What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-05-15 compared with 2024-11-15 · 573 added, 539 removed, 70 unchanged (94% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

following discussion and analysis of the financial condition and results of operations of OS Therapies Incorporated (“OS Therapies,”

the “Company,” “we,” “our” or “us”) should be read in conjunction with the financial

statements and notes thereto appearing in Part I, Item 1 of this report.

In the following discussions, most percentages and dollar amounts

have been rounded to aid presentation, and, accordingly, all amounts are approximations.

Note Regarding Forward-Looking Statements

report contains “forward-looking statements” (within the meaning of Section 27A of the Securities Act of 1933, as amended

(the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)),

which may include information concerning our beliefs, plans, objectives, goals, expectations, strategies, anticipations, assumptions,

estimates, intentions, future events, future revenues or performance, capital expenditures and other information that is not historical

Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may be beyond our control,

and which may cause our actual results, performance or achievements to be materially different from future results, performance or achievements

expressed or implied by such forward-looking statements.

When used in this report, the words “seek,” “estimate,”

“expect,” “anticipate,” “project,” “plan,” “contemplate,” “plan,”

“continue,” “intend,” “believe” and variations of such words or similar expressions are intended

to identify forward-looking statements.

All forward-looking statements are based upon our current expectations and various assumptions.

We believe there is a reasonable basis for its expectations and beliefs, but there can be no assurance that we will realize its expectations

or that its beliefs will prove to be correct.

are a number of risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements

contained in this report.

Examples of risks and uncertainties that could cause actual results to differ materially from historical performance

and any forward-looking statements include, but are not limited to, the risks described under the section below titled “Risk Factors”

of our Registration Statements on Form S-1 initially filed with the Securities and Exchange Commission (the “SEC”) on May

30, 2024 and November 12, 2024, as well as any subsequent filings with the SEC.

may be other factors of which we are currently unaware or which it currently deems immaterial that may cause its actual results to differ

materially from the forward-looking statements.

All forward-looking statements attributable to us or persons acting on our behalf apply

only as of the date they are made and are expressly qualified in their entirety by the cautionary statements included in this report.

Except as may be required by law, we undertake no obligation to publicly update or revise any forward-looking statement to reflect events

or circumstances occurring after the date they were made or to reflect the occurrence of unanticipated events, or otherwise.

make available through its Internet website, free of charge, its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current

Reports on Form 8-K, and amendments to such reports and other filings made by us with the SEC, as soon as practicable after we electronically

file such reports and filings with the SEC.

Management’s Discussion and Analysis of Financial

Condition and Results of Operations.

The following discussion

and analysis of the financial condition and results of operations of OS Therapies Incorporated (“OS Therapies,” the “Company,”

“we,” “our” or “us”) should be read in conjunction with the financial statements and notes thereto

appearing in Part I, Item 1 of this report.

In the following discussions, most percentages and dollar amounts have been rounded to aid

presentation, and, accordingly, all amounts are approximations.

Cautionary Note Regarding Forward-Looking Statements

This report contains “forward-looking

statements” (within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and

Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), which may include information concerning

our beliefs, plans, objectives, goals, expectations, strategies, anticipations, assumptions, estimates, intentions, future events, future

revenues or performance, capital expenditures and other information that is not historical information.

Forward-looking statements involve

known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause our actual results, performance

or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking

When used in this report, the words “seek,” “estimate,” “expect,” “anticipate,”

“project,” “plan,” “contemplate,” “plan,” “continue,” “intend,”

“believe” and variations of such words or similar expressions are intended to identify forward-looking statements.

All forward-looking

statements are based upon our current expectations and various assumptions.

We believe there is a reasonable basis for our expectations

and beliefs, but there can be no assurance that we will realize our expectations or that our beliefs will prove to be correct.

There are a number of risks

and uncertainties that could cause our actual results to differ materially from the forward-looking statements contained in this report.

Examples of risks and uncertainties that could cause actual results to differ materially from historical performance and any forward-looking

statements include, but are not limited to, the risks described under the section below titled “Risk Factors” and in our Annual

Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 31, 2025, as well as any subsequent

filings with the SEC.

There may be other factors

of which we are currently unaware or which we currently deem immaterial that may cause our actual results to differ materially from the

forward-looking statements.

All forward-looking statements attributable to us or persons acting on our behalf apply only as of the date

they are made and are expressly qualified in their entirety by the cautionary statements included in this report.

Except as may be required

by law, we undertake no obligation to publicly update or revise any forward-looking statement to reflect events or circumstances occurring

after the date they were made or to reflect the occurrence of unanticipated events, or otherwise.

We make available through

our Internet website, free of charge, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and

amendments to such reports and other filings made by us with the SEC, as soon as practicable after we electronically file such reports

and filings with the SEC.

Our website address is www.ostherapies.com.

The information contained on our website is not

incorporated by reference into this report.

are a clinical stage biopharmaceutical company focused on the identification, development and commercialization of treatments for Osteosarcoma

(OS) and other solid tumors.

Our mission is to address the significant need for new treatments in cancers of the bone in children and

young adults.

Osteosarcoma is an extremely challenging and often aggressive cancer that has particular treatment challenges due to its

location, changing genotypes and high metastases rates.

We are currently seeking to answer the call for new treatments that will prevent

metastasis and the recurrence of metastases with our lead core product candidate OST-HER2 (also known as OST31-164), a cancer immunotherapy

product candidate that produces a cellular immune response against the cancer antigen HER2.

In 2021, we opened a clinical study to produce

data for the U.S.

Food and Drug Administration (FDA) to evaluate the safety and efficacy of OST-HER2 in patients after resection

of recurrent Osteosarcoma, which achieved full enrollment of 41 patients in October 2023.

We expect topline results from all 41

patients enrolled in the fourth quarter of 2024 and, if successful, intend to seek regulatory approval for OST-HER2 for the prevention

of metastases in Osteosarcoma in 2025.

Upon success in gaining regulatory approval from the FDA with OST-HER2 in Osteosarcoma, we intend

to evaluate OST-HER2’s potential use, both alone and in combination with HER2 targeting antibodies such as Herceptin®, in other

solid tumors including breast, esophageal and lung cancers.

OST-HER2 has potential uses in both the prevention of metastases in solid

tumors, and therapeutically against HER2-expressing solid tumors treated with HER targeting antibodies.

also own rights to OST-Tunable Drug Conjugate (OST-tADC) platform, a next generation antibody-drug conjugate (ADC) silicone dioxide linker

“Tunable” is a term used in drug development that refers to the properties that can be influenced by chemical

modifications, and “antibody-drug conjugate” or ADC is a term used to describe a drug made up of a monoclonal antibody attached

to a cytotoxic payload, or a highly active and toxic pharmaceutical molecule, through chemical linkers.

The ADC links an antibody that

can home in on a targeted tumor to deploy the cytotoxic payload or toxic agent against the tumor.

Furthering our founding mission, we

intend to investigate clinical indications for OST-tADC in Osteosarcoma and other solid tumors

new treatments have been approved by the FDA for human Osteosarcoma for more than 40 years.

In humans, Osteosarcoma is an extremely

rare cancer that primarily affects children, teenagers and young adults generally under 40 years of age.

We are not aware of any

competing adjuvant therapy for Osteosarcoma to be tested in children that is further along in the development process than OST-HER2.

This disease is difficult to diagnose.

The standard of care following first line therapies is simply to screen and wait for possible

recurrence/metastasis, or the development of secondary malignant growths at a distance from a primary site of cancer.

Studies published

in the Journal of Clinical Oncology, “Osteosarcoma Relapse After Combined Modality Therapy:

An Analysis of Unselected Patients

in the Cooperative Osteosarcoma Study Group (COSS),” by Kempf-Bielack B., et al.

(January 2005), and “Second and Subsequent

Recurrences of Osteosarcoma:

Presentation, Treatment, and Outcomes of 249 Consecutive Cooperative Osteosarcoma Study Group Patients,”

by Bielack S., et al.

(February 2009), reported that recurrence/metastasis happens in approximately half of all patients within 12

to 18 months following initial remittance.

For those patients that experience recurrence, metastasis is typically to the lungs and

brain, with survival rates of approximately 13% over the next year, according to these studies.

Accounting Policies and Significant Judgments and Estimates

financial statements are prepared in accordance with generally accepted accounting principles in the United States (“GAAP”).

The preparation of our financial statements and related disclosures requires us to make estimates and judgments that affect the reported

amounts of assets, liabilities, costs and expenses, and the disclosure of contingent assets and liabilities in our financial statements.

We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under

the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that

are not readily apparent from other sources.

The information contained on our website is not incorporated by

reference into this report.

We are a clinical stage biopharmaceutical

company focused on the identification, development and commercialization of treatments for Osteosarcoma (OS) and other solid tumors.

mission is to address the significant need for new treatments in cancers of the bone in children and young adults.

Osteosarcoma is an

extremely challenging and often aggressive cancer that has particular treatment challenges due to its location, changing genotypes and

high metastases rates.

We are currently seeking to answer the call for new treatments that will prevent metastasis and the recurrence

of metastases with our lead core product candidate OST-HER2 (also known as OST31-164), a cancer immunotherapy product candidate that produces

a cellular immune response against the cancer antigen HER2.

In 2021, we opened a clinical study to produce data for the U.S.

and Drug Administration (FDA) to evaluate the safety and efficacy of OST-HER2 in patients after resection of recurrent Osteosarcoma, which

achieved full enrollment of 41 patients in October 2023.

In the first quarter of 2025, we

announced that our Phase IIb clinical trial achieved its primary endpoint with statistical significance .

believe the efficacy results, combined with the favorable safety profile and the unmet clinical need, support the potential for regulatory

We plan to request a Type B or Type C FDA meeting in the second quarter of 2025 to discuss the data and the path to a Biologics

License Application (BLA).

Subject to positive FDA feedback, we plan to submit a BLA with the FDA for approval to market the drug candidate

shortly thereafter.

Upon success in gaining regulatory approval from the FDA with OST-HER2 in Osteosarcoma, we intend to evaluate

OST-HER2’s potential use, both alone and in combination with HER2 targeting antibodies such as Herceptin®, in other solid tumors

including breast, esophageal and lung cancers.

OST-HER2 has potential uses in both the prevention of metastases in solid tumors, and therapeutically

against HER2-expressing solid tumors treated with HER targeting antibodies.

We also own rights to OST-Tunable

Drug Conjugate (OST-tADC) platform, a next generation antibody-drug conjugate (ADC) silicone dioxide linker technology.

is a term used in drug development that refers to the properties that can be influenced by chemical modifications, and “antibody-drug

conjugate” or ADC is a term used to describe a drug made up of a monoclonal antibody attached to a cytotoxic payload, or a highly

active and toxic pharmaceutical molecule, through chemical linkers.

The ADC links an antibody that can home in on a targeted tumor to

deploy the cytotoxic payload or toxic agent against the tumor.

Furthering our founding mission, we intend to investigate clinical indications

for OST-tADC in Osteosarcoma and other solid tumors

No new treatments have been

approved by the FDA for human Osteosarcoma for more than 40 years.

In humans, Osteosarcoma is an extremely rare cancer that primarily

affects children, teenagers and young adults generally under 40 years of age.

We are not aware of any competing adjuvant therapy

for Osteosarcoma to be tested in children that is further along in the development process than OST-HER2.

This disease is difficult to

The standard of care following first line therapies is simply to screen and wait for possible recurrence/metastasis, or the

development of secondary malignant growths at a distance from a primary site of cancer.

Studies published in the Journal of Clinical Oncology,

“Osteosarcoma Relapse After Combined Modality Therapy:

An Analysis of Unselected Patients in the Cooperative Osteosarcoma Study

Group (COSS),” by Kempf-Bielack B., et al.

(January 2005), and “Second and Subsequent Recurrences of Osteosarcoma:

Presentation,

Treatment, and Outcomes of 249 Consecutive Cooperative Osteosarcoma Study Group Patients,” by Bielack S., et al.

(February 2009),

reported that recurrence/metastasis happens in approximately half of all patients within 12 to 18 months following initial remittance.

For those patients that experience recurrence, metastasis is typically to the lungs and brain, with survival rates of approximately 13%

over the next year, according to these studies.

Recent Developments

PIPE Financing

On December 24, 2024, we

entered into a Securities Purchase Agreement (the “PIPE Purchase Agreement”) with certain institutional and accredited investors

(collectively, the “Purchasers”), substantially all of whom are existing stockholders of our company, pursuant to which we

agreed to issue and sell to the Purchasers immediately separable units (the “Units”), with each Unit being comprised of (i)

one share of Series A Senior Convertible Preferred Stock, par value $0.001 per share (the “Series A Preferred Stock”), and

(ii) a warrant to purchase one share of common stock (each, a “Series A Warrant” and such shares, the “Warrant Shares”),

at a price per Unit of $4.00, for aggregate gross proceeds of not less than $6 million and not more than $10 million (the “PIPE

At two closings occurring on December 31, 2024 and January 14, 2025, we issued to the PIPE investors an aggregate of

(i) 1,775,750 shares of Series A Preferred Stock and (ii) Series A Warrants initially exercisable into 1,775,750 shares of common stock.

The gross proceeds from the Private Placement, before deducting transaction fees and other estimated Private Placement expenses, were

approximately $7,103,000.

The PIPE Purchase Agreement

required us to seek stockholder approval for any transactions contemplated by the PIPE Purchase Agreement and the related documents for

which the rules of the NYSE American require stockholder approval (“Stockholder Approval”) and to hold a special meeting of

stockholders for the purpose of obtaining Stockholder Approval not later than April 9, 2025.

On April 9, 2025, we convened

a Special Meeting of Stockholders (the “Special Meeting”) for the Stockholder Approval, in accordance with NYSE American LLC

Company Guide Section 713(a), of the issuance of shares of our common stock upon (i) the conversion of 1,775,750 shares of Series A Preferred

Stock, (ii) the exercise of the Series A Warrants, and (iii) the exercise of the Agent Warrants in connection with our PIPE Financing,

in each case without regard to any limits on conversion or exercise therein and in amounts collectively equal to or exceeding 20% of our

common stock outstanding as of December 24, 2024 (including upon the operation of applicable price reset and anti-dilution provisions

and/or the reduction of conversion prices and exercise prices) (the “Issuance Proposal”).

The Issuance Proposal was approved

by the affirmative vote of a majority of the votes cast by our stockholders at the Special Meeting.

The PIPE Purchase Agreement

restricts us from issuing additional shares of common stock, or securities convertible into or exercisable or exchangeable for shares

of common stock during the period beginning from the closing until the later of (x) six months from the closing and (y) April 9, 2025,

and restricts us from entering into variable rate transactions at any time the Purchasers hold Series A Warrants, subject to certain exceptions.

In connection with the PIPE

Financing, we entered into a Registration Rights Agreement, dated December 31, 2024, with the Purchasers, pursuant to which we agreed

to use reasonable best efforts to, by no later than January 31, 2025, submit to the SEC a registration statement covering the resale of

a number of shares of common stock underlying the Series A Preferred Stock and the Series A Warrants issued pursuant to the PIPE Purchase

Agreement equal to 300% of the shares of common stock initially issuable thereunder, and to use commercially reasonable efforts to cause

such registration statement to be declared effective by the SEC within 45 days thereafter.

Brookline Capital Markets,

a division of Arcadia Securities, LLC (“Brookline”), acted as exclusive placement agent for the issuance and sale of the securities

in the PIPE Financing.

Pursuant to the terms of a letter agreement, dated December 27, 2024, between the Company and Brookline (the “Placement

Agency Agreement”), the Company agreed to pay Brookline an aggregate cash fee (the “Cash Fee”) equal to (i) 7% of the

gross proceeds received by the Company from the sale of the securities in the PIPE Financing to Purchasers other than certain Purchasers

identified on a schedule thereto (“Reduced Fee Purchasers”) plus (ii) 3% of the gross proceeds received by the Company from

the sale of the securities in the PIPE Financing to Reduced Fee Purchasers, plus expenses;

provided that Ceros Financial Services, Inc.,

Brookline’s selected dealer for the PIPE Financing (“Ceros”) is entitled to up to 33.3% of the Cash Fee.

In addition, the Company

agreed to pay Brookline or its designee a fee in the form of warrants to purchase shares of common stock (the “Agent Warrants”).

The Agent Warrants are initially exercisable into a number of shares of common stock equal to (i) 7% of the number of shares of common

stock initially issuable pursuant to the shares of Series A Preferred Stock issued to Purchasers other than Reduced Fee Purchasers in

the PIPE Financing plus (ii) 3% of the number of shares of common stock initially issuable pursuant to the shares of Series A Preferred

Stock issued Reduced Fee Purchasers in the PIPE Financing;

provided that, Ceros is entitled to up to 33.3% of the Agent Warrants.

terms of the Agent Warrants are substantially similar to the terms of the Series A Warrants.

At two closings occurring on December 31,

2024 and January 14, 2025, (i) Brookline received an aggregate cash fee of $159,685 and the right to receive Agent Warrants initially

exercisable for an aggregate of 39,918 shares of common stock, and (ii) Ceros received an aggregate cash fee of $79,723 and the right

to receive Agent Warrants initially exercisable for an aggregate of 19,930 shares of common stock.

Shortly following the second closing,

we issued Brookline’s Agent Warrants and Ceros’ Agent Warrants to their respective designees in accordance with their instructions.

Each of the holders of the Agent Warrants is affiliated with a broker-dealer regulated by the Financial Industry Regulatory Authority,

These selling stockholders acquired their respective securities in the ordinary course of such selling stockholder’s business

and, at the time of the acquisition of the shares to be resold pursuant to this prospectus, the selling stockholders had no agreements

or understandings, directly or indirectly, with any person to distribute them.

Our Acquisition of HER2 and Lm -Related

On April 9, 2025, pursuant

to the terms of an Asset Purchase Agreement, dated as of January 28, 2025 (the “HER2 Purchase Agreement”), between us and

Ayala Pharmaceuticals, Inc., a Delaware corporation formerly known as Advaxis, Inc.

(“Ayala”), we completed the previously

announced acquisition of the Lm -based immune-oncology programs and related intellectual property assets (the “HER2 Assets”)

The HER2 Assets include two investigational new drug (IND) filings with the FDA:

(i) ADXS-503 for non-small cell lung cancer;

and (ii) ADXS-504 for prostate cancer.

In consideration for the

purchase of the HER2 Assets, we agreed to assume certain specified liabilities and to pay an aggregate purchase price of $8,000,000, which

was paid as follows:

(i) $400,000 to Ayala ($150,000 of which was transferred upon signing of the HER2 Purchase Agreement and the remainder

on the closing date);

(ii) $100,000 to a third party on behalf of Ayala on the closing date;

and (iii) $7,500,000 worth of shares of the

our common stock, or 4,774,637 shares based on the volume-weighted average price of the Company’s common stock over the 30 trading

days immediately preceding the closing date (the “Ayala Consideration Shares”).

Because the issuance of the

Ayala Consideration Shares would require us to issue more than 19.99% of our outstanding common stock immediately prior to such issuance

(the “NYSE Ownership Limitation”), we issued to Ayala (i) 2,164,215 shares of common stock (the “Ayala Initial Shares”),

and (ii) a warrant to purchase 2,166,381 shares of common stock (the “Ayala Warrant” and the shares of common stock issuable

thereunder, the “Ayala Warrant Shares”).

Once we obtain stockholder approval in accordance with NYSE American LLC Company

Guide Section 713, we will subsequently issue to Ayala the remaining 444,041 shares of common stock (the “Ayala Additional Consideration

Shares”), except that, if at that time, the number of shares of common stock beneficially owned by Ayala would exceed 9.99% of the

number of shares of our common stock then outstanding, Ayala has the right to require us to issue, in lieu of such shares, a warrant to

purchase 444,041 on substantially the same terms of the Ayala Warrant.

In connection with the issuance

of the Ayala Consideration Shares (including the Ayala Warrant Shares and the Ayala Additional Consideration Shares), we entered into

a registration rights agreement with Ayala, requiring us to file one or more registration statements, as necessary, to register under

the Securities Act the resale of such shares no later than 75 days after the closing of the transaction.

Ayala entered into a lock-up

agreement, pursuant to which, and subject to the terms and conditions set forth therein, Ayala has agreed not to trade or transfer, subject

to certain customary exceptions, any of the Ayala Consideration Shares (including the Ayala Warrant Shares) for a period of 180 days following

the closing of the transaction.

Critical Accounting Policies and Estimates

Our financial statements

are prepared in accordance with generally accepted accounting principles in the United States (“GAAP”).

The preparation

of our financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets,

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

We base our estimates

on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the

results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent

from other sources.

We evaluate our estimates and assumptions on an ongoing basis.

Our actual results may differ

from these estimates under different assumptions or conditions.

accounting policies are those that, in management’s view, are most important to the portrayal of a company’s financial condition

and results of operations and most demanding on their calls on judgment, often as a result of the need to make estimates about the effect

of matters that are inherently uncertain and may change in subsequent periods.

While our significant accounting policies are described

in more detail in Note 2 to our financial statements appearing elsewhere in this report, we believe that the following accounting

policies are those most critical to the judgments and estimates used in the preparation of our financial statements.

Discount and Redemption Premium

evaluated the Group A Convertible Notes, the Group B Convertible Notes, the Group C Convertible Notes and the Bridge Notes (collectively,

the “Convertible Notes”) in accordance with ASC 480, Distinguishing Liabilities from Equity (“ASC 480”)

and determined that the Convertible Notes are considered share-settled debt and should be recorded as a liability.

This conclusion was

determined based on the debt providing the holder with a variable number of shares at settlement with an aggregate fair value equal to

the debt instrument’s outstanding principal.

The general measurement guidance in ASC 480 requires obligations that can be

settled in shares with a fixed monetary value at settlement (e.g., share-settled debt) to be carried at fair value unless other accounting

guidance specifies another measurement attribute.

It has been determined that the appropriate guidance for share-settled debt is ASC 835.

As a result, the Convertible Notes will be recorded at the amortized cost.

initial fair value of the redemption value relating to the convertible debt instruments are capitalized and amortized over the term of

the related debt using the straight-line method, which approximates the interest method.

If a loan is paid in full, any unamortized financing

costs will be removed from the related accounts and charged to operations.

Amortization of debt discount is recorded as a component of

Our actual results may differ from these estimates

under different assumptions or conditions.

Critical accounting policies

are those that, in management’s view, are most important to the portrayal of a company’s financial condition and results of

operations and most demanding on their calls on judgment, often as a result of the need to make estimates about the effect of matters

that are inherently uncertain and may change in subsequent periods.

While our significant accounting policies are described in more detail

in Note 2 to our financial statements appearing elsewhere in this annual report, we believe that the following accounting policies

are those most critical to the judgments and estimates used in the preparation of our financial statements.

Warrant Liability

We do not use derivative

instruments to hedge exposures to cash flow, market, or foreign currency risks.

We evaluate all of our financial instruments, including

issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives,

pursuant to ASC 480 and FASB ASC Topic 815, “Derivatives and Hedging” (“ASC 815”).

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

Series A Warrants issued in connection with the Purchase Agreement are recognized as a derivative liability in accordance with ASC 815.

We recognize the warrant instruments as a liability at fair value and adjust the instruments to fair value at each reporting period.

liability is subject to re-measurement at each balance sheet date until exercised or reclassified, and any change in fair value is recognized

in our consolidated statements of operations.

The fair value of the Series A Warrants was measured using a Binomial simulation model.

The determination of the fair value of the warrant liability may be subject to change as more current information becomes available, and,

accordingly, the actual results could differ significantly.

The revaluation would result in material changes in fair value on a period

by period basis.

We have determined that the fair value of the warrant liability was a critical accounting estimate.

Components of Our Results of Operations

did not recognize revenues for the three months ended March 31, 2025 and 2024.

Operating Expenses.

Our operating expenses are comprised primarily of research and development expenses, general and administrative expenses and licensing

Research and Development

Research and development expenses consist primarily of costs incurred for our research activities, including our drug

discovery efforts, and the development of our product candidates, which include:

● personnel-related costs, including

salaries, benefits and stock-based compensation expense, for employees engaged in research and development functions;

● expenses incurred in connection

with our research programs, including under agreements with third parties, such as consultants and contractors and CROs;

● the cost of developing and

scaling our manufacturing process and manufacturing drug substance and drug product for use in our research and preclinical and clinical

studies, including under agreements with third parties, such as consultants and contractors and contract development and manufacturing

organizations (CDMOs);

● the cost of laboratory supplies

and research materials.

We track our direct external

research and development expenses on a program-by-program basis.

These consist of costs that include fees, reimbursed materials, and other

costs paid to consultants, contractors, CDMOs, and CROs in connection with our preclinical, clinical and manufacturing activities.

do not allocate employee costs, costs associated with our discovery efforts, and facilities expenses, including depreciation or other

indirect costs, to specific product development programs because these costs are deployed across multiple programs and, as such, are not

separately classified.

We expect that our research

and development expenses will increase substantially as we advance OST-HER2 and OST-tADC into clinical development and expand our discovery,

research and preclinical activities.

General and Administrative

General and administrative expenses consist primarily of salaries and related costs, including stock-based compensation,

for personnel in executive, finance and administrative functions.

General and administrative expenses also include professional fees for

legal, patent, consulting, investor and public relations and accounting and audit services.

We anticipate that our general

and administrative expenses will increase in the future as we increase our headcount to support our continued research activities and

development of our product candidates.

We also anticipate that we will incur increased accounting, audit, legal, regulatory, compliance,

and director and officer insurance costs as well as investor and public relations expenses associated with operating as a public company.

Licensing Costs.

incurred in obtaining technology licenses and asset purchases are charged to licensing costs if the technology licensed has not reached

technological feasibility which includes manufacturing, clinical, intellectual property and/or regulatory success which has no alternative

The licenses purchased by us require substantial completion of research and development and regulatory and marketing approval

efforts in order to reach technological feasibility.

Interest Expense.

In accordance with ASU 2015-03, Interest — Imputation of Interest, the unamortized debt discount

is presented in the accompanying balance sheet as a direct deduction from the carrying amount of the related debt.

The fair value of the redemption

liability is calculated under Level 3 of the fair value hierarchy and is determined based upon a Probability-Weighted of Expected Returns

Model (“PWERM”).

This PWERM was determined to be the most appropriate method of estimating the value of possible redemption

or conversion outcomes over time.

The fair value of the redemption liability is calculated using the initial value of the Convertible

Notes less the debt discount rate of 12.5% in Group A, 20% in Groups B and C, and 50% in Groups D, E and F.

The redemption liability is

then amortized over the remaining life of the note, utilizing the interest rates of 10% and 6% for the groups, respectively.

of each note in Group A is for a set period of three years and is variable in Groups B, C, D, E and F, with a range of 12 months to three

We retain the option to negotiate an extended maturity date for Groups B, C, D, E and F.

The new embedded redemption values were

$0 and $1,541,250 for the periods ended September 30, 2024 and December 31, 2023, respectively.

fees associated with the convertible debt raise are legal and investment fees associated with the issuance of the Convertible Notes for

Groups A, B, C, D, E and F.

There were no related parties who received these fees.

The fees are amortized over the life of the Convertible

Notes utilizing an interest rate of 10% for Group A and 6% for Groups B, C, D, E and F.

convertible debt raises and all associated accounts were closed out to stockholders’ equity on August 2, 2024, which was the date

on which we consummated our initial public offering and all outstanding convertible notes automatically converted into shares of common

of Our Results of Operations

We did not recognize revenues for the nine months ended September 30, 2024 or the year ended December 31, 2023.

Our operating expenses are comprised primarily of research and development expenses, general and administrative expenses

and licensing costs.

and Development Expenses.

Research and development expenses consist primarily of costs incurred for our research activities,

including our drug discovery efforts, and the development of our product candidates, which include:

personnel-related

costs, including salaries, benefits and stock-based compensation expense, for employees engaged in research and development functions;

incurred in connection with our research programs, including under agreements with third parties, such as consultants and contractors

cost of developing and scaling our manufacturing process and manufacturing drug substance and drug product for use in our research

and preclinical and clinical studies, including under agreements with third parties, such as consultants and contractors and contract

development and manufacturing organizations (CDMOs);

cost of laboratory supplies and research materials.

track our direct external research and development expenses on a program-by-program basis.

These consist of costs that include fees,

reimbursed materials, and other costs paid to consultants, contractors, CDMOs, and CROs in connection with our preclinical, clinical

and manufacturing activities.

We do not allocate employee costs, costs associated with our discovery efforts, and facilities expenses,

including depreciation or other indirect costs, to specific product development programs because these costs are deployed across multiple

programs and, as such, are not separately classified.

expect that our research and development expenses will increase substantially as we advance OST-HER2 and OST-tADC into clinical development

and expand our discovery, research and preclinical activities in the near term and in the future.

and Administrative Expenses.

General and administrative expenses consist primarily of salaries and related costs, including stock-based

compensation, for personnel in executive, finance and administrative functions.

General and administrative expenses also include professional

fees for legal, patent, consulting, investor and public relations and accounting and audit services.

anticipate that our general and administrative expenses will increase in the future as we increase our headcount to support our continued

research activities and development of our product candidates.

We also anticipate that we will incur increased accounting, audit, legal,

regulatory, compliance, and director and officer insurance costs as well as investor and public relations expenses associated with operating

as a public company.

Costs incurred in obtaining technology licenses and asset purchases are charged to licensing costs if the technology licensed

has not reached technological feasibility which includes manufacturing, clinical, intellectual property and/or regulatory success which

has no alternative future use.

The licenses purchased by us require substantial completion of research and development and regulatory

and marketing approval efforts in order to reach technological feasibility.

We evaluated the Convertible Notes in accordance with ASC 480, Distinguishing Liabilities from Equity (“ASC 480”),

and determined the Convertible Notes are considered share-settled debt and should be recorded as a liability.

This conclusion was determined

based on the debt providing the holder with a variable number of shares at settlement with an aggregate fair value equal to the debt

instrument’s outstanding principal.

The general measurement guidance in ASC 480 requires obligations that can be settled in

shares with a fixed monetary value at settlement (e.g., share-settled debt) to be carried at fair value unless other accounting guidance

specifies another measurement attribute.

It has been determined that the appropriate guidance for share-settled debt is ASC 835.

evaluated the convertible notes issued by us from July 2018 to April 2024 in accordance with ASC 480, Distinguishing Liabilities

from Equity (“ASC 480”), and determined the convertible notes are considered share-settled debt and should be recorded

as a liability.

This conclusion was determined based on the debt providing the holder with a variable number of shares at settlement with

an aggregate fair value equal to the debt instrument’s outstanding principal.

The general measurement guidance in ASC 480 requires

obligations that can be settled in shares with a fixed monetary value at settlement (e.g., share-settled debt) to be carried at fair value

unless other accounting guidance specifies another measurement attribute.

It has been determined that the appropriate guidance for share-settled

debt is ASC 835.

As a result, the convertible notes were recorded at the amortized cost.

2 unchanged sentences

The Series A preferred stock dividend requirement represents the coupon dividends on our preferred

stock and is identified as a separate component of our statement of operations to compute net income (loss) available to common shareholders.

stock that has since been converted and is identified as a separate component of our statement of operations to compute net income (loss)

available to common stockholders.

The coupon dividends are computed at 5% of the principal per annum and are recorded monthly.

The cumulative accrued dividend at September

30, 2024 and 2023 was $375,000 and $312,500, respectively.

The Series A preferred stock was converted into common stock on a 1:1 basis

in February 2024, and the last coupon dividend was issued in the quarter ended March 31, 2024.

Since our inception, we have not recorded income tax benefits for the net operating losses incurred or the research and

development tax credits generated in each year, due to the uncertainty of realizing a benefit from those items.

of December 31, 2023, we had U.S.

federal net operating loss carry forwards of approximately $16.3 million, which may be available

to offset future taxable income.

The federal net operating loss carry forward indefinitely but may only be used to offset 80% of annual

taxable income.

As of December 31, 2023, we also had federal and state general business tax credit carry forwards of $1.4 million

available to offset future tax liabilities and expire at various dates beginning in January 1, 2022.

We have R&D credits that

we opted to convert and use toward payroll taxes in amounts equal to $0.3 million as of December 31, 2023.

As of December 31, 2023,

we also had a federal and state research and development tax credit carry forwards of approximately $0.3 million, which may be available

to offset future tax liabilities and expire at various dates beginning January 1, 2024 and January 1, 2023, respectively.

Offering Costs.

Deferred offering costs consisted of legal, accounting, printing and filing fees that we capitalized, which will

be offset against the gross proceeds from our initial public offering.

of Operations

Three Months Ended September 30, 2024 Compared

to Three Months Ended September 30, 2023

The cumulative

accrued dividend as of March 31, 2025 and December 31, 2024 were $375,000 and $375,000, respectively.

The Series A preferred stock

was converted into common stock on a 1:1 basis in February 2024, and the last coupon dividend was issued in the quarter ended March 31,

Income Taxes.

our inception, we have not recorded income tax benefits for the net operating losses incurred or the research and development tax credits

generated in each year, due to the uncertainty of realizing a benefit from those items.

For years ended December 31,

2024 and December 31, 2023, we had federal net operating loss (“NOLs”) of $22,236,580 and $16,269,893, respectively.

The 2019 NOL carryforward of $292,144 will expire in tax years up through 2037.

The NOLs generated in tax years 2020 and beyond

will carry forward indefinitely, but the deductibility of such federal NOLs is limited.

We have provided a valuation allowance to offset

the deferred tax assets due to the uncertainty of realizing the benefits of the net deferred tax asset.

Our issuances of common stock

have resulted in ownership changes as defined by Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”)

however, we have not conducted a Section 382 study to date.

It is likely that a future analysis may result in the conclusion that

a substantial portion, or perhaps substantially all, of our NOL carryforwards and R&D tax credit carryforwards will expire due to

the limitations of Sections 382 and 383 of the Code.

As a result, the utilization of the carryforwards may be limited, and a portion of

the carryforwards may expire unused.

We are subject to U.S.

federal tax examinations by tax authorities for the year 2021 due to

the fact that NOL carryforwards exist going back to 2019 that may be utilized on a current or future year tax return.

Deferred Offering Costs.

Deferred offering costs consisted of legal, accounting, printing and filing fees that we capitalized, which will be offset against

the gross proceeds from our initial public offering.

Results of Operations

Three Months Ended March 31, 2025 Compared

to Three Months Ended March 31, 2024

The following table summarizes

our results of operations for the three months ended September 30, 2024 and 2023:

September 30,

(In thousands)

Research and development expenses

General and administrative

Total operating expenses

our results of operations for the three months ended March 31, 2025 and 2024:

OPERATING EXPENSES

Research & Development

General & Administrative

Loss from Operations

Other income (expenses):

OTHER INCOME/EXPENSE

Interest Income

Interest Expense

Total other expenses

Cumulative Series A preferred stock dividend requirement

Net loss available to common shareholders

Change in Fair Value of Warrant Liability

TOTAL OTHER INCOME/EXPENSE

$ (3,876,859 )

1 unchanged sentence

Research and Development

Research and development expenses were approximately $1.2 million for the three months ended September 30, 2024

compared to approximately $0.5 million for the three months ended September 30, 2023.

This decrease was primarily due to a decrease

in vendor expenses associated with our Phase IIb clinical trial and a decrease in vendor expenses associated with out OST-tADC platform

The following table summarizes our research and development expenses for the three months ended September 30, 2024 and

As of September 30,

Research and development expenses were approximately $1.3 million for the three months ended March 31, 2025 compared

to approximately $0.4 million for the three months ended March 31, 2024.

This increase was primarily due to an increase in vendor

expenses associated with our Phase IIb clinical trial and a decrease in vendor expenses associated with out OST-tADC platform technology.

The following table summarizes our research and development expenses for the three months ended March 31, 2025 and 2024:

As of March 31,

(In thousands)

4 unchanged sentences

For the three months ended

September 30, 2024 and 2023, the direct research and development expenses related to OST-HER2 were primarily lab fees, vendor expenses

and staff payroll fees.

March 31, 2025 and 2024, the direct research and development expenses related to OST-HER2 were primarily lab fees, vendor expenses and

staff payroll fees.

In 2025, such expenses were primarily lab fees and related clinical support of approximately $0.5 million attributed

to our Phase IIb clinical trial preparation and CRO costs as we completed IND-enabling studies.

OST-tADC related direct research and development

expenses were approximately $0.0 million and $0.0 million for the three months ended September 30, 2024 and 2023, respectively.

General and Administrative

General and administrative expenses for the three months ended September 30, 2024 were approximately $1.2 million

compared to $0.2 million for the three months ended September 30, 2023.

These expenses were primarily attributed to marketing costs

and accounting fees to consultants.

Licensing Costs.

did not have any licensing costs for the three months ended September 30, 2024 and 2023.

Interest Expense.

expense for the three months ended September 30, 2024 was approximately $0.4 million compared to $1.4 million for the three

months ended September 30, 2023.

The amounts of interest are comprised of accretion of debt discount being amortized in 2024 and 2023

from associated discounts related to convertible notes and placement agent warrants, together with interest expenses from the issuances

of convertible notes.

Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023

following table summarizes our results of operations for the nine months ended September 30, 2024 and 2023:

September 30,

(In thousands)

Research and development expenses

to our Phase IIb clinical trial preparation, advisor fees of $0.3 million, and legal costs of $0.1 million as we completed IND-enabling

OST-tADC related direct research and development expenses were approximately $0.04 million and $0.13 million for the

three months ended March 31, 2025 and 2024, respectively.

General and Administrative

Total operating expenses

Loss from operations

Other income (expenses):

Interest Income

General and administrative expenses for the three months ended March 31, 2025 were approximately $3.7 million compared

to $0.3 million for the three months ended March 31, 2024.

These expenses were primarily attributed to marketing costs and advisory

fees associated with the PIPE Financing and equity line of credit.

Interest Expense.

Total other expenses

Cumulative Series A preferred stock dividend requirement

Net loss available to common shareholders

$ (5,922,954 )

$ (6,420,766 )

Research and Development

Research and development expenses were approximately $1.9 million for the nine months ended September 30, 2024

compared to approximately $2.2 million for the nine months ended September 30, 2023.

This decrease was primarily due to a decrease

in vendor expenses associated with our Phase IIb clinical trial and a decrease in vendor expenses associated with out OST-tADC platform

The following table summarizes our research and development expenses for the nine months ended September 30, 2024 and

As of September 30,

(In thousands)

Direct research and development expenses by program:

Unallocated research and development expenses:

Personnel-related

Total research and development expenses

For the nine months ended

September 30, 2024 and 2023, the direct research and development expenses related to OST-HER2 were primarily lab fees, vendor expenses

and staff payroll fees.

In 2024, such expenses were primarily lab fees and related clinical support of approximately $1.6 million attributed

to our Phase IIb clinical trial preparation and CRO costs as we completed IND-enabling studies.

OST-tADC related direct research and development

expenses were approximately $0.0 million and $0.2 million for the nine months ended September 30, 2024 and 2023, respectively.

and Administrative Expenses.

General and administrative expenses for the nine months ended September 30, 2024 were approximately

$1.9 million compared to $1.0 million for the nine months ended September 30, 2023.

These expenses were primarily attributed

to marketing costs and accounting fees to consultants.

We did not have any licensing costs for the nine months ended September 30, 2024 and 2023.

Interest expense for the nine months ended September 30, 2024 was approximately $2.0 million compared to $3.1 million

for the nine months ended September 30, 2023.

The amounts of interest are comprised of accretion of debt discount being amortized in

2024 and 2023 from associated discounts related to convertible notes and placement agent warrants, together with interest expenses from

the issuances of convertible notes.

and Capital Resources

expense for the three months ended March 31, 2025 was approximately $0 million compared to $0.8 million for the three months ended March

The Series A preferred stock

coupon dividend requirement of $31,250 for the three months ended March 31, 2024 represents an expense that terminated during the period

ended March 31, 2024 upon the conversion of our old Series A preferred shares into shares of our common stock.

We issued Series A convertible

preferred stock and detachable warrants on December 31, 2024 and January 14, 2025.

The adjustment of the fair value of the warrant liability

was $1.1 million and $0 million for the three months ended March 31, 2025 and 2024, respectively.

Liquidity and Capital Resources

Operating Losses

Since our inception, we have

2 unchanged sentences

on the successful development and eventual commercialization of our product candidates.

For the nine months ended September 30, 2024 and

For the three months ended March 31, 2025 and

2024, we reported a net loss of approximately $2.7 million and $1.5 million, respectively, and had an accumulated deficit of approximately

2 unchanged sentences

losses for the foreseeable future.

As of September 30, 2024

and 2023, we had cash of approximately $1.9 million and $0.02 million, respectively.

We have funded our operations to date primarily from

the sale of our convertible notes in our private placements, which have provided total gross proceeds of $19.2 million as of July 31,

We believe that the net proceeds from our private placements, together with our existing cash, will enable us to fund our operating

expenses and capital expenditure requirements for the next three to nine months.

consummated our initial public offering on August 2, 2024, converting all our outstanding Convertible Notes into common stock and raising

$6.4 million in gross proceeds on the sale of 1.6 million shares of our common stock.

Net proceeds from our initial public offering were

used to pay off accounts payable and fund continuing losses through September 30, 2024.

following table summarizes our sources and uses of cash for each of the periods presented:

September 30,

As of March 31, 2025 and

December 31, 2024, we had cash of approximately $3.0 million and $5.5 million, respectively.

We have funded our operations to date

primarily from the sale of our convertible notes and Series A securities in our private placements, as well as the sale of our common

stock in our initial public offering, which have provided total gross proceeds of $34.6 million as of March 31, 2025.

We believe that

the net proceeds from our private placements and initial public offering, together with our existing cash, will enable us to fund our

operating expenses and capital expenditure requirements for the next nine to 12 months.

The following table summarizes

our sources and uses of cash for each of the periods presented:

(In thousands)

3 unchanged sentences

Net increase (decrease) in cash

the nine months ended September 30, 2024 and 2023, operating activities used approximately $4.9 million and $2.1 million of cash,

respectively, resulting from our net loss of approximately $5.9 million and $6.3 million, respectively, offset by net non-cash charges

of approximately $1.4 million and $2.6 million, respectively, partially offset by net cash provided by changes in our operating

assets and liabilities of approximately $(0.4) million and $1.6 million, respectively.

Net cash provided by changes

in our operating assets and liabilities for the nine months ended September 30, 2024 and 2023 consisted primarily of an increase (decrease)

in accounts payable of approximately $(0.9) million and $1.1 million, respectively, an increase in accrued interest of approximately

$0.6 million and $0.7 million, respectively, and a change in accrued payroll of approximately $(0.1) million and $(0.1) million,

respectively.

charges for the nine months ended September 30, 2024 and 2023 were primarily the result of the amortization of debt discount on our convertible

debt of approximately $1.4 million and $2.4 million, respectively.

Changes in accounts payable, accrued expenses and other current

liabilities and prepaid expenses and other current assets in all periods were generally due to growth in our business, the advancement

of our research programs and the timing of vendor invoicing and payments.

the nine months ended September 30, 2024 and 2023, net cash provided by investing activities was approximately $0.0 million and $0.0 million,

respectively.

the nine months ended September 30, 2024 and 2023, net cash provided by financing activities was approximately $6.7 million and $2.0 million,

respectively.

The net cash provided by financing activities for the nine months ended September 30, 2024 and 2023 consisted of net proceeds

from sales of convertible notes and our initial public offering, reduced by capitalized deferred offering costs.

have completed seven separate private financing transactions from July 2018 to April 2024 in which we issued the Convertible Notes

and raised total gross proceeds of $19,186,520 from accredited investors.

with respect to the seven separate private financings of convertible notes — A, B, C, D, E, F and BlinkBio — are

indicated in the table below.

September 30,

2023 carrying amount

Convertible Note

ceiling range on

note valuation

(in millions)

to 25 – varies per note

or 50 – varies per note

The total accrued interest

on the convertible notes listed in the table above was approximately $0.0 million and $2.0 million as of September 30, 2024 and December

31, 2023, respectively.

The carrying amount and face amount of such convertible notes differ because of the unamortized debt issuance

costs and the debt discount (which are amortized over the original term of the instrument) — see accounting policy discussion

The material terms of each group of Convertible Notes are described below.

The Convertible Notes, including interest accrued thereon,

automatically converted into common stock upon consummation of our initial public offering on August 2, 2024.

A Convertible Notes.

From July 2018 through November 2021, we issued convertible notes in an aggregate principal amount

of $1,154,000 (the “Group A Convertible Notes”) to accredited investors, including related parties.

Interest on the unpaid

principal balance on the Group A Convertible Notes accrued at a rate of 10% per annum, computed on the basis of the actual number of days

elapsed and a year of 365 days.

Unless earlier converted into shares of Equity Securities, the principal and accrued interest on

the Group A Convertible Notes were due and payable by us on demand by the holders of such convertible notes at any time after the earlier

of (i) the Maturity Date and (ii) the closing of the Next Equity Financing (which was our initial public offering).

the stated Maturity Date varied from the date of issuance of two to four years and was extended in October 2023, under the

same terms, until October 31, 2024.

Group A Convertible Notes automatically converted into shares of our common stock upon the consummation of our initial public offering.

The number of shares of our common stock issued upon the automatic conversion was equal to the quotient obtained by dividing the outstanding

principal and unpaid accrued interest due on the Group A Convertible Note on the date of conversion by a percentage between 80% to 87.5%,

as applicable, of the initial public offering price per share in such offering.

The Group A Convertible Notes had conversion capitalization

ceilings that ranged from $5 million to $25 million, which limited the price a noteholder must pay in a convertible note-to-common

stock conversion occurrence.

The Group A Convertible Notes had a conversion price that ranged from $0.39 to $1.97 per share, depending

on the applicable valuation ceiling of each note (based on the initial public offering price of $4.00 per share).

B Convertible Notes.

From April 2020 through June 2021, we issued convertible notes in an aggregate principal amount

of $5,154,000 (the “Group B Convertible Notes”) to accredited investors.

Interest on the unpaid principal balance of the

Group B Convertible Notes accrued at a rate of 6% per annum, computed on the basis of the actual number of days elapsed and a year

Unless earlier converted into shares of Equity Securities, the principal and accrued interest were due and payable

by us on demand by the convertible holders of such notes at any time after the earlier of (i) the Maturity Date and (ii) the

closing of the Next Equity Financing (which was our initial public offering).

In general, the stated Maturity Date was March 31,

2022 but was extended in October 2023, under the same terms, until October 31, 2024.

Group B Convertible Notes automatically converted into shares of our common stock upon the consummation of our initial public offering.

The number of shares of our common stock issued upon the automatic conversion was equal to the quotient obtained by dividing the outstanding

principal and unpaid accrued interest due on the Group B Convertible Note on the date of conversion by 80% of the initial public offering

price per share in such offering.

The Group B Convertible Notes had a conversion capitalization ceiling of $19 million, which limited

the price a noteholder must pay in a convertible note-to-common stock conversion occurrence.

As a result of the valuation ceiling, the

Group B Convertible Notes had a conversion price of $1.31 per share (based on the initial public offering price of $4.00 per share).

C Convertible Notes.

From June 2021 through January 2023, we issued convertible notes in an aggregate principal amount of

$3,945,020 (the “Group C Convertible Notes”) to accredited investors.

Interest on the unpaid principal balance of the Group

C Convertible Notes accrued at a rate of 6% per annum, computed on the basis of the actual number of days elapsed and a year of

Unless earlier converted into shares of Equity Securities, the principal and accrued interest were due and payable by

us on demand by the holders of such convertible notes at any time after the earlier of (i) the Maturity Date and (ii) the closing

of the Next Equity Financing (which was our initial public offering).

In general, the stated Maturity Date was May 31, 2024 but

was extended in October 2023, under the same terms, until October 31, 2024.

Group C Convertible Notes automatically converted into shares of our common stock upon the consummation of our initial public

The number of shares of our common stock issued upon the automatic conversion was equal to the quotient obtained by

dividing the outstanding principal and unpaid accrued interest due on the Group C Convertible Note on the date of conversion by 80%

of the initial public offering price per share in such offering.

The Group C Convertible Notes had a conversion capitalization

ceiling of $50 million, except that one note was subject to a valuation ceiling of $19 million, which limited the price a noteholder

must pay in a convertible note-to-common stock conversion occurrence.

As a result of the applicable valuation ceiling, the Group C

Convertible Notes had a conversion price of $1.31 or $2.59 per share, as applicable (based on the initial public offering price of

$4.00 per share).

Notes (Groups D, E and F).

In November 2022, we issued convertible notes in an aggregate principal amount of $2,000,000

(the “Group D Convertible Notes”) to accredited investors.

From February to June 2023, we issued convertible notes in an

aggregate principal amount of $1,100,000 (the “Group E Convertible Notes”) to accredited investors.

From June 2023 to April

2024, we issued convertible notes in an aggregate principal amount of $3,433,500 (the “Group F Convertible Notes” and,

collectively with the Group D Convertible Notes and Group E Convertible Notes, the “Bridge Notes”) to accredited investors,

of which an aggregate of $750,000 was issued in April 2024.

Interest on the unpaid principal balance of the Bridge Notes accrued at a

rate of 6% per annum, computed on the basis of the actual number of days elapsed and a year of 365 days.

Unless earlier converted

into shares of Equity Securities, the principal and accrued interest was due and payable by us on demand by the holders of such convertible

notes at any time after the earlier of (i) the Maturity Date and (ii) the closing of the Next Equity Financing (which was our

initial public offering).

In general, the stated Maturity Date was October 31, 2024.

Bridge Notes automatically converted into shares of our common stock upon the consummation of our initial public offering.

of shares of our common stock issued upon the automatic conversion was equal to the quotient obtained by dividing the outstanding principal

and unpaid accrued interest due on a Bridge Note on the date of conversion by 50% of the initial public offering price per share in such

The Bridge Notes had a conversion capitalization ceiling of $50 million, which limited the price a noteholder must pay

in a convertible note-to-common stock conversion occurrence.

As a result of the valuation ceiling, the Bridge Notes had a conversion

price of $2.00 per share (based on the initial public offering price of $4.00 per share).

On March 6, 2024 and June 28, 2024, we issued demand promissory notes to a lender who was an investor in one of our prior

convertible notes rounds in a principal amount of $100,000 and $150,000, respectively.

The demand notes bear interest at a rate of 8%

per annum and the principal plus all accrued interest is payable upon demand by such lender.

If such notes are not paid on demand by

us, interest will accrue at a rate of the lesser of 16% per annum and the highest rate of interest allowable under Maryland law.

of August 14, 2024, we have repaid the demand notes in full.

On August 19, 2020, we issued a convertible note with a principal amount of $2,400,000 (the “BlinkBio Convertible

Note”) to BlinkBio, Inc., which is a related party based on Dr.

Goddard being our Chairman and as the Chairman and Chief Executive

Officer of BlinkBio, in exchange for the entry into the license agreement.

On March 15, 2021, the principal and unpaid accrued interest

of $100,000 of the BlinkBio Convertible Note converted into 1,302,082 shares of our Series A preferred stock and then distributed

to BlinkBio stockholders.

The BlinkBio Convertible Note had a conversion capitalization ceiling of $19.2 million, which limited

the price a noteholder must pay in a convertible note-to-common stock conversion occurrence.

Operating Activities

During the three months ended

March 31, 2025 and 2024, operating activities used approximately $3.4 million and $.6 million of cash, respectively, resulting from our

net loss of approximately $3.9 million and $1.5 million, respectively, offset by net non-cash charges of approximately $0.7 million and

$0.6 million, respectively, partially offset by net cash (used in) provided by changes in our operating assets and liabilities of approximately

$(0.3) million and $0.2 million, respectively.

Net cash provided by changes in our operating assets and liabilities

for the three ended March 31, 2025 and 2024 consisted primarily of an increase (decrease) in accounts payable of approximately $(0.05)

million and $0.04 million, respectively, an increase (decrease) in accrued interest of approximately $0 million and $0.25 million, respectively,

and a change in accrued payroll of approximately $(0.1) million and $(0.05) million, respectively.

The change in accrued expenses of approximately

$(0.15) million and $(0.0) million was a significant portion of the use.

Non-cash charges for the

three months ended March 31, 2025 and 2024 were primarily the result of the changes in the fair value of our warrant liability combined

with our common stock shares issued for service and our stock-based compensation of approximately $0.7 million and $0.6 million, respectively.

Changes in accounts payable, accrued expenses and other current liabilities and prepaid expenses and other current assets in all periods

were generally due to growth in our business, the advancement of our research programs and the timing of vendor invoicing and payments.

Investing Activities

During the three months ended

March 31, 2025 and 2024, net cash used by investing activities was approximately $0.2 million and $0 million, respectively.

Financing Activities

For the three months ended

March 31, 2025 and 2024, net cash provided by financing activities was approximately $1.1 million and $0.7 million, respectively.

Convertible Notes.

We completed seven separate private financing transactions from July 2018 to April 2024 in which we issued convertible notes and

raised total gross proceeds of $19,426,449 from accredited investors.

All of the convertible notes were automatically converted into shares

of our common stock at the closing of our initial public offering.

Demand Notes.

March 6, 2024 and June 28, 2024, we issued demand promissory notes to a lender who was an investor in one of our prior convertible

notes rounds in a principal amount of $100,000 and $150,000, respectively.

The demand notes bear interest at a rate of 8% per annum and

the principal plus all accrued interest is payable upon demand by such lender.

If such notes are not paid on demand by us, interest will

accrue at a rate of the lesser of 16% per annum and the highest rate of interest allowable under Maryland law.

As of August 14, 2024,

we repaid the demand notes in full.

August 19, 2020, we issued a convertible note with a principal amount of $2,400,000 (the “BlinkBio Convertible Note”)

to BlinkBio, Inc., which was a related party because our former Chairman, Colin Goddard, Ph.D., is the Chairman and Chief Executive Officer

of BlinkBio, in exchange for the entry into the license agreement.

On March 15, 2021, the principal and unpaid accrued interest of

$100,000 of the BlinkBio Convertible Note converted into 1,302,082 shares of our Series A preferred stock and then distributed to

BlinkBio stockholders.

The BlinkBio Convertible Note had a conversion capitalization ceiling of $19.2 million, which limited the

price a noteholder must pay in a convertible note-to-common stock conversion occurrence.

On February 9, 2024, the 1,302,082 shares

of our Series A preferred stock were converted into 651,041 shares of common stock (on a post-split basis).

In May 2021, we received the first of two tranches from TEDCO’s Rural & Underserved Business Recovery

from Impact of Covid-19 (RUBRIC) Grant in the amount of $50,000.

In October 2021, we received the second tranche of $50,000, which

brought the total reimbursable grant amount to $100,000.

We are obligated to report on and pay to TEDCO 3% of their quarterly revenues

for a five-year period following the reward date.

May 2021, we received the first of two tranches from TEDCO’s Rural & Underserved Business Recovery from Impact of

Covid-19 (RUBRIC) Grant in the amount of $50,000.

In October 2021, we received the second tranche of $50,000, which brought the total

reimbursable grant amount to $100,000.

We are obligated to report on and pay to TEDCO 3% of their quarterly revenues for a five-year

period following the reward date.

Income from grants and investments are not considered revenues.

Royalties due to TEDCO

are capped at 150% of the amount of the award, or $150,000.

We have the option to eliminate the quarterly royalty obligation by making

an advance payment prior to the end of the five-year period, in which case, we will receive a 10% reduction of the royalty cap percentage

for each year prior to the expiration of the five-year reimbursement period that the grant is repaid in full.

If we cease to meet eligibility

requirements at any time, the reimbursement obligation will become due to TEDCO immediately;

however, the discount for meeting the obligation

will still apply.

Obligations and Other Commitments

enter into contracts in the normal course of business with our CDMOs, CROs and other third parties to support preclinical research studies

and testing and other development activities.

Royalties due to TEDCO are capped at

150% of the amount of the award, or $150,000.

We have the option to eliminate the quarterly royalty obligation by making an advance payment

prior to the end of the five-year period, in which case, we will receive a 10% reduction of the royalty cap percentage for each year prior

to the expiration of the five-year reimbursement period that the grant is repaid in full.

If we cease to meet eligibility requirements

at any time, the reimbursement obligation will become due to TEDCO immediately;

however, the discount for meeting the obligation will

PIPE Financing

On December 24, 2024, we

entered into the PIPE Purchase Agreement with the selling stockholders, substantially all of whom were existing stockholders of the Company,

pursuant to which we agreed to issue and sell to the selling stockholders the Units for aggregate gross proceeds of not less than $6 million

and not more than $10 million.

At two closings occurring on December 31, 2024 and January 14, 2025, we issued to the selling stockholders

an aggregate of (i) 1,775,750 shares of Series A Preferred Stock and (ii) Series A Warrants initially exercisable into 1,775,750 shares

of common stock.

The gross proceeds from the closing of the PIPE Financing, before deducting transaction fees and other estimated PIPE

Financing expenses, were approximately $7,103,000.

The Purchase Agreement requires us to seek stockholder approval for any transactions

contemplated by the Purchase Agreement and the related documents for which the rules of the NYSE American require stockholder approval

(“Stockholder Approval”) and to hold a special meeting of stockholders for the purpose of obtaining Stockholder Approval not

later than April 10, 2025.

In the event Stockholder Approval is not obtained at the first meeting, we are required to call a meeting every

four months seeking Stockholder Approval until Stockholder Approval is obtained.

On April 9, 2025, we convened

the Special Meeting for the Stockholder Approval, in accordance with NYSE American LLC Company Guide Section 713(a), of the issuance of

shares of our common stock upon (i) the conversion of 1,775,750 shares of Series A Preferred Stock, (ii) the exercise of the Series A

Warrants, and (iii) the exercise of the Agent Warrants in connection with our PIPE Financing, in each case without regard to any limits

on conversion or exercise therein and in amounts collectively equal to or exceeding 20% of our common stock outstanding as of December

24, 2024 (including upon the operation of applicable price reset and anti-dilution provisions and/or the reduction of conversion prices

and exercise prices).

The Issuance Proposal was approved by the affirmative vote of a majority of the votes cast by our stockholders at

the Special Meeting.

Brookline acted as exclusive

placement agent for the issuance and sale of the securities in the PIPE Financing.

Pursuant to the terms of the Placement Agency Agreement,

we agreed to pay Brookline an aggregate cash fee (the “Cash Fee”) equal to (i) 7% of the gross proceeds received by the Company

from the sale of the securities in the PIPE Financing to selling stockholders other than certain selling stockholders identified on a

schedule thereto (“Reduced Fee Purchasers”) plus (ii) 3% of the gross proceeds received by the Company from the sale of the

securities in the PIPE Financing to Reduced Fee Purchasers, plus expenses;

provided that Ceros is entitled to 33.3% of the Cash Fee.

In addition, we agreed to

pay Brookline or its designees a fee in the form of the Agent Warrants.

Warrants are initially exercisable into a number of shares of common stock equal to (i) 7% of the number of shares of common stock initially

issuable pursuant to the shares of Series A Preferred Stock issued to Purchasers other than Reduced Fee Purchasers in the PIPE Financing

plus (ii) 3% of the number of shares of common stock initially issuable pursuant to the shares of Series A Preferred Stock issued Reduced

Fee Purchasers in the PIPE Financing;

provided that, Ceros is entitled to up to 33.3% of the Agent Warrants.

The terms of the Agent Warrants

are substantially similar to the terms of the Series A Warrants.

At two closings occurring on December 31, 2024 and January 14, 2025,

(i) Brookline received an aggregate cash fee of $159,685 and 39,918 Agent Warrants, and (ii) Ceros received an aggregate cash fee of $79,723

and 19,930 Agent Warrants.

Contractual Obligations and Other Commitments

We enter into contracts in

the normal course of business with our CDMOs, CROs and other third parties to support preclinical research studies and testing and other

development activities.

These contracts are generally cancellable by us.

Payments due upon cancellation consist

only of payments for services provided or expenses incurred, including non-cancellable obligations of our service providers, up to the

date of cancellation.

Obligations and Research Services

In November 2020, we entered into an amended and restated development, license and supply agreement with Advaxis, Inc.

Ayala Pharmaceuticals, Inc.) (“Advaxis”), a clinical-stage biotechnology company focused on the development and commercialization

of proprietary Lm ( Listeria monocytogenes )-LLO (Listeriolysin O) cancer immunotherapies.

Pursuant to this agreement, Advaxis

granted a license to us that allows us to utilize Advaxis’ ADXS-HER2 construct patents to develop and commercialize ADXS-HER2,

our lead product candidate (OST-HER2).

The agreement was subsequently amended in April 2021 to modify the payment amounts for Milestones

2 and 3 listed in the table below.

Under the terms of the amended agreement, we are required to pay to Advaxis (i) a one-time, non-refundable

payment of $1,550,000 (the “License Commencement Payment”) and (ii) certain amounts based on the achievement of the

milestones described in the payment schedule below.

As of September 30, 2024, we paid to Advaxis a total of $2,925,000, consisting of

(i) the License Commencement Payment for Milestone 1 and (ii) $1,375,000 for Milestone 2.

towards the License Commencement Payment have been recorded as licensing expenses in our Statement of Operations and Comprehensive Loss

for the year ended December 31, 2022.

We expect to achieve Milestone 3 in March 2025.

The payment schedule for milestones and

corresponding payment amounts is set forth below.

Payments due upon cancellation consist only of payments for services

provided or expenses incurred, including non-cancellable obligations of our service providers, up to the date of cancellation.

License Obligations and Research Services

November 2020, we entered into an amended and restated development, license and supply agreement with Advaxis, Inc.

(now Ayala Pharmaceuticals,

Inc.) (“Advaxis”), a clinical-stage biotechnology company focused on the development and commercialization of proprietary

Lm ( Listeria monocytogenes )-LLO (Listeriolysin O) cancer immunotherapies.

Pursuant to this agreement, Advaxis granted a

license to us that allows us to utilize Advaxis’ ADXS-HER2 construct patents to develop and commercialize ADXS-HER2, our lead product

candidate (OST-HER2).

The agreement was subsequently amended in April 2021 to modify the payment amounts for Milestones 2 and 3 listed

in the table below.

Under the terms of the amended agreement, we are required to pay to Advaxis (i) a one-time, non-refundable payment

of $1,550,000 (the “License Commencement Payment”) and (ii) certain amounts based on the achievement of the milestones

described in the payment schedule below.

As of March 31, 2025, we paid to Advaxis a total of $2,925,000, consisting of (i) the License

Commencement Payment for Milestone 1 and (ii) $1,375,000 for Milestone 2.

Payments towards the License

Commencement Payment have been recorded as licensing expenses in our Statements of Operations and Comprehensive Loss for the year ended

December 31, 2022.

We expect to achieve Milestone 3 in 2025.

The payment schedule for milestones and corresponding payment amounts

is set forth below.

Milestone Bearing Event

OST has secured funding of at least $2,337,500, in the aggregate (paid)

The earlier to occur of:

(A) OST having secured at least $8,000,000, in the aggregate, or (B) completion of the first Clinical Trial (paid)

The earlier to

(A) OST having secured at least $8,000,000, in the aggregate, or (B) completion of the first Clinical Trial

The earlier to occur of:

1 unchanged sentence

Cumulative Net Sales of all Licensed Products in excess of $20,000,000

Cumulative Net Sales of all Licensed Products in excess of $50,000,000 Cumulative Net Sales of all Licensed Products in ex

Cumulative Net Sales of all Licensed Products in excess of $50,000,000 Cumulative Net Sales of all Licensed Products

Cumulative Net Sales of all Licensed Products in excess of $100,000,000

milestone payments are non-creditable and non-refundable and are due and payable upon the achievement of the milestone, regardless of

any failure by us to provide notice to Advaxis of such achievement.

addition to the payments upon achievement of the milestones listed in the above payment schedule, we are required to pay to Advaxis (i)

a percentage in the high single digits to low double digits of (a) upfront sublicense fees or (b) clinical or regulatory milestone

payment amounts, paid by a sublicensee to us in consideration of a sublicense grant to such sublicensee, and (ii) a quarterly royalty

of a percentage in the high single digits to low double digits of net sales of our products containing the ADXS-HER2 constructs.

In August 2020, we entered into a licensing agreement with BlinkBio, Inc., a privately-held developer of drug conjugate

therapies designed to facilitate the treatment of cancer.

Pursuant to this agreement, BlinkBio granted a license to us that allows us

to utilize BlinkBio’s proprietary technology to develop, manufacture and commercialize certain of our products.

BlinkBio granted

us an exclusive license for tunable drug conjugates that are directed towards, binds to or modifies the folate receptor alpha and a co-exclusive

license for tunable drug conjugates that are directed towards, binds to or modifies any target other than the folate receptor alpha,

such as HER2.

the terms of the agreement, we are required to pay to BlinkBio (i) an upfront, non-refundable, non-creditable license fee of $300,000

(the “Up-Front Fee”), (ii) a royalty of 6% of net sales of our products that were made using BlinkBio’s proprietary

technology, subject to potential reductions on such royalty, and (iii) certain amounts based on the achievement of the milestones

described in the payment schedule below.

of September 30, 2024, we had paid the Up-Front Fee.

The payment schedule for milestones and corresponding payment amounts is set forth

On April 9, 2025, we acquired

from Ayala the HER2 Assets.

Pursuant to the terms of the HER2 Purchase Agreement, the amended and restated development, license and supply

agreement with Advaxis terminated, and we agreed to a change in milestone payments and royalty consideration owed as it relates to the

OST-HER2 program as follows:

Elimination of $3,500,000 payment owed to Ayala upon the

first filing of a BLA approval for OST-HER2 with the FDA.

Elimination of a total of $16,500,000 in OST-HER2 related

sales milestone payments owed to Ayala made up of the following payments:

● $1,500,000 owed upon reaching cumulative sales of $20,000,000;

● $5,000,000 owed upon reaching cumulative sales of $50,000,000;

● $10,000,000 owed upon reaching cumulative sales of $100,000,000.

The reduction in total royalty consideration owed on OST-HER2

related sales from 10% of net sales owed to Ayala to 1.5% of net sales owed under the Penn License.

The royalty consideration of 1.5%

of net sales owed to University of Pennsylvania going forward will apply to sales related to:

● OST-HER2 related sales;

● ADXS-503 related sales;

● ADXS-504 related sales;

● Sales related to any new immunotherapy drug candidates created

from the Lm platform during the term of our license with the University of Pennsylvania.

August 2020, we entered into a licensing agreement with BlinkBio, Inc., a privately-held developer of drug conjugate therapies designed

to facilitate the treatment of cancer.

Pursuant to this agreement, BlinkBio granted a license to us that allows us to utilize BlinkBio’s

proprietary technology to develop, manufacture and commercialize certain of our products.

BlinkBio granted us an exclusive license for

tunable drug conjugates that are directed towards, binds to or modifies the folate receptor alpha and a co-exclusive license for tunable

drug conjugates that are directed towards, binds to or modifies any target other than the folate receptor alpha, such as HER2.

Under the terms of the agreement,

we are required to pay to BlinkBio (i) an upfront, non-refundable, non-creditable license fee of $300,000 (the “Up-Front Fee”),

(ii) a royalty of 6% of net sales of our products that were made using BlinkBio’s proprietary technology, subject to potential

reductions on such royalty, and (iii) certain amounts based on the achievement of the milestones described in the payment schedule

As of March 31, 2025, we

had paid the Up-Front Fee.

The payment schedule for milestones and corresponding payment amounts is set forth below.

Milestone Bearing Event

7 unchanged sentences

Regulatory Approval in the first of the United States, within the European Union or within the United Kingdom

are required to make the above cash payments to BlinkBio within 30 days of the achievement of each milestone with respect to the

first product to attain each such milestone, except that the first milestone only applies to our first product candidate.

The aggregate

amount of payments relating to milestones 2 through 6 payable thereunder cannot exceed $22,375,000.

connection with the license agreement, we also agreed to issue the BlinkBio Convertible Note.

See “— Convertible Notes”

above for more information on the BlinkBio Convertible Note.

We are required to make the

above cash payments to BlinkBio within 30 days of the achievement of each milestone with respect to the first product to attain each

such milestone, except that the first milestone only applies to our first product candidate.

The aggregate amount of payments relating

to milestones 2 through 6 payable thereunder cannot exceed $22,375,000.

In connection with the license

agreement, we also agreed to issue the BlinkBio Convertible Note.

See “— Convertible Notes” above for more information

on the BlinkBio Convertible Note.

George Clinical.

5 unchanged sentences

approximately $2,436,928.

For the nine months ended September 30, 2024 and year ended December 31, 2023, we paid $345,836 and $921,300,

respectively, to George Clinical.

These payments have been recorded as research and development expenses in our Statement of Operations

and Comprehensive Loss.

The fee schedule for certain fees and corresponding payment amounts is set forth below.

Clinical Payment Schedule

For the three months ended March 31, 2025 and 2024, we paid $0 and $86,687, respectively, to George Clinical.

These payments have been recorded as research and development expenses in our Statement of Operations and Comprehensive Loss.

schedule for certain fees and corresponding payment amounts is set forth below.

George Clinical Payment Schedule

Service Fee Advance (paid)

5 unchanged sentences

Split monthly

Clinical tracks and invoices us for the number of task units completed and pass-through costs are invoiced each month in arrears based

on actual costs without mark-up.

George Clinical tracks and

invoices us for the number of task units completed and pass-through costs are invoiced each month in arrears based on actual costs without

The PTC Fee Advance will be used to offset the first few months of invoices payable.

As of September

30, 2024, the balance due to George Clinical was $295,082.

Sheet Arrangements

did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules

and regulations of the SEC.

Accounting Pronouncements

description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations

is disclosed in Note 2 to Notes to the Financial Statements appearing elsewhere in this report.

JOBS Act permits an emerging growth company such as us to take advantage of an extended transition period to comply with new or revised

accounting standards applicable to public companies until those standards would otherwise apply to private companies.

We have elected

to avail ourselves of the extended transition period for complying with new or revised financial accounting standards.

will remain an emerging growth company until the earliest of (i) the last day of our first fiscal year in which we have total

annual gross revenues of $1.235 billion or more;

(ii) the date on which we are deemed to be a “large accelerated filer”

under the rules of the SEC with at least $700.0 million of outstanding equity securities held by non-affiliates;

date on which we have issued more than $1.0 billion in non-convertible debt securities during the previous three years;

(iv) the last day of our fiscal year following the fifth anniversary of the date of the completion of our initial public offering.

Quantitative and Qualitative Disclosures About Market Risk.

As of March 31, 2025, the balance due

to George Clinical was $148,587.

Off-Balance Sheet Arrangements

We did not have during the

periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.

Recent Accounting Pronouncements

A description of recently

issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2

to Notes to the Financial Statements appearing elsewhere in this report.

The JOBS Act permits an emerging

growth company such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable

to public companies until those standards would otherwise apply to private companies.

We have elected to avail ourselves of the extended

transition period for complying with new or revised financial accounting standards.

We will remain an emerging

growth company until the earliest of (i) the last day of our first fiscal year in which we have total annual gross revenues

of $1.235 billion or more;

(ii) the date on which we are deemed to be a “large accelerated filer” under the rules

of the SEC with at least $700.0 million of outstanding equity securities held by non-affiliates;

(iii) the date on which we

have issued more than $1.0 billion in non-convertible debt securities during the previous three years;

or (iv) the last day

of our fiscal year following the fifth anniversary of the date of the completion of our initial public offering.

Quantitative and Qualitative Disclosures

About Market Risk.

Not applicable.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis