Note 2 – Summary of Significant Accounting Policies

Basis of Presentation - The accompanying unaudited financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim unaudited financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The unaudited financial statements include all adjustments (consisting of normal recurring adjustments) which are, in the opinion of the Company, necessary in order to make the condensed financial statements not misleading. Operating results for the six months ended June 30, 2026 are not necessarily indicative of the final results that may be expected for the year ending December 31, 2026. For more complete financial information, these unaudited financial statements should be read in conjunction with the audited financial statements for the period ended December 31, 2025 included in our Form 10-K filed with the SEC on March 31, 2026 (“Form 10-K”). Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal period, as reported in the Form 10-K, have been omitted.

Liquidity and Going Concern - Since inception, the Company has a history of net losses and negative cash flows from operations. For the six months ended June 30, 2026, the Company recorded a net loss of approximately $7.5 million and used cash in operations of approximately $8.2 million. As of June 30, 2026, the Company had an accumulated deficit of approximately $107.8 million and cash of approximately $20.0 million. On May 5, 2026, the Company completed a private placement financing resulting in gross proceeds of approximately $22.5 million (see Note 4 – Equity). The Company believes that the net proceeds from this financing, combined with the Company's existing cash resources, are sufficient to fund planned operations beyond twelve months from the date these financial statements are issued. Accordingly, these financial statements have been prepared assuming the Company will continue as a going concern.

Cash and Cash Equivalents - The Company considers all highly liquid accounts with original maturities of three months or less at the date of acquisition to be cash equivalents. Periodically, the Company may carry cash balances at financial institutions in excess of the federally insured limit of $250,000. The Company did not carry any cash balances in excess of the FDIC limit as of June 30, 2026. The Company has not experienced losses on these accounts and it believes, based upon the quality of the financial institutions, that the credit risk with regard to these deposits is not significant.

Property and Equipment - Property and equipment is recorded at cost and depreciated over their estimated useful lives using the straight-line depreciation method as follows:

Repairs and maintenance costs are expensed as incurred.

Related Parties - The Company follows Accounting Standards Codification (“ASC”) 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions.

Stock-based Compensation - Employee and non-employee share-based compensation is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period for stock options and restricted stock units.

Restricted Stock Units (“RSUs”) - Our RSUs vest over two to four years from the date of grant. The fair value of RSUs is the market price of our common stock at the date of grant. The Company reverses any previously recognized compensation cost associated with forfeited RSUs in the period which the forfeiture occurs.

Performance Units (“PUs”) - The PUs vest based on our performance against predefined share price targets and the achievement of Positive Interim Clinical Data as defined by the Board.

Warrants - The Company evaluates all freestanding and embedded warrants to determine whether they meet the criteria for equity classification under ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity, or if they must be classified as liabilities under ASC 480 or ASC 815-10. The Company evaluated the warrants and concluded they are indexed to the Company's common stock and meet the equity classification criteria under ASC 815-40, as they are settleable in shares and the Company has sufficient shares authorized. The warrants were recorded at fair value upon issuance within stockholders' equity.

Loss Per Common Share - Basic loss per common share is computed by dividing net loss available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive.

Segment Reporting

The Company manages its operations as a single segment for the purpose of assessing performance and making operating decisions. The Company’s Chief Operating Decision Maker (“CODM”) is its Chief Executive Officer. The CODM allocates resources and evaluates the performance of the Company using information about combined net loss from operations. All significant operating decisions are based upon an analysis of the Company as one operating segment, which is the same as its reporting segment. See statement of operations for information about combined net loss from operations.