investor in consideration for the Series D PIPE Investors’ irrevocable commitment

to purchase shares of the Series D Preferred Stock, and warrants (the “Series D Warrants”) to purchase 4,362,827 shares of

Common Stock, for an aggregate purchase price of approximately $12.9 million and net cash proceeds of $9.3 million.

The exercise price

of the Series D Warrants is $3.6896, and the Series D Warrants are exercisable beginning on the issuance date and expire on the third

anniversary of the issuance date.

Concurrently with entering into the Series D

Securities Purchase Agreement, the Company also entered into a registration rights agreement with the Series D PIPE Investors, pursuant

to which it has agreed to provide the Series D PIPE Investors with certain registration rights related to the shares of Common Stock

underlying the shares of Series D Preferred Stock and Series D Warrants.

Amendment to Series D and Series E Warrants

On December 23, 2025, the Company entered into

Limited Waiver Agreements (the “Warrant Limited Waiver”) with all holders of the Series D and Series E Warrants, effective

as of October 1, 2025, pursuant to which such holders agreed to waive certain provisions of their Series D Warrants and Series E Warrants.

Specifically, in the event the Company issues securities with a conversion price dependent on the price of the Common Stock (the “Variable

Price”), the holders of Series D Warrants and Series E Warrants will no longer have the optional right to convert their applicable

Series D Warrants and Series E Warrants at the Variable Price.

Additionally, the Warrant Limited Waiver waived

the right of the Series D Warrants and the Series E Warrants to receive a guaranteed cash payment in connection with a “Fundamental

Transaction” (as such term is defined in the Series D Warrants and Series E Warrants).

Instead, in connection with a “Fundamental

Transaction” that is not within the Company’s control, the holders of Series D Warrants and Series E Warrants are entitled

only to receive the same form and proportion of consideration (or deemed common stock of the successor entity, if no such consideration

is paid) as is offered and paid to holders of Common Stock, the definition of “Fundamental Transaction” in Series D Warrants

and the Series E Warrants was further amended by the Warrant Limited Waiver to replace each reference to “at least” 50% with

“more than” 50% of the outstanding Common Stock.

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

On June 13, 2025, the Company effected a reverse

stock split of all shares of its issued and outstanding Common Stock at a ratio of one-for-eighty-five (1:85).

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 these consolidated financial statements, on a retrospective basis, to reflect the reverse stock split for all periods

The number of authorized shares and par value of the preferred stock and common stock were not adjusted because of the reverse

Veru Settlement Agreement and Release

On April 19, 2023, the Company entered into an

asset purchase agreement with Veru (the “Veru APA”).

Pursuant to, and subject to the terms and conditions of, the Veru APA,

the Company purchased substantially all of the assets related to Veru’s ENTADFI business, in a transaction that closed in April

Pursuant to the terms of the Veru APA, the Company agreed to provide Veru with initial consideration totaling $20.0 million, including

(i) $4.0 million in the form of a non-interest bearing note payable due on September 30, 2023, and (iii) $10.0 million in the form of

two equal (i.e.

each for $5.0 million) non-interest bearing notes payable, each due on April 19, 2024 (the “April Veru Note”)

and September 30, 2024 (the “September Veru Note” and together with the April Veru Note, the “Veru Notes”).

Subsequently, the Company and Veru modified and

extended the payment terms under the Veru Notes on various occasions.

On August 28, 2025, Veru and the Company agreed to amend and restate

the September Veru Note (as amended and restated, the “Second A&R September Veru Note”).

Pursuant to the Second A&R

September Veru Note, the principal amount owed to Veru was increased by $100,000 to an aggregate principal amount of $5.2 million, and

the maturity date was amended to September 19, 2025.

All other terms of the September Veru Note remained the same.

On August 28, 2025,

Veru and the Company also entered into a waiver agreement (the “August 2025 Veru Waiver”) pursuant to which Veru agreed to

waive and extend the date for payment of the April Veru Note to September 19, 2025.

As of September 22, 2025, approximately $8.8

million was payable to Veru under the Veru Notes and related amendments.

On September 22, 2025, the Company and Veru entered into a Settlement

Agreement and Release (the “Veru Settlement Agreement”), pursuant to which Veru agreed to accept a cash payment of approximately

$6.3 million (including interest accrued through receipt of the Settlement Amounts (as defined herein), 3,125 shares of Series D Preferred

Stock and 846,975 Series D Warrants (such cash payment, shares of Series D Preferred Stock and Series D Warrants, collectively, the “Settlement

Amounts”) in full satisfaction of all amounts due under the Veru Notes, as amended by all preceding amendments, forbearance agreements,

and waivers, and Veru agreed that such acceptance constituted complete discharge of all obligations thereunder.

The Settlement Agreement

contains customary release provisions that upon timely delivery of the Settlement Amounts, Veru shall release all claims or actions against

As of September 24, 2025, Veru confirmed receipt

of all Settlement Amounts in satisfaction of all outstanding amounts, and all Veru Notes and related amendments were deemed cancelled

and terminated, respectively, and of no further force or effect.

Keystone Notes Payable

During the year ended December 31, 2025, the Company

issued six subordinated promissory notes to Keystone Capital Partners, LLC, each with an original issue discount and payable upon the

earlier of (i) receipt of sufficient proceeds from the Company’s Equity Line of Credit (“ELOC”) with an institutional

investor (the “ELOC Purchaser”) or (ii) a specified maturity date.

All notes are subordinated to the Company’s existing

debt obligations to Veru, do not initially bear interest, and are subject to a late charge of 15% per annum on any unpaid amounts past

On February 12, 2025, the Company issued a note with an aggregate principal

amount of $117,647, including an original issue discount of $17,647.

The note matures on November 12, 2025, unless prepaid earlier

upon receipt of sufficient capital from other securities offerings (the “February Keystone Note”).

On May 16, 2025, the Company issued a note with an aggregate principal

amount of $294,118, including an original issue discount of $44,118.

The note matures on February 16, 2026, subject to the same prepayment

provisions (the “May Keystone Note”).

On June 5, 2025, the Company issued a note with an aggregate principal

amount of $147,059, including an original issue discount of $22,059.

The note matures on March 5, 2026, subject to the same prepayment

provisions (the “June Keystone Note”).

On August 6, 2025, the Company issued a note with an aggregate principal

amount of $117,647, including an original issue discount of $17,647.

The note matures on March 6, 2026, subject to the same prepayment

provisions (the “August 6 Keystone Note”).

On August 28, 2025, the Company issued two notes with an aggregate

principal amount of $58,824 each, including an original issue discount of $8,824 each.

The notes mature on May 28, 2026, subject

to the same prepayment provisions (the “August 28 Keystone Notes”).

On September 22 2025, Keystone Capital Partners,

LLC and the Company agreed to exchange the principal owed under the May Keystone Note, the June Keystone Note, the August 6 Keystone Note

and the August 28 Keystone Notes for Series D Preferred Stock of 1,660 shares and Warrants of 449,395 shares of common stock in connection

with the Series D PIPE Financing.

The February Keystone Note was paid in full on October 10, 2025.

During the year ended December 31, 2025, the

Company recorded approximately $0.8 million of interest expense, respectively, which includes accrued interest and amortization of the

debt discount.

The unamortized debt discount as of December 31, 2025 and 2024 was $0 and $5,000, respectively.

As of December 31, 2025

and 2024, the Company has recorded accrued interest of approximately $0 and $0.1 million, respectively, which is included in accrued

expenses in the accompanying consolidated balance sheets.

Series C 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 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.

At any time after the initial issuance date of Series C Preferred Stock, each

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

On October 2,

2024, the Company entered into, and sold, to six institutional investors (collectively, the “Series C 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 Series C PIPE Investors’ irrevocable commitment to purchase

shares of the Series C Preferred Stock, and warrants to purchase 6,963 shares of Common Stock (“Series C Warrants”) for aggregate

net cash proceeds to the Company of $1.9 million.

The exercise price of the Series C Warrants is $372.30 on a post-reverse split basis,

and the Series C Warrants are exercisable six months after the issuance date and expire on the third anniversary of their initial issuance.

On October 2, 2024, in connection with the ELOC,

the Company also entered into the ELOC Purchase Agreement with 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 the limitations described herein.

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”).

On July 16, 2025, the Company exercised its voluntary

Series C Preferred Stock adjustment right to lower the conversion price of the Series C Preferred Stock to $3.50, and holders of 1,920

Series C Preferred Stock shares agreed to convert their shares into shares of common stock.

As of December 31, 2025, 7 shares of Series C

Preferred Stock were outstanding from the original issuance of 3,499 shares of Series C Preferred Stock to institutional investors, after

the i) redemption of 1,369 shares of Series C Preferred Stock for aggregate consideration of $1.71 million, ii) the conversion of 1,920

shares of Series C Preferred Stock into shares of Common Stock, and iii) the exchange of 203 shares of Series C Preferred Stock into 244

shares of Series D Preferred Stock.

Certain Significant Relationships

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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.

titled “Business - Intellectual Property” and Note 5 to our consolidated financial statements included elsewhere in this

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.

license agreement with LabCorp (“LabCorp License Agreement”) 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 LabCorp License Agreement.

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.

are payable under the LabCorp License Agreement.

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

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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

The LabCorp License Agreement and related royalty

payment provisions expire during 2038, which approximates the expiration of the last patent covered by the LabCorp License Agreement.

LabCorp has the right to terminate the LabCorp License Agreement for any reason by providing 90 days written notice to Proteomedix.

party may terminate the LabCorp License Agreement due to a material breach of the terms of the LabCorp License Agreement with 30 days’

notice, provided such breach is not cured within the foregoing 30-day period.

Finally, Proteomedix may terminate the LabCorp 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 period.

On December 6, 2025, Proteomedix and LabCorp

entered into an amendment (the “LabCorp Amendment”) of the LabCorp License Agreement.

The Amendment provides for a new validation

study to be conducted by LabCorp for Proclarix, titled Prostate Cancer Risk Identification in a Multi-Ethnic Cohort:

A Prospective

U.S.-Based Multi-Center Validation Study of Proclarix (the “PRIME Study”).

Pursuant to the LabCorp Amendment, LabCorp

will not be required to pay any royalties or milestone payments in connection with its use of the risk calculator for purposes of the

The Company will compensate LabCorp with specified milestone-based payments for conducting the PRIME Study of up to $300,000

in the aggregate and will bear all associated costs and expenses.

Mid-five figure milestone payments will be made as subjects are enrolled,

commencing on the effective date of the PRIME Study and to be paid for every additional batch of subjects enrolled.

If the final milestone

tier is not reached, the Company must pay Labcorp a fixed amount per subject enrolled beyond the last milestone tier that was paid.

payments are due within thirty (30) days of each invoice.

Pursuant to the LabCorp Amendment, LabCorp is

also required to provide the Company with the results of each clinical study conducted by LabCorp upon completion;

however, the Company

may not use or disclose such results to any third party without LabCorp’s prior consent.

Immunovia-Proteomedix Licensing Agreement

On September 17, 2025, Proteomedix entered into

a licensing agreement (the “Immunovia Agreement”) with Immunovia, Inc.

(“Immunovia”), a pancreatic cancer diagnostics

company based in Lund, Sweden.

Under the Agreement, Proteomedix will provide Immunovia with master cell lines required to produce antibodies

for three of the five biomarkers used in the PancreaSure test, as well as a license to key intellectual property related to the manufacturing

of associated reagents.

In return, Immunovia will make total payments

of $0.6 million over two payments of $0.3 million each to Proteomedix, due on September 30, 2025 (“Initial Up Front Payment”),

and March 31, 2026 (“Second Up Front Payment”).

Based on the terms of the agreement and the nature of the license, the Company

determined that the performance obligations were satisfied upon the transfer of the licensed rights which occurred during 2025.

the Company recognized $0.6 million as license revenue during the year ended December 31, 2025.

Additionally, Immunovia will make a $0.1 million

payment for materials and pay a 3% royalty on net sales of PancreaSure and any other products incorporating the licensed intellectual

property from January 1, 2026, through December 31, 2032.

Services Agreement

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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

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.

The Company had approximately $0 and $1.1 million recorded in related accounts payable as of December

31, 2025 and 2024, respectively, which includes amounts due for early termination of the contract.

See Note 5 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.

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

Services Agreement and statements of work.

Pursuant to the IQVIA 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 of December 31, 2025,

the Company paid IQVIA the agreed upon amount of $150,000 and recorded a gain of approximately $(0.9) million on settlement of accounts

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.

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.

expenses related to Proteomedix will decrease when compared to historical levels due to cost reduction efforts, including headcount reductions,

and the termination of Proteomedix’s pension plan.

Research and Development Expenses

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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.

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,

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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.

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 related

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

expense on notes payable, loss on extinguishment of notes payable, loss on issuance of preferred stock and warrants, loss on extinguishment

of preferred stock, gain on forgiveness of accounts payable, the change in fair value of financial instruments that are recorded as liabilities,

which includes the related party subscription agreement liability, the contingent warrant liability, derivative and warrant liabilities

for share of Series D and E preferred stock, and other income.

Results of Operations

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of operations and comprehensive loss for the periods indicated:

$ (1,708,745 )

Cost of revenue

4 unchanged sentences

Impairment of ENTADFI assets

(11,156,630 )

Impairment of Goodwill

(20,835,000 )

Impairment of Intangibles

Impairment of deposit on asset purchase agreement

(10,279,796 )

Total operating expenses

Loss from operations

(39,054,084 )

Loss from operations

(17,856,856 )

2 unchanged sentences

Loss on extinguishment of note payable

Loss on issuance of preferred stock and warrants

Loss on extinguishment of preferred stock

Interest expense – related party

3 unchanged sentences

Change in fair value of contingent warrant liabilities

Total other (expense)

Change in fair value of Series D Warrant Liability

Change in fair value of Series D Derivative Liability

Change in fair value of Series E Warrant Liability

Change in fair value of Series E Derivative Liability

Gain on forgiveness of accounts payable

Total other income (expense)

Loss before income taxes

1 unchanged sentence

(59,736,203 )

(22,313,916 )

Income tax benefit

$ (58,691,023 )

Income tax (expense) benefit

$ (14,032,342 )

4 unchanged sentences

$ (58,897,427 )

(21,487,733 )

Revenue, Cost of Revenue, and Gross Margin

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.

For the year ended December 31, 2025, revenue

decreased by approximately $1.7 million to $0.8 million from $2.5 million for the year ended December 31, 2024.

Revenues in both periods

were generated entirely by the Company’s Proteomedix subsidiary.

The decrease was primarily attributable to a $2.3 million reduction

in development services revenue reflecting the completion of a service contract with Immunovia in 2024 which did not recur in 2025.

decline was partially offset by the increase in other revenue of $0.6 million, attributable to a license agreement entered with Immunovia

in 2025 that grants rights to use certain intellectual property and proprietary materials developed by Proteomedix.

Product sales remained

relatively consistent at approximately $0.2 million in both 2025 and 2024.

For the year ended December 31, 2025, cost of

revenue decreased by approximately $1.3 million to $0.2 million, compared to $1.5 million in 2024.

This decrease was primarily attributable

to the absence of costs associated with the non-recurring development services project completed in 2024.

Overall, gross margins were

positive in both periods, and cost of revenue in 2025 primarily relates to product costs.

Cost of revenue in 2024 primarily consisted

of amortization of the product rights intangible asset of approximately $0.5 million as well as standard production and sales costs of

approximately $1.0 million.

Selling, General and Administrative Expenses

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general and administrative expenses decreased by approximately $4.2 million to $7.0 million compared to $11.2 million in 2024.

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.

This decrease

was primarily driven by a $1.5 million reduction in payroll-related expenses due to headcount reductions, $1.0 million reduction in net

periodic benefit cost due to the settlement of the defined benefit plan, $0.6 million reduction of professional services, $0.3 million

reduction of amortization expense as the intangibles were fully impaired or amortized in 2024, $0.2 million reduction of stock based

compensation, $0.2 million reduction of insurance expense, $0.2 million reduction of regulatory expenses, and $0.2 million reduction

of miscellaneous business expenses including travel and recruitment fees.

Research and Development Expenses

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.

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.

For the year ended December 31, 2025, there was

a gain of approximately $0.1 million in research and development expenses, compared to an expense of approximately $0.2 million in the

year ended December 31, 2024.

The gain in 2025 resulted from the write-off of previously accrued R&D expenses that were related to

terminated contracts and had no outstanding amounts payable as of December 31, 2025.

There has been no substantial R&D expense since

the Company decided to halt its vaccine programs, clinical studies, and other research activities in late 2023.

During the year ended December 31, 2025, the Company

recorded an impairment of goodwill related to the PMX acquisition totaling $11.5 million, of which $11.0 million was recognized at March

31, 2025 and the remainder at June 30, 2025.

No additional goodwill impairment was recorded after June 30, 2025, primarily due to Series

D and Series E PIPE financings that closed during the second half of 2025, which increased the Company’s market capitalization and

valuation for the remaining goodwill balance.

During the year ended December 31, 2024, the

Company recorded impairments of goodwill and intangibles related to the PMX acquisition of $32.3 million and $10.3 million, respectively.

In addition, the Company recorded an impairment charge of the ENTADFI asset of $3.5 million.

Other Income (Expense)

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

For the year ended December 31, 2025, other income

(expense) increased by approximately $7.1 million to $3.8 million, compared to $(3.2) million in 2024.

The increase was driven primarily

by net fair value gains of $14.9 million associated with the Company’s Series D and Series E warrant liabilities as well as lower

interest expense of $0.7 million and a gain on the forgiveness of accounts payable related to the settlement of IQVIA balances of $0.9

In addition, there was an increase of $6.4 million in net fair value gains from the subscription agreement liability-related

party arising from a lower valuation in the current year resulting from the expiration of the term and increased stock price volatility

through settlement in 2025.

These favorable items were partially offset by losses on debt extinguishment of $5.4 million, losses on issuance

of the Series D and E preferred stock and warrants of $3.7 million, fair value losses of $5.3 million on the embedded derivative liabilities

fair value losses of $1.2 million on the contingent warrants, and $0.2 million loss on extinguishment of preferred stock with most of

the volatility stemming from changes in the Company’s stock price and financing-related fair value remeasurements (See Note 8).

Income Tax (Expense) Benefit

For the years ended December 31, 2025 and 2024,

the Company recorded income tax (expense) benefit of approximately $(525) and $1.0 million, respectively.

The 2024 income tax benefit

is related to foreign deferred income taxes recorded in connection with the acquisition accounting for the Proteomedix transaction.

Liquidity and Capital Resources

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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.

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, 2025, the Company had cash of

approximately $5.2 million, a working capital deficit of approximately $3.1 million and an accumulated deficit of approximately $131.2

During the year ended December 31, 2025, the Company used approximately $9.7 million in cash for operating activities.

as of March 11, 2026, the Company’s cash balance was approximately $3.6 million.

During 2025, the Company closed a Series D Preferred

Stock financing in September 2025 and a Series E Preferred Stock financing in October 2025.

These financings provided the Company with

additional cash flow to support near-term operations.

While these capital raises may enable the Company to sustain current operations

and meet existing obligations, the Company continues to generate recurring net operating losses and has not yet established sustained

positive cash flows to support its strategic growth initiatives, which includes the commercialization of Proclarix, and the development

and commercialization of the Company’s future product candidates.

These factors raise substantial doubt about the Company’s

ability to continue as a going concern for one year from the date of issuance of the consolidated financial statements for the year ended

December 31, 2025.

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

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

Management also intends to pursue additional equity or debt financing to support operations

and strategic initiatives.

However, there are currently no committed sources of financing, and there is no assurance that additional

funding will be available on favorable terms, if at all.

This uncertainty raises significant concern about the Company’s ability

to sustain operations and execute its strategic initiatives.

If additional capital is not secured, the Company may need to curtail clinical

trials, development, and commercialization efforts, and take further measures to reduce expenses to conserve cash.

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

The consolidated financial statements have been prepared assuming the Company will continue as a going concern.

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Future Funding Requirements

We anticipate that we will continue to incur significant

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

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.

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

While the Company closed the Series D and E Preferred

Stock financings in 2025, there are currently no other 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 whether the Company will

have the funds available to be able 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 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’s required to, file for bankruptcy.

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;

the outcome, timing and cost of seeking and obtaining regulatory approvals from the FDA and comparable foreign regulatory authorities, including the potential for such authorities to require that we perform field efficacy studies, require more studies than those that we currently expect or change their requirements regarding the data required to support a marketing application;

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;

the costs of future development and commercialization activities, including

product manufacturing, marketing, sales, royalties, and distribution, for Proclarix, and other products for which we may receive

marketing approval;

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 product;

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

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 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.

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Effect of exchange rate changes on cash

Net (decrease) in cash

$ (3,907,835 )

Net increase (decrease) in cash

$ (3,907,835 )

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Net cash used in operating activities for the

year ended December 31, 2025, was approximately $9.7 million, which primarily resulted from a net loss of approximately $14.0 million,

a non-cash change in fair value of subscription liability of approximately $3.1 million, a non-cash gain on forgiveness of accounts payable

of approximately $0.9 million, a non-cash change in fair value of Series D warrant liability of approximately $10.4 million, a non-cash

change in fair value of Series E warrant liability of approximately $4.5 million, and net changes in our operating assets and liabilities

of $2.4 million.

These items were offset by several non-cash items, which primarily include impairment of goodwill of approximately $11.5

million, loss on extinguishment of notes payable of approximately $5.4 million, loss on issuance of Series D preferred stock of approximately

$2.5 million, loss on issuance of Series E preferred stock of approximately $1.1 million, change in fair value of Series D derivative

liability of approximately $3.8 million, and change in fair value of Series E derivative liability of approximately $1.5 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.

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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.

$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.

Cash Flows from Investing Activities

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.

year ended December 31, 2025 was $0.

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.

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

Cash Flows from Financing Activities

Net cash provided by financing activities for

the year ended December 31, 2025 was approximately $14.5 million, and resulted primarily from proceeds of approximately $9.3 million

from the issuance of Series D preferred stock and warrants, proceeds of approximately $6.3 million from the issuance proceeds of Series

E preferred stock and warrants, $6.4 million from the sale of common stock in connection with the ELOC and $1.3 million from the issuance

of notes payable.

These proceeds were offset by payments on notes payable of approximately $7.1 million and a payment of approximately

$1.7 million related to redemption of the Series C Preferred Stock.

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.

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

series C preferred stock of $1.9 million, and proceeds from sale 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

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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

assets acquired and liabilities assumed based on the cost to the acquiring entity on a relative fair value basis, except for non-qualifying assets including

financial assets such as inventory.

Further, the cost of the acquisition includes the fair value of consideration transferred and direct

transaction costs attributable to the acquisition.

Goodwill is not recognized in an asset acquisition and any excess consideration transferred

over the fair value of the net assets acquired is allocated to the identifiable assets based on relative fair values.

Contingent consideration

payments in asset acquisitions are recognized when the contingency is determined to be probable and reasonably estimable.

If the assets

acquired are a business, the Company accounts for the transaction as a business combination.

Business combinations are accounted for by

using the acquisition method of accounting.

Under the acquisition method, assets acquired, and liabilities assumed are recorded at their

respective fair values.

The excess of the fair value of consideration transferred over the fair value of the net assets acquired is recorded

Acquisition-related expenses are expensed as incurred, and are included in selling, general and administrative expenses in

the consolidated statements of operations and comprehensive loss.

Goodwill and Other Intangible Assets

Accounting for Series D and Series E PIPE

Securities including Warrant and Derivative Liabilities

In connection with the Series D and Series E

PIPE Financings, we issued Series D Preferred Stock and Series D Warrants to certain institutional investors on September 22, 2025, and

Series E Preferred Stock and Series E Warrants to certain institutional investors on October 1, 2025.

The accounting determinations in

connection with the Series D and Series E PIPE Securities have a significant effect on our reported financial position and results of

We determine the accounting classification of

the instruments by first assessing each instrument under ASC 480, Distinguishing Liabilities from Equity, then assessing each instrument

under ASC 815, Derivatives and Hedging Activities.

Under ASC 480, instruments are considered liability classified if they are mandatorily

redeemable, obligate us to settle the warrants or the underlying shares by paying cash or other assets, and instruments that must or

may require settlement by issuing variable number of shares.

If instruments do not meet the liability classification under ASC 480-10,

we assess 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, we also assess whether the instruments are indexed to our Common Stock and whether the instruments are classified as

equity under ASC 815-40 or other GAAP.

After all such assessments, we conclude whether the instruments are classified as liability or

In addition, ASC 815 requires companies to bifurcate

certain features from their host instruments and account for them as free-standing derivative financial instruments should certain criteria

We evaluate our financial instruments to determine whether such instruments are derivatives or contain features that qualify

as embedded derivatives.

Embedded derivatives must be separately measured from the host contract if all the requirements for bifurcation

The assessment of the conditions surrounding the bifurcation of embedded derivatives depends on the nature of the host contract

and the features of the derivatives.

Bifurcated embedded derivatives are recognized at fair value, with changes in fair value recognized

in the consolidated statements of operations each period.

Bifurcated embedded derivatives are classified with the related host contract

in our consolidated balance sheets.

The classification of derivative instruments, including whether such instruments should be recorded

as liabilities or as equity, is re-assessed at the end of each reporting period.

Liability classified instruments require fair

value accounting at issuance and subsequent to initial issuance with all changes in fair value after the issuance date recorded in the

consolidated statements of operations.

The Company concluded the Series D Preferred

Stock and Series E Preferred Stock were more akin to an equity-like host than a debt-like host and were classified as permanent equity

as they were not redeemable in any manner that would require classification outside of permanent equity pursuant to ASC 480-10-S99.

Series D Warrants, Series E Warrants, and certain embedded share-settled redemption features of the Series D Preferred Stock and Series

E Preferred Stock issued were determined to be liability-classified instruments pursuant to ASC 480 and ASC 815.

The embedded features

of the Series D Preferred Stock and Series E Preferred Stock were bifurcated and accounted for separately as derivative liabilities.

Fair Value Measurements for Series D and

E Warrant Amendment Reclassification

On December 23, 2025, the Company executed a

Limited Waiver Agreement (effective October 1, 2025) that amended the September and October 2025 Series D and E warrants (the “Amended

Warrants”), including removal of the issuer-specific cash settlement upon certain Fundamental Transactions and a change to treat

holders pari passu with common shareholders.

Management concluded the Amended Warrants no longer embody an obligation to transfer assets

under ASC 480 and, after evaluating exercise/settlement terms (including anti-dilution, buy-in, authorized-share-failure, and beneficial-ownership

caps), determined they are indexed to the Company’s stock and meet equity-classification conditions under ASC 815-40.

the Series D and Series E warrants were remeasured at fair value and reclassified to additional paid-in capital on December 23, 2025

(See Note 8).

Fair Value Measurements for Series D and

E Warrant and Derivative Liabilities

The Company measured its Series D and E bifurcated

embedded derivatives as of December 31, 2025, at fair value on a recurring basis using level 3 inputs.

Prior to the Series D and E warrant

amendments and reclassification to equity, the warrant liabilities were also measured at fair value on a recurring basis using level

These financial instruments are measured using management’s best estimate of fair value, where the inputs into the determination

of fair value require significant management judgment to estimation.

The derivative and warrant liabilities were both measured using

Monte Carlo valuation models.

Valuations based on unobservable inputs are highly subjective and require significant judgments.

inputs used for the valuation include expected term, volatility, risk-free interest rate, dividend yield, and stock price.

such judgments could have a material impact on fair value estimates.

Goodwill represents the excess of the cost

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To perform its quantitative test, the Company compares the fair value of the reporting unit to its carrying

If the fair value of the reporting unit exceeds the carrying value of its net assets, goodwill is not impaired, and no

further testing is required.

If the fair value of the reporting unit exceeds the carrying value of its net assets, goodwill is not impaired, and

no further testing is required.

If the fair value of the reporting unit is less than the carrying value, the Company measures the amount

of impairment loss, if any, as the excess of the carrying value over the fair value of the reporting unit.

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

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.

Based on its evaluation, the

Company identified and recognized partial impairment charges of goodwill during the years ended December 31, 2025 and 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.

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.

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.

Quantitative and Qualitative Disclosures About

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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.

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

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

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.

Quantitative and Qualitative Disclosures About Market

As a smaller reporting company, we are not required

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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