What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-03-31 compared with 2022-03-31 · 879 added, 672 removed, 211 unchanged (88% of the section changed)

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

THERAPEUTICS, INC.

TO FINANCIAL STATEMENTS

FINANCIAL STATEMENTS

AND SUPPLEMENTARY DATA

UNICYCIVE THERAPEUTICS, INC.

FINANCIAL STATEMENTS

Audited Financial Statements for the years ended December 31, 2021 and 2022:

6 unchanged sentences

of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders

of Unicycive Therapeutics, Inc.

To the Board of Directors

and Stockholders of Unicycive Therapeutics,

Opinion on the Financial Statements

37 unchanged sentences

March 30, 2023

Therapeutics, Inc.

thousands, except for share and per share amounts)

Unicycive Therapeutics, Inc.

Balance Sheets

(in thousands, except for share and per share

Current assets:

Deferred offering costs

Prepaid expenses and other current assets

2 unchanged sentences

Property, plant and equipment, net

Liabilities and stockholders’ (deficit) equity

Liabilities and stockholders’ equity

Current liabilities:

Accounts payable

Related party service fee payable

Accrued liabilities

Convertible notes

Loan from stockholder

Operating lease liability - current

Government loan

Total current liabilities

Operating lease liability – long term

Operating lease liability – long

Total liabilities

8 unchanged sentences

Accumulated deficit

Total stockholders’ (deficit) equity

Total liabilities and stockholders’ (deficit) equity

accompanying notes to the financial statements

Therapeutics, Inc.

of Operations

thousands, except for share and per share amounts)

Total stockholders’ equity (deficit)

Total liabilities and stockholders’

equity (deficit)

See accompanying notes to the financial statements

Unicycive Therapeutics, Inc.

Statements of Operations

(in thousands, except for share and per share

Licensing revenues

Operating expenses:

10 unchanged sentences

Weighted-average shares outstanding used in computing net loss per share, basic and diluted

accompanying notes to the financial statements

Therapeutics, Inc.

of Stockholders’ (Deficit) Equity

thousands, except share amounts)

See accompanying notes to the financial statements

Unicycive Therapeutics, Inc.

Statements of Stockholders’

(Deficit) Equity

(in thousands, except share amounts)

Stockholders’

1 unchanged sentence

Balance at December 31, 2020

Issuance of common stock for cash

Issuance of common stock for anti-dilution clause

Stock-based compensation expense

Balance at December 31, 2020

Net proceeds from initial public offering

4 unchanged sentences

Balance at December 31, 2021

accompanying notes to the financial statements

Therapeutics, Inc.

of Cash Flows

Issuance of common stock for cash, net of issuance costs

Issuance of common stock

Issuance of common stock for vested restricted stock units

Issuance of common stock for exercise of options

Stock-based compensation expense

Balance at December 31, 2022

See accompanying notes to the financial statements

Unicycive Therapeutics, Inc.

Statements of Cash Flows

(in thousands)

Cash flows from operating activities

2 unchanged sentences

R&D expense for issuance of common stock for anti-dilution clause

G&A expense for issuance of common stock

Stock-based compensation expense

16 unchanged sentences

Net proceeds from initial public offering

Issuance of common stock for cash

Issuance of common stock for cash, net of issuance costs

Proceeds from loan from stockholder

1 unchanged sentence

Repayment of loan from stockholder

Deferred offering costs

Payments on financed insurance policies

Proceeds from exercise of options

Proceeds from government loan

Net cash provided by financing activities

Net (decrease) increase in cash

Net cash provided by (used in) financing activities

Net increase (decrease) in cash

Cash at the beginning of the period

1 unchanged sentence

Supplemental cash flow information

Deferred offering costs included in accrued liabilities

Deferred preclinical charges included in prepaid expenses and other current assets

Deferred insurance charges included in prepaid expenses and other current assets

Cash paid for income taxes

accompanying notes to the financial statements

to the Financial Statements

and Description of Business

Therapeutics, Inc.

(“the Company”) was incorporated in the State of Delaware on August 18, 2016.

The Company was dormant

until July 2017 when it began evaluating a number of drug candidates for in-licensing.

Company in-licensed the drug candidate UNI 494 from Sphaera Pharma Pte.

See accompanying notes to the financial statements

Notes to the Financial

Organization and Description of Business

Unicycive Therapeutics, Inc.

(“the Company”)

was incorporated in the State of Delaware on August 18, 2016.

The Company was dormant until July 2017 when it began evaluating a number

of drug candidates for in-licensing.

The Company in-licensed the drug candidate UNI

494 from Sphaera Pharma Pte.

Ltd, a Singapore-based corporation, (“Sphaera”) (Note 3).

UNI 494 is a pro-drug of Nicorandil that is being developed as a treatment for acute kidney injury.

September 2018, the Company purchased a second drug candidate, Renazorb RZB 012 (“Renazorb”) and its trademark, RENALAN,

and various patents from Spectrum Pharmaceuticals, Inc.

UNI 494 is a pro-drug of Nicorandill

that is being developed as a treatment for acute kidney injury.

In September 2018, the Company purchased a second

drug candidate, Renazorb RZB 012 (“Renazorb”) and its trademark, RENALAN, and various patents from Spectrum Pharmaceuticals,

(“Spectrum”) (Note 3).

Renazorb is being developed for the treatment

of hyperphosphatemia in patients with Chronic Kidney Disease (“CKD”).

Company continues to evaluate the licensing of additional technologies and drugs, targeting orphan diseases and other renal, liver and

other metabolic diseases affecting fibrosis and inflammation.

Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry including, but not limited

to, development by competitors of new technological innovations, protection of proprietary technology, dependence on key personnel, compliance

with governmental regulations and the need to obtain additional financing to fund operations.

The Company’s product candidates

currently under development will require significant additional research and development efforts prior to commercialization.

has not generated revenue to date.

Company has incurred operating losses and negative cash flows from operations since inception and expects to continue to incur negative

cash flows from operations for the foreseeable future.

As the Company increases its research and development activities, the operating

losses are expected to increase.

The Company has historically relied on private equity offerings, debt financings and loans from a stockholder

to fund its operations.

As of December 31, 2020 and 2021, the Company had an accumulated deficit of $ 5.9 million and $ 15.9 million, respectively.

Renazorb is being developed for the treatment of hyperphosphatemia in patients with Chronic Kidney

Disease (“CKD”).

The Company continues to evaluate the licensing

of additional technologies and drugs, targeting orphan diseases and other renal, liver and other metabolic diseases affecting fibrosis

and inflammation.

The Company is subject to risks and uncertainties

common to early-stage companies in the biotechnology industry including, but not limited to, development by competitors of new technological

innovations, protection of proprietary technology, dependence on key personnel, compliance with governmental regulations and the need

to obtain additional financing to fund operations.

The Company’s product candidates currently under development will require significant

additional research and development efforts prior to commercialization.

Future revenue streams may consist of collaboration or licensing

revenue as well as product sales.

The Company has generated approximately $ 1.0 million in licensing revenue through December 31, 2022.

The Company has incurred operating losses and

negative cash flows from operations since inception and expects to continue to incur negative cash flows from operations in the future.

As the Company increases its research and development activities, the operating losses are expected to increase.

The Company has historically

relied on private equity offerings, debt financings and loans from a stockholder to fund its operations.

As of December 31, 2021 and 2022,

the Company had an accumulated deficit of $ 15.9 million and $ 34.0 million, respectively.

As a result of its initial public offering (“IPO”),

1 unchanged sentence

approximately $ 22.3 million in net proceeds after deducting the underwriting discounts, commissions and other offering expenses.

intends to use the net proceeds from the IPO to complete pre-clinical and clinical studies, submit regulatory filings to the FDA, and

for general and corporate purposes, including hiring additional management and conducting market research and other commercial planning.

The Company expects to continue incurring losses for the foreseeable

future and will be required to raise additional capital in the future to complete its planned clinical trials, pursue product development

initiatives and penetrate markets for the sale of its products.

Management believes that the Company will continue to have access to capital

resources through possible equity offerings, debt financings, corporate collaborations or other means.

From January 2021 through May 2021,

the Company received an aggregate of $ 1.1 million upon the issuance of convertible notes.

These funds were used primarily to settle outstanding

accounts payable as well as to make payments on the loan outstanding from the chief executive officer and principal stockholder.

the Company received approximately $ 22.3 million in net proceeds from its IPO.

There can be no assurance that the Company will be able

to obtain additional financing on terms acceptable to the Company, on a timely basis or at all.

If the Company is unable to secure additional

capital, it may be required to curtail any clinical trials and development of new or existing products and take additional measures to

reduce expenses in order to conserve its cash in amounts sufficient to sustain operations and meet its obligations.

Based on the Company’s

current level of expenditures, and given the Company’s cash balance of $ 16.6 million as of December 31, 2021, the Company believes

that it has sufficient resources such that there is not substantial doubt about our ability to continue operations for at least one year

after the date that these financial statements are available to be issued.

of Significant Accounting Policies

of Presentation

financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United

States of America (“GAAP”).

common share amounts and per share amounts have been adjusted to reflect a 1-for-4.3 reverse stock split of the Company’s common

stock that was effected on June 21, 2021.

The preparation of financial statements in conformity with GAAP requires

management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of

contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the periods presented.

Company has used the net proceeds from the IPO to complete pre-clinical and clinical studies, prepare regulatory filings for the FDA,

and for general and corporate purposes, including hiring additional management and conducting market research and other commercial planning.

On March 6, 2023, the Company announced it has

signed a securities purchase agreement with certain healthcare-focused institutional investors that will provide up to $ 130.0 million

in gross proceeds through a private placement and that includes initial upfront funding of $ 30.0 million.

The Company expects to continue incurring losses

in the future and will be required to raise additional capital in the future to complete its planned clinical trials, pursue product

development initiatives and penetrate markets for the sale of its products.

Management believes that the Company will continue to have

access to capital resources through possible equity offerings, debt financings, corporate collaborations or other means.

2021 through May 2021, the Company received an aggregate of $ 1.1 million upon the issuance of convertible notes.

These funds were used

primarily to settle outstanding accounts payable as well as to make payments on the loan outstanding from the chief executive officer

and principal stockholder.

In 2021, the Company received approximately $ 22.3 million in net proceeds from its IPO, and in March 2023

the Company received approximately $ 28.1 million in net proceeds from a private placement financing.

There can be no assurance that the

Company will be able to obtain additional financing on terms acceptable to the Company, on a timely basis or at all.

If the Company is

unable to secure additional capital, it may be required to curtail any clinical trials and development of new or existing products and

take additional measures to reduce expenses in order to conserve its cash in amounts sufficient to sustain operations and meet its obligations.

Based on the Company’s current level of expenditures, and after receiving the proceeds from the private placement in March 2023,

the Company believes that it has sufficient resources such that there is not substantial doubt about the ability to continue operations

for at least one year after the date that these financial statements are available to be issued.

Summary of Significant Accounting Policies

Basis of Presentation

The financial statements and accompanying notes

have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

All common share amounts and per share amounts

have been adjusted to reflect a 1-for-4.3 reverse stock split of the Company’s common stock that was effected on June 21, 2021.

Use of Estimates

The preparation of financial statements in conformity

with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and

the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during

the periods presented.

Management believes that these estimates and assumptions are reasonable;

however, actual results may differ and could have a material

effect on future results of operations and financial position.

Significant items subject to such estimates and assumptions include progress

estimates for material third party research and development contracts, stock-based compensation and fair value of the Company’s

common stock prior to the Company’s IPO.

however, actual results may differ and

could have a material effect on future results of operations and financial position.

Significant items subject to such estimates and assumptions

include stock-based compensation.

Actual results may materially differ from those estimates.

Company operates and manages its business as one reportable operating segment.

The Company’s Chief Executive Officer, who is the

chief operating decision maker, reviews financial information on an aggregate basis for purposes of allocating resources and evaluating

financial performance.

and Uncertainties

Company operates in a dynamic and highly competitive industry and believes that changes in any of the following areas could have a material

adverse effect on the Company’s future financial position, results of operations, or cash flows:

Segment Information

The Company operates and manages its business

as one reportable operating segment.

The Company’s Chief Executive Officer, who is the chief operating decision maker, reviews

financial information on an aggregate basis for purposes of allocating resources and evaluating financial performance.

Risks and Uncertainties

The Company operates in a dynamic and highly

competitive industry and believes that changes in any of the following areas could have a material adverse effect on the Company’s

future financial position, results of operations, or cash flows:

ability to obtain future financing;

advances and trends in new technologies and industry standards;

advances and trends in new technologies

and industry standards;

results of clinical trials;

regulatory approval and market acceptance

of the Company’s products;

development of sales channels;

regulatory approval and market acceptance of the Company’s products;

of sales channels;

certain strategic relationships;

litigation or claims against the Company

related to intellectual property, product, regulatory, or other matters;

and the Company’s ability to attract and retain employees

necessary to support its growth.

Company’s general business strategy may be adversely affected by any such economic downturns (including the current downturn related

to the ongoing COVID-19 pandemic), volatile business environments and continued unstable or unpredictable economic and market conditions.

product candidates developed by the Company will require approvals from the FDA or other international regulatory agencies prior to commercial

There can be no assurance that the Company’s current product candidates or any future product candidates will receive the

necessary approvals.

If the Company is denied approval, approval is delayed or the Company is unable to maintain approval, it could have

a materially adverse impact on the Company.

Company has expended and will continue to expend substantial funds to complete the research, development and clinical testing of its

product candidates.

The Company also will be required to expend additional funds to establish commercial-scale manufacturing arrangements

and to provide for the marketing and distribution of products that receive regulatory approval.

The Company will require additional funds

to commercialize its products.

The Company is unable to entirely fund these efforts with its current financial resources.

funds are unavailable on a timely basis from operations or additional sources of financing, the Company may have to delay, reduce the

scope of or eliminate one or more of its research or development programs, which would materially and adversely affect its business,

financial condition and operations.

Company is dependent upon the services of its employees, consultants and other third parties.

Offering Costs

Deferred offering costs, consisting of legal, accounting and other

fees and costs relating to the Company’s IPO were capitalized and recorded as a current asset on the balance sheet.

There were $ 0.2

million of deferred offering costs capitalized as of December 31, 2020.

As of December 31, all previously deferred offering costs, totaling

approximately $ 0.9 million, were netted against the proceeds received upon the closing of the IPO, which occurred on July 15, 2021.

Plant and Equipment

plant and equipment are recorded at cost less accumulated depreciation.

Additions, improvements, and major renewals or replacements that

substantially extend the useful life of an asset are capitalized.

litigation or claims against the Company related to intellectual property, product,

regulatory, or other matters;

and the Company’s ability to attract and retain employees necessary to support its growth.

The Company’s general business strategy

may be adversely affected by any such economic downturns (including the current downturn related to the COVID-19 pandemic), volatile

business environments and continued unstable or unpredictable economic and market conditions.

Any product candidates developed by the Company

will require approvals from the FDA or other international regulatory agencies prior to commercial sales.

There can be no assurance that

the Company’s current product candidates or any future product candidates will receive the necessary approvals.

If the Company

is denied approval, approval is delayed or the Company is unable to maintain approval, it could have a materially adverse impact on the

The Company has expended and will continue to

expend substantial funds to complete the research, development and clinical testing of its product candidates.

The Company also will

be required to expend additional funds to establish commercial-scale manufacturing arrangements and to provide for the marketing and

distribution of products that receive regulatory approval.

The Company will require additional funds to commercialize its products.

Company is unable to entirely fund these efforts with its current financial resources.

If adequate funds are unavailable on a timely

basis from operations or additional sources of financing, the Company may have to delay, reduce the scope of or eliminate one or more

of its research or development programs, which would materially and adversely affect its business, financial condition and operations.

The Company is dependent upon the services of

its employees, consultants and other third parties.

Property, Plant and Equipment

Property, plant and equipment are recorded at

cost less accumulated depreciation.

Additions, improvements, and major renewals or replacements that substantially extend the useful

life of an asset are capitalized.

Repairs and maintenance expenditures are expensed as incurred.

is computed using the straight-line method over the estimated useful lives of the related assets, which range from three to seven years.

Leasehold improvements are amortized on a straight-line basis over the shorter of their estimated useful lives or the remaining lease

assesses the carrying value of property and equipment whenever events or changes in circumstances indicate that the carrying value may

not be recoverable.

If there is indication of impairment, management prepares an estimate of future cash flows expected to result from

the use of the asset and its eventual disposition.

If these cash flows are less than the carrying amount of the asset, an impairment

loss is recognized to write down the asset to its estimated fair value at that time.

At December 31, 2021, management determined there

were no impairments of the Company’s property and equipment.

Company determines whether a contract is, or contains, a lease at inception.

Right-of-use assets represent the Company’s right

to use an underlying asset during the lease term, and lease liabilities represent the Company’s obligation to make lease payments

arising from the lease.

Right-of-use assets and lease liabilities are recognized at lease commencement based upon the estimated present

value of unpaid lease payments over the lease term.

The Company uses its incremental borrowing rate based on the information available

at lease commencement in determining the present value of unpaid lease payments.

Value of Financial Instruments

Company’s financial instruments include cash, prepaid expenses, accounts payable, convertible notes and a loan from the Chief Executive

Officer and stockholder of the Company.

The carrying amounts of these items approximate fair value as of December 31, 2020 and 2021 due

to their short-term nature.

Concentration

of Credit Risk

instruments that potentially subject the Company to concentration of credit risk consist of cash.

All of the Company’s cash was

deposited in one account at a financial institution, and the account balance may at times exceed federally insured limits.

believes that the Company is not exposed to significant credit risk due to the financial strength of the depository institution in which

the cash is held.

expenses represent costs incurred that benefit future periods.

Depreciation is computed using the straight-line

method over the estimated useful lives of the related assets, which range from three to seven years.

Leasehold improvements are amortized

on a straight-line basis over the shorter of their estimated useful lives or the remaining lease term.

Management assesses the carrying value of property

and equipment whenever events or changes in circumstances indicate that the carrying value may not be recoverable.

If there is indication

of impairment, management prepares an estimate of future cash flows expected to result from the use of the asset and its eventual disposition.

If these cash flows are less than the carrying amount of the asset, an impairment loss is recognized to write down the asset to its estimated

fair value at that time.

At December 31, 2021, management determined there were no impairments of the Company’s property and equipment.

The Company determines whether a contract is,

or contains, a lease at inception.

Right-of-use assets represent the Company’s right to use an underlying asset during the lease

term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease.

Right-of-use assets

and lease liabilities are recognized at lease commencement based upon the estimated present value of unpaid lease payments over the lease

The Company uses its incremental borrowing rate based on the information available at lease commencement in determining the present

value of unpaid lease payments.

Fair Value of Financial Instruments

The Company’s financial instruments include

cash, prepaid expenses, accounts payable, and in prior periods also included convertible notes and a loan from the Chief Executive Officer

and stockholder of the Company.

The carrying amounts of these items approximate fair value as of December 31, 2021 and 2022 due to their

short-term nature.

Concentration of Credit Risk

Financial instruments that potentially subject

the Company to concentration of credit risk consist of cash.

All of the Company’s cash was deposited in one account at a financial

institution during 2021 and 2022, and the account balance may at times exceed federally insured limits.

The cash and cash equivalents

we use to satisfy our working capital and operating expense needs are currently held in accounts at various financial institutions.

and cash equivalents could be adversely impacted, including the loss of uninsured deposits and other uninsured financial assets, if one

or more of the financial institutions in which the Company holds its cash or cash equivalents fails or is subject to other adverse conditions

in the financial or credit markets.

Prepaid Expenses

Prepaid expenses represent costs incurred that

benefit future periods.

These costs are amortized over specific time periods based on the agreements.

and Development Expenses

Revenue Recognition

The Company has implemented ASC 606, Revenue

from Contracts with Customers.

This guidance included the development of new policies based on the five-step model provided in the new

revenue standard, ongoing contract review requirements, and gathering of information provided for disclosures.

The Company recognizes

revenue from product sales or services rendered when control of the promised goods are transferred to a counterparty in an amount that

reflects the consideration to which we expect to be entitled in exchange for those goods and services.

To achieve this core principle,

we apply the following five steps:

identify the contract with the client, identify the performance obligations in the contract, determine

the transaction price, allocate the transaction price to performance obligations in the contract and recognize revenues when or as the

Company satisfies a performance obligation.

Research and Development Expenses

Substantially all of the Company’s research

and development expenses consist of expenses incurred in connection with the development of the Company’s product candidates.

expenses include fees paid to third parties to conduct certain research and development activities on the Company’s behalf and related

progress estimates for those activities, consulting costs, costs for laboratory supplies, product acquisition and license costs, certain

payroll and personnel-related expenses, including salaries and bonuses, employee benefit costs and stock-based compensation expenses for

the Company’s research and product development employees and allocated overheads, including information technology costs and utilities

and expenses for issuance of shares pursuant to the anti-dilution clause in the purchase of IPR&D technology.

The Company expenses

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

and Administrative Expenses

and administrative expenses represent personnel costs for employees involved in general corporate functions, including finance, accounting,

legal and human resources, among others.

Additional costs included in general and administrative expenses consist of professional fees

for legal (including patent costs), audit and other consulting services, stock-based compensation and other general corporate overhead

expenses as well as costs from a service agreement with a related party (See Note 7).

Company expenses all costs as incurred in connection with patent licenses and applications (including direct application fees, and the

legal and consulting expenses related to making such applications) and such costs are reflected in general and administrative expenses

in the statements of operations.

The Company accounts for stock-based compensation for all share-based

payments made to employees and non-employees by estimating the fair value on the date of grant and recognizing compensation expense over

the requisite service period on a straight-line basis.

The Company recognizes forfeitures related to stock-based compensation as they

expenses include fees paid to third parties to conduct certain research and development activities on the Company’s behalf, consulting

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

salaries and bonuses, employee benefit costs and stock-based compensation expenses for the Company’s research and product development

employees and allocated overheads, including information technology costs and utilities and expenses for issuance of shares pursuant

to the anti-dilution clause in the purchase of IPR&D technology.

The Company expenses both internal and external research and development

expenses as they are incurred.

General and Administrative Expenses

General and administrative expenses represent

personnel costs for employees involved in general corporate functions, including finance, accounting, legal and human resources, among

Additional costs included in general and administrative expenses consist of professional fees for legal (including patent costs),

audit and other consulting services, stock-based compensation and other general corporate overhead expenses as well as costs from a service

agreement with a related party (See Note 8).

The Company expenses all costs as incurred in

connection with patent licenses and applications (including direct application fees, and the legal and consulting expenses related to

making such applications) and such costs are reflected in general and administrative expenses in the statements of operations.

Stock-Based Compensation

The Company accounts for stock-based compensation

for all share-based payments made to employees and non-employees by estimating the fair value on the date of grant and recognizing compensation

expense over the requisite service period on a straight-line basis.

The Company recognizes forfeitures related to stock-based compensation

as they occur.

The Company estimates the fair value of stock options using the Black-Scholes option-pricing model.

The Black-Scholes model requires

the input of subjective assumptions, including expected common stock volatility, expected dividend yield, expected term, risk-free interest

rate, and the estimated fair value of the Company’s underlying common stock on the date of grant.

Stock Valuations

Prior to the Company’s IPO, the fair value

of common stock was estimated with the assistance of an independent third-party valuation expert when issuing stock options and computing

their estimated stock-based compensation expense.

The assumptions underlying these valuations represented management’s best estimates,

which involved inherent uncertainties and the application of significant levels of management judgment.

In order to determine the fair

value, the Company considered, among other things, contemporaneous transactions involving the sale of common stock to unrelated third

parties, the lack of marketability of the common stock and the market performance of comparable publicly traded companies.

Subsequent to our IPO, the Company determines the fair value of common

stock from closing prices as quoted on the NASDAQ exchange.

Company accounts for corporate income taxes in accordance with GAAP as stipulated in ASC, Topic 740, Income Taxes, (“ASC 740”).

This standard entails the use of the asset and liability method of computing the provision for income tax expense.

Current tax expense

results from corporate tax payable at the Federal and California jurisdictions for the Company, which relate to the current accounting

Deferred tax expense results primarily from temporary differences between financial statement and tax return reporting, which

result in additional tax payable in future periods.

Deferred tax assets and liabilities are determined based on the differences between

the financial statement basis and tax basis of assets and liabilities using enacted tax rates and law.

Net future tax benefits are subject

to a valuation allowance when management expects that it is more-likely-than-not that some portion or all of the deferred tax assets

will not be realized.

and non-current tax assets and liabilities are based upon an estimate of taxes refundable or payable for each of the jurisdictions in

which the Company is subject to tax.

In the ordinary course of business there is inherent uncertainty in quantifying income tax positions.

The Company assess income tax positions and record the largest amount of tax benefit with a greater than 50 % likelihood of being realized

upon ultimate settlement with a taxing authority that has full knowledge of all relevant information.

For those income tax positions

where it is not more likely than not that a tax benefit will be sustained, no tax benefit is recognized in the financial statements.

The Company’s policy is to recognize interest or penalties related to income tax matters in income tax expense.

Comprehensive

loss includes all changes in equity (net assets) during a period from non-owner sources.

There were no elements of other comprehensive

income (loss) in the periods presented, as a result comprehensive loss is the same as net loss for each period presented.

Loss per Share

net loss per common share is calculated by dividing the net loss by the weighted-average number of common shares outstanding during the

period, without consideration of potentially dilutive securities.

Diluted net loss per share is computed by dividing the net loss by

the weighted-average number of common shares and potentially dilutive securities outstanding for the period.

For purposes of the diluted

net loss per share calculation, common stock options and warrants are considered to be potentially dilutive securities.

Basic and diluted

net loss per share is presented in conformity with the two-class method required for participating securities.

has no participating securities and as such, the net loss was attributed entirely to common stockholders.

As the Company has reported

a net loss for all periods presented, diluted net loss per common share is the same as basic net loss per common share for those periods.

All common share amounts and per share amounts have been adjusted to reflect a 1-for-4.3 reverse stock split of the Company’s common

stock that was effectuated on June 21, 2021.

Accounting Pronouncements

time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard

setting bodies and adopted by the Company as of the specified effective date.

Unless otherwise discussed, the impact of recently issued

standards that are not yet effective are not expected to have a material impact on the Company’s financial position or results

of operations upon adoption.

August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which

simplifies the accounting for convertible instruments.

ASU 2020-06 eliminates certain models that require separate accounting for embedded

conversion features.

Additionally, among other changes, the guidance eliminates certain of the conditions for equity classification for

contracts in an entity’s own equity.

The guidance also requires entities to use the if-converted method for all convertible instruments

in the diluted earnings per share calculation and include the effect of share settlement for instruments that may be settled in cash

or shares, except for certain liability-classified share-based payment awards.

This guidance is effective for the Company beginning in

the first quarter of 2022 and must be applied using either a modified or full retrospective approach.

Early adoption is permitted, but

no earlier than annual periods beginning after December 15, 2020.

The Company is currently evaluating the impact this guidance will have

on its financial statements.

February 2016, the FASB issued ASU 2016-02, Leases (Topic 842).

This ASU requires a lessee to recognize in the statement of financial

position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying

asset for the leases with a term of greater than 12 months.

This ASU is effective for the Company’s fiscal years beginning after

December 15, 2021, with early adoption permitted.

The Black-Scholes

model requires the input of subjective assumptions, including expected common stock volatility, expected dividend yield, expected term,

risk-free interest rate, and the estimated fair value (prior to the Company’s initial public offering) or the public market closing

price of the Company’s underlying common stock on the date of grant.

Common Stock Valuations

The Company is required to periodically estimate

the fair value of common stock when issuing stock options and computing their estimated stock-based compensation expense.

The fair value

of common stock prior to the Company’s initial public offering was determined on a periodic basis, with the assistance of an independent

third-party valuation expert.

The assumptions underlying these valuations represented Management’s best estimates, which involved

inherent uncertainties and the application of significant levels of Management judgment.

In order to determine the fair value, the Company

considered, among other things, contemporaneous transactions involving the sale of the Company’s common stock to unrelated third

the lack of marketability of the Company’s common stock;

and the market performance of comparable publicly traded companies.

The Company accounts for corporate income taxes

in accordance with GAAP as stipulated in ASC, Topic 740, Income Taxes, (“ASC 740”).

This standard entails the use of the

asset and liability method of computing the provision for income tax expense.

Current tax expense results from corporate tax payable

at the Federal and California jurisdictions for the Company, which relate to the current accounting period.

Deferred tax expense results

primarily from temporary differences between financial statement and tax return reporting, which result in additional tax payable in

future periods.

Deferred tax assets and liabilities are determined based on the differences between the financial statement basis and

tax basis of assets and liabilities using enacted tax rates and law.

Net future tax benefits are subject to a valuation allowance when

management expects that it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized.

Current and non-current tax assets and liabilities

are based upon an estimate of taxes refundable or payable for each of the jurisdictions in which the Company is subject to tax.

ordinary course of business there is inherent uncertainty in quantifying income tax positions.

The Company assess income tax positions

and record the largest amount of tax benefit with a greater than 50 % likelihood of being realized upon ultimate settlement with a taxing

authority that has full knowledge of all relevant information.

For those income tax positions where it is not more likely than not that

a tax benefit will be sustained, no tax benefit is recognized in the financial statements.

The Company’s policy is to recognize

interest or penalties related to income tax matters in income tax expense.

The Tax Cuts and Jobs Act of 2017 eliminated

the option to immediately deduct research and development expenditures in the year incurred under Section 174, which became effective

January 1, 2022.

We are monitoring legislation for any further changes to Section 174 and the impact, if any, to the financial statements

Comprehensive Loss

Comprehensive loss includes all changes in equity

(net assets) during a period from non-owner sources.

There were no elements of other comprehensive income (loss) in the periods presented,

as a result comprehensive loss is the same as net loss for each period presented.

Net Loss per Share

Basic net loss per common share is calculated

by dividing the net loss by the weighted-average number of common shares outstanding during the period, without consideration of potentially

dilutive securities.

Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares

and potentially dilutive securities outstanding for the period.

For purposes of the diluted net loss per share calculation, common stock

options and warrants are considered to be potentially dilutive securities.

Basic and diluted net loss per share is presented in conformity

with the two-class method required for participating securities.

The Company has no participating securities and as such, the

net loss was attributed entirely to common stockholders.

As the Company has reported a net loss for all periods presented, diluted net

loss per common share is the same as basic net loss per common share for those periods.

All common share amounts and per share amounts

have been adjusted to reflect a 1-for-4.3 reverse stock split of the Company’s common stock that was effectuated on June 21, 2021.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements

are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies and adopted by the Company

as of the specified effective date.

Unless otherwise discussed, the impact of recently issued standards that are not yet effective are

not expected to have a material impact on the Company’s financial position or results of operations upon adoption.

In August 2020, the FASB issued ASU 2020-06, Accounting

for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for convertible instruments.

ASU 2020-06 eliminates certain models that require separate accounting for embedded conversion features.

Additionally, among other changes,

the guidance eliminates certain of the conditions for equity classification for contracts in an entity’s own equity.

also requires entities to use the if-converted method for all convertible instruments in the diluted earnings per share calculation and

include the effect of share settlement for instruments that may be settled in cash or shares, except for certain liability-classified

share-based payment awards.

This guidance is effective for the Company beginning in the first quarter of 2022 and must be applied using

either a modified or full retrospective approach.

Early adoption is permitted, but no earlier than annual periods beginning after December

The Company adopted the standard on January 1, 2022 using a modified retrospective approach, and the adoption did not result

in any adjustments on the Company’s financial statements.

In February 2016, the FASB issued ASU 2016-02,

Leases (Topic 842).

This ASU requires a lessee to recognize in the statement of financial position a liability to make lease payments

(the lease liability) and a right-of-use asset representing its right to use the underlying asset for the leases with a term of greater

than 12 months.

This ASU is effective for the Company’s fiscal years beginning after December 15, 2021, with early adoption permitted.

The Company has adopted this standard effective as of January 1, 2019.

chose to adopt certain practical expedients available from the FASB.

As a policy election, the Company chose to expense and amortize,

on a straight line, the leases with terms less than 12 months.

In addition, the Company chose not to separate certain lease and non-lease

components when evaluating the fair value of a lease.

The adoption of this standard did not have a material effect on the Company’s

financial statements.

regards to manufacturing, testing and potential commercial supply of Renazorb, the Company has entered into an agreement with Shilpa

Medicare Ltd based in India.

According to the terms of the agreement Unicycive will pay the vendor $2 million in the first calendar year

when the net revenue reaches $10 million from sales of Renazorb following its approval by the FDA and commercial supply of the product

by the vendor (First Payment).

Thereafter, we will pay $2 million per year for four consecutive years, after the first year’s payment,

for the total payments of $10 million, provided all commercial supplies are continued to be manufactured and supplied by the vendor.

Unicycive is not obligated to make any payments to the vendor until FDA approval of the product is obtained and commercial revenue is

October 2017, the Company entered into an exclusive license agreement with Sphaera, a stockholder, for the rights to further develop

the drug candidate, UNI 494, for commercialization.

No payments were made upon execution of the agreement but rather payments for $50,000

will be due commencing with the initiation by the Company of a second clinical trial and $50,000 on completion of such trial.

time the FDA accepts a NDA application submitted by the Company for the product, the Company will pay Sphaera $1.65 million.

Upon commercialization

and sale of the drug product, royalty payments will also be payable quarterly to Sphaera equal to 2% of net sales on the preceding quarter.

September 2018, the Company entered into an Assignment and Asset Purchase Agreement with Spectrum Pharmaceuticals, Inc.

Agreement”) pursuant to which the Company purchased certain assets from Spectrum, including Spectrum’s right, title, interest

in and intellectual property related to Renazorb RZB 012, also known as RENALAN™ (“Renalan”) and RZB 014, also known

as SPI 014 (“SPI” and together with Renalan, the “Compounds”), to further develop and commercialize Renazorb

and related compounds.

In partial consideration for the Spectrum Agreement, the Company issued 313,663 shares of common stock to Spectrum

valued at approximately $ 4,000 which represented four percent of the Company on a fully-diluted basis at the date of the execution of

the Spectrum Agreement.

The Spectrum Agreement has an anti-dilution provision, which provides that Spectrum maintain its ownership interest

in the Company at 4 % of the Company’s shares on a fully-diluted basis.

Fully-diluted shares of common stock for purposes of the

Renazorb Purchase Agreement assumes conversion of any security convertible into or exchangeable or exercisable for common stock or any

combination thereof, including any common stock reserved for issuance under a stock option plan, restricted stock plan, or other equity

incentive plan approved by the Board of Directors of the Company immediately following the issuance of additional shares of the Company’s

common stock (but prior to the issuance of any additional shares of common stock to Spectrum).

Spectrum’s ownership shall not be

subject to dilution until the earlier of thirty-six months from the first date the Company’s stock trades on a public market, or

the date upon which the Company attains a public market capitalization of at least $ 50 million.

As part of the anti-dilution clause,

the Company issued 149,762 and 105,897 shares of common stock during the years ended December 31, 2019 and 2020, respectively.

recognized $ 145,000 and $ 104,000 for the years ended December 31, 2019 and 2020, respectively, as research and development expenses as

cost to issue those shares.

On July 13, 2021, the Company’s IPO resulted in a public market capitalization

The Company chose to adopt the package of practical expedients

available from the FASB.

As a policy election, the Company chose to expense and amortize, on a straight line, the leases with terms less

than 12 months.

In addition, the Company chose not to separate certain lease and non-lease components when evaluating the fair value

The adoption of this standard did not have a material effect on the Company’s financial statements.

Significant Agreements

With regards to manufacturing, testing and potential

commercial supply of Renazorb, the Company has entered into an agreement with Shilpa Medicare Ltd based in India.

According to the terms

of the agreement Unicycive will pay the vendor $2 million in the first calendar year when the net revenue reaches $10 million from sales

of Renazorb following its approval by the FDA and commercial supply of the product by the vendor (First Payment).

Thereafter, the Company

will pay $2 million per year for four consecutive years, after the first year’s payment, for the total payments of $10 million,

provided all commercial supplies are continued to be manufactured and supplied by the vendor.

Unicycive is not obligated to make any

payments to the vendor until FDA approval of the product is obtained and commercial revenue is generated.

In October 2017, the Company entered into an

exclusive license agreement with Sphaera, a stockholder, for the rights to further develop the drug candidate, UNI 494, for commercialization.

No payments were made upon execution of the agreement but rather payments for $50,000 will be due commencing with the initiation by the

Company of a second clinical trial and $50,000 on completion of such trial.

At the time the FDA accepts a NDA application submitted by

the Company for the product, the Company will pay Sphaera $1.65 million.

Upon commercialization and sale of the drug product, royalty

payments will also be payable quarterly to Sphaera equal to 2% of net sales on the preceding quarter.

In September 2018, the Company entered into an

Assignment and Asset Purchase Agreement with Spectrum Pharmaceuticals, Inc.

(“Spectrum Agreement”) pursuant to which the Company

purchased certain assets from Spectrum, including Spectrum’s right, title, interest in and intellectual property related to Renazorb

RZB 012, also known as RENALAN™ (“Renalan”) and RZB 014, also known as SPI 014 (“SPI” and together with

Renalan, the “Compounds”), to further develop and commercialize Renazorb and related compounds.

In partial consideration for

the Spectrum Agreement, the Company issued 313,663 shares of common stock to Spectrum valued at approximately $ 4,000 which represented

four percent of the Company on a fully-diluted basis at the date of the execution of the Spectrum Agreement.

The Spectrum Agreement has

an anti-dilution provision, which provides that Spectrum maintain its ownership interest in the Company at 4 % of the Company’s shares

on a fully-diluted basis.

Fully-diluted shares of common stock for purposes of the Renazorb Purchase Agreement assumes conversion of any

security convertible into or exchangeable or exercisable for common stock or any combination thereof, including any common stock reserved

for issuance under a stock option plan, restricted stock plan, or other equity incentive plan approved by the Board of Directors of the

Company immediately following the issuance of additional shares of the Company’s common stock (but prior to the issuance of any

additional shares of common stock to Spectrum).

Spectrum’s ownership shall not be subject to dilution until the earlier of thirty-six

months from the first date the Company’s stock trades on a public market, or the date upon which the Company attains a public market

capitalization of at least $ 50 million.

On July 13, 2021, the Company’s initial public offering resulted in a public market capitalization

of at least $ 50 million, and as a result the Company was required to issue 438,374 anti-dilution shares of common stock.

This issuance

represents the final anti-dilution calculation required under the Spectrum Agreement, and no further anti-dilution shares will be issued.

represented the final anti-dilution calculation required under the Spectrum Agreement, and no further anti-dilution shares will be issued.

The Company calculated the fair value of the shares and recognized $ 2.2 million to research and development expenses as cost to issue

those shares during the third quarter of 2021.

The Company is also required to pay Spectrum 40% of all of the Company’s sublicense

income for any sublicense granted to certain sublicensees during the first 12 months after the Closing Date (as that term is defined

in the Renazorb Purchase Agreement) and 20% of all other sublicense income.

The Company’s payment obligations to Spectrum will

expire on the twentieth (20 th ) anniversary of the Closing Date of the Renazorb Purchase Agreement.

On February 8, 2021, the Company entered into

a Master Services Agreement (the “Renazorb Development Agreement”) with Ascent Development Services, Inc.

pursuant to which Ascent will provide strategic services related to the development of Renazorb or other investigational products (the

“Compounds”) for clinical use and regulatory approval in Japan and other Asian countries.

The Renazorb Development Agreement

anticipates services to be provided by Ascent will include market research, facilitation of informal and formal meetings with Japan’s

Pharmaceutical and Medical Devices Agency (“PMDA”), management of contract research organizations and clinical trials, and

government applications and regulatory filings related to the Asian development of the Compounds.

Unicycive will supply the Compounds

or other materials necessary for Ascent to perform the development services.

The initial Statement of Work (“SOW”) under the

Renazorb Development Agreement encompasses the development of clinical strategy as well as both informal and formal meetings with the

The budget for the initial SOW is approximately 24,000,000 Japanese Yen, and an upfront payment of approximately $87,000, was paid

to Ascent upon the execution of the Renazorb Development Agreement.

Deliverables for the initial SOW were completed by December 31, 2021.

In the event an NDA filing for Renazorb is accepted by the FDA, the Company will be required

to pay $ 0.2 million to Altair Nanomaterials, Inc., (“Altair”) in accordance with the Spectrum Agreement.

In addition, in the

event FDA approval for Renazorb is received, the Company will be required to pay $ 4.5 million to Altair.

The Company is also required

to pay Spectrum 40% of all of the Company’s sublicense income for any sublicense granted to certain sublicensees during the first

12 months after the Closing Date (as that term is defined in the Renazorb Purchase Agreement) and 20% of all other sublicense income.

The Company’s payment obligations to Spectrum will expire on the twentieth (20 th ) anniversary of the Closing Date of

the Renazorb Purchase Agreement.

In August 2022, the Company received an upfront payment of approximately $ 1.0 million as a result of

a sublicense development agreement with Lee’s Pharmaceutical (HK) Limited.

The payment represents sublicense income as described

in the Spectrum Agreement, and 20 % of the amount received has been accrued as an R&D expense in the accompanying statements of operations

for the year ended December 31, 2022.

On July 19, 2021, the Company entered into an

1 unchanged sentence

related to the development of UNI-494.

The budget for the initial study, which will also include clinical pharmacology, translational

sciences, and bioanalytical services, is approximately $1.9 million, and related payments totaling approximately $379,000 have

been paid to Syneos during the year ended December 31, 2021.

Sheet Components

expenses and other current assets as of December 31, 2020 and 2021 consisted of the following (in thousands):

Prepaid directors and officers

liability insurance premiums

The initial budget for the study, which includes clinical pharmacology, translational sciences,

and bioanalytical services, was approximately $ 2.3 million.

Related payments totaling approximately $ 1.8 million have been paid to Syneos

as of December 31, 2022, and approximately $ 0.2 million has been recorded as accounts payable or accrued expense in the accompanying

balance sheet as of December 31, 2022.

On January 6, 2022, the Company entered into

a Master Services Agreement with Quotient Sciences Limited (“Quotient”), a UK based company that provides drug development

and analysis services, for the purpose of performing clinical research in support of UNI-494.

The initial budget for the study is

approximately $ 3.7 million, and subsequent revisions reduced the overall budget to $ 2.6 million.

Related payments totaling approximately

$ 1.5 million have been paid to Quotient as of December 31, 2022, approximately $ 0.9 million of related expense has been recorded, and

approximately $ 1.0 million has been recorded as prepaid expense in the accompanying balance sheet as of December 31, 2022.

On February 9, 2022, the Company entered into

a Master Services Agreement with CBCC Global Research Inc.

(“CBCC”), a California based company that provides clinical trial

and related services, for the purpose of performing clinical research in support of Renazorb.

The budget for the initial study was approximately

$ 1.4 million.

Payments relating to the initial agreement totaling approximately $ 0.4 million have been paid to CBCC as of December 31,

2022, and approximately $ 0.4 million of related expense has been recorded.

In September 2022, a statement of work revised the remaining

services budget to approximately $ 0.1 million.

On June 29, 2022, the Company entered into an

Agreement with Inotiv, an Indiana based company that provides preclinical trial and related services, for the purpose of performing research

in support of Renazorb.

The budget for the services is approximately $ 1.0 million.

Approximately $ 0.7 million has been paid to Inotiv

as of December 31, 2022 and approximately $ 0.4 million has been recorded as prepaid expense in the accompanying balance sheet as of December

On July 14, 2022, the Company entered into a

license agreement with Lee’s Pharmaceutical (HK) Limited (see Note 4).

Under the terms of the agreement, Lee’s Pharmaceutical

will be responsible for development, registration filing and approval for Renazorb in China, Hong Kong, and certain other Asian markets.

In addition, Lee’s Pharmaceutical will have sole responsibility for the importation of the drug product from the Company and for

the costs of commercialization of Renazorb in the licensed territories.

The Company has received an upfront payment of $ 1.0 million,

expects to receive up to $ 1.0 million in milestone payments upon product launch in China and will be eligible for tiered royalties of

between 7 % and 10 % upon achievement of prespecified regulatory and commercial achievements.

On July 27, 2022, the Company entered into an

Agreement with Celerion, a Nebraska based company that provides clinical trial and related services, for the purpose of performing research

in support of Renazorb.

The budget for the services is approximately $ 2.7 million, and approximately $ 2.7 million has been paid to Celerion

as of December 31, 2022.

Licensing Revenues

On July 14, 2022, the Company entered into a

license agreement (“Agreement”) with Lee’s Pharmaceutical (HK) Limited (“Lee’s”).

Under the terms

of the agreement, Lee’s Pharmaceutical will be responsible for development, registration filing and approval for Renazorb in China,

Hong Kong, and certain other Asian markets.

In addition, Lee’s will have sole responsibility for the importation of the drug product

from the Company and for the costs of commercialization of Renazorb in the licensed territories.

Both parties agreed to enter into a

separate manufacturing and supply agreement whereby Unicycive will supply Lee’s with Renazorb product.

The Company has received

an upfront payment of approximately $ 1.0 million, expects to receive up to $ 1.0 million in milestone payments upon product launch in

China and will be eligible for tiered royalties of between 7 % and 10 % upon achievement of prespecified regulatory and commercial achievements.

The Company has evaluated the Agreement in accordance

with FASB Topics 808 – Collaborative Arrangements and 606 -Revenue for Contracts from Customers.

The Company first assessed whether

the contractual arrangement is within the scope of ASC 808 which defines a collaborative arrangement as a contractual arrangement that

involves a joint operating activity.

Under ASC 606, the counterparty is considered a customer only if it is acquiring goods or services

that are an output of the entity’s “ordinary activities”.

The Agreement is consistent with the Company’s current

ongoing operations, which is an operating model adopted by many early-stage biotech companies.

The license portion of the contract as

well as the future potential transactions under a manufacturing and supply agreement both represent a vendor-customer relationship.

The Company does not believe that its promise

to provide goods under a future manufacturing and supply agreement represents a material right to Lee’s, and therefore the promise

does not represent current performance obligation.

The Company has concluded the agreement contains one performance obligation –

the IP license.

ASC 606 indicates that constrained variable consideration

should be included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative

revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

consideration consisting of milestone payments and sales-based royalties may be received based on the completion of certain clinical,

regulatory, and commercial activities.

The Company has concluded that the future milestone payments should be excluded from the transaction

price due to the uncertainty of achievement as of December 31, 2022.

The Company will reassess this conclusion at each reporting date

until the uncertainties are resolved.

For the sales-based royalty payments, guidance

requires an entity to recognize revenue for a sales-based royalty promised in exchange for a license of intellectual property only when

the later of 1) the subsequent sale or usage occurs, or 2) the performance obligation to which some or all the sales-based or usage-based

royalty has been allocated has been satisfied or partially satisfied.

The Company has concluded that the future sales-based royalties

should be excluded from the transaction price as of December 31, 2022.

The Company will reassess this conclusion at each reporting date.

The Company has concluded that at contract inception

the total transaction price is the $ 1.0 million upfront fee.

The Company has concluded that the license of

the Renazorb IP is functional IP as it contains all the necessary information for Lee’s to develop for commercialization in the

Unicycive’s ongoing activities do not significantly affect the standalone functionality of the IP.

In addition, the

functionality of the IP is not expected to substantially change during the license period based on Unicycive’s activities.

revenue should therefore be recognized at a point in time.

This intellectual property was transferred to Lee’s in July 2022, and

the Company has recognized $ 1.0 million in the accompanying statements of operations as licensing revenue for the year ended December

Balance Sheet Components

Prepaid expenses and other current assets as

of December 31, 2021 and 2022 consisted of the following (in thousands):

Prepaid directors and officers liability insurance premiums

Prepaid preclinical services

plant and equipment as of December 31, 2020 and 2021 consisted of the following (in thousands):

Property, plant and equipment as of December

31, 2021 and 2022 consisted of the following (in thousands):

Leasehold improvements

1 unchanged sentence

Less accumulated depreciation

payable as of December 31, 2020 and 2021 consisted of the following (in thousands):

Accounts payable as of December 31, 2021 and

2022 consisted of the following (in thousands):

Trade accounts payable

Credit card liability

liabilities as of December 31, 2020 and 2021 consisted of the following (in thousands):

Accrued liabilities as of December 31, 2021 and

2022 consisted of the following (in thousands):

Accrued labor costs

Accrued drug development costs

Company leases office space under an operating lease.

In December 2021, the Company entered into a lease agreement for 2,367 square feet

of office space commencing December 1, 2021.

The initial lease term is for two years, and there is an option to extend the lease for

an additional year.

accounting for the leases, the Company adopted ASC 842 Leases on January 1, 2019, which requires a lessee to record a right-of-use asset

and a corresponding lease liability at the inception of the lease initially measured at the present value of the lease payments.

Company classified the lease as an operating lease and, at December 1, 2021, determined that the present value of the lease was approximately

$ 318,000 using a discount rate of 8.0 %.

In accordance with ASC 842, the right-of-use asset will be amortized over the life of the underlying

The Company determined that the option to extend the lease for an additional year was not considered reasonably certain at December

During the year ended December 31, 2021, the Company reflected amortization of right-of-use asset of approximately $ 12,000 ,

resulting in a right of use asset balance of $ 305,000 .

the year ended December 31, 2021, the Company made cash payments on the lease of $ 14,000 towards the lease liabilities.

As of December

31, 2021, the total lease liability was $ 306,000 .

ASC 842 requires recognition in the statement of operations of a single lease cost,

calculated so that the cost of the lease is allocated over the lease term, generally on a straight-line basis.

Rent expense for the lease

for the year ended December 31, 2021 was approximately $ 14,000 .

of the Company’s lease liabilities are as follows (in thousands):

Year ending December 31, 2022

Operating Lease

The Company leases office space under an operating

In December 2021, the Company entered into a lease agreement for 2,367 square feet of office space commencing December 1, 2021.

The initial lease term is for two years , and there is an option to extend the lease for an additional year.

In accounting for the leases, the Company adopted

ASC 842 Leases on January 1, 2019, which requires a lessee to record a right-of-use asset and a corresponding lease liability at the

inception of the lease initially measured at the present value of the lease payments.

The Company classified the lease as an operating

lease and, at December 1, 2021, determined that the present value of the lease was approximately $ 318,000 using a discount rate of 8.0 %.

In accordance with ASC 842, the right-of-use asset will be amortized over the life of the underlying lease.

The Company determined that

the option to extend the lease for an additional year was not considered reasonably certain at December 31, 2021 or December 31, 2022.

During the year ended December 31, 2022, the Company reflected amortization of right-of-use asset of approximately $ 154,000 , resulting

in a right of use asset balance of $ 152,000 .

During the year ended December 31, 2022, the

Company made cash payments on the lease of $ 170,000 towards the lease liabilities.

As of December 31, 2022, the total lease liability

was $ 155,000 .

ASC 842 requires recognition in the statement of operations of a single lease cost, calculated so that the cost of the

lease is allocated over the lease term, generally on a straight-line basis.

Rent expense for the lease for the years ended December 31,

2021 and December 31, 2022 was approximately $ 14,000 and $ 173,000 , respectively.

Maturities of the Company’s lease liabilities

are as follows (in thousands):

Operating Lease

Year ending December 31, 2022

Total lease payments

Less imputed interest

rate / present value discount

Less imputed interest rate / present value discount

Present value of lease liability

1 unchanged sentence

Long term portion

In January through May 2021, the Company issued convertible notes (the

“2021 Notes”) in the aggregate principal amount of approximately $ 1.1 million.

The 2021 Notes bear interest at a rate of 12%

per annum, payable at maturity, and mature between January and May, 2022.

The 2021 Notes shall automatically convert into shares of the

Company’s common stock upon the closing of a financing pursuant to which the Company receives gross proceeds of at least $500,000

(a “Qualified Financing”) or upon a change of control.

The 2021 Notes shall convert into such numbers of shares of the Company’s

common stock equal to the conversion amount divided by the Conversion Price.

“Conversion Price” means (i) in the event of

a Qualified Financing, 70% of the price per share (or conversion price, as applicable) of common stock (or securities convertible into

common stock, as applicable) sold in such financing or (ii) in the event of a change of control, the price per share reflected in such

Company has accounted for the 2021 Notes as stock-settled debt and was accreting the carrying amount of the 2021 Notes to the settlement

amount through maturity.

In July through November 2020, the Company issued convertible notes

(the “2020 Notes”) in the aggregate principal amount of $1.3 million.

The 2020 Notes bear interest at a rate of 12% per annum,

payable at maturity, and mature between July and November, 2021.

The 2020 Notes shall automatically convert into shares of the Company’s

common stock upon the closing of a financing pursuant to which the Company receives gross proceeds of at least $500,000 (a “Qualified

Financing”) or upon a change of control.

The 2020 Notes shall convert into such numbers of shares of the Company’s common

stock equal to the conversion amount divided by the Conversion Price.

“Conversion Price” means (i) in the event of a Qualified

Financing, 70% of the price per share (or conversion price, as applicable) of common stock (or securities convertible into common stock,

as applicable) sold in such financing or (ii) in the event of a change of control, the price per share reflected in such transaction.

Company has accounted for the 2020 Notes as stock-settled debt and is accreting the carrying amount of the 2020 Notes to the settlement

amount through maturity.

As of December 31, 2020, unpaid and accrued interest of $ 53,000 as well as debt discount accretion expense of

approximately $ 186,000 was included with the convertible notes on the balance sheet.

As a result of the completion of the Company’s IPO on July 15,

2021, approximately $ 2.4 million of principal and $ 191,000 of unpaid accrued interest related to the 2021 and 2020 Notes was converted

into shares of common stock.

Additionally the noteholders were granted warrants equal to 25 % of the conversion shares issued.

The conversion

resulted in a loss of $ 431,000 that is included as loss on debt conversion in the accompanying statements of operations for the year ended

December 31, 2021.

Protection Program Loan

April 23, 2020, the Company entered into an $18,000 loan with Silicon Valley Bank pursuant to the Small Business Administration’s

(“SBA”) Paycheck Protection Program (“PPP”) as well as a $1,000 loan pursuant to the Economic Injury Disaster

Assistance Program.

The PPP loan proceeds are intended to be used for payroll over the eight-week period following the date of the loan.

The loan terms provide that no principal or interest payments are due and interest will accrue at 1% per annum commencing on April 23,

2020 through October 23, 2020 (deferral period).

Commencing one month after the deferral period and continuing monthly through the maturity

of the loan on April 23, 2022, equal monthly payments of principal and interest are due.

The Company classified the loans as a current

liability, has applied for and received loan forgiveness in February 2021, and recorded a gain on extinguishment of debt in the statement

Convertible Notes

In January through May 2021, the Company issued

convertible notes (the “2021 Notes”) in the aggregate principal amount of approximately $ 1,098,000 .

The 2021 Notes bear interest

at a rate of 12 % per annum, payable at maturity, and mature between January and May, 2022.

The 2021 Notes shall automatically convert

into shares of the Company’s common stock upon the closing of a financing pursuant to which the Company receives gross proceeds

of at least $ 0.5 million (a “Qualified Financing”) or upon a change of control.

The 2021 Notes shall convert into such numbers

of shares of the Company’s common stock equal to the conversion amount divided by the Conversion Price.

“Conversion Price”

means (i) in the event of a Qualified Financing, 70 % of the price per share (or conversion price, as applicable) of common stock (or

securities convertible into common stock, as applicable) sold in such financing or (ii) in the event of a change of control, the price

per share reflected in such transaction.

The Company accounted for the 2021 Notes as stock-settled

debt and was accreting the carrying amount of the 2021 Notes to the settlement amount through maturity.

In July through November 2020, the Company issued

convertible notes (the “2020 Notes”) in the aggregate principal amount of $ 1,290,000 .

The 2020 Notes bear interest at a rate

of 12 % per annum, payable at maturity, and mature between July and November, 2021.

The 2020 Notes shall automatically convert into shares

of the Company’s common stock upon the closing of a financing pursuant to which the Company receives gross proceeds of at least

$ 0.5 million (a “Qualified Financing”) or upon a change of control.

The 2020 Notes shall convert into such numbers of shares

of the Company’s common stock equal to the conversion amount divided by the Conversion Price.

“Conversion Price” means

(i) in the event of a Qualified Financing, 70 % of the price per share (or conversion price, as applicable) of common stock (or securities

convertible into common stock, as applicable) sold in such financing or (ii) in the event of a change of control, the price per share

reflected in such transaction.

The Company accounted for the 2020 Notes as stock-settled

debt and is accreting the carrying amount of the 2020 Notes to the settlement amount through maturity.

As of December 31, 2020, unpaid

and accrued interest of $ 0.1 million as well as debt discount accretion expense of approximately $ 0.2 million was included with the convertible

notes on the balance sheet.

As a result of the completion of the Company’s

IPO on July 13, 2021, approximately $ 2.4 million of principal and $ 0.2 million of unpaid accrued interest related to the 2021 and 2020

Notes was converted into shares of common stock.

Additionally the noteholders were granted warrants equal to 25 % of the conversion shares

The conversion resulted in a loss of $ 0.4 million that is included as loss on debt conversion in the accompanying statements

of operations for the year ended December 31, 2021.

Party Transactions

from Chief Executive Officer and Stockholder

The Company received advances from a stockholder of $ 248,000 during

the year ended December 31, 2021.

The Company repaid amounts owed to the stockholder of $ 1.4 million during the year ended December 31,

As of December 31, 2020 and 2021, the current liability loan from a stockholder was approximately $ 967,000 and $ 0 , respectively.

Paycheck Protection Program Loan

On April 23, 2020, the Company entered into an

$ 18,000 loan with Silicon Valley Bank pursuant to the Small Business Administration’s (“SBA”) Paycheck Protection Program

(“PPP”) as well as a $ 1,000 loan pursuant to the Economic Injury Disaster Assistance Program.

The PPP loan proceeds are intended

to be used for payroll over the eight-week period following the date of the loan.

The loan terms provide that no principal or interest

payments are due and interest will accrue at 1 % per annum commencing on April 23, 2020 through October 23, 2020 (deferral period).

one month after the deferral period and continuing monthly through the maturity of the loan on April 23, 2022, equal monthly payments

of principal and interest are due.

The Company classified the loans as a current liability, has applied for and received loan forgiveness

in February 2021, and recorded a gain on extinguishment of debt in the statement of operations for the year ended December 31, 2021.

Related Party Transactions

Loan from Chief Executive Officer and Stockholder

The Company received advances from a stockholder

of $ 248,000 during the year ended December 31, 2021.

The Company repaid all amounts owed to the stockholder of $ 1.4 million during the

year ended December 31, 2021.

Common Stock Purchase Agreement and Service

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the Company in 2017, which were issued in 2018.

July 1, 2017, as amended on April 6, 2020, the Company entered into a Service Agreement with Globavir Biosciences, Inc.

(“Globavir”),

a related party (the “Service Agreement”).

Globavir provides administrative and consulting services and shared office space

and other costs in connection with the Company’s drug development programs.

The initial amended term of the Service Agreement expired

on December 31, 2020, and the agreement automatically renews for successive one month periods after the initial termination date.

to the Service Agreement, the Company paid Globavir $50,000 per month through December 31, 2019 and $10,000 per month commencing on January

As of December 31, 2020, $9,000 was payable to Globavir for service fees.

During the fourth quarter of 2021, after determining

that future services under the Service Agreement were no longer required, the Company wrote off the $28,000 remaining prepaid balance

due from Globavir as of December 31, 2021.

Service fee expenses were $120,000 and $148,000 for the years ended December 31, 2020 and

2021, respectively, and were recorded as general and administrative expenses in the statements of operations.

and Contingencies

On July 1, 2017, as amended on April 6, 2020,

the Company entered into a Service Agreement with Globavir Biosciences, Inc.

(“Globavir”), a related party (the “Service

Globavir provides administrative and consulting services and shared office space and other costs in connection with

the Company’s drug development programs.

The initial amended term of the Service Agreement expired on December 31, 2020, and the

agreement automatically renews for successive one month periods after the initial termination date.

Pursuant to the Service Agreement,

the Company paid Globavir $ 50,000 per month through December 31, 2019 and $ 10,000 per month commencing on January 1, 2020.

fourth quarter of 2021, after initially determining that future services under the Service Agreement were no longer required, the Company

wrote off the $ 28,000 remaining prepaid balance due from Globavir as of December 31, 2021.

During the year ended December 31, 2022, after

determining that although a shared office space is no longer utilized, consulting services continued to be provided, the Company amended

the Service Agreement to reflect the consulting services at a reduced service fee of $ 6,000 per month and a termination date of June

Commitments and Contingencies

Contingencies

Company is subject to claims and legal proceedings that arise in the ordinary course of business.

Such matters are inherently uncertain,

and there can be no guarantee that the outcome of any such matter will be decided favorably to the Company or that the resolution of

any such matter will not have a material adverse effect upon the Company’s financial statements.

The Company currently has no pending

claims or legal proceedings.

The Company is subject to claims and legal proceedings

that arise in the ordinary course of business.

Such matters are inherently uncertain, and there can be no guarantee that the outcome

of any such matter will be decided favorably to the Company or that the resolution of any such matter will not have a material adverse

effect upon the Company’s financial statements.

The Company currently has no pending claims or legal proceedings.

In September 2020, the Company signed an engagement

letter (the “Benchmark Agreement”) with The Benchmark Company LLC (“Benchmark”) to act as the lead or managing

underwriter in connection with the Company’s planned IPO.

In connection with this agreement the Company agreed to pay a nonaccountable

expense allowance to Benchmark equal to 1.0 % of the gross proceeds received in the Company’s planned IPO.

In addition to the non-accountable

expense allowance, the Company has also agreed to pay or reimburse the underwriters for certain of the underwriters’ out-of-pocket

expenses relating to the offering, including all reasonable fees and expenses of the underwriters’ outside legal counsel, and background

checks, which shall not exceed in the aggregate $ 132,500 .

underwriter in connection with the Company’s planned initial public offering.

In connection with this agreement the Company agreed

to pay a nonaccountable expense allowance to Benchmark equal to 1.0 % of the gross proceeds received in the Company’s planned initial

public offering.

In addition to the non-accountable expense allowance, the Company has also agreed to pay or reimburse the underwriters

for certain of the underwriters’ out-of-pocket expenses relating to the offering, including all reasonable fees and expenses of

the underwriters’ outside legal counsel, and background checks, which shall not exceed in the aggregate $ 132,500 .

In March 2021, the Benchmark Agreement was terminated.

Concurrent with

the termination, the Company signed an advisory services agreement pursuant to which the Company will pay Benchmark $ 150,000 upon the

closing of the planned IPO, and Benchmark provided advisory services with respect to the public offering.

The Company paid the $ 150,000

advisory fee in July 2021.

Concurrent with the termination, the Company signed an advisory services agreement pursuant to which the Company will pay Benchmark $ 150,000

upon the closing of the planned initial public offering, and Benchmark provided advisory services with respect to the public offering.

The Company paid the $ 150,000 advisory fee in July 2021.

In December 2022, the Company signed an advisory

services agreement with Maxim Group LLC (“Maxim”) pursuant to which the Company will pay Maxim $ 100,000 upon the closing

of a private placement of the Company’s equity or equity-linked securities.

Maxim provided advisory services with respect to a

private placement securities purchase agreement with certain healthcare-focused institutional investors, which closed in March of 2023.

The Company paid the $ 100,000 advisory fee in March 2023.

Indemnifications

the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties

and provide for general indemnifications, including for losses suffered or incurred by the indemnified party, in connection with any

trade secret, copyright, patent or other intellectual property infringement claim by any third party with respect to its technology.

The term of these indemnification agreements is generally perpetual any time after the execution of the agreement.

The Company’s

exposure under these agreements is unknown because it involves claims that may be made against the Company in the future, but that have

not yet been made.

To date, the Company has not paid any claims or been required to defend any action related to its indemnification

Company believes that the likelihood of conditions arising that would trigger these indemnities is remote and, historically, the Company

had not made any significant payment under such indemnification provisions.

Accordingly, the Company has not recorded any liabilities

relating to these agreements.

However, the Company may record charges in the future as a result of these indemnification obligations.

Additionally,

the Company has agreed to indemnify its directors and officers for certain events or occurrences while the director or officer is, or

was serving, at the Company’s request in such capacity.

The indemnification period covers all pertinent events and occurrences

during the director’s or officer’s service.

In the normal course of business, the Company

enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications,

including for losses suffered or incurred by the indemnified party, in connection with any trade secret, copyright, patent or other intellectual

property infringement claim by any third party with respect to its technology.

The term of these indemnification agreements is generally

perpetual any time after the execution of the agreement.

The Company’s exposure under these agreements is unknown because it involves

claims that may be made against the Company in the future, but that have not yet been made.

To date, the Company has not paid any claims

or been required to defend any action related to its indemnification obligations.

The Company believes that the likelihood of conditions

arising that would trigger these indemnities is remote and, historically, the Company had not made any significant payment under such

indemnification provisions.

Accordingly, the Company has not recorded any liabilities relating to these agreements.

However, the Company

may record charges in the future as a result of these indemnification obligations.

Additionally, the Company has agreed to indemnify

its directors and officers for certain events or occurrences while the director or officer is, or was serving, at the Company’s

request in such capacity.

The indemnification period covers all pertinent events and occurrences during the director’s or officer’s

Employee Benefit Plan

3 unchanged sentences

100 % vested.

The Company’s 401K Plan provides that the Company match each participant's contribution at 100 % up to 4 % of the employee’s

eligible compensation.

Company contributions to the 401K Plan totaled approximately $ 0 and $ 6,000 for the years ended December 31, 2020

and 2021, respectively.

Stockholders’

(Deficit) Equity

Company is authorized to issue up to 200,000,000 shares of common stock at par value of $ 0.001 per share.

of Common Stock and Warrants

During July 2021, as a result of its IPO, the

Company issued 5,000,000 shares of common stock and 4,000,000 warrants to investors in exchange for cash at $ 5.00 per unit, consisting

of $ 4.99 per share of common stock and $.0125 per four fifths of a warrant.

The warrants have a 5 -year term and an exercise price of $ 6.00

The underwriters exercised their option to purchase an additional 600,000 warrants, and the Company received $ 7,500 in proceeds.

As a result of the IPO, the Company’s outstanding convertible

notes and unpaid accrued interest were converted into 736,773 shares of common stock.

Additionally, in accordance with the original terms

of the warrant agreements convertible noteholders were granted a total of 184,193 common stock warrants with a 5 -year term and with an

exercise price of $ 6.00 per warrant.

following table summarizes activity for warrants for the year ended December 31, 2021:

The Company’s 401(k) Plan provides that the Company match each participant’s contribution at 100 % up to 4 % of

the employee’s eligible compensation.

Company contributions to the 401(k) Plan totaled approximately $ 6,000 and $ 60,000 for the

years ended December 31, 2021 and 2022, respectively.

Stockholders’ (Deficit) Equity

Authorized Common Stock

The Company is authorized to issue up to 200,000,000

shares of common stock at par value of $ 0.001 per share.

Issuance of Common Stock and Warrants

During July 2021, as a result of its initial

public offering, the Company issued 5,000,000 shares of common stock and 4,000,000 warrants to investors in exchange for cash at $ 5.00

per unit, consisting of $ 4.99 per share of common stock and $.

0125 per four fifths of a warrant.

The warrants have a 5 -year term and

an exercise price of $ 6.00 per warrant.

The underwriters exercised their option to purchase an additional 600,000 warrants, and the Company

received $ 7,500 in proceeds.

As a result of the initial public offering, the

Company’s outstanding convertible notes and unpaid accrued interest were converted into 736,773 shares of common stock.

Additionally,

convertible noteholders were granted a total of 184,193 common stock warrants with a 5 -year term and with an exercise price of $ 6.00

The following table summarizes activity for warrants

for the year ended December 31, 2022:

(in thousands)

3 unchanged sentences

Outstanding, December 31, 2022

July 2021, 438,374 shares of common stock were allocated to Spectrum Pharmaceuticals, Inc.

in accordance with the anti-dilution provisions

of the Company’s Assignment and Asset Purchase Agreement with Spectrum.

the year ended December 31, 2021, employees and consultants exercised a total of 383,721 stock options and the Company received $119,000

A portion of these options were exercised early (prior to vesting), and as of December 31, 2021, 76,397 of the options remained

Proceeds received related to the unvested options of $60,000 at December 31, 2021 were included in accrued liabilities on the

accompanying balance sheets and will be reclassified to equity as vesting occurs, provided the employees and consultants continue to

provide services to the Company.

The vested portion of the exercises was 307,317 shares at December 31, 2021.

the year ended December 31, 2020, the Company issued 33,263 shares to investors in exchange for cash at $ 4.21 per share and 24,627 shares

to Spectrum following its anti-dilution provision (Note 3).

Rights of Common Stock

holder of shares of common stock shall be entitled to one vote for each share thereof held.

of December 31, 2020 and 2021, the Company had 10,000,000 shares of preferred stock authorized, par value of $ 0.001 per share and no

shares of preferred stock were issued or outstanding.

July 15, 2021, in connection with the completion of the Company’s IPO, the Company adopted a new comprehensive equity incentive

plan, the 2021 Omnibus Equity Incentive Plan (the “2021 Plan”).

Following the effective date of the 2021 Plan, no further

awards may be issued under the 2018 Plan or the 2019 Plan (collectively, the “Prior Plans”).

However, all awards under the

Prior Plans that are outstanding as of the effective date of the 2021 Plan will continue to be governed by the terms, conditions and

procedures set forth in the Prior Plans and any applicable award agreements.

A total of 1,302,326 shares of common stock are reserved

for issuance pursuant to the 2021 Plan.

The 2021 Plan provides for the issuance of incentive stock options, non-statutory stock options,

stock appreciation rights, restricted stock, restricted stock units, and other stock-based awards.

October 2019, the Company adopted the 2019 Stock Option Plan (“2019 Plan”) which allowed for the granting of incentive stock

options (“ISO”), non-qualified stock options (“NSO”) to the employees, members of the board of directors and

consultants of the Company.

In 2019 and during the first seven months of 2020, the Company granted ISOs and NSOs to consultants and directors

from the 2019 Plan.

As of December 31, 2019, 232,558 shares were authorized for issuance and 75,581 shares were available for future

grant under the 2019 Plan.

On April 6, 2020 the Company increased the shares authorized for issuance to 348,837 shares total.

Voting Rights of Common Stock

Each holder of shares of common stock shall be

entitled to one vote for each share thereof held.

Preferred Stock

As of December 31, 2021 and 2022, the Company

had 10,000,000 shares of preferred stock authorized, par value of $ 0.001 per share and no shares of preferred stock were issued or outstanding.

Stock-based Compensation

On July 15, 2021, in connection with the completion

of the Company’s IPO, the Company adopted a new comprehensive equity incentive plan, the 2021 Omnibus Equity Incentive Plan (the

“2021 Plan”).

Following the effective date of the 2021 Plan, no further awards may be issued under the 2018 Plan or the 2019

Plan (collectively, the “Prior Plans”).

However, all awards under the Prior Plans that are outstanding as of the effective

date of the 2021 Plan will continue to be governed by the terms, conditions and procedures set forth in the Prior Plans and any applicable

award agreements.

A total of 1,302,326 shares of common stock are reserved for issuance pursuant to the 2021 Plan.

The 2021 Plan provides

for the issuance of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, restricted stock

units, and other stock-based awards.

As of December 31, 2021 and 2022, 674,176 and 389,676 shares of common stock, respectively, are

available under the 2021 Plan.

In October 2019, the Company adopted the 2019

Stock Option Plan (“2019 Plan”) which allowed for the granting of incentive stock options (“ISO”), non-qualified

stock options (“NSO”) to the employees, members of the board of directors and consultants of the Company.

In 2019 and during

the first seven months of 2020, the Company granted ISOs and NSOs to consultants and directors from the 2019 Plan.

As of December 31,

2019, 232,558 shares were authorized for issuance and 75,581 shares were available for future grant under the 2019 Plan.

2020 the Company increased the shares authorized for issuance to 348,837 shares total.

As of July 15, 2021, no further awards

may be issued under the 2019 Plan due to the adoption of the Company’s 2021 Plan.

2018, the Company adopted the 2018 Equity Incentive Plan (“2018 Plan”) which allowed for the granting of incentive stock

options (“ISO”), non-qualified stock options (“NSO”), stock appreciation rights, restricted stock and restricted

stock units to the employees, members of the board of directors and consultants of the Company.

In 2018, the Company granted ISOs and

NSOs to consultants and directors from this plan.

As of December 31, 2020, 465,116 shares were authorized for issuance and 17,442 shares

were available for future grant under the 2018 Plan.

As of July 15, 2021, no further awards may be issued under the 2018 Plan due to

the adoption of the Company’s 2021 Plan.

following table summarizes activity for stock options under all plans for the year ended December 31, 2021:

On February 17, 2021, the Company increased the

shares authorized for issuance to 1,767,442 shares total.

As of July 15, 2021, no further awards may be issued under the 2019 Plan due

to the adoption of the Company’s 2021 Plan.

In 2018, the Company adopted the 2018 Equity

Incentive Plan (“2018 Plan”) which allowed for the granting of incentive stock options (“ISO”), non-qualified

stock options (“NSO”), stock appreciation rights, restricted stock and restricted stock units to the employees, members of

the board of directors and consultants of the Company.

In 2018, the Company granted ISOs and NSOs to consultants and directors from this

As of December 31, 2020, 465,116 shares were authorized for issuance and 17,442 shares were available for future grant under the

As of July 15, 2021, no further awards may be issued under the 2018 Plan due to the adoption of the Company’s 2021 Plan.

The following table summarizes activity for stock

options under all plans for the year ended December 31, 2022:

(in thousands)

5 unchanged sentences

Options vested and exercisable as of December 31, 2022

grant date fair value of options granted during the year ended December 31, 2021 was $ 2.1 million.

of December 31, 2021, the unrecognized compensation cost related to outstanding stock options was $ 2.0 million, which is expected to

be recognized as expense over approximately 2.4 years.

July 2021, the Company granted a director 26,738 restricted stock units with a grant date fair value of $ 100,000 , resulting in a fair

value per share of $ 3.74 .

Subject to the director’s continued service, the restricted stock units shall vest upon the one-year

anniversary of the date of grant.

As of December 31, 2021, the unrecognized compensation cost related to outstanding restricted stock

units was approximately $ 54,000 , which is expected to be recognized as expense over approximately 7 months.

Company has recorded stock-based compensation expense, which includes expense related to restricted stock units, allocated by functional

cost as follows for the years ended December 31, 2020 and 2021 (in thousands):

Ended December 31, 2020

Ended December 31, 2021

The grant date fair value of options granted

during the year ended December 31, 2022 was $0.2 million.

As of December 31, 2022, the unrecognized compensation

cost related to outstanding stock options was $ 1.1 million, which is expected to be recognized as expense over approximately 2.3 years.

During the year ended December 31, 2021, employees

and consultants exercised a total of 383,721 stock options and the Company received $ 119,000 in proceeds.

A portion of these options

were exercised early (prior to vesting), and as of December 31, 2022, 9,546 of the options remained unvested.

Proceeds received related

to the unvested options of approximately $ 31,000 at December 31, 2022 were included in accrued liabilities on the accompanying balance

sheets and will be reclassified to equity as vesting occurs, provided the employees and consultants continue to provide services to the

Proceeds received related to the vested portion of options of $ 29,000 were reclassified to equity during the year ended December

The vested portion of the exercises was 374,168 shares at December 31, 2022.

During May 2022, the Company granted a consultant

10,000 restricted stock units with a grant date fair value of $ 7,200 , resulting in a fair value per share of $ 0.72 .

Subject to the consultant’s

continued service, the restricted stock units shall vest upon the two-year anniversary of the date of grant.

As of December 31, 2022,

the unrecognized compensation cost related to the grant was approximately $ 5,000 , which is expected to be recognized as expense over

approximately 17 months.

During July 2021, the Company granted a director

26,738 restricted stock units with a grant date fair value of $ 100,000 , resulting in a fair value per share of $ 3.74 .

The restricted

stock units vested in July 2022.

The Company has recorded stock-based compensation

expense, which includes expense related to restricted stock units, allocated by functional cost as follows for the years ended December

31, 2021 and 2022 (in thousands):

Research and development

1 unchanged sentence

Total stock-based compensation

Value of Stock Options

assumptions are based on the following for each of the periods presented:

Term - The expected term is calculated using the simplified method which is used when there is insufficient historical data about

exercise patterns and post-vesting employment termination behavior.

The simplified method is based on the vesting period and the contractual

term for each grant, or for each vesting-tranche for awards with graded vesting.

The mid-point between the vesting date and

the maximum contractual expiration date is used as the expected term under this method.

Stock Fair Value - The fair value of the common stock underlying the Company’s stock

options prior to the IPO was estimated at each grant date and was determined on a periodic basis and based either on transactions with

third parties in which common stock was sold for cash or with the assistance of an independent third-party valuation expert.

to our IPO, the fair value underlying the Company’s common stock is determined based on the public market closing price on each

date of grant.

The assumptions underlying these valuations represented management’s best estimates, which involved inherent uncertainties

and the application of significant levels of management judgment.

- The expected volatility being used is derived from the historical stock volatilities of a representative industry peer group of

comparable publicly listed companies over a period approximately equal to the expected term of the options.

Interest Rate - The risk-free interest rate is based on median U.S.

Treasury zero coupon issues with remaining terms similar to the

expected term on the options.

Dividend - The Company has never declared nor paid any cash dividends and does not plan to pay cash dividends in the foreseeable

future, and therefore, used an expected dividend yield of zero.

following averaged assumptions were used to calculate the fair value of awards granted to employees, directors and non-employees for

the years ended December 31, 2020 and 2021:

Fair Value of Stock Options

The assumptions are based on the following for

each of the periods presented:

Expected Term - The expected

term is calculated using the simplified method which is used when there is insufficient historical data about exercise patterns and post-vesting

employment termination behavior.

The simplified method is based on the vesting period and the contractual term for each grant, or for

each vesting-tranche for awards with graded vesting.

The mid-point between the vesting date and the maximum contractual expiration

date is used as the expected term under this method.

Common Stock Fair Value - The

fair value of the common stock underlying the Company’s stock options prior to the initial public offering was estimated at each

grant date and was determined on a periodic basis and based either on transactions with third parties in which common stock was sold

for cash or with the assistance of an independent third-party valuation expert.

Subsequent to our initial public offering, the fair value

underlying the Company’s common stock is determined based on the public market closing price on each date of grant.

The assumptions

underlying these valuations represented management’s best estimates, which involved inherent uncertainties and the application

of significant levels of management judgment.

Volatility - The expected volatility

being used is derived from the historical stock volatilities of a representative industry peer group of comparable publicly listed companies

over a period approximately equal to the expected term of the options.

Risk-free Interest Rate - The

risk-free interest rate is based on median U.S.

Treasury zero coupon issues with remaining terms similar to the expected term on the

Expected Dividend – Through

December 31, 2022, the Company has never declared nor paid any cash dividends.

The following averaged assumptions were used

to calculate the fair value of awards granted to employees, directors and non-employees for the years ended December 31, 2021 and 2022:

Expected volatility

101.00 – 105.00

Risk-free interest rate

2 unchanged sentences

5.13 - 6.25 years

reconciliation of the provision for income taxes to the amount computed by applying the statutory income tax rate of 21 % to the net loss

is summarized for the years ended December 31, 2020 and 2021 is as follows:

Income taxes (benefit) at statutory

State income tax (benefit), net of federal

A reconciliation of the provision for income

taxes to the amount computed by applying the statutory income tax rate of 21 % to the net loss is summarized for the years ended December

31, 2021 and 2022 is as follows:

Income taxes (benefit) at statutory rates

State income tax (benefit), net of federal benefit

Change in valuation allowance

1 unchanged sentence

Effective income tax rate

the years ended December 31, 2020 and 2021, the Company did not record a deferred income tax expense or benefit.

Income tax expense has

been nominal for the years ended December 31, 2020 and 2021.

tax assets and liabilities are recognized for the expected tax consequences attributable to the differences between financial reporting

and the tax basis of existing assets and liabilities and operating loss carryforward, and they are measured using enacted tax rates expected

to be in effect when differences are expected to reverse.

A valuation allowance is recorded for loss carryforwards and other deferred

tax assets where it is more likely than not that such loss carryforward and deferred tax asset will not be realized.

Significant components

of the Company’s deferred tax assets at December 31, 2020 and 2021 are shown below (in thousands):

For the years ended December 31, 2021 and 2022,

the Company did not record a deferred income tax expense or benefit.

Income tax expense has been nominal for the years ended December

31, 2021 and 2022.

Deferred tax assets and liabilities are recognized

for the expected tax consequences attributable to the differences between financial reporting and the tax basis of existing assets and

liabilities and operating loss carryforward, and they are measured using enacted tax rates expected to be in effect when differences

are expected to reverse.

A valuation allowance is recorded for loss carryforwards and other deferred tax assets where it is more likely

than not that such loss carryforward and deferred tax asset will not be realized.

Significant components of the Company’s deferred

tax assets at December 31, 2021 and 2022 are shown below (in thousands):

Deferred tax assets:

Stock-based compensation

Net operating losses carryforwards

Depreciation and Amortization

Capitalized research

Accrued expenses

Gross deferred tax assets

Valuation allowance

Deferred tax assets, net

of valuation allowance

valuation allowance increased by $ 1.6 million during the year ended December 31, 2021.

We have concluded, based upon ASC 740, that it

is more likely than not we will not realize any benefit from the deferred tax assets related to certain Federal and state’s net

operating loss and credit carryforward.

Accordingly, the Company has established a full valuation allowance against its Federal and state

deferred tax assets.

of December 31, 2021, the Company had available Federal and California net operating loss carryforwards of approximately $ 9.5 million

and $ 3.9 million to reduce future taxable income, if any.

Federal net operating losses generated prior to 2018 and all state net operating

losses generated expire in varying amounts beginning in 2037.

These net operating losses, generated after 2017, do not expire and will

be able to offset 80% of taxable income generated in the future.

of December 31, 2021, the Company had research and development credit carryforwards of approximately $ 900 and $ 100,000 available to reduce

future taxable income, if any, for federal and state income tax purposes, respectively.

These credits have been provided a full reserve

under ASC 740-10.

The federal credit carryforwards begin to expire in 2037, and the state credit carryforwards can be carried forward

indefinitely.

of net operating losses and tax credits may be subject to an annual limitation due to ownership change limitations provided in the Internal

Revenue Code of 1986, as amended (the “Code”), and similar state provisions.

The effect of an ownership change would be the

imposition of annual limitation on the use of net operating loss (“NOL”) carryforwards attributable to periods before the

change in ownership.

An assessment of such ownership changes under Section 382 of the Code was not completed through December 31, 2021

and, as such the Company is not able to determine the impact on the NOLs and tax credit carryforwards, if any, as of the date of the

Deferred tax assets, net of valuation allowance

The valuation allowance increased by $ 4.4 million

during the year ended December 31, 2022.

The Company has concluded, based upon ASC 740, that it is more likely than not the Company will

not realize any benefit from the deferred tax assets related to certain Federal and state’s net operating loss and credit carryforwards.

Accordingly, the Company has established a full valuation allowance against its Federal and state deferred tax assets.

As of December 31, 2022, the Company had available

Federal and California net operating loss carryforwards of approximately $ 15.4 million and $ 13.1 million to reduce future taxable income,

Federal net operating losses generated prior to 2018 and all state net operating losses generated expire in varying amounts beginning

These net operating losses, generated after 2017, do not expire and will be able to offset 80 % of taxable income generated in

As of December 31, 2022, the Company had research

and development credit carryforwards of approximately $ 444,000 and $ 245,000 available to reduce future taxable income, if any, for federal

and state income tax purposes, respectively.

These credits have been provided a full reserve under ASC 740-10.

The federal credit carryforwards

begin to expire in 2037, and the state credit carryforwards can be carried forward indefinitely.

Utilization of net operating losses and tax credits

may be subject to an annual limitation due to ownership change limitations provided in the Internal Revenue Code of 1986, as amended

(the “Code”), and similar state provisions.

The effect of an ownership change would be the imposition of annual limitation

on the use of net operating loss (“NOL”) carryforwards attributable to periods before the change in ownership.

An assessment

of such ownership changes under Section 382 of the Code was not completed through December 31, 2022 and, as such the Company is not able

to determine the impact on the NOLs and tax credit carryforwards, if any, as of the date of the financial statements.

To the extent that

an assessment is completed in the future, the Company’s ability to utilize tax attributes could be restricted on a year-by-year

basis and certain attributes could expire before they are utilized.

On March 27, 2020, the Coronavirus Aid, Relief,

and Economic Security Act (“CARES Act”) was enacted in response to the COVID-19 pandemic.

The CARES Act, among other things,

permits NOL carryovers and carrybacks to offset 100 % of taxable income for taxable years beginning before 2021.

In addition, the CARES

Act allows NOLs incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund

of previously paid income taxes.

Due to the Company’s history of NOLs, the CARES Act did not have a material impact on the Company’s

financial statements.

To the extent that an assessment is completed in the future, the Company’s ability to utilize tax attributes

could be restricted on a year-by-year basis and certain attributes could expire before they are utilized.

March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted in response to the COVID-19

The CARES Act, among other things, permits NOL carryovers and carrybacks to offset 100% of taxable income for taxable years

beginning before 2021.

In addition, the CARES Act allows NOLs incurred in 2018, 2019, and 2020 to be carried back to each of the five

preceding taxable years to generate a refund of previously paid income taxes.

Due to the Company’s history of NOLs, the CARES Act

is not expected to have a material impact on the Company’s financial statements.

Company applies the guidance under ASC 740, subtopic 10-50-15, Unrecognized Tax Benefit Related Disclosures (formerly FASB Interpretation

48, Accounting for Uncertainty in Income Taxes).

For benefits to be realized, a tax position must be more likely than not to be sustained

upon examination by tax authorities.

The amount recognized is measured as the largest amount of benefit that is greater than 50 % likely

of being realized upon settlement.

This interpretation also provides guidance on measurement, de-recognition, classification, interest

and penalties.

following table summarizes the changes to the Company’s gross unrecognized tax benefits for the years ended December 31, 2020 and

2021 (in thousands):

The Company applies the guidance under ASC 740,

subtopic 10-50-15, Unrecognized Tax Benefit Related Disclosures (formerly FASB Interpretation 48, Accounting for Uncertainty in Income

For benefits to be realized, a tax position must be more likely than not to be sustained upon examination by tax authorities.

The amount recognized is measured as the largest amount of benefit that is greater than 50 % likely of being realized upon settlement.

This interpretation also provides guidance on measurement, de-recognition, classification, interest and penalties.

The Tax Cuts and Jobs Act (“TCJA”)

included a change in the treatment of research and development (“R&D”) expenditures for tax purposes under Section 174.

Effective for tax years beginning after December 31, 2021, specified R&D expenditures must undergo a 5-year amortization period for

domestic spend and a 15-year amortization period for foreign spend.

Prior to the effective date (2021 tax year and prior), taxpayers

were able to immediately expense R&D costs under Section 174(a) or had the option to capitalize and amortize R&D expenditures

over a 5-year recovery period under Section 174(b).

The Company has evaluated the current legislation at this time and prepared the provision

by following the treatment of R&D expenditures for tax purposes under Section 174.

The following table summarizes the changes to

the Company’s gross unrecognized tax benefits for the years ended December 31, 2021 and 2022 (in thousands):

Beginning balance

1 unchanged sentence

Ending balance

of December 31, 2020 and 2021, the total unrecognized tax benefit was approximately $ 29,000 and $ 101,000 , respectively.

The Company does

not expect any material changes to the estimated amount of liability associated with its uncertain tax positions within the next 12 months.

The Company’s policy is to recognize interest and penalties related to uncertain tax positions in income tax expense.

As of December

31, 2021, the Company had no accrued interest and penalties related to uncertain tax positions.

Company files U.S.

and state income tax returns with varying statutes of limitations.

Tax years 2017 and forward remain open to examination

due to the carryover of NOL carryforwards.

As of December 31, 2021 and 2022, the total unrecognized

tax benefit was approximately $ 101,000 and $ 690,000 , respectively.

The Company does not expect any material changes to the estimated

amount of liability associated with its uncertain tax positions within the next 12 months.

The Company’s policy is to recognize

interest and penalties related to uncertain tax positions in income tax expense.

As of December 31, 2022, the Company had no accrued

interest and penalties related to uncertain tax positions.

The Company files U.S.

and state income tax returns

with varying statutes of limitations.

Tax years 2018 and forward remain open to examination due to the carryover of NOL carryforwards.

There are no ongoing examinations by taxing authorities at this time.

loss per share

following table sets forth the computation of basic and diluted net loss per share (in thousands, except share and per share data):

Ended December 31, 2020

Ended December 31, 2021

Weighted-average

shares outstanding used in computing net loss per share attributable to common stockholders, basic and diluted

Net loss per share attributable to common stockholders,

basic and diluted

following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share for

the periods presented because including them would have been antidilutive:

Ended December 31, 2020

Ended December 31, 2021

Net loss per share

The following table sets forth the computation

of basic and diluted net loss per share (in thousands, except share and per share data):

Weighted-average shares outstanding used in computing net loss per share attributable to common stockholders, basic and diluted

Net loss per share attributable to common stockholders, basic and diluted

The following outstanding shares of potentially

dilutive securities were excluded from the computation of diluted net loss per share for the periods presented because including them

would have been antidilutive:

Options to purchase common stock

Warrants to purchase

On January 6, 2022, the Company entered into a

Master Services Agreement with Quotient Sciences Limited, a UK based company that provides drug development and analysis services, for

the purpose of performing clinical research in support of UNI-494.

Warrants to purchase common stock

Subsequent Events

On February 1, 2023, the Company entered into

a Master Services Agreement with CBCC Global Research Inc., a California based company that provides clinical trial and related service,

for the purpose of performing clinical research in support of Renazorb.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

an exclusive license agreement with Lotus Pharmaceutical (“Lotus”), a leading global pharmaceutical company, for the development

and commercialization of Renazorb® (lanthanum dioxycarbonate) in the Republic of Korea.

Under the terms of the agreement, Lotus will

be responsible for development, registration filing and approval of Renazorb in the Republic of Korea.

In addition, Lotus will have sole

responsibility for the importation of the drug product from Unicycive and for the costs of commercialization of Renazorb in the Republic

Unicycive received an upfront payment of $ 750,000 , less applicable withholding taxes, and may receive up to $ 4.45 million in

milestone payments and tiered royalties upon achievement of prespecified regulatory and commercial achievements.

The Company received advances from a stockholder

of $ 210,000 during February, 2023.

The Company repaid amounts owed to the stockholder of $ 210,000 plus accrued interest during March

On March 3, 2023, the Company signed a securities

purchase agreement with certain healthcare-focused institutional investors that will provide up to $ 130 million in gross proceeds to

Unicycive through a private placement that includes initial upfront funding of $ 30 million.

The funding is being led by Vivo Capital

with participation from RA Capital, BVF Partners, Logos Capital, and is supported by existing investors Nantahala Capital Partners and

Rosalind Advisors Inc.

In conjunction with the financing, Gaurav Aggarwal, M.D., Managing Director of Vivo Capital, will join the Unicycive

Board of Directors.

Pursuant to the securities purchase agreement,

the Company issued to institutional purchasers (i) $ 30 million in shares of the Company’s Series A Convertible Preferred Stock

and (ii) three tranches of warrants that are exercisable for convertible preferred stock as follows:

● The Tranche A warrants for an aggregate exercise price of approximately $ 25 million are exercisable until 21 days following the Company’s announcement of receipt of FDA approval for Renazorb;

● The Tranche B warrants for an aggregate exercise price of approximately $ 25 million are exercisable until 21 days following the Company’s announcement of receipt of TDAPA approval for Renazorb;

● The Tranche C warrants for an aggregate exercise price of approximately $ 50 million are exercisable until 21 days following public disclosure of four quarters of commercial sales of Renazorb following receipt of TDAPA approval.

In addition, the Company issued (i) $ 190,000

in shares of the Company’s Series A Convertible Preferred Stock and (ii) three tranches of warrants that are exercisable for convertible

preferred stock to employees of the Company.

Shares of Series A Convertible Preferred Stock

were issued at a price of $ 1,000.00 per share.

In addition, the Company shall modify its dividend

policy to state that the Company intends to pay dividends to all stockholders, including holders of Series A Preferred Stock on an as-if-converted-to-common-stock

basis, on a quarterly basis in an amount of which the aggregate of all quarterly dividends shall equal at least seventy-five percent

( 75 %) of its annual net cash flow from operations following the approval of Renazorb by the FDA if obtained, and the commencement of

commercial sales.

CHANGES IN AND

DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data