What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2024-03-28 compared with 2023-03-31 · 805 added, 498 removed, 592 unchanged (69% of the section changed)

FINANCIAL STATEMENTS

AND SUPPLEMENTARY DATA

FINANCIAL STATEMENTS AND SUPPLEMENTARY

UNICYCIVE THERAPEUTICS, INC.

2 unchanged sentences

Report of Independent Registered Public Accounting Firm (PCAOB ID # 606 ) F-2

Report of Independent Registered Public Accounting Firm (PCAOB ID #199) F-3

Balance Sheets as of December 31, 2022 and 2023 F-4

4 unchanged sentences

of Independent Registered Public Accounting Firm

To the Audit Committee and Stockholders

Unicycive Therapeutics, Inc.

Opinion on the Financial Statements

We have audited the accompanying balance

sheet of Unicycive Therapeutics, Inc.

(the “Company”) as of December 31, 2023, and the related statements of operations, stockholders’

deficit, and cash flows for the year ended, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December

31, 2023, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally

accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”)

and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance

with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether

the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were

we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an understanding

of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s

internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures

to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that

respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as

evaluating the overall presentation of the financial statements.

We believe that our audit provide a reasonable basis for our opinion.

/s/ Grassi & Co., CPAs, P.C .

We have served as the Company’s

auditors since 2023.

Jericho, New York

March 28, 2024

of Independent Registered Public Accounting Firm

To the Board of Directors

1 unchanged sentence

Opinion on the Financial Statements

We have audited the accompanying balance sheets

of Unicycive Therapeutics, Inc.

(the “Company”) as of December 31, 2022 and 2021, and the related statements of operations,

stockholders’ (deficit) equity, and cash flows for each of the two years in the period ended December 31, 2022, and the related

notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in

all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its

cash flows for each of the two years in the period ended December 31, 2022, in conformity with accounting principles generally accepted

in the United States of America.

We have audited the accompanying balance sheet of Unicycive Therapeutics,

(the “Company”) as of December 31, 2022, and the related statement of operations, stockholders’ (deficit) equity,

and cash flows for the year ended December 31, 2022, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December

31, 2022, and the results of its operations and its cash flows for the year ended December 31, 2022, in conformity with accounting principles

generally accepted in the United States of America.

Basis for Opinion

6 unchanged sentences

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the

We conducted our audit in accordance with the

standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial

statements are free of material misstatement, whether due to error or fraud.

1 unchanged sentence

to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding

As part of our audit, we are required to obtain an understanding

of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s

1 unchanged sentence

Accordingly, we express no such opinion.

Our audits included performing procedures to assess

Our audit included performing procedures to assess

the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond

1 unchanged sentence

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating

the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

We have served as the Company's auditor since

We believe that our audit provides a reasonable basis for our opinion.

We served as the Company's auditor from 2019 to

/s/ Mayer Hoffman McCann P.C.

9 unchanged sentences

Property, plant and equipment, net

Liabilities and stockholders’ equity

Liabilities and stockholders’ deficit

Current liabilities:

1 unchanged sentence

Accrued liabilities

Warrant liability

Operating lease liability – current

Total current liabilities

Operating lease liability – long

Operating lease liability – long term

Total liabilities

Commitments and contingencies (Note 8)

Stockholders’ (deficit) equity:

Stockholders’ deficit:

Series A-2 preferred stock, $ 0.001 par value per share – zero and 43,649 shares authorized at December 31, 2022 and December 31, 2023, respectively;

zero and 43,649 shares outstanding at December 31, 2022 and December 31, 2023, respectively

Preferred stock:

$ 0.001 par value per share— 10,000,000 shares authorized at December 31, 2021 and 2022;

no shares issued and outstanding at December 31, 2021 and 2022

Common stock, $ 0.001 par value per share – 200,000,000 shares authorized at December 31, 2021 and 2022;

14,996,534 shares issued and outstanding at December 31, 2021, and 15,231,655 shares issued and outstanding at December 31, 2022

$ 0.001 par value per share— 10,000,000 and 9,926,161

shares authorized at December 31, 2022 and December 31, 2023, respectively;

zero shares issued and outstanding at December 31, 2022 and

December 31, 2023

Common stock, $ 0.001 par value per share – 200,000,000 shares

authorized at December 31, 2022 and December 31, 2023;

15,231,655 shares issued and outstanding at December 31, 2022 and 34,756,049 issued

and outstanding at December 31, 2023

Additional paid-in capital

Accumulated deficit

Total stockholders’ equity (deficit)

Total liabilities and stockholders’

equity (deficit)

Total stockholders’ deficit

Total liabilities and stockholders’ deficit

See accompanying notes to the financial statements

8 unchanged sentences

Loss from operations

Other expenses:

Other income (expenses):

Interest income

Interest expense

Loss on debt conversion

Gain on extinguishment of debt

Total other expenses

Net loss per share, basic and diluted

Change in fair value of warrants

Total other income (expenses)

Deemed dividend to Series A-1 preferred stockholders

Net loss attributable to common stockholders

Net loss per share attributable to common stockholders, basic and diluted

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

1 unchanged sentence

Unicycive Therapeutics, Inc.

Statements of Stockholders’

(Deficit) Equity

Statements of Stockholders’ (Deficit)

(in thousands, except share amounts)

Stockholders’

Preferred Stock

Balance at December 31, 2020

Net proceeds from initial public offering

Conversion of convertible notes into common stock

Issuance of common stock for exercise of options

Issuance of common stock for anti-dilution clause

Stock-based compensation expense

Preferred Stock

Stockholders’

Balance at December 31, 2021

5 unchanged sentences

Balance at December 31, 2022

Issuance of Series A-1 preferred stock, net of issuance costs and allocated fair value of warrant liability

Deemed dividends on Series A-1 preferred stock

Issuance of Series A-2 preferred stock and common stock upon conversion of Series A-1 preferred stock

Issuance of common stock for exercise of options

Stock-based compensation expense

Balance at December 31, 2023

See accompanying notes to the financial statements

Unicycive Therapeutics, Inc.

Unicycive Therapeutics,

Statements of Cash Flows

3 unchanged sentences

Depreciation expense

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

G&A expense for issuance of common stock

Stock-based compensation expense

Convertible debt discount amortization

Amortization of operating lease right of use asset

Convertible debt non-cash interest

Gain on extinguishment of debt

Deferred compensation to CEO

Loss on debt conversion

Change in fair value of warrant liability

Changes in assets and liabilities:

2 unchanged sentences

Operating lease liability

Related party service fee payable

Net cash used in operating activities

3 unchanged sentences

Cash flows from financing activities

Net proceeds from initial public offering

Issuance of common stock for cash, net of issuance costs

Proceeds from loan from stockholder

Proceeds from convertible notes

Repayment of loan from stockholder

Payments on financed insurance policies

Proceeds from exercise of options

Net cash provided by (used in) financing activities

Net increase (decrease) in cash

Issuance of common stock for cash, net of issuance costs

Proceeds from issuance of Series A-1 preferred stock and warrants

Issuance costs related to Series A-1 preferred stock and warrants

Net cash (used in) provided by financing activities

Net (decrease) increase in cash

Cash at the beginning of the period

3 unchanged sentences

Deferred insurance charges included in prepaid expenses and other current assets

Issuance of Series A-2 preferred stock and common stock upon conversion of Series A-1 preferred stock

Accrued dividends on preferred stock

Fair value of warrants issued in connection with the issuance of preferred stock

Cash paid for interest

Cash paid for income taxes

See accompanying notes to the financial statements

Notes to the Financial

Notes to the Financial Statements

Organization and Description of Business

2 unchanged sentences

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 was dormant until July 2017 when it began evaluating several

drug candidates for in-licensing.

The Company in-licensed the drug candidate UNI

1 unchanged sentence

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

UNI 494 is a pro-drug of Nicorandill

UNI 494 is a pro-drug of Nicorandil

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”).

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.

drug candidate, Renazorb RZB 012 and its trademark, RENALAN, and various patents from Spectrum Pharmaceuticals, Inc.

Renazorb (“Oxylanthanum Carbonate”) 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

6 unchanged sentences

revenue as well as product sales.

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

The Company has generated approximately $ 0.7 million in licensing revenue during the year ended December

The Company has incurred operating losses and

2 unchanged sentences

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,

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

As of December 31, 2022, and December

31, 2023, the Company had an accumulated deficit of $ 34.0 million and $ 64.5 million, respectively.

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

on July 13, 2021 the Company began trading on the Nasdaq Capital Market under the symbol “UNCY”, and on July 15, 2021 received

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

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.

In connection with its initial public offering

(“IPO”), on July 13, 2021, the Company began trading on the Nasdaq Capital Market under the symbol “UNCY”, and

on July 15, 2021, received approximately $ 22.3 million in net proceeds after deducting the underwriting discounts, commissions and other

offering expenses.

The 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 3, 2023, the Company entered into a securities

purchase agreement with certain healthcare-focused institutional investors that may provide up to $ 130.0 million in gross proceeds through

a private placement and that included initial upfront funding of $ 28.0 million in net proceeds.

On March 13, 2024, the Company entered into a securities purchase agreement

with certain healthcare-focused institutional investors to provide $ 50 million in gross proceeds through a private placement.

to the securities purchase agreement, the Company issued institutional purchasers $ 50 million in shares of Series B Convertible Preferred

The Company expects to continue incurring losses

2 unchanged sentences

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.

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

no assurance that the Company will be able to obtain additional financing on terms acceptable to the Company, on a timely basis or at

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 currently anticipated level of expenditures, and after receiving the proceeds

from the private placement in March 2024, 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

2 unchanged sentences

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

6 unchanged sentences

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.

Significant items subject to such estimates and

assumptions include stock-based compensation and valuation of warrant liabilities.

Actual results may materially differ from those estimates.

Revenue Recognition

The Company recognizes revenue in accordance

with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”).

The Company applies the five-step model in ASC 606 and recognizes revenue from product sales or services rendered when control of the

promised goods or services are transferred to a counterparty in an amount that reflects the consideration to which the Company expects

to be entitled in exchange for those goods and services.

To achieve this core principle, the Company applies 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

Warrant Liability

In conjunction with the issuance of Series A-1

Preferred Stock (see Note 10), the Company established a warrant liability as of March 3, 2023, representing the fair value of warrants

that may be issued (and have since been issued – see Note 11), subject to shareholder approval, upon conversion of the Series A-1

Preferred Stock.

The Company accounts for these warrants as liabilities (in accordance with ASC 480, Distinguishing Liabilities from

Equity ) on the balance sheets as a result of certain redemption clauses that are not within the control of the Company.

liability was initially measured at fair value and is remeasured at fair value each reporting period.

Changes in the fair value of the

warrant liability is recognized in earnings during each period.

The warrant liability is measured using Level 3 fair value inputs.

Note 11 for a description of warrant liability and the related valuations.

Segment Information

2 unchanged sentences

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.

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

Risks and Uncertainties

45 unchanged sentences

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

If there is indication

If there is an indication

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

1 unchanged sentence

fair value at that time.

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

On December 31, 2023, management determined there were no impairments of the Company’s property and equipment.

The Company determines whether a contract is,

4 unchanged sentences

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.

The Company uses its estimated 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.

the warrant liability, cash and cash equivalents, accounts payable and accrued liabilities.

Fair value is defined as the price that would

be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement

GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value.

The fair value

hierarchy contains the following levels:

Level 1 — defined

as observable inputs based on unadjusted quoted prices for identical instruments in active markets;

Level 2 — defined

as inputs other than Level 1 that are either directly or indirectly observable in the marketplace for identical or similar instruments

in markets that are not active;

Level 3 — defined

as unobservable inputs in which little or no market data exists where valuations are derived from techniques in which one or more

significant inputs are unobservable.

The fair value of the warrant liability associated

with the Company’s March 2023 private placement transaction, further described in Note 11, was determined as of March 3, 2023,

and March 31, 2023, by using a Monte Carlo simulation technique (“MCS”) to value the embedded derivatives associated with

the warrants.

The MCS methodology calculates the theoretical value of a warrant liability based on certain parameters, including:

the threshold of exercising the warrants, (ii) the price of the underlying security, (iii) the time to expiration, or expected term,

(iv) the expected volatility of the underlying security, (v) the risk-free rate, (vi) the number of paths, and (vii) estimated probability

assumptions surrounding shareholder approval as well as the achievement by the Company of technical milestones associated with regulatory

and commercial progress.

The MCS valuation model was used for the valuations

performed as of the transaction inception at March 3, 2023 and at March 31, 2023 due to uncertainty in the timing of shareholder approval

and the potential variability in the warrant exercise prices.

On June 26, 2023, the Company held its annual shareholder meeting, and

as a result, shareholder approval for the issuance of common shares upon the conversion of the Series A-1 Preferred Stock was obtained,

the warrants were issued, and the exercise price for the warrants became fixed.

Therefore, as of December 31, 2023, the fair value of

the warrant liability was determined using a Black Scholes model with parameters including (i) the exercise price of the warrants, (ii)

the price of the underlying security, (iii) the time to expiration, or expected term, (iv) the expected volatility of the underlying

security, (v) the risk-free rate, and (vi) estimated probability assumptions surrounding the achievement by the Company of technical

milestones associated with regulatory and commercial progress.

These valuation techniques involve management’s

estimates and judgment based on unobservable inputs and are classified in Level 3.

The fair value estimates may not be indicative of

the amounts that would be realized in a market exchange.

Additionally, there may be inherent uncertainties or changes in the underlying

assumptions used, which could significantly affect the current or future fair value estimates.

Generally, a significant increase (decrease)

in the probabilities of shareholder approval and the achievement of technical milestones would have resulted in a significantly higher

(lower) fair value measurement;

however, changes in other inputs such as expected term and price of the underlying common stock will

have a directionally opposite impact on fair value measurement.

The following table summarizes the fair value

hierarchy of financial liabilities measured at fair value as of December 31, 2023 (in thousands).

Warrant liability

Total liabilities at fair value

The following table summarizes the changes in fair value of the warrant

liability classified in Level 3.

Gains and losses reported in this table include changes in fair value that are attributable to unobservable

inputs (in thousands).

Fair value, January 1, 2023

Issuance of warrants (March 3, 2023)

Change in fair value of warrants

Fair value, December 31, 2023

The expense relating to the change in fair value

of the warrant liability of $ 10.3 million for the year ended December 31, 2023, is included in other income (expense) in the statements

of operations.

ASC 820, Fair Value Measurement and Disclosures

requires all entities to disclose the fair value of financial instruments, both assets and liabilities, for which it is practicable to

estimate fair value.

As of December 31, 2022 and 2023, the recorded values of cash and cash equivalents, accounts payable, and accrued

liabilities approximated fair value due to the short-term nature of the instruments.

Cash and cash equivalents, accounts payable, and

accrued liabilities are Level 1 financial instruments.

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.

the Company to concentration of credit risk consist of cash and cash equivalents.

All of the Company’s cash was deposited in one

account at a financial institution during 2022.

Beginning in 2023, the Company’s cash and cash equivalents are distributed across

multiple financial institutions.

Cash balances may at times exceed federally insured limits.

Cash 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.

No such losses have been incurred through December 31, 2023.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets represent

costs incurred that benefit future periods.

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

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

Substantially all the Company’s research

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

2 unchanged sentences

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.

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

General and Administrative Expenses

2 unchanged sentences

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).

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).

The Company expenses all costs as incurred in

12 unchanged sentences

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

3 unchanged sentences

Current tax expense results from corporate tax payable

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

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

Deferred tax expense results

18 unchanged sentences

January 1, 2022.

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

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

Comprehensive Loss

4 unchanged sentences

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.

Basic and diluted net loss per share is presented

in conformity with the two-class method required for participating securities.

Basic and diluted net loss for common stock

and for preferred stock is computed by dividing the sum of distributed earnings and undistributed earnings for each class of stock by

the weighted average number of shares outstanding for each class of stock for the period.

Diluted net loss per share includes potentially

dilutive securities outstanding for the period.

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

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

Recent Accounting Pronouncements

4 unchanged sentences

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.

The Company adopted Accounting Standards Update

2016-13, Financial Instruments – Credit Losses (“ASC 326”), as of October 1, 2023.

standard adds to U.S.

GAAP an impairment model, known as the current expected credit loss (“CECL”) model, that is based on

expected losses rather than incurred losses.

Under the new guidance, an entity recognizes as an allowance its estimate of expected credit

losses, which is intended to result in the timelier recognition of losses.

Under the CECL model, entities estimate credit losses over

the entire contractual term from the date of initial recognition of the financial instrument.

As the Company does not currently have

any trade receivables, there was no cumulative effect adjustment, and the adoption of this standard did not have a material impact on

the Company’s financial statements.

Income Taxes Disclosures – In December

2023, the FASB issued ASU No.

2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.” ASU 2023-09 requires

disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid.

ASU 2023-09 is effective for public entities with annual periods beginning after December 15, 2024, with early adoption permitted.

Company is currently evaluating the impact of this guidance on its consolidated financial statements.

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

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

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.

4 unchanged sentences

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.

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.

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

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 Oxylanthanum Carbonate following its approval by the FDA and commercial supply of the product by the vendor.

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

No payments were made upon execution of the agreement but 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.

If 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 in 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

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.

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.

(“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 Oxylanthanum Carbonate and related compounds.

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.

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 Oxylanthanum Carbonate 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 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.

In the event an NDA filing for Oxylanthanum Carbonate

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 Oxylanthanum Carbonate 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 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 Spectrum

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 Spectrum Agreement.

In August 2022, the Company received an upfront payment of approximately $ 1.0

million resulting from 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.

In February 2023, the Company received an upfront payment of approximately

$ 0.7 million resulting from a sublicense development agreement with Lotus International Pte Ltd.

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, 2023.

On July 19, 2021, the Company entered into an

3 unchanged sentences

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.

Approximately $ 0.2 million has been recorded as accounts payable or accrued

expense in the accompanying balance sheet as of December 31, 2022, and the research was completed during 2023.

On January 6, 2022, the Company entered into

4 unchanged sentences

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.

$ 2.5 million have been paid to Quotient as of December 31, 2023.

Approximately $ 2.0 million of related expense has been recorded, and

approximately $ 1.0 million and $ 0.6 million has been recorded in prepaid expenses and other current assets in the accompanying balance

sheets as of December 31, 2022 and 2023, respectively.

On February 9, 2022, the Company entered into

1 unchanged sentence

(“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.

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

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 March 31, 2023, 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, and the research was completed as of March 31, 2023.

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 Oxylanthanum

The budget for the services is approximately $ 1.3 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 April 10, 2023, the Company entered into an agreement with Inotiv

that provides preclinical trial and related services, for the purpose of performing research in support of UNI-494.

The budget for these

services is approximately $ 1.4 million.

Approximately $ 2.2 million has been paid to Inotiv as of December 31, 2023, and approximately

$ 0.4 million and $ 0.3 million has been recorded in prepaid expenses and other current assets in the accompanying balance sheets as of

December 31, 2022 and 2023, respectively.

On July 14, 2022, the Company entered into a

1 unchanged sentence

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.

will be responsible for development, registration filing and approval for Oxylanthanum Carbonate 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 Oxylanthanum Carbonate 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.

in support of Oxylanthanum Carbonate.

The budget for the services is approximately $ 2.7 million, approximately $ 2.7 million has been

paid to Celerion as of December 31, 2023, and the research was completed during 2023.

On February 1, 2023, the Company entered into

a license agreement with Lotus International Pte Ltd.

(“Lotus”) (see Note 4).

Under the terms of the agreement, Lotus will

be responsible for development, registration filing and approval for Oxylanthanum Carbonate in the licensed territory of South Korea.

In addition, Lotus will have sole responsibility for the importation of the drug product from the Company and for the costs of commercialization

of Oxylanthanum Carbonate in the licensed territory.

The Company has received an upfront payment of $ 0.7 million, may receive up to $ 3.7

million in future milestone payments and will be eligible for tiered royalties upon achievement of specified commercial achievements.

On June 29, 2023 and October 26, 2023, the Company entered into services

agreements with Shilpa Medicare Ltd related to NDA filing support for Oxylanthanum Carbonate.

The agreements provide for total payments

of up to $ 3.7 million, and the Company has made $ 3.0 million in payments pursuant to the agreements as of December 31, 2023.

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.

license agreement (the “Lee’s 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

Oxylanthanum Carbonate 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 Oxylanthanum Carbonate in the licensed

Both parties agreed to enter into a separate manufacturing and supply agreement whereby Unicycive will supply Lee’s

with Oxylanthanum Carbonate 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 Lee’s Agreement

in accordance with ASC 808, Collaborative Arrangements (“ASC 808”) and ASC 606.

The Company first assessed whether

3 unchanged sentences

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 Lee’s 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.

does not represent a 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.

Variable 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 and December 31, 2023.

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 and December 31, 2023.

The Company will reassess this conclusion at each reporting

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

in the Territory.

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

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

The 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

On February 1, 2023, the Company entered into

a license agreement (“Lotus Agreement”) with Lotus International Pte Ltd.

Under the terms of the agreement,

Lotus will be responsible for development, registration filing and approval for Oxylanthanum Carbonate in the licensed territory of South

In addition, Lotus will have sole responsibility for the importation of the drug product from the Company and for the costs of

commercialization of Oxylanthanum Carbonate in the licensed territory.

The Company has agreed to complete development of the drug product,

at its own expense, as required for obtaining regulatory approval in the U.S.

Both parties agreed to enter into a separate manufacturing

and supply agreement whereby Unicycive will supply Lotus with Oxylanthanum Carbonate product.

The Company has received an upfront payment

of $ 0.7 million, may receive up to $ 3.7 million in future milestone payments and will be eligible for tiered royalties upon achievement

of specified commercial achievements.

The Company has evaluated the Lotus Agreement

in accordance with ASC 808 and ASC 606.

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 Lotus 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 Lotus, and therefore the promise does

not represent a current performance obligation.

The Company evaluated the development services and concluded that although not material

in cost, they are highly interrelated with the license grant.

If a promised good or service is not distinct, an entity is required to

combine that good or service with other promised goods or services until it identifies a bundle of goods or services that is distinct.

The combination of the license grant and development services is distinct as Lotus plans to use the product of this bundled unit for

developing its regulatory applications.

The Company concluded that the Lotus agreement contains one performance obligation, the bundle

of the license grant and development services.

ASC 606 indicates that constrained variable consideration

1 unchanged sentence

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,

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

regulatory, and commercial activities.

11 unchanged sentences

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

the total transaction price is $ 675,000 amount of the upfront payment.

ASC 606 generally requires an entity to allocate the transaction

price to the performance obligations in proportion to their standalone selling prices (i.e., on a relative standalone selling price basis).

The Company identified the bundle of the license grant and development services as the single performance obligation in the agreement.

The $ 675,000 initial transaction price will therefore be entirely allocated to this obligation.

The Company has concluded that the license of the Oxylanthanum Carbonate

IP is functional IP.

However, since it is not distinct, revenue must be recognized based on the combination of the functional IP and the

related development services.

Lotus will not simultaneously receive and consume the benefits of the Oxylanthanum Carbonate IP or development

Since the performance of the development services creates an asset that will also be used by the Company and can be licensed

to other customers outside of the Territory, the Company is considered to control the asset as it is created, and it does create an asset

with an alternative use.

Therefore, the Company concluded that control is not deemed to be transferred over time and is instead transferred

at a point in time.

The intellectual property was transferred to Lotus in February 2023, and the development services were determined

to be immaterial to the contract.

The Company has recognized $ 0.7 million in the accompanying statements of operations as licensing revenue

for the year ended December 31, 2023.

Balance Sheet Components

19 unchanged sentences

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 .

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

On March 3, 2023, the Company

expanded its leased space through a lease amendment by an additional 2,456 square feet commencing March 15, 2023.

The term of the amended

lease is for three years with an option to extend the lease for three additional years .

The lease amendment represents a modification

of the original lease, and the Company evaluated the new agreement under ASC 842, Leases .

The Company classified the lease as

an operating lease and, on March 15, 2023, determined that the present value of the lease was approximately $ 1.0 million using an estimated

incremental borrowing rate of 10 %.

During the years ended December 31, 2022 and 2023, the Company reflected amortization of right-of-use

asset of approximately $ 154,000 and $ 275,000 , respectively, resulting in a right of use asset balance of approximately $ 0.8 million at

December 31, 2023.

During the year ended December 31, 2023, 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.

Company made cash payments on the lease of approximately $ 331,000 towards the lease liabilities.

As of December 31, 2023, the total lease

liability was $ 0.8 million.

Rent expense for the lease for the years ended December 31, 2022 and 2023 was approximately $ 173,000 and

$ 354,000 , respectively.

Maturities of the Company’s lease liabilities

are as follows (in thousands):

Operating Lease

Year ending December 31, 2024

Year ending December 31, 2025

Year ending December 31, 2026

Total lease payments

Less imputed interest rate / present value discount

2 unchanged sentences

Long term portion

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.

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

1 unchanged sentence

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.

of $ 210,000 during February 2023.

The Company repaid amounts owed to the stockholder of $ 210,000 plus accrued interest during March 2023.

Common Stock Purchase Agreement and Service

Agreement with Globavir

On July 1, 2017, the Company entered into a Common

Stock Purchase Agreement (“Stock Agreement”) with Globavir.

The Company’s principal stockholder is also the principal

stockholder in Globavir.

The Stock Agreement provided for the distribution of 62,181 shares of the Company’s common stock, valued

at $ 0.013 per share, to Globavir’s stockholders as payment for Globavir’s services and shared costs rendered on behalf of

the Company in 2017, which were issued in 2018.

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

1 unchanged sentence

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

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

Globavir provided 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.

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

Pursuant to the Service Agreement,

5 unchanged sentences

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

The Company has not entered into any additional agreements with Globavir during the year ended December 31, 2023.

Commitments and Contingencies

6 unchanged sentences

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 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 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

9 unchanged sentences

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 terms of these indemnification agreements are generally

perpetual any time after the execution of the agreements.

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

10 unchanged sentences

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.

request in such a capacity.

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

4 unchanged sentences

100 % vested.

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.

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

of the employee’s eligible compensation.

Company contributions to the 401(k) Plan totaled approximately $ 60,000 and $ 107,000 for

the years ended December 31, 2022 and 2023, respectively.

Stockholders’ (Deficit) Equity

2 unchanged sentences

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

Issuance of Common Stock and Warrants

Issuance of Common Stock and Warrants from

Initial Public Offering

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.

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

6 unchanged sentences

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:

The warrants from the initial public offering

are equity classified.

The following table summarizes activity for the Company’s IPO warrants for the year ended December 31, 2023:

(in thousands)

3 unchanged sentences

Outstanding, December 31, 2023

Issuance of Common Stock Upon Conversion of

Series A-1 Preferred Stock

On June 26, 2023, the Company held its annual

shareholder meeting and, as a result, shareholder approval for the issuance of common shares upon the conversion of the Series A-1 Preferred

Stock was obtained (see Notes 10 and 11).

On July 11, 2023, pursuant to the Certificate of Designation of Preferences, Rights and Limitations

of the Series A Convertible Voting Preferred Stock (the “Certificate of Designation”), the Company issued a total of 19,516,205

shares of common stock and 43,649 Series A-2 Preferred Stock in settlement of the auto-conversion of the Series A-1 Preferred Stock.

Voting Rights of Common Stock

1 unchanged sentence

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.

Issuance of Series A Preferred Stock

As of December 31, 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.

On March 3, 2023, the Company issued and sold,

in a private placement, 30,190 shares of Series A-1 Preferred Stock for an aggregate net proceeds of $ 28.0 million (the “Preferred

Stock Offering”), net of placement agent fees and offering expenses of $ 2.2 million.

The Company intends to use the net proceeds

from the Preferred Stock Offering to support the Company’s New Drug Application (NDA) submission for approval of Oxylanthanum Carbonate

for the treatment of hyperphosphatemia and, if approved, for the commercial launch of Oxylanthanum Carbonate in the U.S.

Pursuant to the Certificate of Designation, as

of March 3, 2023, each share of Series A-1 Preferred Stock was, subject to approval of the Company’s stockholders, convertible

into a unit (“Unit”) consisting of:

(i) shares of common stock of the Company and, if applicable, shares of Series A-2 Preferred

Stock, in lieu of common stock, (ii) a tranche A warrant to acquire approximately 46,675,940 shares (excluding deemed dividends) of Series

A-3 Preferred Stock (the “Tranche A Warrant”), (iii) a tranche B warrant to acquire approximately 42,432,672 shares (excluding

deemed dividends) of Series A-4 Preferred Stock (the “Tranche B Warrant”), and (iv) a tranche C warrant to acquire approximately

67,892,276 shares (excluding deemed dividends) of Series A-5 Preferred Stock (the “Tranche C Warrant”, together with the

Tranche A Warrant and the Tranche B Warrant, the “Warrants”).

The Tranche A Warrant, for an aggregate exercise price of approximately

$25 million, is exercisable until 21 days following the Company’s announcement of receipt of FDA approval for Oxylanthanum Carbonate,

the Tranche B Warrant, for an aggregate exercise price of approximately $25 million, is exercisable until 21 days following the Company’s

announcement of receipt of Transitional Drug Add-On Payment Adjustment (“TDAPA”) approval for Oxylanthanum Carbonate, and

the Tranche C Warrant for an aggregate exercise price of approximately $50 million is exercisable until 21 days following four quarters

of commercial sales of Oxylanthanum Carbonate following receipt of TDAPA approval.

The Company has designated 30,190 shares of Series

A-1 Preferred Stock, 1,800,000 shares of Series A-2 Preferred Stock, 1,800,000 shares of Series A-3 Preferred Stock, 1,800,000 shares

of Series A-4 Preferred Stock, and 3,600,000 shares of Series A-5 Preferred Stock, together the “Series A Preferred Stock”.

The Series A Preferred Stock has a par value of $ 0.001 per share.

The Certificate of Designation states that, to the extent that the

conversion of the Series A-1 preferred stock as well as the exercise of the Warrants into Series A-2, Series A-3, Series A-4, and Series

A-5 preferred stock results in a beneficial ownership interest in excess of the maximum percentage of common stock upon conversion, the

holders will receive the as converted equivalent for the remaining shares in preferred stock.

The Company determined that the holders could

detach the Warrants from the Series A-1 Preferred Stock, because the stock will automatically convert into shares of common stock, and

the holders will be able to sell those shares while retaining the Warrants.

Accordingly, the Warrants are considered freestanding from

the Series A-1 Preferred Stock.

The Company noted that at contract inception, the Warrants were contingently issuable upon the occurrence

of a specified event (shareholder approval).

In connection with the Series A-1 Preferred Stock

issuance, the Company recognized liabilities for the associated Warrants, which had an aggregate fair value of $ 2.8 million at the time

Offering costs of $ 0.2 million were allocated to the Warrants and expensed during March 2023.

The fair value of the Warrants

was accounted for as a reduction to the net proceeds of the Preferred Stock Offering, which resulted in an initial carrying value of

$ 25.4 million for the Series A-1 Preferred Stock (net of $ 2.0 million of placement agent fees and offering costs allocated to the Series

A-1 Preferred Stock).

Refer to Note 11 for disclosures related to the Warrants.

On June 26, 2023, the Company held its annual

shareholder meeting and, as a result, shareholder approval for the conversion of the Series A-1 Preferred Stock was obtained.

11, 2023, pursuant to the Certificate of Designation, the Company issued 19,516,205 shares of common stock (see Note 9) and 43,649 shares

of Series A-2 Preferred Stock in partial settlement of the auto-conversion of the Series A-1 preferred shares.

As of December 31, 2023,

there were zero shares of Series A-1 preferred stock issued and outstanding and there were 43,649 shares of Series A-2 Preferred Stock

issued and outstanding.

The Series A-1 Preferred Stock have the following

Prior to the receiving stockholder

approval, dividends will accrue, on all issued and outstanding shares of Series A-1 Preferred Stock, prior to and in preference to all

other shares of capital stock of the Company, at an annual rate of eight percent ( 8 %) compounded annually on the original per share price

(plus any such accreted compounded amounts);

provided that such annual dividend rate shall increase to fourteen percent ( 14 %) if stockholder

approval is not obtained at the first meeting of stockholders following the date of the Preferred Stock offering.

If such dividends are

not declared and paid in cash, the dividend amounts will be added to the aggregate liquidation preference then outstanding of the Series

A-1 Preferred Stock.

As of December 31, 2023, the Company recorded $ 0.9 million, or $ 28.71 per share, of deemed dividends on the Series

A-1 Preferred Stock.

Holders of the Series A-1 Preferred Stock

are entitled to vote together with the common stock on an as-if-converted-to-common-stock basis as determined by dividing the liquidation

preference with respect to such shares of Series A Preferred Stock by the conversion price.

Holders of common stock are entitled to one

vote for each share of common stock held on all matters submitted to a vote of stockholders.

Accordingly, holders of Series A Preferred

Stock will be entitled to one vote for each whole share of Common Stock into which their Series A Preferred Stock is then-convertible

on all matters submitted to a vote of stockholders.

Board of Directors Designation Rights:

of Series A-1 Preferred Stock have the right to appoint one member to the Board of Directors.

In March 2023, Dr.

Gaurav Aggarwal was

appointed to the Company’s Board of Directors.

On the tenth trading day following the announcement

of the stockholder approval, each share of Series A-1 Preferred Stock shall automatically convert into a unit consisting of:

number of shares of common stock equal to the quotient of (A) the liquidation preference with respect to such share of Series A-1 Preferred

Stock, divided by (B) the conversion price, provided that, to the extent the share conversion would cause such Holder’s beneficial

ownership to exceed 9.99%, such holder shall receive shares of Series A-2 Preferred Stock in lieu of common stock, on a one-for-one basis,

with respect to the number of shares of common stock that exceed 9.99% ownership, (2) a Tranche A Warrant, (3) a Tranche B Warrant, and

(4) a Tranche C Warrant.

Liquidation Preference:

The Series A-1 Preferred

Stock shall have a liquidation preference of one-times the original per share price of $ 1,000 per share, plus any accrued but unpaid

dividends thereon, whether or not declared, subject to certain customary anti-dilution adjustments.

The Series A-2, A-3, A-4, and A-5 Preferred Stock

have the following rights:

While shares of Series A Preferred

Stock are issued and outstanding, holders of Series A Preferred Stock shall be entitled to receive, and the Corporation shall pay, dividends

on shares of Series A Preferred Stock equal (on an as-if-converted-to-Common-Stock basis) and in the same form as dividends (other than

dividends in the form of Common Stock) actually paid on shares of the Common Stock when, as and if such dividends are paid on shares

of the Common Stock.

Holders of the Series A-2, A-3, A-4,

and A-5 Preferred Stock are entitled to vote together with the common stock on an as-if-converted-to-common-stock basis as determined

by dividing the liquidation preference with respect to such shares of Preferred Stock by the conversion price.

Holders of common stock

are entitled to one vote for each share of common stock held on all matters submitted to a vote of stockholders.

Accordingly, holders

of Series A Preferred Stock will be entitled to one vote for each whole share of Common Stock into which their Series A Preferred Stock

is then-convertible on all matters submitted to a vote of stockholders.

At the option of the holder thereof, each share

of Series A-2 Preferred Stock, Series A-3 Preferred Stock, Series A-4 Preferred Stock, or Series A-5 Preferred Stock shall be convertible

into one share of common stock.

Warrant Liability

In connection with the Preferred Stock Offering

(see Note 10), the Company issued the Warrants.

After the Warrants were legally issued as a result

of the automatic conversion of the Series A-1 Preferred Stock upon shareholder approval, they became immediately exercisable at the option

of the holder.

The Company determined that the Warrants, while still contingently issuable, qualified as derivative instruments pursuant

to ASC 815-40, Contracts in an Entity’s Own Equity and that the Warrants were considered issued for accounting purposes

concurrently with the Series A-1 Preferred Stock.

On June 26, 2023, the Company held its annual

shareholder meeting, and as a result, shareholder approval for the conversion of the Series A-1 Preferred Stock was obtained.

11, 2023, pursuant to the Certificate of Designation, the Company issued, in addition to common stock and Series A-2 Preferred Stock,

(i) a Tranche A Warrant to acquire 47,852,430 shares of Series A-3 Preferred Stock, (ii) a Tranche B Warrant to acquire 43,502,206 shares

of Series A-4 Preferred Stock, and (iii) a Tranche C Warrant to acquire 69,603,531 shares of Series A-5 Preferred Stock.

The Warrants are recognized as liabilities in

the balance sheets and were initially recognized at fair value at the time of issuance.

The Warrants are also subject to remeasurement

at each balance sheet date after issuance.

Any change in fair value is recognized as a component of other income (expense) in the statements

of operations in the period of change.

The valuation of the Warrants contains unobservable

inputs that reflect the Company’s own assumptions for which there is little market data.

Accordingly, the Warrants are measured

at fair value on a recurring basis using unobservable inputs and are classified as Level 3 inputs.

The significant unobservable inputs

used in the fair value measurement of the Company’s Warrants include, but are not limited to, probability of obtaining certain

shareholder approvals, probability of reaching certain technical milestones related to the development of Oxylanthanum Carbonate, and

the estimated term of the Warrants.

Significant increases (decreases) in any of those inputs in isolation would result in a significantly

higher (lower) fair value measurement.

Generally, a change in the assumption used for the probability of obtaining certain shareholder

approvals is not correlated to a change in the probability of reaching certain technical milestones.

However, a change to the assumption

used for the probability of obtaining certain shareholder approvals or a change in the probability of reaching certain technical milestones

would have been accompanied by a directionally opposite change and a directionally similar change, respectively, in the assumption used

for the estimated term.

The fair value of the contingently issuable Warrants

associated with the Company’s March 2023 private placement transaction was determined as of March 3, 2023, and March 31, 2023,

by using a Monte Carlo simulation technique (“MCS”) to value the embedded derivatives associated with the Warrants.

methodology calculates the theoretical value of a warrant based on certain parameters, including:

(i) the threshold of exercising the

warrant, (ii) the price of the underlying security, (iii) the time to expiration, or expected term, (iv) the expected volatility of the

underlying security, (v) the risk-free rate, (vi) the number of paths, (vii) estimated probability assumptions surrounding shareholder

approval as well as the achievement by the Company of technical milestones associated with regulatory and commercial progress, and (viii)

an estimated discount for lack of marketability.

The MCS valuation model was used for the valuation

performed as of the transaction inception on March 3, 2023, and on March 31, 2023, due to uncertainty in the timing of shareholder approval

and the potential variability in the Warrant exercise price.

On June 26, 2023, the Company held its annual shareholder meeting, and as

a result, shareholder approval for the issuance of common shares upon the conversion of the Series A-1 Preferred Stock was obtained and

the exercise price for the Warrants became fixed.

Therefore, as of December 31, 2023, the fair value of the Warrants was determined using

a Black Scholes model using parameters including (i) the exercise price of the warrant, (ii) the price of the underlying security, (iii)

the time to expiration, or expected term, (iv) the expected volatility of the underlying security, (v) the risk-free rate, and (vi) estimated

probability assumptions surrounding the achievement by the Company of technical milestones associated with regulatory and commercial

These valuation techniques involve management’s

estimates and judgment based on unobservable inputs and are classified in Level 3.

The fair value estimates may not be indicative of

the amounts that would be realized in a market exchange.

Additionally, there may be inherent uncertainties or changes in the underlying

assumptions used, which could significantly affect the current or future fair value estimates.

Generally, a significant increase (decrease)

in the probabilities of shareholder approval and the achievement of technical milestones would have resulted in a significantly higher

(lower) fair value measurement;

however, changes in other inputs such as expected term and price of the underlying common stock will

have a directionally opposite impact on fair value measurement.

The Company uses a third-party valuation expert

to assist in the determination of the fair value of the Warrants.

The tables below summarize the valuation inputs into the Black Scholes

model for the liability associated with the three tranches of Warrants at December 31, 2023.

Fair value of underlying stock

Exercise price

96.5 % – 139.2

Risk free rate

Dividend yield

Term (in years)

Discount for lack of marketability

Probability for FDA approval

Fair value of underlying stock

Exercise price

114.6 % – 139.2

Risk free rate

Dividend yield

Term (in years)

Discount for lack of marketability

Probability for FDA approval

Fair value of underlying stock

Exercise price

107.8 % – 114.6

Risk free rate

Dividend yield

Term (in years)

Discount for lack of marketability

Probability for FDA approval

As of the issuance date (March 3, 2023), the

Company estimated the fair value of the Warrants to be $ 2.8 million.

As of December 31, 2023, the Company estimated the fair value of

the Warrants to be $ 13.1 million.

The following table summarizes activity for the

Company’s Warrants for the year ended December 31, 2023 (includes the conversion effect in the liquidation preference of accrued

(in thousands)

Outstanding, December 31, 2022

Warrants issued

Warrants exercised

Outstanding, December 31, 2023

Stock-based Compensation

7 unchanged sentences

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.

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.

A total of 1,302,326 shares of common stock were reserved for issuance pursuant to the 2021 Plan prior to our annual

meeting on June 26, 2023.

Shareholders approved an increase to the number of shares reserved on June 26, 2023, and accordingly, at December

31, 2023, approximately 12,775,996 shares are reserved for issuance.

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.

December 31, 2022, approximately 389,676 shares of common stock were available under the 2021 Plan.

As of December 31, 2023, there are

approximately 2,815,503 shares of common stock available under the 2021 Plan.

The following table summarizes activity for stock

11 unchanged sentences

cost related to outstanding stock options was $ 5 million, which is expected to be recognized as expense over approximately 2.9 years.

During August 2023, the Company granted a consultant

10,000 restricted stock units with a grant date fair value of $ 7,500 , resulting in a fair value per share of $ 0.75 .

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, 2023,

the unrecognized compensation cost related to the grant was approximately $ 4,000 , which is expected to be recognized as expense over

approximately 15 months.

During the year ended December 31, 2021, employees

4 unchanged sentences

to the unvested options of approximately $ 4,000 at December 31, 2023 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

sheet 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 $ 27,000 were reclassified to equity during the year ended December

44 unchanged sentences

December 31, 2023, the Company has never declared nor paid any cash dividends.

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 Oxylanthanum Carbonate by the FDA if obtained, and the commencement

of commercial sales.

The following averaged assumptions were used

13 unchanged sentences

Change in valuation allowance

Interest on convertible notes

Fair value adjustment on warrants

Effective income tax rate

19 unchanged sentences

Valuation allowance

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.

Net deferred tax assets, net of valuation allowance

Deferred tax liabilities:

Total deferred tax liabilities

Net deferred tax assets / liabilities

The valuation allowance increased by $ 3.7 million during the year ended

December 31, 2023.

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 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, 2023, 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

Federal and state net operating loss carryforwards of approximately $ 24.7 million and $ 11.6 million, respectively, 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.

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

in the future.

As of December 31, 2023, the Company had research

15 unchanged sentences

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.

The Company applies the guidance under ASC 740,

3 unchanged sentences

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

2 unchanged sentences

Additions related to current year positions

Additions related to prior year positions

Ending balance

As of December 31, 2022 and 2023, the total unrecognized

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

tax benefit was approximately $ 0.7 million and $ 1.0 million, respectively.

The Company does not expect any material changes to the estimated

10 unchanged sentences

Net loss per share

The Company computes net loss per share using

the two-class method.

The two-class method uses an earnings allocation formula that determines net loss per share for common stock and

any participating securities according to dividends declared and participation rights in undistributed earnings.

Diluted net loss per share includes the potential

dilutive effect of common stock equivalents as if such securities were converted or exercised during the period, when the effect is dilutive.

Common stock equivalents include:

(i) outstanding stock options and restricted stock units;

(ii) common stock to be issued upon the assumed

exercise of the Company’s common stock warrants;

and (iii) prior to issuance, the issuable warrants related to the Company’s

March private placement financing.

Because the impact of these items is generally anti-dilutive during periods of net loss, there is

no difference between basic and diluted income (loss) per common share for periods with net losses.

The following table sets forth the computation

of basic and diluted net loss per share (in thousands, except share and per share data):

of basic and diluted net loss per share of common and preferred stock (in thousands, except share and per share data):

Deemed dividends on Series A-1 Preferred Stock

Net loss attributable to common shares, basic and diluted

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

5 unchanged sentences

Warrants to purchase common stock

Warrants to purchase convertible preferred stock

Subsequent Events

On February 1, 2023, the Company entered into

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.

On March 13, 2024, the Company signed a securities purchase agreement

with certain healthcare-focused institutional investors that will provide $ 50 million in gross proceeds to Unicycive through a private

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

the Company issued to institutional purchasers $ 50 million in shares of the Company’s Series B Convertible Preferred Stock.

50,000 Shares of Series B Convertible Preferred

Stock were issued at a price of $ 1,000.00 per share with an initial conversion price of $ 1.00 per common share.

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