NYSE: APUS

At the Effective Time, (i) each share of MindWave
common stock issued and outstanding immediately prior to the Effective Time shall be canceled and converted into the right to receive
a portion of the Merger Consideration, consisting of shares of Company Preferred Stock; and (ii) each holder of such shares shall
receive, for each share of MindWave Common Stock held immediately prior to the Effective Time, a pro rata portion of the Merger Consideration,
allocated as follows: (A) a number of duly authorized, validly issued, fully paid and nonassessable shares of Company Common Stock,
such that the aggregate number of shares of Company Common Stock issued to all holders of MindWave Common Stock shall equal 0% of the
total number of shares of Company Common Stock issued and outstanding as of the date of the Merger Agreement (the “Common Stock
Cap”), with each holder’s allocation rounded down to the nearest whole share; and (B) a number of duly authorized,
validly issued, fully paid and nonassessable shares of Company Preferred Stock, such that, immediately following the Effective Time, the
holders of MindWave Common Stock collectively hold, on an as-converted to Company Common Stock basis, 90.9% of the total issued and
outstanding equity securities of the Company (exclusive of the Company Common Stock issued pursuant to clause (A) and calculated
on a fully diluted basis). The shares of Company Common Stock and Company Preferred Stock issued to holders of MindWave Common Stock pursuant
to the Merger Agreement, on an as-converted and fully diluted basis, shall collectively represent 90.9% of the equity capital of
the Company as of the Closing. For purposes of the Merger Agreement, the shares of Company Common Stock, Company Preferred Stock, and
MindWave Common Stock issued pursuant to the Merger Agreement are collectively referred to as the “Merger Consideration.”

In connection with the Merger Agreement, on December 1,
2025, certain stockholders of the Company, collectively holding approximately 51% of the Company’s shares of common stock, par value
$0.01 per share (the “Common Stock”), approved by written consent in lieu of a special meeting (the “Written
Consent”), in accordance with Section 228 of the Delaware General Corporation Law (the “DGCL”) and the
Company’s Amended and Restated Certificate of Incorporation, the following actions (the “Corporate Actions”):

1.The Preferred Stock Conversion and Issuance: the issuance of Company Common Stock upon
the conversion (the “Preferred Stock Conversion”) of the Series A Convertible Preferred Stock, par value $0.01
per share of the Company (the “Preferred Stock”);

2.The Notes Conversion and Issuance: the issuance of Company Common Stock upon the conversion
of the convertible notes (the “Notes Conversion”) issued by the Company pursuant to that certain Securities Purchase
Agreement, entered into by the Company and certain institutional investors on December 1, 2025, and amended by that certain Amendment
No. 1 to Securities Purchase Agreement on December 8, 2025;

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3.The Reverse Stock Split: a 1-for-10 reverse stock split (the “Reverse
Stock Split”) of the Company’s Common Stock, a change in the par value per share of the Company’s Common Stock from
$0.01 to $0.001 (the “Change in Par Value”), and a corresponding amendment (the “Charter Amendment”)
to the Company’s Amended and Restated Certificate of Incorporation (the “Charter”) to (i) authorize the
Board of Directors to effect the Reverse Stock split and (ii) the Change in Par Value;

4.The 2024 Plan Share Increase: an amendment to the Apimeds Pharmaceuticals US, Inc.
2024 Equity Incentive Plan (the “2024 Plan”) to increase the number of shares of Common Stock issuable under the 2024
Plan to 2,096,679; and

5.The 2025 Equity Plan: the approval and adoption the Apimeds Pharmaceuticals US, Inc.
2025 Equity Incentive Plan (the “2025 Plan”).

In connection with such Corporate Actions, the Company
filed and mailed an information statement (the “Information Statement”) to its stockholders pursuant to Rule 14c-2
under the Securities Act of 1934, as amended. The Corporate Actions will not become effective until at least 20 calendar days after the
mailing of the definitive Information Statement (the “Waiting Period”). Following the expiration of the Waiting Period,
or March 25, 2026, the Company expects to file the Charter Amendment with the Secretary of State of the State of Delaware to effect the
Reverse Stock Split and the Change in Par Value.

As a result of the Merger, the Preferred Stock Conversion,
and the Notes Conversion, a change in control of the Company will occur within the meaning of the NYSE American Company Guide. Accordingly,
the Company will be required to submit a new listing application to NYSE American (the “Listing Application”). Although
stockholder approval of the Preferred Stock Conversion and the Notes Conversion has been obtained by the Written Consent, which will become
effective at the Action Effective Time, the Company does not intend to effect the Preferred Stock Conversion and the Notes Conversion
unless and until NYSE American has approved the Listing Application. There can be no assurance that NYSE American will approve the Listing
Application. If such approval is not obtained, the Preferred Stock Conversion and the Notes Conversion will not be completed.

INFORMATION ABOUT THE BUSINESS OF APIMEDS PHARMACEUTICALS
US, INC.

Unless the context otherwise indicates or requires,
all references in this section to “we,” “us,” “our,” “our company” “the Company”
and “Apimeds US” refer to Apimeds Pharmaceuticals US, Inc.

The Company conducts its business through two
wholly-owned operating subsidiaries, Lokahi Therapeutics, Inc.and MindWave Innovations Inc.

INFORMATION ABOUT THE BUSINESS OF LOKAHI THERAPEUTICS,
INC.

Unless the context otherwise indicates or requires,
all references in this section to “we,” “us,” “our,” “our company” “the Company”
and “Lokahi” refer to Lokahi Therapeutics, Inc.

We are a clinical stage biopharmaceutical company
in the process of developing Apitox, an intradermally administered bee venom-based toxin. Our focus is primarily on developing innovative
therapies that address inflammation and pain management symptoms associated with knee OA and, to a lesser extent, MS. Apitox is currently
marketed and sold by Apimeds Inc. (“Apimeds Korea”) in South Korea as “Apitoxin” for the treatment of OA. Apimeds
US is not associated with the market, sale and revenues generated from Apitoxin in South Korea, and Apitoxin has not yet been approved
by the FDA for any indication.

Apitox is a purified, pharmaceutical grade venom (bee
venom), of the Apis mellifera, or western honeybee, which is classified by the FDA as an active pharmaceutical ingredient
(“API”). Bee venom has been used in Asia and Europe to treat pain for hundreds of years. While not FDA approved
in a controlled, prescription based biologic environment for defined indications, the use of bee venom has been FDA approved as a “under
the skin injection” to reduce the allergic reactions to bee stings. Apimeds Korea has developed a proprietary method and process
for turning extracted bee venom into a lyophilized powder for reconstitution prior to intradermal dose injections, which they sell in
South Korea as Apitoxin. We intend to use a similar process with respect to Apitox, pursuant to the Business Agreement, which gives us
a license to utilize all prior clinical development data associated with Apitoxin. The advancement of extracted bee venom for treatment
of inflammatory conditions, including but not limited to knee OA and MS is speculative but based on direction provided by prior clinical
data.

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Apimeds Korea successfully completed Phase I,
Phase II, and Phase III trials in OA in 2003, at which point Apitoxin was approved by the Korean Ministry of Food and Drug Safety
(“MFDA”) to treat pain and mobility in patients with OA. Since 2003, a post-marketing/approval safety study in South
Korea followed 3,194 patients from 2003 through 2009, with no serious adverse events. The purpose of a Phase I trial is to test
to determine whether a new treatment is safe and look for the best way to give the treatment. Phase II trials test to determine whether
a condition or disease responds to the new treatment. Phase III trials test to determine whether a new treatment is better than a
standard treatment.

In 2013, the first of two required U.S. Phase III
clinical trials was authorized to enroll patients to study the use of Apitoxin to study the same indication as approved in South Korea
in 2023 — treatment of pain and lack of mobility in patients with OA (the “Apimeds Korea Phase III OA Trial”).
The Apimeds Korea Phase III OA Trial (330 patients) was completed in 2018, and displayed no serious adverse events.

Based on the results from the Apimeds Korea Phase III
OA Trial, which demonstrated therapeutic (statistical and clinically significant improvements in all outcome measures of pain, physical
function, and disease assessment) effect compared to the placebo group, but in combination with prior development by Apimeds Korea, did
not meet the FDA’s standards for approval, as the study population was too small and the methods for handling missing data were
inadequate, resulting in a study that did not demonstrate a significant treatment effect. We will be pursuing a second Phase III
trial to meet agreed upon FDA standards. Based on results from the Apimeds Korea Phase III OA Trial, we have evaluated the most appropriate
population, defined as advanced knee OA patients, which will range from defined grade 2, 3 and 4 within this treatment group, to continue
to progress our own Phase III trial. Pursuant to our previous correspondence with the FDA, we have designed and will implement our
Phase III trial to best address our patient population, appropriate dosing, and the most effective way to evaluate Apitox in meeting
the patient population’s needs.

We believe the progress we are making in clinical
trials provides us support in our belief in the potential of Apitox to be an innovative therapy. We aim to treat the inflammation and
pain management symptoms associated with knee OA and to help manage the devastating symptoms of this disease. In the future, we also aim
to leverage our research in knee OA to investigate how Apitox may be used to treat similar symptoms associated with MS.

Treatment of OA

OA is typically treated with painkillers known as non-steroidal
anti-inflammatory drugs (NSAIDs). These medications have an anti-inflammatory and pain-relieving effect. These medications include ibuprofen
(Motrin, Advil) naproxen (Aleve) and diclofenac (Voltaren and others). All of these medications work by blocking enzymes that cause pain
and swelling. The problem is that some of those enzymes also help blood to clot and protect the lining of your stomach. Without them,
you can bruise easily, develop ulcers and may even bleed in your intestines. NSAIDs also increase your chance of heart attack, stroke
and heart failure. The risk increases the longer you use them and the more you take. We believe Apitox could be a successful alternative
to NSAIDs in the treatment of the inflammation and pain management symptoms associated with OA without the harmful side effects.

According to MedicalNewsToday, OA is the most common
form of arthritis, affecting around 500 million people worldwide, or around 7% of the global population. Currently, in the United States, over
32 million people suffer from OA. As the 15th highest cause of years lived with disability (YLDs)
worldwide, the burden OA poses to individuals is substantial, characterized by pain, activity limitations, and reduced quality of
life. The economic impact of OA, which includes direct and indirect (time) costs, is also substantial, ranging from 1 to 2.5% of gross
national product (GNP) in countries with established market economies, like the United States. Though trends in OA prevalence vary
by geography, the prevalence of OA is projected to rise in regions with established market economies such as North America and Europe,
where populations are aging and the prevalence of obesity is rising.

While OA can occur in any joint, it occurs most frequently
in the knee, which, according to ScienceDirect, currently accounts for 365 million cases worldwide and 61% of YLDs lost due to OA,
followed by the hand.

Our current efforts are focused on the development
of Apitox in the United States for the treatment of inflammation and pain management relating to OA in the knee.

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Treatment of MS

Additionally, we believe the previous clinical trial
success of Apimeds Korea with respect to the use of Apitoxin to treat symptoms associated with knee OA, and pending the success of our
anticipated Phase III trial in knee OA, we will be in a position to further explore the use of Apitox as a potential treatment for
the symptoms of MS. MS is a chronic disease of the central nervous system. It is an autoimmune condition that is characterized by
the body’s own immune cells (macrophages and lymphocytes) attacking the myelin that coats nerve cells, which can lead to inflammation
throughout the central nervous system. MS is an unpredictable disease that affects people differently. Some people with MS may have only
mild symptoms. Others may lose their ability to see clearly, write, speak, or walk when communication between the brain and other parts
of the body becomes disrupted.

MS is the most common progressive neurologic disease
of young adults worldwide. A study funded by the National MS Society estimates that nearly one million individuals are currently
affected by this disease in the United States. The total economic burden of MS in the United States is estimated to be $85.4 billion,
with $63.3 billion in direct medical costs and $22.1 billion in indirect and nonmedical costs. MS typically affects patients
at a young age, resulting in a greater loss of productivity and quality of life.

Beta interferon drugs are among the most common medications
used to treat MS. Interferons are signaling molecules that regulate immune cells. Potential side effects of these drugs include flu-like
symptoms (which usually fade with continued therapy), depression, or elevation of liver enzymes.

Pain from MS can be felt in different
parts of the body. Trigeminal neuralgia (facial pain) is treated with anticonvulsant or antispasmodic drugs, or less commonly, painkillers.
Central pain, a syndrome caused by damage to the brain and/or spinal cord, can be treated with gabapentin and nortriptyline. Treatments
for chronic back or other musculoskeletal pain may include heat, massage, ultrasound, and physical therapy.

OA and the Current Standard of Care

OA is a degenerative joint disease in which the
tissues in the joint break down over time. It is the most common type of arthritis and is more common in older people. People with osteoarthritis
usually have joint pain and, after rest or inactivity, stiffness for a short period of time.

There are four stages of OA: (1) Minor — minor
wear-and-tear in the joints and little to no pain in the affected area, (2) Mild — more noticeable bone spurs, the
affected area feels stiff after sedentary periods and patients may need a brace, (3) Moderate — cartilage in the
affected area begins to erode, the joint becomes inflamed and causes discomfort during normal activities, and (4) Severe — the
patient is in a lot of pain, the cartilage is almost completely gone leading to an inflammatory response from the joint, and overgrowth
of bony spurs may cause severe pain.

With the progression of OA of the knee, there is obvious
joint inflammation which causes frequent pain when walking, running, squatting, extending or kneeling. Along with joint stiffness after
sitting for long or when waking up in the morning, there may be popping or snapping sounds when walking.

The data from the Apimeds Korea Phase III OA
Trial suggest that Apitox would have the most potential in treating OA in stages 3 and 4.

MS and the Current Standard of Care

MS is increasingly recognized as a neurodegenerative
disease triggered by an inflammatory attack of the central nervous system. There is no cure for multiple sclerosis. Treatment typically
focuses on speeding recovery from attacks, reducing new radiographic and clinical relapses, slowing the progression of the disease,
and managing MS symptoms.

MS is unpredictable and can vary substantially
from person to person. MS is divided into four types: clinically isolated syndrome (CIS), relapsing-remitting MS (RRMS), secondary
progressive MS (SPMS) and primary progressive MS (PPMS).

CIS refers to a first episode of neurologic symptoms
caused by inflammation and demyelination in the central nervous system.

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RRMS, the most common disease course, shows clearly
defined attacks of new or increasing neurologic symptoms. These attacks are also called relapses or exacerbations. They are followed
by periods of partial or complete recovery, or remission. In remissions, all symptoms may disappear or some symptoms may continue and
become permanent. However, during those periods, the disease does not seem to progress.

SPMS follows the initial relapsing-remitting course.
Some people diagnosed with RRMS eventually go on to have a secondary progressive course, in which neurologic function worsens progressively
or disability accumulates over time.

With PPMS, neurologic function worsens or disability
accumulates as soon as symptoms appear, without early relapses or remissions. PPMS can be further characterized as either active (with
an occasional relapse and/or evidence of new MRI activity over a specified period of time) or not active, as well as with progression
(evidence of disability accrual over time, with or without relapse or new MRI activity) or without progression.

Patients with MS tend to be more educated about their
disease and better organized than patients with other diseases, resulting in patients that are aggressive in their approach to treatment.
This is due to MS impacting otherwise healthy people in the prime of their lives.

MS treatment has undergone significant evolution in
the last ten years with the development and approval of certain new drugs, including several oral agents such as Ocrevus, in the
United States. These new agents not only give patients additional treatment options, but also have improved the efficacy and safety
of treatment for MS overall. In general, these drugs are “disease modifying agents,” intended to slow down the immune mediated
damage to the myelin sheaths that underlie symptoms in MS. However, they often do not adequately address the symptoms that MS patients
experience such as walking problems, bladder control, dizziness, and especially pain. A 2022 study estimated that the average cost of
treatment for patients with MS is approximately $88,000 annually. The out-of-pocket expense for patients can be significantly reduced
through certain insurance plans. However, we believe there is the ability for Apitox to be positioned as an important and cost-effective
therapy.

We believe the data from the Apimeds Korea Phase III
OA Trial suggest that Apitox may have the potential as an adjunctive therapy for all four types of MS. We intend to explore Apitox
as a potential adjunctive therapy through non-registered corporate sponsorship studies to begin determining the appropriate MS patient
populations.

Market Opportunity

We believe there is a significant market opportunity
in the United States for Apitox in the treatment of certain symptoms of knee OA and eventually MS. According to Precedence Research
the osteoarthritis therapeutics market size accounted for $8.28 billion in 2022 and it is expected to hit around $20.24 billion
by 2032, expanding at a CAGR of 9.4% from 2023 to 2032. Although OA can damage any joint, the disorder most commonly affects joints in
your hands, knees, hips and spine. OA symptoms can usually be managed, although the damage to joints can’t be reversed. Apitox
has certain anti-inflammatory properties, which we believe give it significant potential to help treat the symptoms of certain chronic
diseases that involve difficult to control pain and inflammation.

According to Pharmaceutical Technology the MS market
size in the United States accounted for $10.73 billion in 2022 and is expected to hit $24.4 billion by 2030, expanding
at a CAGR of 10.32%. Starting in the first quarter of 2025, we intend to begin the early prosecution of appropriate MS patient populations
through non-registered corporate sponsorship studies. Subject to FDA approval, our development of Apitox in the United States will
in the near term, have two distinct focuses (i) the treatment of the certain symptoms of knee OA and (ii) the quality of life
issues surrounding knee OA, such as pain and lack of mobility.

Living with a chronic disease is challenging,
as it interferes with physical, mental, and social functions and thus greatly affects a person’s quality of life. Indeed, chronically
ill patients are facing major struggles such as higher expenditures, social isolation and loneliness, disabilities, fatigue, pain/discomfort,
feelings of distress, anger, hopelessness, frustration, anxiety, and depression. There is the general assumption that symptom reduction
increases a patient’s quality of life. Our approach with Apitox centers around this concept — effectively treating
certain symptoms of the patient’s disease, thus improving their overall quality of life. Bee venom has been shown to have anti-inflammatory
effects. At low doses, bee venom can suppress inflammatory cytokines such as interleukin-6 (IL-6), IL-8, interferon-γ (IFN-γ),
and tumor necrosis factor-α (TNF-α). A decrease in the signaling pathways responsible for the activation of inflammatory cytokines,
such as nuclear factor-kappa B (NF-κB), extracellular signal-regulated kinases (ERK1/2) and protein kinase Akt, and porphyromonas
gingivalis lipopolysaccharide (PgLPS)-treated human keratinocytes has been associated with treatments involving bee venom. We believe
the driver of pain in the highest category of OA is correlated to the key inflammatory elements treated by bee venom, meaning the evaluation
of our Phase III data may lead to a small indication for narcotic use reduction in the treatment of stage 4 OA. Lokahi partners with
universities to give students hands-on exposure to the strategic side of biopharma, from evaluating clinical assets to understanding intellectual
property, market dynamics, and go-to-market strategies. The ai² Futures Lab™ functions as both a discovery engine for potential
therapeutic assets and a training ground for the next generation of biotech and business leaders.

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Our Product Candidate

Apitox is purified honeybee (Apis mellifera) venom
manufactured as a lyophilized powder for reconstitution in 0.5% preservative-free lidocaine (lmg/mg) prior to intradermal dose injections
that are administered up to 1,500 micrograms per weekly visit. The biologically active components include melittin (40-50%), apamin (2-3%),
mast cell degranulating (“MCD”) peptide (Peptide 401,2-3%), phospholipase A2 (10-15%), hyaluronidase (1.5-2%) and other components
in small amounts, including dopamine and norepinephrine. According to a publication entitled “Pharmacological effects and mechanisms
of bee venom and its main components: Recent progress and perspective” by Shi et al., certain components of honeybee venom have
been found to have both anti-inflammatory and analgesic effects. The anti-inflammatory and analgesic effects are attributed to the presence
of Peptide 401, adolapin and other components that inhibit prostaglandin synthesis. The hormone-stimulating effects are attributed to
the presence of melittin, cardiopep and other components that stimulate the pituitary-adrenal axis to produce cortisol. Results from an
animal study entitled “Effect of bee venom and melittin on plasma cortisol in the unanesthetized monkey” published
by Vick et al., indicate that melittin appears to stimulate the production of cortisol from the adrenal gland. The immune-modulating effects,
especially as it pertains to MS, are suggested to be mediated by CD4+CD2S+Foxp3+ regulatory T cells (Tregs) that are influenced by phospholipase
A2. While the exact mechanism of action of Apitox is not fully understood, research such as the publication entitled “Therapeutic
Use of Bee Venom and Potential Applications in Veterinary Medicine” by Bava et al., suggests that certain components in Apitox
may ameliorate immune-inflammatory responses associated with MS. Such studies suggested that treatments with melittin prevent inflammatory
cytokine expression and produces anti-inflammatory effects. The proposed indication for Apitox is to provide add-on therapy for the signs
and symptoms of MS in patients whose condition is relapsing-remitting (RRMS), primary-progressive (PPMS) or secondary progressive (SPMS).

Clinical Development History

Founded in 1989, Apimeds Korea pursued a traditional
drug development process in South Korea for Apis mellifera, the bee venom API for Apitoxin. Apimeds Korea completed a formal preclinical
study to validate dosing and safety for human administration with a focus on antigenicity and toxicology in 1993.

A Phase I trial was completed in 1994, studying
the toxicity and safety of Apitoxin in 20 healthy subjects. The purpose of the Phase I trial was to determine if therapeutic doses
of Apitoxin was safe and to identify possible side-effects, if any. Injections of Apitoxin were given two to three times a week, for a
total of 12 sessions spanning over four to six weeks. Laboratory and physical examination of the subjects included (i) serum
cortisol levels (to see if Apitoxin stimulated the release of cortisol), (ii) serum ionized calcium level (to determine if Apitoxin
decreased the serum calcium level), (iii) urinalysis, (iv) hematology and blood chemistry, and (v) vital signs. The Phase I
trial demonstrated that there were no significant changes pre- and post-testing of the serum cortisol levels, serum ionized calcium levels,
hematology, blood chemistry, urinalysis, and vital signs after the subjects were injected with Apitoxin according to the protocol. There
were no significant physiological changes in the clinical evaluations of the subjects and localized itching was the most frequent side
effect and was managed with ice packs or external anti-itching gels. No severe side effects or aftereffects were observed. The Phase I
trial indicated that Apitox is safe for humans when applied in therapeutic doses.

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The Phase I trial was followed by a Phase II
trial in 101 subjects to determine the efficacy of Apitoxin at various dose levels. This was a randomized active-controlled clinical trial
with three groups receiving the study drug at various dose levels and one group receiving the control drug (nabumetone) for a six-week
period. Patients received twice weekly injections of Apitox intradermally at dosages titrated to a maximum of 0.7 mg (Group A), 1.5 mg
(Group B), and 2.0 mg (Group C) for a period of six weeks. Control group patients (Group D) received 1,000 mg of nabumetone
orally each day for the same six-week period. There were 25, 26, 25 and 25 patients assigned to Groups A, B, C and D, respectively.
Efficacy of treatment was evaluated by the physician investigators using a 4-point Likert-like symptom severity rating scale developed
by the authors to assess Pain, Disability and Physical Signs. A similar 5-point scale was used for patient self-evaluation. Safety of
the Apitoxin injection was evaluated by patient reaction, hematologic examination, and laboratory chemistry analysis of blood and urine.
Efficacy data was reported for the 81 patients who completed the study. While there were no significant differences in symptom severity
scores among the four groups at baseline, symptom scores were significantly better in the bee venom injection groups than in the control
group at six weeks and 10 weeks after the start of treatment (p<0.01). A treatment was considered effective if there was
a 20% improvement from baseline in symptom scores after 6 weeks of treatment. Based on this definition, therapy demonstrated overall
efficacy in 70.0% of patients in Group A, 85.7% in Group B, 90.0% in Group C, and 61.9% in Group D (drug control). Overall efficacy
was significantly greater in treatment Groups B and C combined than in the nabumetone-treated control group D (p<0.0177). Importantly,
efficacy of treatment among all patients treated with Apitoxin injection was greater than among nabumetone-treated patients for each category
assessed: Pain: 85.2% versus 76.2%; Disability: 77.0% versus 71.4%; and Physical Signs: 62.3% vs. 23.8%. It is also noteworthy that, unlike
the drug control group, the Apitoxin injection groups continued to demonstrate improved symptom scores at four weeks after the last
treatment (10 weeks). There were no significant changes in vital signs or results of laboratory examinations of any patient in this
clinical trial. Localized itching was experienced by all patients who received Apitox injections. Itching at the injection site generally
lasted for two to three weeks; several patients had this reaction for a longer period. This Phase II study showed that Apitoxin
was significantly more effective than the control drug, nabumetone, in the treatment of knee and spinal osteoarthritis patients. It clearly
showed that improvement in pain, disability and physical signs was greater in the bee venom injection groups than in the nabumetone control
group. No significant side effects developed at the therapeutic doses studied. However, research should be continued to minimize itching
and pain at bee venom injection sites, and possible allergic reaction should always be considered with treatment at high doses.

In 2002, a formal Phase III double-blind,
placebo-controlled trial was completed with 407 subjects (311 of which obeyed the trial protocol and completed the clinical study). The
purpose of the Phase III trial was conducted to verify the efficacy and safety of the medicine resulting from the prior Phase I
and Phase II trials. The therapeutic course treatment included a total of 12 injections over a period of 6 weeks. Final evaluations
were completed in the 8th week, following two weeks of no injections. During the trial period, laboratory tests
were carried out three times (before injection, in the second week, in the sixth week), and the efficacy evaluation was performed four
times (before injection, in the second week, in the sixth week, and in the eighth week). Safety of the Apitoxin injection was evaluated
by hematologic examination, measurement of cortisol and calcium levels, and laboratory chemistry analysis of blood and urine. The primary
efficacy variable for the trial was the ratio of the subjects who showed more than 20% improvement in the total points of test items for
efficacy evaluation 6 weeks after injection, compared with the total points before injection of the medicine (the “improvement
rate”). Data obtained from subjects of the clinical test were analyzed by two methods, ITT (Intention to Treat) analysis and PP
(Per Protocol) Among 310 subjects who participated in the efficacy evaluation, 153 and 157 patients belonged to the Apitoxin group and
the nabumetone group, respectively. For the Apitoxin group, the ratio of the subjects who showed more than 20% improvement in the total
points was 48.70% (75/154 subjects, 95% confidence interval (“CI”): 40.8~56.6%), while for the nabumetone group, it was 46.15%
(72/156 subjects, 95% CI: 38.3~54.0%), indicating that the improvement rate in the Apitoxin group was greater than in the nabumetone group;
however, there was no statistical significance. (p=0.6533). Among a total of 407 subjects (Apitoxin group: 204; Nabumetone group: 203),
38.24% (78/204) of the Apitoxin group showed more than 20% improvement during the 6th week of injection, while 38.42%
of the Nabumetone group improved by more than 20%, indicating that the two groups showed similar improvement rate (p=0.9688). The second
efficacy variable was the improvement rate during the 8th week (2 weeks after the completion of the final injection).
According to results from comparing the total points of efficacy evaluation items during the second week after completion of injection
(during the 8th week after injection) with the total points before injection, 58.44% (90/154) of the Apitoxin group
showed a higher improvement rate than during the 6th week (48.70%), while 42.95% (67/156) of the Nabumetone group
showed lower improvement rate than during the 6th week (46.15%). There was statistical difference in total point
of efficacy evaluation items between the two groups (p=0.0064). These results suggest that even after treatment stops, the efficacy of
Apitoxin continues. With respect to safety, among a total of 407 subjects who participated in the safety evaluation, 69 (33.82%) of the
Apitoxin group showed an adverse event, while 59 (29.06%) of the Nabumetone indicated adverse event. These results indicate that the Apitoxin
group had an elevated adverse event rate than the Nabumetone group, but there was no statistically significant difference between the
two groups (p=0.3526).

In May 2003, MFDA granted approval for the use
of Apitoxin in the treatment of pain and mobility in patients with OA. A post-marketing/approval safety study in South Korea followed
3,194 patients from 2003 through 2009, with no serious adverse events or negative safety signals.

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In 2013, preliminary Phase III clinical trials
were authorized to enroll patients by the FDA to study the same indication approved in South Korea — treatment of pain
and lack of mobility in patients with OA. The results of the preliminary Phase III clinical trial indicated statistical and
clinically significant improvements in all outcome measures of pain, physical function, and disease assessment in the study group. The
study group included 330 patients with diagnosed osteoarthritis of the knee. The subjects were evaluated for relief of pain using Western
Ontario and McMaster Osteoarthritis Index (WOMAC) and physician and patient global assessments. The primary efficacy measure was relief
of pain and inflammation over a 12-week treatment period after randomization into the trial. The secondary efficacy measure was improvement
of mobility. Treatment effect will be compared in a 2-1 Apitox vs active control. Compared with the placebo group (histamine), subjects
in the Apitox group who received a maximum dose (1500 micrograms) at each weekly visit over 12 weeks showed a significantly more
improvement in all outcome measures (WOMAC pain, WOMAC physical function, visual analog scale (“VAS”) pain, patient and physician
global assessments of OA). Further, post hoc analyses showed that a statistically significant greater percentage of Apitox-treated subjects
had at least a 40% and 60% reduction in WOMAC pain as compared to placebo-treated subjects. Sensitivity analyses confirmed the validity
of the statistical methods and population definitions. The improvements in pain endpoints were highly significant for both the modified
intention to treat and per protocol populations and the improvement was sustained during the four weeks following Apitox treatment.

Except for an expected higher incidence of injection
site reactions (<5%) in the Apitox group, the overall safety profiles were comparable between the treatment groups. A serious adverse
event of the anaphylactic reaction occurred in an Apitox-treated subject because of a quick injection rate. However, the subject was treated,
and the event was resolved within one day. The incidence of adverse events overall was similar between the Apitox and Placebo groups
(49.0% and 46.3%, respectively), and there were no clinically meaningful changes, within and between groups, in laboratory parameters,
vital signs, physical examination, or electrocardiogram results.

During Apimeds Korea meetings with the FDA, the FDA
highlighted concerns regarding the opioid crisis. As Apitoxin has been previously approved in South Korea, we believe Apitox could be
a viable treatment option within the United States after additional clinical investigation, including our anticipated Phase III
trial. Initially, Apimeds Korea elected not to pursue the OA indication in the United States based on its evaluation of potential
market adoption and the existing competitive environment for OA. Based on results from the Apimeds Korea Phase III OA Trial
and correspondence with the FDA, we believe we are now in a position to continue to advance our Phase III trial for knee OA.

We intend to conduct an additional Phase III
trial in knee OA. Based on our previous correspondence with the FDA, we have started to design and will implement our Phase III
trial to best address our patient population of patients with grade 2, 3 and 4 knee OA, appropriate dosing, and the most effective way
to evaluate Apitox in meeting a patient’s needs. This trial will be an update to the plan of execution based on review of data,
discussions with former principal investigators from Apimeds Korea. Upon successful completion and FDA clearance of our Phase III
trial in knee OA, we will be positioned to submit a BLA.

We intend that the purpose of this trial will be to
evaluate the effectiveness of Apitox in the treatment of grade 2, 3 and 4 OA of the knee. The trial will be designed with a specific focus
on the identified subgroup from which we see the highest degree of benefit.

8

The following table summarizes the preliminary clinical
trial activity by Apimeds Korea with respect to Apitoxin:

Preliminary Clinical Data in MS Patients

The United States data from the literature on
bee venom studies in MS patients, Table A (Hauser et al. 2001) below, showed clinically significant improvements in disability symptoms
following treatment.

In Table A, results were categorized into the following
groups: dramatic disability improvement (>12 points on the Related Observable Symptom Scale (“ROSS”), good improvement
(7-12 points on ROSS), minimal improvement (<7 points on ROSS), no improvement (<2 points on ROSS), and negative (any total negative
response on ROSS). Descriptive analysis of the ROSS clinical outcomes showed that more than 68% of MS patients showed some kind of positive
improvement in disability (dramatic, good or minimal) and 58% demonstrated a marked improvement (dramatic or good).

Table A. Summary
of Patient Disability Improvement to Bee Venom Treatment Using ROSS

N
% of

Participants
Follow-up Survey

(% improvement)
Related Observable

Symptoms Scale

(points improvement)

Dramatic
15
29.4%
>30%, or
>12 points

Good
15
29.4%
10 – 29%, or
7 – 12 points

Minimal
5
9.8%
<10%, or
<7 points

None
15
29.4%
<2%, or
<2 points

Negative
1
2.0%
Any total negative response
Any total negative response

After 1 year of bee-venom injections, 68.6 percent
of participants showed improvement. N = number of participants.

Apimeds Korea used data from its first Phase III
clinical trial for OA and peer reviewed publications, including those referenced in Table A above and formal Phase I (the “Castro
Phase I Trial”) and Phase II (the “Wesselius Phase II Trial”) publications specific to MS, to support
its submission in 2014 of its Investigational New Drug Application (“IND”) 122804 (A Phase III, Multi-Center, Randomized,
Double-Blind, Placebo-Controlled, Parallel Group Study to Evaluate the Safety and Efficacy of Apitox Add-on Therapy for Improving Disability
and Quality of Life in Patients with Multiple Sclerosis).

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Castro Phase I Trial

The Castro Phase I Trial involved a total of
nine bee venom nonallergic patients with progressive forms of MS, who were 21 – 55 years of age with no other illnesses.
The subjects distributed across four groups (A, B, C, and D) and followed a structured 1-year immunization schedule. Hyperreactivity to
bee venom was evaluated by questionnaire, physical examination, and a battery of hematologic, metabolic, and immunologic tests. Responses
to therapy were evaluated by questionnaire, functional neurological tests, and changes in measurement of somatosensory-evoked potentials.
While no serious adverse allergic reactions were observed in any of the subjects, four experienced worsening of neurological symptoms,
requiring their discontinuation in the study. The observed negative effects could not be conclusively attributed to adverse reactions
arising from the administered therapy. Of the remaining five subjects, three reported subjective amelioration of symptoms and two exhibited
objective improvement. Despite suggesting safety in this preliminary study, the small sample size precluded definitive conclusions regarding
the efficacy of the treatment for MS. Larger and more carefully conducted multicenter studies were required to establish efficacy.

Wesselius Phase II Trial

The Wesselius Phase II Trial involved a randomized
crossover study of 26 patients diagnosed with relapsing-remitting or relapsing secondary progressive MS. Participants were assigned
to 24 weeks of medically supervised bee sting therapy, or a control period of 24 weeks of no treatment. Live bees (up to a maximum
of 20) were used to administer bee venom three times per week. The primary outcome was the cumulative number of new gadolinium-enhancing
lesions on T1-weighted MRI of the brain. Secondary outcomes were lesion load on T2*-weighted MRI, relapse rate, disability (Expanded Disability
Status Scale, Multiple Sclerosis Functional Composite, Guy’s Neurologic Disability Scale), fatigue (Abbreviated Fatigue Questionnaire,
Fatigue Impact Scale), and health-related quality of life (Medical Outcomes Study 36-Item Short Form General Health Survey).
The results of the Wesselous Phase II Trial indicated that during bee sting therapy, there was no significant reduction in the cumulative
number of new gadolinium-enhancing lesions. The T2*-weighted lesion load further progressed, and there was no significant reduction in
relapse rate. There was no improvement of disability, fatigue, and quality of life. Bee sting therapy was well tolerated, and there were
no serious adverse events. In this trial, treatment with bee venom in patients with relapsing multiple sclerosis did not reduce disease
activity, disability, or fatigue and did not improve quality of life measured using gadolinium-enhancing MRI.

From June 2014 to June 2018, Apimeds Korea
corresponded with the FDA and there were no clinical holds at that time. Sponsorship of IND 122804 was transferred from Apimeds Korea
to us in October 2020. On September 21, 2021, we responded to customary non-clinical hold comments from the FDA. In November 2021,
we received a customary clinical hold from the FDA due to the retirement of the former principal investigator. We have subsequently updated
the FDA with a new principal investigator via our Chief Medical Officer, Dr. Christopher Kim. In February 2023, the FDA removed
the clinical hold and concluded it may be initiated. We have subsequently made the strategic decision to focus our efforts and capital
on our Phase III trial in knee OA, and instead focus our MS efforts on the early prosecution of appropriate MS patient populations
through non-registered corporate sponsorship studies.

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Our Commercialization Strategy

We are dedicated to the effective implementation of
regulatory, clinical and legal strategies to create value in Apitox. The effective execution of this strategy will provide us the opportunity
to evaluate and potentially acquire other assets that fit within our space for development.

Manufacturing

We intend to continue to engage a third-party manufacturer,
Piramal Pharma Solutions, in Lexington, Kentucky to support our Phase III trial and, if Apitox is approved by the FDA, commercial
manufacturing. This manufacturer has dedicated experience in development and technology transfer of sterile dose formulations, including
liquid and lyophilized formulations.

Research and Development

We are currently engaged exclusively in the clinical
development of Apitox for continued use in knee OA through a Phase III trial in knee OA and potential use for MS through the early
prosecution of appropriate patient populations through non-registered corporate sponsorship studies.

Sales and Marketing

The healthcare providers associated with the treatment
of inflammation and pain management symptoms associated with OA and MS are not limited to one specialist but involve a comprehensive team
of providers focused on slowing the progression of the disease along with the physical, emotional and day-to-day management of the
condition. Each of these providers represents a potential customer for Apitox.

Apitoxin, which will be known as Apitox in the United States,
has established technological credibility through its preclinical testing, Phase I, Phase II and preliminary Phase III
clinical studies completed by Apimeds Korea. Apimeds Korea received regulatory approval for Apitoxin by the MFDA in South Korea, as well
as long-term safety data from treatment of patients in Korea from 2003 to 2009. There were no serious adverse events from over 3,000 patients
monitored, and Apitoxin has been approved and marketed in South Korea for OA since 2003. We update the FDA annually on safety data generated
by Apimeds Korea from South Korea.

We aim to obtain FDA approval for Apitox in the United States
market for treatment of inflammation and pain management symptoms associated with knee OA, and eventually MS, and expand the indication
portfolio in the autoimmune market with a strategic marketing partner. The marketing partner strategy is common in the pharmaceutical
marketplace, as the infrastructure, overhead, and barriers to entry dilute the focus and can rapidly erode the financial well-being of
small, product development-based companies such as us. By identifying the strategic marketing partner at an early stage, the companies
can deliver a final product, or family of products, in a form factor or variety of form factors over time, that specifically suit the
target market. We believe that Apitox represents a significant opportunity as a platform technology, with numerous product-line extensions,
and the potential for new, ancillary products such as delivery devices.

Reimbursement Strategy

Apimeds expects to apply to the Centers for Medicare
and Medicaid Studies (“CMS”) for temporary generic reimbursement codes 12 to 18 months prior to a BLA approval. Temporary
codes are used until manufacturers apply for, and receive, permanent codes, which identify the drug and its therapeutic class. Permanent
codes are issued by CMS on a rolling quarterly basis.

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We will engage third party contractors to assist the
us with reimbursement, coding and policy development prior to, during and at the time of approval of Apitox. We will look for a contractor
to provide the following services to us:

●Coding Assessment and Strategy/Execution — CPT
Review of Apitox Administration by Multiple Intradermal Injections. Assess the landscape to ensure a clear understanding of the key
dynamics and analyze relevant proxies and precedent. Further assess relevant drug administration codes and whether appropriate codes
exist.

●Medical Coverage Policy Analysis — Provide
a framework and set expectations for Medicare’s anticipated coverage approach to Apitox, specifically in the context of intra articular
hyaluronic acid use agent coverage policies and implications of their efficacy uncertainty.

●Medicare Local Coverage Analysis and Implications — Given
the significance of Medicare policy standards, local and national Medicare policies often shape payer and provider perceptions and decisions.
As complex statutory and regulatory guidance shape Medicare decision-making, ADVI analyzes, investigates, and synthesize Medicare policies
that could affect access (coverage, coding and reimbursement) for Apitox.

●Medicaid and Commercial Coverage Analysis and Implications — Analyze
available medical policies for five large state Medicaid agencies (based on population and geographic variation) and major commercial
payers (where publicly available).

●Payer Policy Internal Expert Interviews — Conduct
payer interviews with relevant Medicare, Medicaid and commercial policy advisors.

●HCPCS Coding and Payment Assessment — Assess
the coding and reimbursement landscape to ensure Apimeds has a clear understanding of the key dynamics with the HCPCS application process
and the Medicare Hospital Outpatient Prospective Payment System (OPPS) pass-through status application process. Through this assessment,
identify the areas of concern, expectations, timing, timelines, and processes associated. This is especially relevant given the 2020
implementation of a new HCPCS review process.

●Address key Part B/medical benefit implications to Apitox
in the following fields:

●HCPCS and OPPS application timelines (and potential evolution
leading to launch),

●coding/access implications prior to code assignment (e.g., NOC/miscellaneous
codes), review the merits/risks of Q-code,

●further review the application processes, expectations, case
examples, timelines, and hurdles that APUS may face across settings of care, payers, and with CMS,

●case examples, timelines, and hurdles across settings of care
with payers and CMS,

●review of reimbursement implications, and

●methodologies (ASP, WAC, AWP), role of sequestration, 340B,
patient financial burden.

●Develop Payer (with Emphasis on Medicare) Launch Recommendations — Based
on the above primary and secondary research, synthesize the discussions and summarize the overall findings of the payer survey, highlighting
themes, and provide recommendations and considerations for optimizing market access, given the current and evolving reimbursement landscape.
This section will include payer (emphasis on Medicare) launch strategy recommendations (including timeline) and a local/national Medicare
engagement strategy.

Competition

We compete in an industry characterized by rapidly
advancing technologies, intense competition, a changing regulatory and legislative landscape and a strong emphasis on the benefits of
intellectual property protection and regulatory exclusivities.

12

Like any biopharmaceutical company, we face competition
from multiple sources, including large or established pharmaceutical, biotechnology, and wellness companies, academic research institutions,
government agencies, and private institutions. We believe our drug candidate will prevail amid the competitive landscape through its efficacy,
safety, administration methods, cost, public and institutional demand, intellectual property portfolio, and treatment of the root cause
of many age-associated diseases.

Many of our competitors, either alone or with strategic
partners, have substantially greater financial, technical, and human resources than we do. Accordingly, our competitors may be more successful
in obtaining approval for treatments and achieving widespread market acceptance, rendering our treatments obsolete or non-competitive. Accelerated
merger and acquisition activity in the biotechnology and biopharmaceutical industries may result in even more resources concentrated among
a smaller number of our competitors. These companies also compete with us in recruiting and retaining qualified scientific and management
personnel, establishing clinical study sites, patient registration for clinical studies, and acquiring technologies complementary to,
or necessary for, our programs. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative
arrangements with large and established companies. Our commercial opportunity could be substantially limited in the event that our competitors
develop and commercialize products that are more effective, safer, more tolerable, more convenient, or less expensive than our comparable
products. In geographies that are critical to our commercial success, competitors may also obtain regulatory approvals before us, resulting
in our competitors building a strong market position in advance of our products’ entry. We believe the factors determining the success
of our programs will be the efficacy, safety, and convenience of our drug candidates.

Additionally, consumer preference for branded, generic
or private label products sold by competitors could adversely impact our financial performance. Our competitors, which differ within individual
geographic markets, include large-scale retailers, smaller high-growth companies (which often operate on a regional basis and offer aggressive
competition), multinational corporations moving into or expanding their presence in the consumer healthcare market, and “private-label”
products sold by retailers.

Our aim is to reduce the use of NSAIDS and opioid
use as it relates to the pain management associated with OA. We believe that if approved by the FDA, Apitox may be a non-addictive
option to patients experiencing debilitating pain.

Business Agreement

On August 2, 2021, we entered into an agreement
with Apimeds Korea, a principal stockholder of the Company (the “Business Agreement”). Pursuant to the Business Agreement,
Apimeds Korea granted to the Company a sublicensable, royalty-bearing license to utilize all prior clinical development data associated
with Apitoxin, Apitox, and all related names, advance clinical research, develop, manufacture and commercialize and sell Apitox in the
United States. In exchange for this license, the Company will pay Apimeds Korea a perpetual royalty of 5% of the Company’s
earnings before interest and taxes (as determined consistent with GAAP, derived from the sale or license of Apitox, less any shipping,
handling, and insurance charges, credits (arising from returns or other adjustments), discounts, rebates, or allowances of any kind (if
any). The Business Agreement can be terminated by mutual written agreement by the parties and will automatically terminate upon the bankruptcy
or dissolution of the Company.

Assignment Agreement

On October 12, 2021, we entered into an intellectual
property assignment agreement (the “Assignment Agreement”), which was effective as of May 12, 2020, with Apimeds Korea
and Dr. Christopher Kim, the Company’s Chairman and Chief Medical Officer and the founder of Apimeds Korea. During Dr. Kim’s
engagement with Apimeds Korea, he contributed to the development of the intellectual property as it relates to Apitoxin, which will be
marketed in the United States as Apitox (the “Assigned IP”).

Pursuant to the Assignment Agreement, Dr. Kim
sold, transferred, and conveyed all his rights, title and interest in the Assigned IP to Apimeds Korea. Dr. Kim retained no right
to use the Assigned IP. Additionally, the Assignment Agreement acknowledged that the Assigned IP was licensed to us to use via the
Business Agreement.

Intellectual Property

Apitox’s API is bee venom, a natural, non-synthetic
compound that is not patentable, so we rely principally on trade secrets to protect our rights to Apitox, particularly the method and
process of manufacturing Apitox.

13

Supplier

We purchase venom from our United States supplier,
Apico, Inc. (“Apico”), via a letter agreement. Pursuant to the letter agreement, Apico agreed that for a period of ten years,
or until November 3, 2031 it would not supply Apis Mellifea venom for pharmaceutical use for any buyer other than
us; provided that Apico may also supply Apimeds Korea for its use outside of the United States. The letter agreement
excludes customers using venom for immunology, cosmetic or any other “non-pharmaceutical” use. The letter agreement may be
terminated upon mutual written consent of both Apico and the Company.

Apico has developed and practices a proprietary method
of harvesting venom. It operates under and is certified in current good manufacturing practice regulations enforced by the FDA and has
an active and current Drug Master File (“DMF”) with the FDA. DMF’s are submissions to the FDA used to provide confidential,
detailed information about facilities, processes, or articles used in the manufacturing, processing, packaging, and storing of human drug
products. We have an exclusive relationship with our supplier for pharmaceutical use in the United States and they are not permitted
to sell to any other party for pharmaceutical use.

Apimeds Korea has a number of proprietary analytical
methods for the classification and identification of specific pharmacologically active fractions of its venom, along with numerous manufacturing
processes from filtration, vial filing and lyophilization required to produce Apitoxin. Apitoxin is the only approved and commercially
available therapeutic product containing purified and sterile bee venom that is registered as an API in South Korea. The proprietary methods
developed and practiced for the commercial manufacturing of Apitoxin include dilution, filtering, vial staging and lyophilization parameters
and cycles.

We plan to file Apitox as a BLA with the Centers for
Biologics and Research of the FDA following the successful completion of our Phase III trial for knee OA. The FDA provides 12-year
market exclusivity at the time of approval of a BLA, with the potential for a six-month extension upon approval for pediatric use. If
the BLA is approved, the 12-year period would be retroactive to the date of the application.

We intend to file a U.S. trademark application
for “Apitox”.

Regulatory Environment

Government Regulation and Product Approval

In the United States, biological products are
subject to regulation under the Federal Food, Drug, and Cosmetic Act (the “FDCA”), and the Public Health Service Act (the
“PHSA”), and other federal, state, and local statutes and regulations. Both the FDCA and PHSA and their corresponding regulations
govern, among other things, the research, development, clinical trials, testing, manufacturing, quality control, safety, purity and potency
(efficacy), labeling, packaging, storage, record keeping, distribution, reporting, marketing, promotion, advertising, post-approval monitoring,
and post-approval reporting involving biological products. Along with third-party contractors, we will be required to navigate the various
preclinical and clinical regulatory obligations and the commercial approval requirements of the governing regulatory agencies of the countries
in which we wish to conduct studies or seek approval or licensure of our product candidate. The processes for obtaining regulatory approvals
in the United States, along with subsequent compliance with applicable laws and regulations and other regulatory authorities, require
the expenditure of substantial time and financial resources.

Government policies may change, and additional government
regulations may be enacted that could prevent or delay further development or regulatory approval of any product candidates, product or
manufacturing changes, additional disease indications or label changes. We cannot predict the likelihood, nature or extent of government
regulation that might arise from future legislative or administrative action.

Review and Approval for Licensing Biologics
in the United States

In the United States, FDA regulates our current
product candidate as a biological product, or biologics, under the FDCA, the PHSA, and associated implementing regulations. Biologics,
like other drugs, are used for the diagnosis, cure, mitigation, treatment, or prevention of disease in humans. In contrast to low molecular
weight drugs, which have a well-defined structure and can be thoroughly characterized, biologics are generally derived from living material
(human, animal, or microorganism), are complex in structure, and thus are usually not fully characterized.

14

Biologics are also subject to other federal, state,
and local statutes and regulations. The failure to comply with applicable statutory and regulatory requirements at any time during the
product development process, approval process, or after approval may subject a sponsor or applicant to administrative or judicial enforcement
actions. These actions could include the suspension or termination of clinical trials by FDA, FDA’s refusal to approve pending applications
or supplemental applications, withdrawal of an approval, issuance of warning or untitled letters, product recalls, product seizures, total
or partial suspension of production or distribution, import detention, injunctions, fines, refusals of government contracts, restitution,
disgorgement of profits, or civil or criminal investigations and penalties brought by FDA, the Department of Justice (“DOJ”),
and other governmental entities.

An applicant seeking approval to market and distribute
a biologic in the United States must typically undertake the following:

●completion of non-clinical laboratory tests and studies performed
in accordance with FDA’s good laboratory practice (“GLP”) regulations;

●manufacture, labeling and distribution of investigational drugs
in compliance with FDA’s current good manufacturing practice (“cGMP”) requirements;

●submission to FDA of an investigational new drug application
(“IND”), which must become effective before clinical trials may begin and must be updated annually and when significant changes
are made;

●approval by an independent institutional review board (“IRB”)
for each clinical site before each clinical trial may be initiated;

●performance of adequate and well-controlled human clinical trials
in accordance with FDA’s Good Clinical Practices (“GCP”) to establish the safety, purity, and potency of the proposed
biological product candidate for its intended purpose;

●after completion of all pivotal clinical trials, preparation
of and submission to FDA of a BLA requesting marketing approval, which includes providing sufficient evidence to establish the efficacy,
safety, purity, and potency of the proposed biological product for its intended use, including from results of nonclinical testing and
clinical trials;

●satisfactory completion of an FDA advisory committee review,
when appropriate, as may be requested by FDA to assist with its review;

●satisfactory completion of one or more FDA inspections of the
manufacturing facility or facilities at which the proposed product, or certain components thereof, are produced to assess compliance
with cGMP and data integrity requirements to assure that the facilities, methods, and controls are adequate to preserve the biological
product’s identity, strength, quality, and purity and, if applicable, FDA’s good tissue practice (“GTP”) requirements
for human cellular and tissue products;

●satisfactory completion of FDA inspections of selected clinical
investigation sites to assure compliance with GCP requirements and the integrity of the clinical data;

●satisfactory completion of an FDA sponsor GCP inspection, often
conducted at the applicant’s headquarters facility;

●payment of user fees (unless there is a waiver, exemption, or
reduction) under the Prescription Drug User Fee Act (“PDUFA”) for the relevant year;

●FDA’s review and approval of the BLA to permit commercial
marketing of the licensed biologic for particular indications for use in the United States;

●compliance with post-approval requirements, including the potential
requirements to implement a risk evaluation and mitigation strategy (“REMS”), to report adverse events and biological product
deviations, and to complete any post-approval studies; and

●completion of any post-approval clinical studies required by
FDA, such as confirmatory trials or pediatric studies.

15

From time to time, legislation is drafted, introduced,
and passed in Congress that could significantly change the statutory provisions governing the testing, approval, manufacturing, and marketing
of biological products regulated by FDA. In addition to new legislation, FDA regulations, guidance documents, and policies are often
revised or interpreted by the agency in ways that may significantly affect the regulation of biological products in the United States.
It is impossible to predict whether further legislative changes will be enacted or whether FDA regulations, guidance, policies, or interpretations
will change, and the effects of any such changes.

Preclinical and Clinical Development

Before an applicant can begin testing the potential
product candidate in human subjects, the applicant must first conduct preclinical studies. Preclinical studies may include laboratory
evaluations of product chemistry, toxicity, and formulation, as well as in vitro and animal studies to assess the potential safety and
activity of the drug for initial testing in humans and to establish a rationale for therapeutic use. Preclinical studies are subject to
federal regulations and requirements, including GLP regulations, which govern the conduct of animal studies designed to test a product’s
safety. None of our preclinical studies to date have been animal studies. The results of an applicant’s preclinical studies are
submitted to FDA as part of an IND.

An IND is a request for authorization from FDA to
administer an investigational new drug product to humans. An IND is an exemption from the FDCA that allows an unapproved drug to be shipped
in interstate commerce for use in a clinical trial. Such authorization must be secured prior to interstate shipment and administration
of a biological drug that is not subject of an approved BLA. In support of an IND, applicants must submit a protocol for each clinical
trial, which details, among other things, the objectives of the trial, the parameters to be used in monitoring safety and the effectiveness
criteria to be evaluated. A separate submission to the existing IND must be made for each successive clinical trial conducted during product
development and for any subsequent protocol amendments.

Human clinical trials may not begin until an IND is
effective. The IND automatically becomes effective 30 days after receipt by FDA, unless FDA raises safety concerns or questions about
the proposed clinical trial within the 30-day time period. In such a case, FDA may place the IND on clinical hold and the IND sponsor
must resolve any of FDA’s outstanding concerns or questions before the clinical trial can begin. Submission of an IND therefore
may or may not result in regulatory authorization to begin a clinical trial.

FDA may also place a clinical hold or partial clinical
hold on a clinical trial following commencement of the trial under an IND. A clinical hold is an order issued by FDA to the sponsor
to delay a proposed clinical investigation or to suspend an ongoing investigation. A partial clinical hold is a delay or suspension of
only part of the clinical work requested under the IND. For example, under a partial clinical hold, FDA may instruct a sponsor not
to enroll any new patients into a study but permit the previously enrolled patients to continue in the study. No more than 30 days
after imposition of a clinical hold or partial clinical hold, FDA will provide the sponsor a written explanation of the basis for the
hold. Following issuance of a clinical hold or partial clinical hold, an investigation may only resume after the FDA has notified the
sponsor that the investigation may proceed. FDA will base that determination on information provided by the sponsor addressing the deficiencies
previously cited or otherwise satisfying FDA that the investigation can proceed.

Clinical trials involve the administration of the
investigational product to human subjects under the supervision of qualified investigators in accordance with GCP regulations, which include
the requirement that all research subjects provide their informed consent for their participation in any clinical trial. If a sponsor
chooses to conduct a foreign clinical study under an IND, all FDA IND requirements must be met unless waived. When the foreign clinical
study is not conducted under an IND, the sponsor must ensure that the study complies with GCP regulations in order to use the study as
support for an IND or application for marketing approval, including review and approval by an IRB and informed consent from subjects.

Furthermore, an independent IRB for all sites participating
in a clinical trial must review and approve the plan for any clinical trial and its informed consent form before the clinical trial begins
at each site and must monitor the trial until completed. Regulatory authorities, the IRB, or the sponsor may suspend a clinical trial
at any time on various grounds, including a finding that the subjects are being exposed to an unacceptable health risk or that the trial
is unlikely to meet its stated objectives.

16

Some trials also include oversight by an independent
group of qualified experts organized by the clinical trial sponsor, known as a data safety monitoring board (“DSMB”). DSMBs
review unblinded study data at pre-specified times during the course of the study. If the DSMB determines that there is an unacceptable
safety risk for subjects or other grounds, such as no demonstration of efficacy, the DSMB can make a recommendation to the sponsor to
modify or stop the trial.

Other grounds for a sponsor’s decision to suspend
or terminate a study may be made based on evolving business objectives or the competitive climate.

For purposes of BLA approval, clinical trials are
typically conducted in the following sequential phases:

●Phase 1: The investigational
product is initially introduced into a small group of healthy human subjects or patients with the target disease or condition. These
trials are designed to test the safety, dosage tolerance, absorption, metabolism and distribution of the investigational product in humans
and the side effects associated with increasing doses. These trials may also yield early evidence of effectiveness.

●Phase 2: The investigational
product is administered to a slightly larger patient population with a specified disease or condition to evaluate the preliminary efficacy,
optimal dosages, and dosing schedule and to identify possible adverse side effects and safety risks. Multiple Phase 2 clinical trials
may be conducted to obtain information prior to beginning larger and more expensive Phase III clinical trials.

●Phase 3: The investigational
product is administered to an expanded patient population to further evaluate dosage, to provide statistically significant evidence of
clinical efficacy and to further test for safety, generally at multiple geographically dispersed clinical trial sites. These clinical
trials are intended to generate sufficient data to statistically demonstrate the efficacy and safety of the product, to establish the
overall risk/benefit ratio of the investigational product, and to provide an adequate basis for product approval by FDA.

These phases may overlap or be combined. In some cases,
FDA may require, or companies may voluntarily pursue, additional clinical trials after a product are approved to gain more information
about the product, referred to as Phase 4 trials. Post-approval trials are conducted following initial approval, often to develop
additional data and information relating to the use of the product in new indications.

Progress reports detailing the results of the clinical
trials must be submitted at least annually to FDA. In addition, IND safety reports must be submitted to FDA for any of the following:
serious and unexpected suspected adverse reactions in study subjects; findings from epidemiological studies, pooled analysis of multiple
studies, animal or in vitro testing, or other clinical studies, whether or not conducted under an IND, and whether or not conducted by
the sponsor, that suggest a significant risk in humans exposed to the drug; and any clinically important increase in the rate of a serious
suspected adverse reaction over such rate listed in the protocol or investigator brochure.

A sponsor’s planned clinical trials may not
be completed successfully within any specified period, or at all. Furthermore, the FDA or the sponsor may suspend or terminate a clinical
trial at any time on various grounds, including a finding that the research subjects are being exposed to an unacceptable health risk.
Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution, or an institution it represents, if the clinical
trial is not being conducted in accordance with the IRB’s requirements or if the drug has been associated with unexpected serious
harm to patients. FDA will typically inspect one or more clinical sites to assure compliance with GCP and the integrity of the clinical
data submitted.

During clinical development, the sponsor often refines
the indication and endpoints on which the BLA will be based. For endpoints based on patient-reported outcomes (“PROs”), the
process typically is an iterative one. FDA has issued guidance on the framework it uses to evaluate PRO instruments. Although the agency
may offer advice on optimizing PRO instruments during the clinical development process, FDA usually reserves final judgment until it reviews
the BLA.

Concurrent with clinical trials, companies often complete
additional animal studies, and develop additional information about the chemistry and physical characteristics of the drug and finalize
a process for manufacturing the product in commercial quantities in accordance with cGMP. The manufacturing process must be capable
of consistently producing quality batches of the drug candidate and, among other things, must develop methods for testing the identity,
strength, quality, purity and potency of the final drug. Additionally, appropriate packaging must be selected and tested, and stability
studies must be conducted to demonstrate that the drug candidate does not undergo unacceptable deterioration over its shelf life.

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BLA Submission and Review

Assuming successful completion of all required clinical
testing in accordance with all applicable regulatory requirements, an applicant may submit a BLA requesting licensing to market the biologic
for one or more indications in the United States. The BLA must include the results of nonclinical studies and clinical trials; detailed
information on the product’s chemistry, manufacture, controls; and proposed labeling. Under the PDUFA, a BLA submission is subject
to an application user fee, unless a waiver, reduction, or exemption applies.

FDA will initially review the BLA for completeness
before accepting it for filing. Under FDA’s procedures, the agency has 60 days from its receipt of a BLA to determine whether
the application will be accepted for filing and substantive review. If the agency determines that the application does not meet this initial
threshold standard, FDA may refuse to file the application and request additional information, in which case the application must be resubmitted
with the requested information and review of the application delayed.

After the BLA is accepted for filing, FDA reviews
the BLA to determine, among other things, whether a product is safe, pure, and potent and if the facility in which it is manufactured,
processed, packed, or held meets standards designed to assure the product’s continued identity, strength, quality, safety, purity,
and potency. To ensure cGMP, GLP, GCP, GTP, and other regulatory compliance, an applicant must incur significant expenditure of time,
money, and effort in the areas of training, record keeping, production and quality control. In addition, FDA expects that all data be
reliable and accurate, and requires sponsors to implement meaningful and effective strategies to manage data integrity risks. Data integrity
is an important component of the sponsor’s responsibility to ensure the safety, efficacy and quality of its product or products.

For cellular products, FDA will not approve the product
if the manufacturer is not in compliance with the GTPs, to the extent applicable. GTPs are FDA regulations and guidance documents that
govern the methods used in, and the facilities and controls used for, the manufacture of human cells, tissue, and cellular and tissue-based
products (“HCT/Ps”), which are human cells or tissue intended for implantation, transplant, infusion, or transfer into a human
recipient. The primary intent of the GTP requirements is to ensure that cell and tissue-based products are manufactured in a manner designed
to prevent the introduction, transmission and spread of communicable disease. FDA regulations also specify how HCT/P establishments must
register and list their HCT/Ps with FDA and how they must evaluate donors through screening and testing, where applicable.

If the FDA determines that the application, manufacturing
process or manufacturing facilities are not acceptable, it will outline the deficiencies in the submission and often will request additional
testing or information. Notwithstanding the submission of any requested additional information, FDA ultimately may decide that the application
does not satisfy the regulatory criteria for approval.

The performance goals and policies implemented by
FDA under the PDUFA generally provide for FDA action on an original BLA within 10 months of filing, which (as discussed above) typically
occurs within 60 days of submission, but that deadline is extended in certain circumstances. Furthermore, the review process is often
significantly extended by FDA’s requests for additional information or clarification.

FDA may refer applications for novel products or products
that present difficult questions of safety or efficacy to an advisory committee. Typically, an advisory committee consists of a panel
that includes clinicians and other experts who will review, evaluate, and provide a recommendation as to whether the application should
be approved and, if so, under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers
such recommendations carefully when making decisions and usually has followed such recommendations.

After FDA evaluates a BLA and conducts inspections
of manufacturing facilities where the investigational product and/or its components will be produced, FDA may issue an approval letter
or a Complete Response Letter (“CRL”). An approval letter authorizes commercial marketing of the biological with specific
prescribing information for specific indications. A CRL will describe all of the deficiencies that FDA has identified in the BLA, except
that where FDA determines that the data supporting the application are inadequate to support approval, FDA may issue the CRL without first
conducting required inspections, testing submitted product lots and/or reviewing proposed labeling. If and when the deficiencies have
been addressed to FDA’s satisfaction in a resubmission of the BLA, FDA will issue an approval letter. In issuing the CRL, the FDA
may recommend actions that the applicant might take to place the BLA in condition for approval, including requests for additional data,
information, or clarification. FDA may delay or refuse approval of a BLA if applicable regulatory criteria are not satisfied and may require
additional testing or information and/or require new clinical trials. Even with submission of this additional information, FDA ultimately
may decide that the application does not satisfy the regulatory criteria for approval.

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During the approval process, FDA will determine whether
a REMS is necessary to help ensure the benefits outweigh the risks of the biologic. A REMS is a safety strategy to manage a known or potential
serious risk associated with a product and to enable patients to have continued access to such medicines by managing their safe use, and
could include medication guides, physician communication plans or elements to assure safe use, such as restricted distribution methods,
patient registries and other risk minimization tools. If FDA concludes that a REMS is needed, the BLA sponsor must submit a proposed REMS
and FDA will not approve the BLA without a REMS that the agency has determined is acceptable.

If the FDA approves a product, it may limit the approved
indications for use for the product, or require that contraindications, warnings, or precautions be included in the product labeling.
FDA may also require that post-approval studies, including Phase 4 clinical trials, be conducted to further assess the drug’s
safety after approval. FDA may prevent or limit further marketing of a product based on the results of post-market studies or surveillance
programs.

FDA may also require testing and surveillance programs
to monitor the product after commercialization. For biologics, such testing may include official lot release, which requires the manufacturer
to perform certain tests on each lot of the product before it is released for distribution. The manufacturer then typically must submit
samples of each lot of products to the FDA, together with a release protocol showing a summary of the history of manufacture of the lot
and the results of all of the manufacturer’s tests performed on the lot. The FDA may also perform certain confirmatory tests on
lots of some products itself, before releasing the lots for distribution by the manufacturer.

In general, an approved BLA only allows the sponsor
to market the biologic as approved, without modification. If, for example, a sponsor modifies an approved T cell product to target different
peptides or in our case to target another HLA type, the sponsor would be required to either file a supplemental BLA with FDA or receive
FDA approval for a comparability protocol in order to implement this change into the final product.

The FDA may withdraw the product approval if compliance
with pre- and post-marketing requirements is not maintained or if problems occur after the product reaches the marketplace.

Post-Approval Requirements

Any products manufactured or distributed pursuant
to FDA approvals are subject to pervasive and continuing regulation by FDA, including, among other things, requirements relating to recordkeeping,
periodic reporting, reporting of certain deviations and adverse experiences, product sampling and distribution, and advertising and promotion
of the product. After approval, many types of changes to the approved product, such as adding new indications, manufacturing changes and
additional labeling claims, are often subject to further testing requirements and FDA review and approval, depending on the nature of
the post-approval change. There also are continuing user fee requirements, under which FDA assesses an annual program fee for each product
identified in an approved BLA. Biologic manufacturers and their third-party contractors are required to register their facilities
with the FDA and certain state agencies. These facilities are subject to routine and periodic unannounced inspections by FDA and certain
state agencies for compliance with cGMP, post-marketing safety reporting and data integrity requirements, which impose certain procedural
and documentation requirements to assure quality of manufacturing and product. FDA has increasingly observed cGMP violations involving
data integrity during site inspections and is a significant focus of its oversight. Requirements with respect to data integrity include,
among other things, controls ensuring complete and secure data; activities documented at the time of performance; audit trail functionality;
authorized access and limitations; validated computer systems; and review of records for accuracy, completeness, and compliance with established
standards.

Post-approval changes to the manufacturing process
are strictly regulated, and, depending on the significance of the change, may require FDA approval before being implemented. FDA regulations
also require investigation and correction of any deviations from cGMP and impose reporting requirements upon the sponsor and any third-party
manufacturers that the sponsor may use. Accordingly, manufacturers must continue to expend time, money, and effort in the area of production
and quality control to maintain compliance with cGMP, data integrity, pharmacovigilance, and other aspects of regulatory compliance.

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The FDA may withdraw the approval if compliance with
regulatory requirements and standards is not maintained or if problems occur after the product reaches the market. Later discovery of
previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes,
or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition
of post-approval studies to assess new safety risks; or imposition of distribution or other restrictions under a REMS. Other potential
consequences include, for example:

●restrictions on the marketing or manufacturing of a product,
complete withdrawal of the product from the market, or product recalls;

●fines, warning or untitled letters, or holds on post-approval
clinical studies;

●refusal of FDA to approve pending applications or supplements
to approved applications, or suspension or revocation of existing product approvals;

●product seizure or detention, or refusal of FDA to permit the
import or export of products; or

●permanent injunctions and consent decrees, including the imposition
of civil or criminal penalties.

FDA strictly regulates the marketing, labeling, advertising,
and promotion of prescription drug products placed on the market. A company can make only those claims relating to safety and efficacy,
purity and potency that are approved by the FDA and in accordance with the provisions of the approved labeling. FDA’s regulation
includes, among other things, standards and regulations for direct-to-consumer advertising, communications regarding unapproved uses,
industry-sponsored scientific and educational activities and promotional activities involving the Internet and social media. Promotional
claims relating to a product’s safety or effectiveness are prohibited before the drug is approved. After approval, a product generally
may not be promoted for uses that are not approved by FDA, as reflected in the product’s prescribing information. In the United States,
healthcare professionals are generally permitted to prescribe drugs for such uses not described in the drug’s labeling, known as
off-label uses, because FDA does not regulate the practice of medicine. However, FDA regulations impose rigorous restrictions on manufacturers’
communications and prohibit the promotion of off-label uses. It may be permissible, under very specific, narrow conditions, for a manufacturer
to engage in non-promotional, non-misleading communication regarding off-label information, such as distributing scientific or medical
journal information.

If a company is found to have promoted off-label uses,
it may become subject to adverse public relations and administrative and judicial enforcement by FDA, the DOJ, or the Office of the Inspector
General of the Department of Health and Human Services (“HHS”), as well as other federal and state authorities. This could
subject a company to a range of penalties that could have a significant commercial impact, including civil, administrative, and criminal
fines, penalties, and agreements that materially restrict the manner in which a company promotes or distributes products. The federal
government has levied large civil, administrative, and criminal fines and penalties against companies for alleged improper promotion and
has also requested that companies enter into Corporate Integrity Agreements and Consent Decrees of Permanent Injunction under which specified
promotional conduct is changed or curtailed.

The distribution of prescription drugs and biologics
are subject to the Drug Supply Chain Security Act (“DSCSA”), which requires manufacturers and other stakeholders to comply
with product identification, tracing, verification, detection and response, notification, and licensing requirements. In addition, the
Prescription Drug Marketing Act and its implementing regulations and state laws limit the distribution of prescription pharmaceutical
product samples, and the DSCSA imposes requirements to ensure accountability in distribution and to identify and remove prescription drug
and biological products that may be counterfeit, stolen, contaminated, or otherwise harmful from the market.

Expedited Development and Review Programs

FDA offers a number of expedited development and review
programs for qualifying product candidates. The fast-track program is intended to expedite or facilitate the process of reviewing new
products that meet certain criteria. Specifically, new products are eligible for fast-track designation if they are intended to treat
a serious or life-threatening disease or condition and demonstrate the potential to address unmet medical needs for the disease or condition.
A product intended to treat a serious or life-threatening disease or condition may also be eligible for breakthrough therapy designation
to expedite its development and review. Any marketing application for a biologic submitted to FDA for approval, including a product with
a fast-track designation and/or breakthrough therapy designation, may be eligible for other types of FDA programs intended to expedite
FDA review and approval process, such as priority review and accelerated approval. FDA also may grant accelerated approval to certain
products studied for their safety and effectiveness in treating serious or life-threatening diseases or conditions.

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The RMAT designation, which we are currently planning
to seek for some of our therapies, is intended to facilitate an efficient development program for, and expedite review of, any drug that
meets the following criteria: (1) the drug is a cell therapy, therapeutic tissue engineering product, human cell and tissue product,
or any combination product using such therapies or products, with limited exceptions; (2) the drug is intended to treat, modify,
reverse, or cure a serious or life-threatening disease or condition; and (3) preliminary clinical evidence indicates that the drug
has the potential to address unmet medical needs for such a disease or condition. Like breakthrough therapy designation, RMAT designation
provides potential benefits that include more frequent meetings with FDA to discuss the development plan for the product candidate and
eligibility for rolling review and priority review. Products granted RMAT designation may also be eligible for accelerated approval on
the basis of a surrogate or intermediate endpoint reasonably likely to predict long-term clinical benefit, or reliance upon data obtained
from a meaningful number of sites (including through expansion to additional sites) so as to remove any likelihood of site-specific or
investigator-specific bias on the evidence of effectiveness. Once approved, when appropriate, FDA can permit fulfillment of post-approval
requirements for RMATs receiving accelerated approval through the submission of clinical evidence, clinical studies, patient registries,
or other sources of real-world evidence such as electronic health records; through the collection of larger confirmatory datasets; or
through post-approval monitoring of all patients treated with the therapy prior to approval.

Fast track designation, breakthrough therapy designation,
priority review, accelerated approval, and RMAT designation do not change the standards for approval but may expedite the development
or approval process.

Patent Term Restoration and Marketing Exclusivity

After approval, owners of relevant drug or biological
product patents may apply for up to a five year term patent extension to restore a portion of patent term lost during product development
and FDA review of a BLA if approval of the application is the first permitted commercial marketing or use of a drug or biologic containing
the active ingredient under the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman
Act. The allowable patent term extension is calculated as one-half of the product’s testing phase, which is the time between the
effective date of an IND and initial BLA submission, and all of the approval phase, which is the time between BLA submission and approval,
up to a maximum of five years. The time can be shortened if the FDA determines that the applicant did not pursue approval with due
diligence. The total patent term after the extension may not exceed 14 years from the date of FDA approval of the product. Only one
patent claiming each approved product is eligible for restoration and the patent holder must apply for restoration within 60 days
of approval, even if the product cannot be commercially marketed at that time. The USPTO, in consultation with FDA, reviews and approves
the application for patent term restoration.

For patents that might expire during the BLA application
phase, the patent owner may request an interim patent extension. An interim patent extension increases the patent term by one year and
may be renewed up to four times. For each interim patent extension granted, the post-approval patent extension is reduced by one year.
The director of the USPTO must determine that approval of the product candidate covered by the patent for which a patent extension is
being sought is likely. Interim patent extensions are not available for a product candidate for which a BLA has not been submitted.

Biosimilars and Marketing Exclusivities

The Biologics Price Competition and Innovation Act
(“BPCIA”) created an abbreviated approval pathway for biological product candidates shown to be highly similar to or interchangeable
with an FDA licensed biological product. A biological product on which another biological product candidate’s BLA relies to establish
bio similarity is known as a reference product. Bio similarity sufficient to reference a prior FDA-approved product requires that there
be no differences in conditions of use, route of administration, dosage form and strength, and no clinically meaningful differences between
the biological product candidate and the reference product in terms of safety, purity, and potency. Bio similarity must be shown through
analytical trials, animal trials and at least one clinical trial, unless the Secretary of HHS waives a required element. A biosimilar
product candidate may be deemed interchangeable with a prior approved product if it meets the higher hurdle of demonstrating that it can
be expected to produce the same clinical results as the reference product and, for products administered multiple times, the biological
product candidate and the reference biologic may be switched after one has been previously administered without increasing safety risks
or risks of diminished efficacy relative to exclusive use of the reference biologic. Complexities associated with the larger, and often
more complex, structures of biologics, as well as the process by which such products are manufactured, pose significant hurdles to implementation
of the abbreviated approval pathway that are still being resolved by FDA.

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A reference biologic is granted 12 years of exclusivity
from the time of first licensure of the reference product, and no application for a biosimilar can be submitted for four years from
the date of licensure of the reference product. The first biological product candidate submitted under the abbreviated approval pathway
that is determined to be interchangeable with the reference product has exclusivity against a finding of interchangeability for other
biologics for the same condition of use for the lesser of (i) one year after first commercial marketing of the first interchangeable
biosimilar, (ii) 18 months after the first interchangeable biosimilar is approved if there is no patent challenge, (iii) 18 months
after resolution of a lawsuit over the patents of the reference biologic in favor of the first interchangeable biosimilar applicant, or
(iv) 42 months after the first interchangeable biosimilar’s application has been approved if a patent lawsuit is ongoing
within the 42 month period. At this time, it is unclear whether products deemed “interchangeable” by FDA will, in fact, be
readily substituted by pharmacies, which are governed by state pharmacy laws and regulations.

Healthcare Regulation

Coverage, Pricing, and Reimbursement

Our ability to successfully commercialize any products
for which we receive regulatory approval for commercial sale will depend, in part, on the extent to which third-party payors provide coverage
and establish adequate reimbursement levels for such products, and significant uncertainty exists as to the coverage and reimbursement
status of any products for which may we obtain regulatory approval. In the United States, third-party payors include federal and
state health care programs, private managed care providers, health insurers and other organizations. The process for determining whether
a third-party payor will provide coverage for a product may be separate from the process for setting the price of a product or for establishing
the reimbursement rate that such a payor will pay for the product. Third-party payors may limit coverage to specific products on an approved
list, also known as a formulary, which might not include all of the FDA-approved products for a particular indication. Third-party payors
are increasingly challenging the price, examining the medical necessity, and reviewing the cost-effectiveness of medical products, therapies,
and services, in addition to questioning their safety and efficacy. We may need to conduct expensive pharmaco-economic studies in order
to demonstrate the medical necessity and cost-effectiveness of our products, in addition to the costs required to obtain the FDA approvals.
Our product candidates may not be considered medically necessary or cost-effective. A payor’s decision to provide coverage for a
product does not imply that an adequate reimbursement rate will be approved. Further, one payor’s determination to provide coverage
for a product does not assure that other payors will also provide coverage for the product. Adequate third-party reimbursement may not
be available to enable us to maintain price levels sufficient to realize an appropriate return on our investment in product development.

The marketability of any product candidates for which
we receive regulatory approval for commercial sale may suffer if the government and third-party payors fail to provide adequate coverage
and reimbursement. In addition, emphasis on managed care in the United States has increased and we expect will continue to increase
the pressure on healthcare pricing. Coverage policies and third-party reimbursement rates may change at any time. Even if favorable coverage
and reimbursement status is attained for one or more products for which we receive regulatory approval, less favorable coverage policies
and reimbursement rates may be implemented in the future.

Other Healthcare Laws and Compliance Requirements

Although we currently do not have any commercialized
products, our current and future business operations may be subject to additional healthcare regulation and enforcement by the federal
government and by authorities in the states and foreign jurisdictions in which we conduct our business. Such laws include, without limitation,
state and federal anti-kickback, fraud and abuse, false claims, privacy and security, price reporting and physician sunshine laws. Some
of our pre-commercial activities are subject to some of these laws.

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The federal Anti-Kickback Statute makes it illegal
for any person or entity, including a prescription drug manufacturer or a party acting on its behalf to knowingly and willfully, directly
or indirectly, solicit, receive, offer, or pay any remuneration in cash or in kind that is intended to induce or reward the referral of
business, including the purchase, order, or lease of any item or service for which payment may be made under a federal healthcare program,
such as Medicare or Medicaid. The term “remuneration” has been broadly interpreted to include anything of value. The Anti-Kickback
Statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on one hand and prescribers, purchasers, formulary
managers and beneficiaries on the other.

Although there are a number of statutory exceptions
and regulatory safe harbors protecting some common activities from prosecution, the exceptions and safe harbors are drawn narrowly. Practices
that involve remuneration that may be alleged to be intended to induce prescribing, purchases or recommendations may be subject to scrutiny
if they do not qualify for an exception or safe harbor. Failure to meet all of the requirements of a particular applicable statutory exception
or regulatory safe harbor does not make the conduct per se illegal under the Anti-Kickback Statute. Instead, the legality of the arrangement
will be evaluated on a case-by-case basis based on a cumulative review of all its facts and circumstances. Several courts have found that
the Anti-Kickback Statute may be violated if any one purpose of an arrangement involving remuneration is to induce referrals of federal
healthcare program business. In addition, liability may be established without actual knowledge of the statute or specific intent to violate
it. Violations of this law are punishable by up to ten years in prison, and can also result in criminal fines, civil money penalties
and exclusion from participation in federal healthcare programs.

Moreover, a claim including items or services resulting
from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal civil False
Claims Act.

The federal civil False Claims Act prohibits, among
other things, individuals or entities from knowingly presenting, or causing to be presented, a false or fraudulent claim for payment of
government funds or knowingly making, using, or causing to be made or used, a false record or statement material to an obligation to pay
money to the government or knowingly concealing or knowingly and improperly avoiding, decreasing, or concealing an obligation to pay money
to the federal government. Persons and entities can be held liable under these laws if they are deemed to “cause” the submission
of false or fraudulent claims by, for example, providing inaccurate billing or coding information to customers or promoting a product
off-label. Many pharmaceutical and other healthcare companies have been investigated and have reached substantial financial settlements
with the federal government under the civil False Claims Act for a variety of alleged improper marketing activities, including: providing
free product to customers with the expectation that the customers would bill federal programs for the product; providing sham consulting
fees, grants, free travel and other benefits to physicians to induce them to prescribe the company’s products; and inflating prices
reported to private price publication services, which are used to set drug payment rates under government healthcare programs. Penalties
for federal civil False Claims Act violations may include up to three times the actual damages sustained by the government, plus mandatory
civil penalties of between $13,508 and $27,018 for each separate false claim, and the potential for exclusion from participation in federal
healthcare programs. In addition, although the federal False Claims Act is a civil statute, False Claims Act violations may also implicate
various federal criminal statutes.

The healthcare fraud provisions of the Health Insurance
Portability and Accountability Act (“HIPAA”) prohibit knowingly and willfully executing, or attempting to execute, a scheme
to defraud any healthcare benefit program, including private third-party payors, knowingly and willfully embezzling or stealing from a
healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying,
concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery
of or payment for healthcare benefits, items or services. Like the federal Anti-Kickback Statute, a person or entity does not need to
have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.

Many states have analogous laws and regulations, such
as: state anti-kickback and false claims laws that may apply to sales or marketing arrangements and claims involving healthcare items
or services reimbursed by non-governmental third-party payors, including private insurers; laws that require pharmaceutical companies
to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by
the federal government or otherwise restrict payments that may be made to certain healthcare providers; laws that require drug manufacturers
to report information related to clinical trials or information related to payments and other transfers of value to physicians and other
healthcare providers or marketing expenditures; laws that restrict the ability of manufacturers to offer co-pay support to patients for
certain prescription drugs; and laws and local ordinances that require identification or licensing of sales representatives.

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HIPAA, as amended by the Health Information Technology
for Economic and Clinical Health Act (“HITECH”), and their implementing regulations, mandates, among other things, the adoption
of uniform standards for the electronic exchange of information in common healthcare transactions, as well as standards relating to the
privacy and security of individually identifiable health information, which require the adoption of administrative, physical and technical
safeguards to protect such information. Among other things, HITECH makes HIPAA’s security standards directly applicable to business
associates, defined as independent contractors or agents of covered entities that create, receive, or obtain protected health information
in connection with providing a service for or on behalf of a covered entity. HITECH also increased the civil and criminal penalties that
may be imposed against covered entities and business associates and gave state attorneys general new authority to file civil actions for
damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorney’s fees and costs associated with pursuing
federal civil actions. In addition, certain state laws govern the privacy and security of health information in certain circumstances,
some of which are more stringent than HIPAA and many of which differ from each other in significant ways and may not have the same effect,
thus complicating compliance efforts. Failure to comply with these laws, where applicable, can result in the imposition of significant
civil and/or criminal penalties.

The U.S. federal Physician Payment Sunshine Act,
implemented as the Open Payments Program, requires manufacturers of drugs, devices, biologics, and medical supplies for which payment
is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to
CMS information related to direct or indirect payments and other transfers of value to physicians and teaching hospitals (and certain
other practitioners as of 2022), as well as ownership and investment interests held in the company by physicians and their immediate family
members.

Because we intend to commercialize products that could
be reimbursed under a federal health care program and other governmental healthcare programs, we intend to develop a comprehensive compliance
program that establishes internal control to facilitate adherence to the rules and program requirements to which we will or may become
subject. Although the development and implementation of compliance programs designed to establish internal control and facilitate compliance
can mitigate the risk of investigation, prosecution, and penalties assessed for violations of these laws, the risks cannot be entirely
eliminated.

If our operations are found to be in violation of
any of such laws or any other governmental regulations that apply to us, we may be subject to penalties, including, without limitation,
administrative, civil and criminal penalties, damages, fines, disgorgement, contractual damages, reputational harm, diminished profits
and future earnings, the curtailment or restructuring of our operations, exclusion from participation in federal and state healthcare
programs and individual imprisonment, any of which could adversely affect our ability to operate our business and our financial results.

Health Care Reforms

In the United States and some foreign jurisdictions,
there have been, and continue to be, legislative and regulatory changes and proposed changes regarding the healthcare system that could
prevent or delay marketing approval of product candidates, restrict or regulate post-approval activities, and affect the ability to profitably
sell product candidates for which marketing approval is obtained. Among policy makers and payors in the United States and elsewhere,
there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving
quality and/or expanding access. In the United States, the pharmaceutical industry has been a particular focus of these efforts and
has been significantly affected by major legislative initiatives.

For example, the Affordable Care Act (“ACA”)
substantially changed the way healthcare is financed by both the government and private insurers, and significantly impacts the U.S. pharmaceutical
industry. The ACA contains provisions that may reduce the profitability of drug products through increased rebates for drugs reimbursed
by Medicaid programs, extension of Medicaid rebates to Medicaid managed care plans, mandatory discounts for certain Medicare Part D
beneficiaries, and annual fees based on pharmaceutical companies’ share of sales to federal health care programs. The ACA made several
changes to the Medicaid Drug Rebate Program, including increasing pharmaceutical manufacturers’ rebate liability by raising the
minimum basic Medicaid rebate. The ACA also expanded the universe of Medicaid utilization subject to drug rebates by requiring pharmaceutical
manufacturers to pay rebates on Medicaid managed care utilization and by enlarging the population potentially eligible for Medicaid drug
benefits.

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There have been judicial challenges to certain aspects
of the ACA, as well as efforts by Congress to modify, and by agencies to alter the implementation of, certain aspects of the ACA. For
example, Congress eliminated the tax penalty for failure to comply with the ACA’s individual mandate to carry health insurance.
Further, the Bipartisan Budget Act of 2018, among other things, amended the ACA to increase from 50 percent to 70 percent the
point-of-sale discount that is owed by pharmaceutical manufacturers who participate in Medicare Part D to close the coverage gap
in most Medicare drug plans, commonly referred to as the donut hole.

It is possible that the ACA, as currently enacted
or as may be amended in the future, as well as other healthcare reform measures, including those that may be adopted in the future, may
result in more rigorous coverage criteria, and less favorable payment methodologies, or other downward pressure on coverage and payment
and the price that we receive for any approved product. Any reduction in reimbursement or restriction on coverage under Medicare or other
federal health care programs may result in a similar reduction or restriction by private payors.

Other legislative changes have been proposed and adopted
in the U.S. since the ACA was enacted. For example, the Inflation Reduction Act introduces several changes to the Medicare Part D
benefit, including a limit on annual out-of-pocket costs and a change in manufacturer liability under the program which could negatively
affect the profitability of our product candidates. The IRA sunsets the current Part D coverage gap discount program starting in
2025 and replaces it with a new manufacturer discount program. Failure to pay a discount under this new program will be subject to a civil
monetary penalty. In addition, the IRA establishes a Medicare Part B inflation rebate scheme effective January 2023 and a Medicare
Part D inflation rebate scheme effective October 2022, under which, generally speaking, manufacturers will owe rebates if the
price of a Part B or Part D drug increases faster than the pace of inflation. Failure to timely pay a Part B or D inflation
rebate is subject to a civil monetary penalty. The IRA also creates a drug price negotiation program under which the prices for Medicare
units of certain high Medicare spend drugs and biologicals without generic or biosimilar competition will be capped by reference to, among
other things, a specified non-federal average manufacturer price starting in 2026. Failure to comply with requirements under the drug
price negotiation program is subject to an excise tax and/or a civil monetary penalty. Congress continues to examine various policy proposals
that may result in pressure on the prices of prescription drugs with respect to the government health benefit programs and otherwise.
The IRA or other legislative changes could impact the market conditions for our product candidates.

In general, there has been heightened governmental
scrutiny over the manner in which drug manufacturers set prices for their commercial products, which has resulted in several Congressional
inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to drug product
pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies
for drug products. At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control
pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain
product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other
countries and bulk purchasing.

Drug Pedigree Laws

State and federal governments have proposed or enacted
various drug pedigree laws which can require the tracking of all transactions involving prescription drugs from the manufacturer to the
pharmacy (or other dispensing) level. Companies are required to maintain records documenting the chain of custody of prescription drug
products beginning with the purchase of such products from the manufacturer. Compliance with these pedigree laws requires implementation
of extensive tracking systems as well as heightened documentation and coordination with customers and manufacturers. While we fully intend
to comply with these laws, there is uncertainty about future changes in legislation and government enforcement of these laws. Failure
to comply could result in fines or penalties, as well as loss of business that could have a material adverse effect on our financial results.

Federal Regulation of Patent Litigation Settlements
and Authorized Generic Arrangements

As part of the Medicare Prescription Drug, Improvement,
and Modernization Act of 2003, companies are required to file with the U.S. Federal Trade Commission (“FTC”)
and the U.S. Department of Justice certain types of agreements entered into between brand and generic pharmaceutical companies related
to the settlement of patent litigation or manufacture, marketing and sale of generic versions of branded drugs. This requirement could
affect the manner in which generic drug manufacturers resolve intellectual property litigation and other disputes with brand pharmaceutical
companies and could result generally in an increase in private-party litigation against pharmaceutical companies or additional investigations
or proceedings by the FTC or other governmental authorities.

25

Other

The U.S. federal government, various states and
localities have laws regulating the manufacture and distribution of pharmaceuticals, as well as regulations dealing with the substitution
of generic drugs for branded drugs. Our operations are also subject to regulation, licensing requirements and inspection by the states
and localities in which our operations are located or in which we conduct business.

Certain of our activities are also subject to FTC
enforcement actions. The FTC enforces a variety of antitrust and consumer protection laws designed to ensure that the nation’s markets
function competitively, are vigorous, efficient and free of undue restrictions. Federal, state, local and foreign laws of general applicability,
such as laws regulating working conditions, also govern us.

In addition, we are subject to numerous and increasingly
stringent federal, state and local environmental laws and regulations concerning, among other things, the generation, handling, storage,
transportation, treatment and disposal of toxic and hazardous substances, the discharge of pollutants into the air and water and the cleanup
of contamination. We are required to maintain and comply with environmental permits and controls for some of our operations, and these
permits are subject to modification, renewal and revocation by the issuing authorities. Our environmental capital expenditures and costs
for environmental compliance may increase in the future as a result of changes in environmental laws and regulations or increased manufacturing
activities at any of our facilities. We could incur significant costs or liabilities as a result of any failure to comply with environmental
laws, including fines, penalties, third-party claims and the costs of undertaking a clean-up at a current or former site or at a site
to which our wastes were transported. In addition, we have grown in part by acquisition, and our diligence may not have identified environmental
impacts from historical operations at sites we have acquired in the past or may acquire in the future.

Employees

As of the date of this Annual Report, we have
seven (7) full time employees. We have no part-time employees and we engage one consultant. We believe that we maintain good relations
with our employees.

INFORMATION ABOUT THE BUSINESS OF MINDWAVE INNOVATIONS
INC

Unless the context otherwise indicates or requires,
all references in this section to “we,” “us,” “our,” “our company” “the Company”
and “MindWave” refer to MindWave Innovations Inc

MindWave Innovations Inc (“MindWave,”
the “Company,” “we,” “us” or “our”) is a technology platform company focused on institutional
Digital Asset Treasury (“DAT”) solutions, centered on enabling corporations and institutions to hold, manage, and generate
yield on Bitcoin reserves through a compliant, scalable infrastructure. Our strategic model integrates secure digital treasury wallets,
AI-supported Bitcoin yield programs, and a validator-enabled ecosystem supported by our native token, $NILA. TechyTrade Innovations
Pte. Ltd. is a Singapore exempt private company and wholly owned subsidiary of MindWave Innovations Inc (“TechyTrade (Singapore)”). TechyTrade
FZ LLC is a limited liability company operating under the laws of the Ras Al Khaimah Economic Zone is a wholly owned subsidiary of TechyTrade
Singapore (“TechyTrade (Dubai)”). MindWave operates through an international structure that includes TechyTrade (Singapore)
and TechyTrade (Dubai), which contains the primary business operations of MindWave.

Our balance sheet strategy is designed to align with
our DAT offering. TechyTrade (Dubai) owns or controls 1,000 Bitcoin free of encumbrances, identifiable and segregated within a sub-wallet
architecture created and administered by MindWave Ltd. for the benefit of TechyTrade (Dubai), with private keys and beneficial ownership
retained by TechyTrade (Dubai). TechyTrade (Dubai) has no indebtedness other than trade payables, which were less than fifty percent of
cash on hand. This reserve posture is intended to preserve purchasing power, provide continuous exposure to Bitcoin, and support our yield
infrastructure without requiring asset sales.

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We intend to commercialize our principal DAT offerings
for institutional clients, which comprise: (i) secure corporate Bitcoin treasury infrastructure designed for public-company balance
sheets and institutional controls; (ii) AI-supported Bitcoin yield strategies intended to deliver risk-managed, programmatic yield
including InsureTech; and (iii) a validator-enabled ecosystem that supports utility and governance via $NILA across interoperable
verticals, including AdTech engagement platforms and ClimateTech impact systems, as described in our technical materials. Custody of client
assets is expected to occur through regulated third-party providers and institutional-grade wallet solutions, implemented within a segregation
and control framework consistent with institutional compliance requirements.

Our operating framework is designed around Bitcoin
as the core reserve and risk collateral reference for treasury and yield solutions. We expect to avoid hybrid collateral models in favor
of a Bitcoin-centric approach that is transparent, simple, and consistent with our treasury and platform design. Within our ecosystem,
$NILA functions as an economic and governance substrate to activate services, enable staking mechanisms that align incentives, and facilitate
validator economics across our interoperable platforms.

We intend to serve corporate treasuries and institutions
that maintain or plan to maintain Bitcoin reserves and require scalable, compliant DAT capabilities. We also expect to support high-net-worth
individuals and funds seeking institutional controls for Bitcoin reserve management and programmatic yield. Consistent with institutional
practices, our anticipated operations emphasize transparency and risk management, including conservative collateralization where relevant
to client programs, real-time risk monitoring, and robust anti-money laundering (AML) and know-your-customer (KYC) processes. We are pursuing
strategic relationships with financial institutions, placement agents, and digital-asset service providers to support custody, treasury
operations, and capital formation for expansion of our platform.

We believe that our combination of (i) an institutional
Bitcoin reserve posture supported by segregated custody architecture and independent attestation, (ii) AI-enhanced yield strategies
integrated into a controlled DAT stack, and (iii) a validator-enabled ecosystem powered by $NILA positions us to meet emerging institutional
demand for Bitcoin treasury solutions. In connection with our merger with Apimeds Pharmaceuticals US, Inc., our DAT platform is expected
to be operated within a publicly listed structure, with Apimeds’ biopharmaceutical business continuing within a subsidiary post-closing,
and capital formation initiatives contemplated to support both the DAT platform and biopharmaceutical development. We believe this structure
enhances our ability to scale client adoption while maintaining regulatory discipline and institutional-grade controls.

General Development of Our Business

MindWave Innovations Inc was incorporated in the State
of Delaware in 2025. On December 1, 2025, MindWave signed and closed an Agreement and Plan of Merger with Apimeds Pharmaceuticals
US, Inc. (“Apimeds”), Apimeds Merger Sub, Inc. (“Merger Sub”), Lokahi Therapeutics, Inc., and Erik
Emerson, pursuant to which Merger Sub merged with and into MindWave, with MindWave surviving as a wholly owned subsidiary of Apimeds (the
“Merger”).

Following the Merger, we have focused our development
efforts on scaling an institutional DAT platform. Consistent with our treasury reserve posture, our group maintains Bitcoin as its core
reserve asset. As previously mentioned, TechyTrade (Dubai) owns and controls 1,000 Bitcoin, identifiable and segregated in sub-wallets
administered by MindWave Ltd.

Our principal activities consist of: (i) building
our institutional DAT stack, including secure corporate Bitcoin treasury infrastructure and AI-supported Bitcoin yield strategies; (ii) implementing
and attesting to our Bitcoin reserve and segregated custody architecture; and (iii) forming relationships with regulated custodians,
wallet and validator providers, financial institutions, and placement agents to support custody, risk management, compliance (including
AML/KYC), and capital formation. We are in the execution stage and are preparing for commercialization of our DAT offerings.

Roadmap and Milestones

Our near-term priorities focus on: (i) onboarding
initial institutional clients to our corporate Bitcoin treasury infrastructure; (ii) progressing AI-supported, risk-managed yield
programs under defined policy and control frameworks; (iii) standing up enterprise validator services to support network participation
and governance; and (iv) advancing development of our ClimateTech, AdTech, and InsurTech verticals to interoperate with our DAT stack.
Over time, we intend to expand treasury management capabilities, scale validator operations, and develop ecosystem utility, subject to
applicable regulatory requirements, market conditions, and governance approvals.

27

Our Treasury Strategy and Digital Asset Treasury
Platform

Bitcoin Treasury Strategy

We believe that Bitcoin is an attractive
reserve asset because (i) it can serve as a store of value supported by a robust, public, open-source architecture that is independent
of sovereign monetary policy, (ii) its fixed supply offers the potential to serve as a long-term hedge against inflation and, as
adoption increases, the opportunity for appreciation, and (iii) the Bitcoin network provides infrastructure for financial and technological
innovation.

We were formed with the intention of operating an
institutional-focused Digital Asset Treasury (“DAT”) platform, and our group has adopted a Bitcoin-centric reserve posture aligned
with that platform. Under this posture, our treasury reserve assets consist principally of:

●Cash and cash equivalents sufficient for working capital
and operational needs; and

●Bitcoin held at the operating-subsidiary level as our primary
reserve asset, maintained within a segregated sub-wallet architecture and free of encumbrances, subject to business needs and market
conditions.

Consistent with this reserve posture, we may from
time to time evaluate capital raising transactions to support platform development, working capital, and expansion of our reserve
strategy. We expect future capital allocation decisions to consider market conditions, risk management, regulatory considerations, and
anticipated operating requirements. Our strategy contemplates that we may (i) periodically rebalance or sell Bitcoin for general
corporate purposes, (ii) utilize our Bitcoin reserve within conservative, risk-managed programs that support our yield and validator
infrastructure, and (iii) evaluate compliant structures to generate programmatic returns consistent with institutional practices
and applicable law.

We also plan to conduct advocacy and educational
initiatives regarding institutional Bitcoin treasury standards, custody segregation, controls, and reporting, including thought leadership
and partnerships intended to support the broader adoption of compliant corporate Bitcoin treasury operations.

DAT Yield and Validator Infrastructure

Our core offerings center on an institutional
DAT stack designed to help corporations and institutions hold, manage, and generate yield on Bitcoin reserves. Key components include:

●Institutional treasury infrastructure. Secure
wallet architecture with segregation and controls designed to align with public-company balance sheet requirements and institutional
compliance frameworks.

●AI-supported yield programs. Risk-managed
strategies intended to produce programmatic returns on Bitcoin reserves, with governance and monitoring controls suitable for institutional
participants.

●Validator-enabled ecosystem. Operations
that support network economics and governance across our ecosystem, including utility powered by our native token, $NILA.

Client assets, if and when onboarded, are expected
to be held through regulated third-party custodians or institutional-grade wallet solutions within a segregation and control
framework consistent with AML/KYC and other applicable requirements. We emphasize conservative collateralization (where relevant to client
programs), real-time risk monitoring, and robust compliance processes.

Our Bitcoin Holdings

On March 31, 2025, TechyTrade (Dubai) entered
into an Asset Purchase Agreement with MindWave Ltd., pursuant to which TechyTrade (Dubai) acquired 1,000 bitcoin. The bitcoin are held
free of encumbrances within a segregated sub-wallet architecture administered by MindWave Ltd. We did not sell any bitcoin during 2024
or 2025.

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Our Industry Overview

Bitcoin Industry

Bitcoin is a digital asset that is issued by and transmitted
through an open-source protocol, known as the Bitcoin protocol, collectively maintained by a peer-to-peer network of decentralized user
nodes. This network hosts a public transaction ledger, known as the Bitcoin blockchain, on which bitcoin holdings and all validated transactions
that have ever taken place on the Bitcoin network are recorded. Balances of bitcoin are stored in individual “wallet” functions,
which associate network public addresses with one or more “private keys” that control the transfer of bitcoin. The Bitcoin
blockchain can be updated without any single entity owning or operating the network.

Creation of New Bitcoin and Limits on Supply

The Bitcoin protocol limits the total number of bitcoins
that can be generated over time to 21 million. As of October 2025, approximately 19.93 million bitcoins have been generated.
New bitcoins are created and allocated by the Bitcoin protocol through a “mining” process that rewards users that validate
transactions in the Bitcoin blockchain. Validated transactions are added in “blocks” approximately every 10 minutes. The mining
process serves to validate transactions and secure the Bitcoin network. Mining is a competitive and costly operation that requires a large
amount of computational power to solve complex mathematical algorithms. This expenditure of computing power is known as “proof of
work.”

To incentivize miners to incur the costs of mining
bitcoin, the Bitcoin protocol rewards miners that successfully validate a block of transactions with newly generated bitcoin. The current
reward for miners that successfully validate a block of transactions is 3.125 bitcoin per mined block. The mining reward is reduced by
half, which is referred to as a bitcoin halving, after every 210,000 blocks are mined. This has historically occurred approximately every
four years. The most recent bitcoin halving occurred in April 2024, and the next bitcoin halving is expected to occur sometime
in 2028.

Modifications to the Bitcoin Protocol

Bitcoin is an open-source network that has no central
authority, so no one person can unilaterally make changes to the software that runs the network. However, there is a core group of developers
that maintains the code for the Bitcoin protocol, and they can propose changes to the source code and release periodic updates and other
changes. Unlike most software that has a central entity that can push updates to users, bitcoin is a peer-to-peer network in which individual
network participants, called nodes, decide whether to upgrade the software and accept the new changes. As a practical matter, a modification
becomes part of the Bitcoin protocol only if the proposed changes are accepted by participants collectively having more than 50% of the
processing power, known as hash rate, on the network. If a certain percentage of the nodes reject the changes, then a “fork”
takes place, and participants can choose the version of the software they want to run.

Forms of Attack Against the Bitcoin Network and
Wallets

Blockchain technology has many built-in security features
that make it difficult for hackers and other malicious actors to corrupt the protocol or blockchain. However, as with any computer network,
the Bitcoin network may be subject to certain attacks. Some forms of attack include unauthorized access to wallets that hold bitcoin and
direct attacks, like “51% attacks” or “denial-of-service attacks” on the Bitcoin network.

Bitcoin is controllable only by the possessor of both
the unique public key and private key(s) relating to the local or online digital wallet in which the bitcoin is held. Private keys
used to access bitcoin balances are not widely distributed and are typically held on hardware (which can be physically controlled by the
holder or by a third party such as a custodian) or via software programs on third-party servers. One form of obtaining unauthorized access
to a wallet occurs following a phishing attack where the attacker deceives the victim and manipulates them into sharing their private
keys for their digital wallet or other sensitive information. Other similar attacks may also result in the loss of private keys and the
inability to access, and effective loss of, the corresponding bitcoin.

A “51% attack” may occur when a group
of miners attain more than 50% of the Bitcoin network’s mining power, thereby enabling them to control the Bitcoin network and protocol
and manipulate the blockchain. A “denial-of-service attack” occurs when legitimate users are unable to access information
systems, devices, or other network resources due to the actions of a malicious actor flooding the network with traffic until the network
is unable to respond or crashes. The Bitcoin network has been, and can be in the future, subject to denial-of-service attacks, which can
result in temporary delays in block creation and in the transfer of bitcoin.

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Bitcoin Industry Participants

The primary Bitcoin industry participants are miners,
investors and traders, digital asset exchanges and service providers, including custodians, brokers, payment processors, wallet providers
and financial institutions.

Miners. Miners range from bitcoin enthusiasts
to professional mining operations that design and build dedicated mining machines and data centers, including mining pools, which are
groups of miners that act cohesively and combine their processing power to mine bitcoin blocks. See “— Creation
of New Bitcoin and Limits on Supply” above.

Investors and Traders. Bitcoin investors
and traders include individuals and institutional investors who, directly or indirectly, purchase, hold, and sell bitcoin or bitcoin-based
derivatives. On January 10, 2024, the Securities and Exchange Commission (“SEC”) issued an order approving several
applications for the listing and trading of shares of spot bitcoin exchange-traded products (“ETPs”) on U.S. national
securities exchanges. While the SEC had previously approved exchange-traded funds where the underlying assets were bitcoin futures contracts,
this order represented the first time the SEC approved the listing and trading of ETPs that acquire, hold and sell bitcoin directly. ETPs
can be bought and sold on a stock exchange like traditional stocks, and provide investors with another means of gaining economic exposure
to bitcoin through traditional brokerage accounts.

Digital Asset Exchanges. Digital asset
exchanges provide trading venues for purchases and sales of bitcoin in exchange for fiat or other digital assets. Bitcoin can be exchanged
for fiat currencies, such as the U.S. dollar, at rates of exchange determined by market forces on bitcoin trading platforms, which
are not regulated in the same manner as traditional securities exchanges. In addition to these platforms, over-the-counter markets and
derivatives markets for bitcoin also exist. The value of bitcoin within the market is determined, in part, by the supply of and demand
for bitcoin in the global bitcoin market, market expectations for the adoption of bitcoin as a store of value, the number of merchants
that accept bitcoin as a form of payment, and the volume of peer-to-peer transactions, among other factors.

Service providers. Service providers offer
a multitude of services to other participants in the Bitcoin industry, including custodial and trade execution services, commercial and
retail payment processing, wallet solutions and financial institutions. If adoption of the Bitcoin network continues to materially increase,
we anticipate that service providers may expand the currently available range of services and that additional parties will enter the service
sector for the Bitcoin network.

Other Digital Assets

As of the date of this Annual Report, bitcoin
was the largest digital asset by market capitalization. However, numerous alternative digital assets exist, and many entities, including
consortia and financial institutions, are actively researching and investing resources in blockchain platforms and digital assets that
utilize consensus mechanisms other than proof-of-work mining, which is employed by the Bitcoin network. For example, in late 2022, the
Ethereum network transitioned to a “proof-of-stake” mechanism for validating transactions that requires significantly less
computing power than proof-of-work mining. Other alternative digital assets that compete with bitcoin in certain ways include “stablecoins,”
which are designed to maintain a constant price because of their issuers’ promise to hold high-quality liquid assets (such as U.S. dollar
deposits and short-term U.S. treasury securities) equal to the total value of stablecoins in circulation. Stablecoins have grown
rapidly as an alternative to bitcoin and other digital assets as a medium of exchange and store of value, particularly on digital asset
trading platforms. As of December 31, 2024, two of the eight largest digital assets by market capitalization were U.S. dollar-backed
stablecoins.

Additionally, central banks in some countries have
started to introduce digital forms of legal tender. For example, China’s central bank digital currency (“CBDC”)
project was made available to consumers in January 2022, and governments including the United States and the European Union
have discussed the potential creation of new CBDCs.

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Our Market Opportunity for Institutional Bitcoin
Treasury and DAT Solutions

The use of Bitcoin as a corporate treasury reserve
asset has expanded as companies and institutions evaluate alternatives to traditional cash management strategies. While fiat currency
and short-term government securities remain predominant, the emergence of U.S. spot Bitcoin exchange-traded funds and increasing
recognition of Bitcoin as an investable asset class have contributed to broader institutional acceptance. A growing number of public and
private companies, investment funds, and other institutional allocators have begun to evaluate or adopt Bitcoin reserves as a potential
long-term store of value and as a component of diversified treasury strategies.

Despite these developments, adoption of Bitcoin for
treasury purposes remains limited relative to the overall size of global corporate treasury balances. We believe this gap highlights a
meaningful market opportunity for institutional-grade platforms that can provide compliant, transparent, and risk-managed infrastructure
for Bitcoin treasury operations. Key needs we see in the market include secure custody with segregation and controls; governance frameworks
aligned with public-company standards; accounting and reporting support; risk-managed yield programs; and integration into existing treasury
workflows.

We believe there is an opportunity to differentiate
by offering an integrated DAT solution that combines: (i) corporate Bitcoin treasury infrastructure designed for institutional policies
and controls; (ii) AI-supported, risk-managed yield programs intended to produce programmatic returns on reserve assets; and (iii) a
validator-enabled ecosystem that supports network participation and governance, with utility powered by our native token, $NILA. As
institutional comfort and regulatory clarity continue to develop, we expect the use of Bitcoin in treasury management to expand, supported
by demand for transparent, regulated, and operationally disciplined solutions.

In our view, market growth will be driven by several
secular trends: increased institutional access to Bitcoin through regulated vehicles and service providers; enhancements in custody, compliance,
and accounting standards; and the need for end-to-end platforms that allow corporate treasury teams to implement Bitcoin strategies without
building bespoke infrastructure. Our platform is being developed to address these requirements by providing segregation, controls, monitoring,
and reporting consistent with institutional expectations, along with programmatic yield and validator capabilities designed to complement
a Bitcoin-centric reserve posture.

Our Products and Services

Our principal planned products and services focus
on delivering an institutional Digital Asset Treasury (“DAT”) platform that enables corporations and institutions to hold,
manage, and generate yield on Bitcoin reserves through a compliant, scalable infrastructure. We are in the development execution stage
and are actively building the underlying architecture, governance, and partnerships necessary to support future commercialization.

Institutional DAT Platform

●Corporate Bitcoin treasury infrastructure. Segregated wallet
architecture, permissions and controls, and reporting designed to align with institutional compliance frameworks and public-company balance
sheet requirements.

●AI-supported yield programs. Risk-managed strategies intended
to produce programmatic returns on Bitcoin reserves, with governance, monitoring, and risk limits tailored for institutional participants.

●Validator-enabled ecosystem. Network operations that support
validator economics and governance across our interoperable platforms, with utility powered by our native token, $NILA.

●Compliance and risk management. Policies and tooling addressing
AML/KYC, ongoing monitoring, collateral and reserve discipline where relevant to client programs, and real-time risk analytics.

●Advisory and enablement. Onboarding and operational support
to help clients adopt institutional Bitcoin treasury standards, including segregation, reconciliation, and controls.

Treasury Reserve and Bitcoin Strategy

Our group maintains a Bitcoin-centric reserve posture
that aligns with our DAT platform. This approach is intended to preserve purchasing power, provide continuous exposure to Bitcoin, and
support our yield and validator infrastructure. From time to time, we may evaluate capital raising transactions to fund platform development,
operations, and reserve strategy, subject to market conditions, risk management, regulatory considerations, and anticipated operating
needs.

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Custody and Execution Services

We intend to utilize regulated third-party custodians
and institutional-grade wallet solutions for the safekeeping of any client assets onboarded to our platform, as well as our operating-subsidiary
reserves. These providers are expected to support secure custody, segregation, and controls, and to offer affiliated execution services
for Bitcoin acquisitions and dispositions consistent with institutional best practices.

Ecosystem Verticals Powered by $NILA

In addition to our core Digital Asset Treasury (“DAT”)
platform, we operate interoperable verticals powered by our native token, $NILA, which enables governance, utility, and value flow across
our ecosystem.

●ClimateTech (AQUAE Impact). One our ecosystems is a blockchain-powered
sustainability engine intended to generate verifiable, insured environmental impact outcomes, including fractionalized credits linked
to analog forest projects and other conservation efforts. The roadmap contemplates phases focused on expanding analog forest capacity,
introducing water-conservation and biodiversity credits, and building a secondary market for the exchange of such credits.

●AdTech (Wave+). Another ecosystem is a micro-engagement
platform to convert user attention into tokenized value for brand and mission-aligned campaigns. The platform is designed to support
daily active engagement, with contemplated revenue streams from ad placements, partner campaigns, and conversion fees.

●InsurTech (Institutional Insurance Engine). We are designing
an insurance framework to complement digital treasury strategies through surplus-capital-style models backed by strengthened, Bitcoin-centric
balance sheets. The goal is to support treasury protection, parametric digital-asset coverage, and institutional insurance primitives
that can be integrated with our DAT platform.

Validator Infrastructure

We intend to operate enterprise-grade validator nodes
to support network participation, governance, and rewards within our ecosystem and for institutional clients. The validator stack
is being developed with an emphasis on high availability, slashing prevention, hardware security (including HSM/TEE-based protections),
governance controls, and policy-limited MEV/PBS participation. Anticipated revenue drivers include staking rewards, protocol incentives,
enterprise validator service fees, and ecosystem transaction fees.

Revenue Model

Our contemplated revenue model includes multiple streams
that align with institutional treasury adoption:

●Treasury Management Fees: Asset-under-management-based
fees for corporate treasury wallets and related services.

●Performance and Program Fees: Participation in net returns
from AI-supported yield programs, subject to institutional governance and risk policies.

●Validator Services and Protocol Incentives: Enterprise
staking and validator service fees, protocol-derived incentives, and transaction-based revenues tied to ecosystem activity. Monetization
associated with ClimateTech (e.g., fractionalized credits), AdTech (campaign and placement revenue), and InsurTech-related structures,
where applicable.

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Our Customers

We target enterprise clients that require institutional
governance, custody segregation, and audit-ready reporting for Bitcoin treasury operations, including public and private corporate treasury
teams, institutional investors and asset managers, financial institutions and intermediaries, and high-net-worth organizations with significant
Bitcoin reserves. We aim to integrate into CFO, treasury, and risk committee workflows, including policy design, compliance and accounting
support, and board-level reporting.

We have generated revenues and do not currently rely
on any single customer for more than 10% of our revenues.

Our Market Positioning

We believe our market positioning is strengthened
by the integration of our institutional Digital Asset Treasury (“DAT”) platform, segregated custody architecture, and
Bitcoin-centric reserve posture. Our platform is designed to enable corporations and institutions to implement Bitcoin treasury operations
with the governance, controls, and reporting expected by institutional stakeholders, while complementing those reserves with AI-supported,
risk-managed yield programs and validator participation within our broader ecosystem.

Our Bitcoin holdings are maintained primarily as a
treasury reserve asset intended to support our balance sheet and operational resilience. Our reserve posture reinforces our credibility
with institutional clients by aligning our incentives with a Bitcoin-centric treasury strategy and by demonstrating disciplined custody,
segregation, and control practices.

By maintaining a Bitcoin-centric reserve posture and
building end-to-end DAT infrastructure, we aim to provide a comprehensive, compliant, and scalable pathway for institutions to adopt Bitcoin
in treasury management. This integration of reserve management, custody controls, yield programs, and validator operations is intended
to enhance risk management, support operational discipline, and provide a foundation for long-term value creation.

Our Competitive Strengths

Platform Governance and $NILA Utility

$NILA functions as a governance and utility token
within our ecosystem, facilitating validator participation, program access, and value exchange across verticals. Governance processes
are designed to be policy-driven and auditable, with the objective of aligning incentives among stakeholders while maintaining institutional
controls. Within our validator framework, we intend to limit protocol participation to policy-permitted activities and to maintain
risk controls, including stake diversification, slashing protection, and real-time monitoring.

We believe the following strengths position us to
compete effectively in the emerging institutional Bitcoin treasury market:

●Institutional DAT stack. End-to-end infrastructure for
corporate Bitcoin treasury operations, including secure wallet architecture, permissions and controls, reconciliation, and reporting
aligned with institutional requirements.

●Segregated custody architecture. Use of institutional-grade
wallet solutions and regulated third-party providers for safekeeping, with segregation and control frameworks designed to mitigate counterparty
and operational risks.

●Bitcoin-centric reserve posture. A treasury strategy centered
on Bitcoin reserves intended to preserve purchasing power, maintain continuous exposure, and support platform credibility with institutional
clients.

●AI-supported yield programs. Risk-managed strategies intended
to produce programmatic returns on reserve assets, governed by policies, monitoring, and limits consistent with institutional risk management.

●Validator-enabled ecosystem. Network participation that
supports validator economics and governance across interoperable platforms, with utility powered by our native token, $NILA.

●Compliance and governance. Emphasis on AML/KYC, surveillance,
and real-time risk monitoring, together with operational controls designed to align with institutional and public-company standards.

●Scalable partner network. Strategic relationships with
custodians, wallet providers, financial institutions, and other service partners to support onboarding, execution, and operational scale.

●Operational discipline. A focus on segregation, transparency,
and audit-ready processes to support institutional adoption and long-term sustainability.

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We believe our integrated approach — combining
corporate Bitcoin treasury infrastructure, AI-supported yield programs, validator operations, and interoperable verticals powered by $NILA — addresses
key adoption barriers by offering a policy-driven, audit-ready, and scalable pathway for institutions. Our multi-vertical design
is intended to enhance network effects and create diversified revenue opportunities aligned with institutional compliance and governance
expectations.

Custody of Our Bitcoin

Our Bitcoin reserve is maintained within a segregated
sub-wallet architecture created and administered by MindWave Ltd. for the benefit of our operating subsidiary, TechyTrade (Dubai). TechyTrade
(Dubai) holds the private keys and retains full beneficial ownership and control of the segregated wallet(s). The 1,000 Bitcoin are identifiable,
segregated, and held free and clear of any encumbrances. This structure is intended to mitigate counterparty exposure associated with
omnibus custody while maintaining operational controls and traceability over our reserve assets.

We conduct diligence and ongoing oversight of our
wallet architecture and related service providers, focusing on segregation, key-management controls, access permissions, and incident-response
procedures. Our controls emphasize least-privilege access, multi-factor authentication, operational separation of duties, and audit trails
for key interactions and movement authorizations. We supplement these controls with periodic independent attestations to verify the existence,
segregation, and control of our Bitcoin holdings as of specified dates.

For any client assets that may be onboarded to our
platform in the future, we expect to utilize regulated third-party custodians and institutional-grade wallet solutions, implemented within
a segregation and control framework designed to meet institutional compliance requirements (including AML/KYC, monitoring, and reporting).
We anticipate diversifying custody solutions as appropriate to support risk management and operational resilience, and we will evaluate
additional custodial partners over time.

Where we engage third-party providers, we expect to
conduct initial and periodic reviews of their security, operations, and controls, including — but not limited to — key-management
practices, cold-storage policies, cybersecurity programs, business continuity and disaster recovery readiness, and the availability of
third-party assurance reporting. We also seek contractual provisions addressing segregation of assets and clarifying that digital assets
held for our benefit are not part of a custodian’s bankruptcy estate under applicable law.

We continuously monitor the safekeeping of our Bitcoin
through internal controls, reconciliation, and external confirmations, and we will conduct supplemental diligence when warranted by market
conditions or other circumstances.

Policy Framework and Risk Management

We are building our platform around policy-based governance
intended to satisfy institutional requirements and auditor expectations. Core elements include board-approved asset allocation and transaction
policies, segregation of duties, multi-step approval workflows, transaction screening, real-time solvency and exposure limits, and emergency
protocol “kill-switches.” For yield programs, we intend to maintain leverage caps, counterparty concentration limits, daily
reconciliations, and tail-risk hedging parameters. For validator operations, we emphasize uptime targets, redundancy, slashing prevention,
and pre-defined MEV/PBS participation rules. We expect to produce periodic “audit packs,” including reconciliations and
control attestations, for institutional users.

Potential Advantages and Disadvantages of Holding
Bitcoin

We believe that bitcoin is an attractive asset because
it can serve as a store of value, supported by a robust and public open-source architecture, that is untethered to sovereign monetary
policy. We also believe that, due to its limited supply, bitcoin offers the potential to serve as a hedge against inflation in the long-term
and, if its adoption increases, the opportunity for appreciation in value.

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Bitcoin exists entirely in electronic form, as virtually
irreversible public transaction ledger entries on the blockchain, and transactions in bitcoin are recorded and authenticated not by a
central repository, but by a decentralized peer-to-peer network. This decentralization mitigates the risks of certain threats common to
centralized computer networks, such as denial-of-service attacks, and reduces the dependency of the bitcoin network on any single system.
The decentralization of user nodes and miners also mitigates the risk of a 51% attack, which would be very costly and difficult to execute
with respect to bitcoin because the Bitcoin network is open source and widely distributed, and transactions on the blockchain require
significant computing power to be validated. However, while the Bitcoin network as a whole is decentralized, the private keys used to
access bitcoin balances are not widely distributed and are susceptible to phishing and other attacks designed to obtain sensitive
information or gain access to password-protected systems. Loss of such private keys can result in an inability to access, and effective
loss of, the corresponding bitcoin. Consequently, bitcoin holdings are susceptible to all of the risks inherent in holding any electronic
data, such as power failure, data corruption, security breach, communication failure and user error, among others. These risks, in turn,
make bitcoin substantially more susceptible to theft, destruction, or loss of value from hackers, corruption, viruses and other technology-specific
factors as compared to conventional fiat currency or other conventional financial assets.

In addition, the Bitcoin network relies on open-source
developers to maintain and improve the Bitcoin protocol. Accordingly, bitcoin may be subject to protocol design changes, governance disputes
such as “forked” protocols, competing protocols, and other open source-specific risks that do not affect conventional proprietary
software.

Government Regulation

The laws and regulations applicable to bitcoin and
digital assets are evolving and subject to interpretation and change.

Governments around the world have reacted differently
to digital assets; certain governments have deemed them illegal, and others have allowed their use and trade without restriction, while
in some jurisdictions, such as the U.S., digital assets are subject to overlapping, uncertain and evolving regulatory requirements.

As digital assets have grown in both popularity and
market size, the U.S. Executive Branch, Congress and a number of U.S. federal and state agencies, including the Financial Crimes
Enforcement Network (“FinCEN”), the Commodity Futures Trading Commission (“CFTC”), the SEC, the Financial Industry
Regulatory Authority (“FINRA”), the Consumer Financial Protection Bureau (“CFPB”), the Department of Justice,
the Department of Homeland Security, the Federal Bureau of Investigation, the Internal Revenue Service (“IRS”) and state financial
regulators, have been examining the operations of digital asset networks, digital asset users and digital asset exchanges, with particular
focus on the extent to which digital assets can be used to violate state or federal laws, including to facilitate the laundering of proceeds
of illegal activities or the funding of criminal or terrorist enterprises, and the safety and soundness and consumer-protective safeguards
of exchanges or other service-providers that hold, transfer, trade or exchange digital assets for users. Many of these state and federal
agencies have issued consumer advisories regarding the risks posed by digital assets to investors. In addition, federal and state agencies,
and other countries have issued rules or guidance regarding the treatment of digital asset transactions and requirements for businesses
engaged in activities related to digital assets.

Depending on the regulatory characterization of bitcoin,
the markets for bitcoin in general, and our activities in particular, our business and our bitcoin strategy may be subject to regulation
by one or more regulators in the United States and globally. Ongoing and future regulatory actions may alter, to a materially adverse
extent, the nature of digital assets markets, the participation of industry participants, including service providers and financial institutions
in these markets, and our ability to pursue our bitcoin strategy. Additionally, U.S. state and federal and foreign regulators and
legislatures have taken action against industry participants, including digital assets businesses, and enacted restrictive regimes in
response to adverse publicity arising from hacks, consumer harm, or criminal activity stemming from digital assets activity. U.S. federal
and state energy regulatory authorities are also monitoring the total electricity consumption of cryptocurrency mining, and the potential
impacts of cryptocurrency mining to the supply and dispatch functionality of the wholesale grid and retail distribution systems. Many
state legislative bodies have passed, or are actively considering, legislation to address the impact of cryptocurrency mining in their
respective states.

The CFTC takes the position that some digital assets,
including bitcoin, fall within the definition of a “commodity” under the Commodities Exchange Act of 1936,
as amended (the “CEA”). Under the CEA, the CFTC has broad enforcement authority to police market manipulation and fraud in
spot digital assets markets in which we may transact. Beyond instances of fraud or manipulation, the CFTC generally does not oversee cash
or spot market exchanges or transactions involving digital asset commodities that do not utilize margin, leverage, or financing. In addition,
CFTC regulations and CFTC oversight and enforcement authority apply with respect to futures, swaps, other derivative products and certain
retail leveraged commodity transactions involving digital asset commodities, including the markets on which these products trade.

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The SEC and its staff have taken the position that
certain other digital assets fall within the definition of a “security” under the U.S. federal securities laws. Public
statements made by senior officials and senior members of the staff at the SEC indicate that the SEC does not consider bitcoin to be a
security under the federal securities laws. However, such statements are not official policy statements by the SEC and reflect only the
speakers’ views, which are not binding on the SEC or any other agency or court and cannot be generalized to any other digital assets.
In addition, since transactions in bitcoin provide a degree of anonymity, they are susceptible to misuse for criminal activities, such
as money laundering. This misuse, or the perception of such misuse, could lead to greater regulatory oversight of bitcoin and Bitcoin
platforms, and there is the possibility that law enforcement agencies could close or blacklist bitcoin platforms or other bitcoin-related
infrastructure with little or no notice and prevent users from accessing or retrieving bitcoin held via such platforms or infrastructure.
For example, the U.S. Treasury Department’s Office of Foreign Assets Control has issued updated advisories regarding the use
of virtual currencies, added a number of digital asset exchanges and service providers to the Specially Designated Nationals and
Blocked Persons list and engaged in several enforcement actions, including a series of enforcement actions that have either shut down
or significantly curtailed the operations of several smaller digital asset exchanges associated with Russian and/or North Korean nationals.
Additionally, in January 2025, the Consumer Financial Protection Bureau announced that it is seeking public input on privacy protections
and surveillance in digital payments, particularly those offered through large technology platforms.

As noted above, activities involving bitcoin and other
digital assets may fall within the jurisdiction of more than one financial regulator and various courts and such laws and regulations
are rapidly evolving and increasing in scope. On January 23, 2025, President Trump issued an executive order titled, Strengthening
American Leadership in Digital Financial Technology. While the executive order did not mandate the adoption of any specific regulations,
the executive order identifies certain key objectives to guide agencies involved in crypto regulation, including (i) protecting the
sovereignty of the United States dollar by promoting the development of United States dollar-backed stablecoins, (ii) providing
regulatory clarity and certainty built on technology-neutral regulations for individuals and firms involved in digital assets, including
through well-defined jurisdictional regulatory boundaries, and (iii) taking measures to protect Americans from the risks of Central
Bank Digital Currencies. To achieve these objectives, the executive order established a working group on digital asset markets within
the National Economic Council, comprised of representatives from key federal agencies, with a tight timeline for examining existing regulations
and proposing a new regulatory framework. There have also been several bills introduced in Congress that propose to establish additional
regulation and oversight of the digital asset markets.

Aspects of our business involve collecting, processing,
disclosing, storing, and transmitting personal data, which are subject to certain privacy policies, contractual obligations, and U.S. and
foreign laws, regulations, and directives relating to privacy and data protection.

There are a broad variety of other data protection
laws in the United States that are or may be applicable to our activities, and a wide range of enforcement agencies at both the state
and federal levels that can review companies for privacy and data security concerns based on general consumer protection laws. The Federal
Trade Commission and state Attorneys General all are aggressive in reviewing privacy and data security protections for consumers. New
laws also are being considered at both the state and federal levels. A broad range of legislative measures also have been introduced at
the federal level. Accordingly, failure to comply with federal and state laws (both those currently in effect and future legislation)
regarding privacy and security of personal information could expose us to fines and penalties under such laws. In the event of a security
breach, we also may have obligations to notify our customers or other parties or individuals about this breach, and this can lead to significant
costs and the risk of potential enforcement and/or litigation. There is also a threat of consumer class actions related to these laws
and the overall protection of personal data. Even if we are not determined to have violated these laws, government investigations into
these issues typically require the expenditure of significant resources and generate negative publicity, which could harm our reputation
and our business.

There are similar laws in other countries, including
the General Data Protection Regulation (“GDPR”) in the European Union which imposes requirements regarding the handling and
security of personal data, requires disclosure of data breaches to individuals, customers, and data protection authorities in certain
circumstances, requires companies to honor data subjects’ requests relating to their personal data, permits regulators to impose
fines of up to €20,000,000 or 4% of global annual revenue, whichever is higher, and establishes a private right of action.

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In addition to these specific laws, we also are subject
to other privacy, security, and data protection laws around the world. In addition to the laws in place already, other countries are also
considering new or expanded laws governing privacy and data security that may impact our business practices. These laws may impact our
ongoing business activities and our relationships with our business partners, customers and service providers.

Furthermore, the U.S. Congress is considering
comprehensive privacy legislation. At this time, it is unclear whether Congress will pass such a law and if so, when and what it will
require and prohibit. Moreover, it is not clear whether any such legislation would give the Federal Trade Commission (“FTC”)
any new authority to impose civil penalties for violations of the Federal Trade Commission Act in the first instance, whether Congress
will grant the FTC rulemaking authority over privacy and information security, or whether Congress will vest some or all privacy and data
security regulatory authority and enforcement power in a new agency, akin to EU data protection authorities.

Sales and Marketing

Our sales and marketing strategy is designed to expand
awareness of our institutional DAT platform, build credibility with corporate treasury teams and institutional allocators, and drive adoption
of our offerings across target enterprise markets. Key elements include strategic partnerships, targeted distribution through enterprise
sales and channels, and education-led marketing that emphasizes governance, compliance, and risk management.

Strategic Partnerships

We intend to rely on strategic relationships with
regulated custodians, institutional-grade wallet providers, financial institutions, accounting and audit advisors, and other digital-asset
service providers to support our treasury operations and client enablement. Because we are not directly licensed to provide custody, execution,
or intermediation services, we expect these partners to supply the necessary regulatory infrastructure and, in certain cases, act as distribution
channels. These relationships are expected to support secure custody, segregation and control frameworks, execution services for Bitcoin
acquisitions and dispositions, validator operations, and programmatic risk management. We also expect to collaborate with placement agents
and traditional financial institutions to broaden institutional reach and facilitate client onboarding. We will continue to evaluate additional
partnerships with enterprise software integrators, cloud and security vendors, and protocol-level partners to enhance scale, resilience,
and interoperability.

Distribution Methods

We plan to distribute our DAT solutions directly to
enterprise clients through internal business development and relationship management teams focused on corporate treasuries, institutions,
and financial intermediaries. In addition, we expect to leverage partnerships with custodians, wallet providers, and financial institutions
to support client acquisition, onboarding, and ongoing operations. Over time, we anticipate supplementing these channels with participation
in industry conferences and education-led initiatives, including research and thought-leadership publications tailored for CFOs, treasury
leaders, boards, and risk committees. We do not expect to rely on mass-market retail marketing programs.

Marketing

We intend to emphasize education, transparency, and
strategic engagement aligned with institutional standards. We expect to target the following principal audiences:

●Corporate treasury managers and CFO organizations seeking to
integrate Bitcoin into reserve strategies with institutional governance, controls, and reporting.

●Institutional investors and asset managers, including hedge
funds and family offices, seeking institutional-grade custody, risk-managed yield programs, and validator-enabled capabilities.

●Financial institutions and intermediaries evaluating Bitcoin
treasury offerings for their clients and seeking compliant, scalable infrastructure.

●High-net-worth individuals with significant Bitcoin holdings
who require institutional-grade custody, governance, and programmatic operations.

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Our marketing strategy is expected to combine targeted
enterprise outreach, channel partnerships, and education-driven content intended to promote responsible adoption of institutional Bitcoin
treasury practices while reinforcing MindWave’s commitment to compliance, governance, and long-term value creation.

Intellectual Property

We rely on a combination of proprietary software,
trade secrets, and contractual protections to develop and operate our DAT platform, including components related to wallet orchestration,
segregation and controls, risk analytics, AI-supported yield programs, and validator operations. We also rely on confidentiality and invention-assignment
agreements with employees, contractors, and partners. From time to time, we may pursue trademark protection for brand names and logos
associated with our products and ecosystem (including, for example, MindWave and $NILA), and we will evaluate additional intellectual
property protections as our platform develops and markets evolve.

Seasonality

Our business is not subject to material seasonal variations.
However, our results of operations may be affected by fluctuations in the market price of bitcoin and by the timing of capital raising
activities, which may not occur evenly throughout the year.

Employees

As of January 11, 2026, we had a total of 9 employees,
none of whom are based in the United States. None of our employees are represented by a labor union. We have not experienced any
work stoppages and generally consider our relations with our employees to be good.

Legal Proceedings

From time to time, we may be involved in legal
proceedings, claims, or regulatory matters arising in the ordinary course of business. As of the date of this Annual Report, we are not
a party to any material pending legal proceedings, nor are we aware of any such proceedings contemplated by governmental authorities.

On April 24, 2026, the Company, MindWave, and
Lokahi Therapeutics, Inc., a Nevada corporation (“Lokahi” and, together with the Company and MindWave, the “Company
Parties”), together with Erik Emerson, individually and in his capacity as Bio Business Representative under the Merger Agreement,
entered into a Confidential Settlement and Mutual Release Agreement (the “Settlement Agreement”) with Inscobee Inc.,
a South Korean corporation (“Inscobee”), and Apimeds Inc., a South Korean corporation and wholly owned subsidiary of
Inscobee (“Apimeds Korea” and, together with Inscobee, the “Inscobee Parties”). Concurrently with
the Settlement Agreement, the Company Parties and the Inscobee Parties also entered into a Side Letter Agreement (Merger Unwind Conditions)
(the “Side Letter”), which is incorporated into and forms part of the Settlement Agreement.

The Settlement Agreement resolves all outstanding
disputes among the parties arising from the Merger Agreement and related transactions.

Also on April 30, 2026,
the Company entered into a Forbearance Agreement (the “Forbearance Agreement”) with Alto Opportunity Master Fund, SPC
– Segregated Master Portfolio B (the “Investor”), which holds a senior convertible note in the aggregate original
principal amount of $11,000,000 (the “Existing Note”), issued pursuant to a Securities Purchase Agreement, dated
December 1, 2025 (the “Securities Purchase Agreement”).

Pursuant to the Forbearance Agreement, the Investor
has agreed to forbear from exercising any of its rights or remedies under the Existing Note with respect to certain existing events of
default (collectively, the “Existing Defaults”) during the period commencing on the date of the Forbearance Agreement
through and including June 30, 2026 (or such later date as the Investor may elect in its sole discretion) (the “Forbearance Period”).

The Settlement Agreement, the Side Letter, and
the Forbearance Agreement are described in the Company’s Current Report on Form 8-K filed with the SEC on May 3, 2026, and are
incorporated herein by reference.

Facilities

Our principal executive offices are located at 60
Paya Lebar Road #04-23, Singapore 409051.

Available Information

Our website is located at www.mindwavedao.com.