NASDAQ: CVKD

Our broader pipeline
includes two additional clinical-stage assets—tecarfarin and frunexian. Tecarfarin is an oral vitamin K antagonist (“VKA”)
(a warfarin replacement for patients with complex needs) designed to prevent heart attacks, strokes, and deaths due to blood clots in
patients requiring chronic anticoagulation. Specifically, our focus for tecarfarin is for chronic use in patients with kidney dysfunction
or left ventricular assist devices (“LVADs”). Tecarfarin has been specifically designed to overcome metabolic factors that
can make warfarin less reliable. Frunexian is a first-in-class, Phase 2-ready intravenous (“IV”) Factor XIa inhibitor designed
for acute care settings where contact activation of coagulation by medical devices or artificial surfaces is significant. Frunexian is
the only IV FXIa inhibitor in clinical development that targets the acute/critical care hospital setting exclusively.

Recent Developments

Veralox Asset Purchase

On December 10, 2025, we entered into an Asset
Purchase Agreement (the “Veralox Purchase Agreement”) with Veralox Therapeutics Inc., a Delaware corporation (“Veralox”),
pursuant to which Veralox sold to us all, or substantially all, of its right title and interest in assets owned or otherwise used or
held for use by Veralox in connection with the compound known as CAD-1005 (formerly “VLX-1005”), and all back-up and follow-on
compounds, including the CAD-2000 (formerly “VLX-2000”) series (the “Compounds”), including, without limitation,
all intellectual property related to the Compounds, all inventory related to the Compounds, certain contracts including a license agreement,
all Permits and other Governmental Authorizations and Books and Records (as such terms are defined in the Veralox Purchase Agreement),
free and clear of any liens (the “Veralox Assets”). The transactions contemplated by the Veralox Purchase Agreement were
consummated on December 10, 2025.

The Veralox Assets also
include the assignment of an Amended and Restated Exclusive License Agreement by and between Veralox and Old Dominion University, as
successor in interest to Eastern Virginia Medical School (“Licensor”), dated as of May 1, 2020, as amended on December 9,
2025 pursuant to a First Amendment to Amended and Restated Exclusive License Agreement (the “Amendment to License Agreement”)
by and between Old Dominion University, as successor in interest to Eastern Virginia Medical School, and Veralox (as amended, collectively,
the “Old Dominion License Agreement”), pursuant to which Licensor granted Veralox an exclusive worldwide license under the
EVMS Patent Rights (as such term is defined in the Old Dominion License Agreement) related to the development and commercialization of
4-((2-Hydroxy-3-MethoxyBenzyl)Amino) Benzenesulfonamide Derivatives as 12-Lipoxygenase Inhibitors.

See “Veralox Purchase
Agreement” and “Old Dominion License Agreement” below for more detailed descriptions of the Veralox Purchase Agreement
and the Old Dominion License Agreement.

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Our Strategy

Our overarching goal at Cadrenal is to advance
novel therapies for life-threatening immune and thrombotic conditions. Our current primary focus is advancing a transformative therapeutic
approach for the treatment of HIT. On March 26, 2026, we completed our EOP2 meeting with the FDA and clarified a potential registrational
path for our planned Phase 3 pivotal trial of CAD-1005 in patients with HIT. Our Phase 3 trial protocol will still be subject to additional
information which may be set forth in the final meeting minutes from the FDA and any further comments we may receive from the FDA upon
their review of the protocol. Commencement of a pivotal Phase 3 clinical trial in patients with HIT will also be subject to obtaining
sufficient financing.

If we are successful in obtaining FDA approval
of CAD-1005 for our first indication, we intend to seek to expand the label for CAD-1005 through additional filings, to explore the full
spectrum of applications where we believe CAD-1005 can improve on existing standard treatment; including diabetes, atherosclerosis and
chronic vascular inflammation and hyper-inflammatory responses, as seen in severe respiratory infections.

CAD-1005

Our lead product candidate,
CAD-1005, is a first-in-class selective 12-LOX inhibitor being developed for the treatment of HIT,
a deadly immune-mediated thrombotic disorder. CAD-1005 is designed to selectively inhibit 12-LOX, a pathway integral to the primary immune
mechanisms driving HIT. Unlike existing therapies for HIT, which are only directed at preventing thrombotic complications, this approach
addresses the primary underlying pathophysiology of HIT. CAD-1005 has an ODD from the FDA for prophylaxis of thrombosis in patients with
HIT, as well as an FDA Fast Track designation for the treatment and prevention of HIT, and an orphan designation from the EMA for the
treatment of platelet-activating factor 4 disorders.

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Heparin-Induced Thrombocytopenia
(HIT)

Heparin is the most
widely used parenteral anticoagulant in modern-day practice. HIT is a serious, life-threatening prothrombotic complication of heparin
administration, with high morbidity and mortality. HIT arises as a consequence of an immune reaction to endogenous platelet factor 4
(PF4) bound to exogenous heparin. Binding of HIT antibodies to platelet FcγRIIa (the platelet IgG receptor) and the FcγRI
receptor (CD64) on monocytes results in the generation of thrombin, tissue factor, platelet-fibrin thrombi, procoagulant microparticles,
and further PF4 release, creating a vicious cycle of additional platelet activation and resulting in a high likelihood of adverse thrombotic
events. Argatroban and bivalirudin, both non-heparin-directed thrombin inhibitors, were approved in the United States for the treatment
of HIT in the early 2000s, but, as parenteral anticoagulants, they only limit the progression of thrombus and do not address the underlying
immune-mediated, platelet-centric pathophysiology of the disease. Since their approval, no additional treatments have been approved to
prevent or treat HIT. Moreover, despite the use of such parenteral non-heparin anticoagulants, severe thrombotic complications of HIT
occur frequently. Recent findings reported by Shatzel et al. and Ramadan et al. highlight the high incidence and clinical burden of thrombotic
complications in contemporary HIT patients, highlighting the limitations of existing therapies. Therefore, we are developing a new drug
candidate designed to directly address the pathophysiology of HIT by targeting platelet 12-LOX and thereby interrupting a vicious cycle
of immune-mediated platelet activation.

12-LOX Inhibition
and CAD-1005

12-LOX is highly expressed
in human platelets and catalyzes the formation of 12-hydroxyeicosatetraenoic acid (12-HETE), which is a key intermediary signaling molecule
in FcγRIIa-mediated platelet activation. Growing scientific evidence has identified 12-LOX as a key mediator of platelet activation
and immune thrombotic responses. Foundational work by McKenzie et al. (2022) significantly advanced the understanding of 12-LOX signaling
in platelet-driven immune thrombosis, including in HIT, supporting the 12-LOX pathway as a compelling therapeutic target. Pharmacologic
inhibition of 12-LOX has been shown to suppress platelet activation, while having minimal impact on normal hemostasis and without increasing
bleeding risk, a common limitation of current antiplatelet therapies. Historically, however, industry-wide drug development efforts targeting
12-LOX have been hindered by a lack of selectivity, raising concerns about off-target effects and safety. This challenge has limited
the development of earlier 12-LOX inhibitors by other developers, none of which advanced to clinical stage development.

CAD-1005 is a potent
and selective inhibitor of 12-LOX and is the only such inhibitor currently in clinical-stage development. It represents a novel approach
to reduce the risk of severe thrombotic events in patients with HIT by specifically targeting a key platelet inflammatory signaling pathway
that is believed to play a major role in HIT. In animal models of HIT, CAD-1005 has been shown to prevent or treat HIT and halt the development
of both thrombocytopenia and abnormal blood clots, and has not been associated with increased bleeding in either animals or healthy human
volunteers. The 12-LOX portfolio obtained from Veralox includes both parenteral (injectable) and oral second-generation candidates, addressing
a range of acute and chronic conditions.

Pre-Clinical Data

In vivo inhibition of 12-HETE synthesis and the
efficacy of CAD-1005 have been demonstrated in animal models of thrombosis and in immune-mediated thrombocytopenia and thrombosis. Importantly,
this impact on thrombosis was not accompanied by increases in bleeding. In mice expressing the human immune receptor on their platelets,
Veralox showed that administration of CAD-1005 following HIT induction resulted in blunted thrombocytopenia and reduced platelet activation
and thrombus formation. Veralox further demonstrated that coagulation (assessed by thromboelastography) was not impacted by CAD-1005,
while the direct thrombin inhibitor argatroban significantly delayed the onset of coagulation and clot formation. Moreover, bleeding
times in these mice were not altered by CAD-1005, whereas argatroban-treated mice required cauterization to stop bleeding. Finally, human
whole blood, as measured by whole-blood aggregometry and high-shear arterial flow chamber experiments, was protected from platelet activation
and clot formation in the presence of CAD-1005. Thus, preclinical studies demonstrate the potential effectiveness of CAD-1005 in blocking
platelet activation, clot formation, and thrombosis in both mouse models and human blood.

Phase 1 Data

Veralox conducted two Phase 1 clinical studies
of CAD-1005 in healthy volunteers; these demonstrated that CAD-1005 was well tolerated, with no deaths, no serious adverse events, and
no trend in adverse event reporting with increasing doses. The first was a 2-part, placebo-controlled, study of the safety, tolerability,
and pharmacokinetics (“PK”) of single and multiple ascending doses of IV CAD-1005 in 96 healthy subjects. In this study CAD-1005
was found to be well tolerated with no reports of serious adverse events (“SAEs”), dose-limiting toxicities (“DLTs”)
or discontinuations; adverse events (AEs) were infrequent and mild. There were dose-linear increases in key PK metrics, approaching dose
proportionality, with no upper limit on tolerability to the maximum dose tested. The second study was a Phase 1b drug-drug interaction
(“DDI”) study of CAD-1005 in conjunction with argatroban. The study showed that co-administration of CAD-1005 with argatroban
was well tolerated with no SAEs; AEs were infrequent and mild. Analyses of PK and PD (as measured by activated partial thromboplastin
time (“aPTT”) data revealed no evidence of a pharmacokinetic or pharmacodynamic interaction

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Phase 2 Data

Veralox also recently completed a Phase 2 randomized, double-blind
pilot study of CAD-1005 versus placebo in participants with suspected HIT already treated with the standard of care (“SoC”)
(argatroban or bivalirudin). After confirming a 4Ts score ≥ 4 and a positive PF4 immunoassay, participants were consented and enrolled;
a confirmatory serotonin release assay (SRA) test was also performed, but participants were randomized and treated once the test was drawn;
they did not await the test results. Participants were randomized 1:1 to either CAD-1005 plus SoC or placebo plus SoC. The study had hoped
to validate a potential new surrogate endpoint for clinical efficacy, with platelet count recovery rate selected as the primary endpoint,
and the composite of new or worsening thromboembolic events as the key secondary endpoint against which the surrogate was to be validated.
Notably, this was the first blinded, placebo-controlled trial in HIT ever undertaken. The study was initiated in 2024; it originally intended
to enroll 60 patients and was concluded in December 2025 following the transfer of program ownership from Veralox to Cadrenal. At the
time the study was terminated a total of 22 participants had received study medication (12 received CAD-1005 and 10 received placebo –
all on a background of either argatroban or bivalirudin). CAD-1005 failed to meet its primary endpoint since it did not significantly
affect the primary endpoint of platelet count recovery rate, but a high rate of thrombotic events (>75%) was observed in the placebo
group, with fewer thrombotic events in the CAD-1005 group (50%), although the study was not powered to detect statistical significance.

Planned Pivotal Phase 3 Trial

On March 26, 2026, we completed our EOP2 meeting with the FDA
and clarified a potential registrational path for our planned Phase 3 pivotal trial of CAD-1005 in patients with HIT. Our Phase 3 trial
protocol will still be subject to additional information which may be set forth in the final meeting minutes from the FDA and any further
comments we may receive from the FDA upon their review of the protocol.

Potential Additional Applications for 12-LOX Inhibitors

Beyond HIT, selective 12-LOX inhibition has potential
applications in several high-impact disease areas with multi-billion-dollar market opportunities:

● Acute
Indications: Potential opportunities in ischemia-reperfusion injury, acute kidney
injury, microvascular thrombosis, and other immune thrombocytopenias.

● Chronic
Indications: Potential opportunities in diabetes (Type 1 and Type 2), obesity, atherosclerosis,
vascular inflammation, and heart failure

● Other
Indications: Potential opportunities in stored platelet preservation

Tecarfarin

Tecarfarin is a novel
late-stage, reversible VKA (a warfarin replacement for patients with complex needs) designed to prevent heart attacks, strokes, and deaths
due to blood clots in patients requiring chronic anticoagulation. Tecarfarin is specifically designed to overcome metabolic factors that
can make warfarin less reliable. Cadrenal’s approach with respect to tecararin has been a pipeline-in-a-product approach. Tecarfarin
has ODD and Fast Track designation from the FDA for the prevention of systemic thromboembolism (blood clots) of cardiac origin in patients
with end stage kidney disease (“ESKD”) and atrial fibrillation (“AFib”). Tecarfarin also has ODD from the FDA
for the prevention of thrombosis and thromboembolism in patients with an implanted mechanical circulatory support device, which includes
LVADs, a mechanical heart pump.

Tecarfarin has been
evaluated in eleven (11) human clinical trials in over 1,000 individuals (269 patients were treated for at least six months, and 129
patients were treated for one year or more). In Phase 1, Phase 2, and Phase 2/3 clinical trials, tecarfarin has generally been well-tolerated
in both healthy adult subjects and patients with chronic kidney disease (“CKD”). In the Phase 2/3 trial, EMBRACE-AC, the
largest tecarfarin trial with 607 patients, including those with mechanical heart valves, only 1.6% of the blinded tecarfarin subjects
suffered from major bleeding, and there were no thrombotic events.

Over the course of the
last twelve months, the development strategy for tecarfarin has continued to evolve. We have recently completed the manufacturing of
tecarfarin drug product in accordance with current good manufacturing practices (“cGMP”) and are evaluating opportunities
for additional Phase 2/3 trials for ESKD patients with atrial fibrillation and/or stable LVAD patients currently treated with warfarin.

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Background

There are multiple medical
conditions or clinical circumstances that require anticoagulation to prevent the development of blood clots. Despite the availability
of a number of parenteral (acute) and oral (chronic) agents, there is no single perfect anticoagulant for all clinical situations, and
significant treatment gaps exist in the safety, predictability, and efficacy of anticoagulant therapy in a number of high-risk circumstances.
The prevailing treatment for patients requiring chronic anticoagulation includes two types of oral anticoagulants: VKAs and direct acting
oral anticoagulants (“DOACs”).

Warfarin is currently the predominant VKA treatment
option in the U.S. and has been in use since the early 1950s, including in patients with non-valvular AFib and in patients
with valvular heart diseases with AFib. Warfarin is metabolized via the cytochrome p450 (CYP450) pathway primarily by the CYP2C9 enzyme;
approximately 15% of clinically used drugs are metabolized by the same enzyme, including certain anticoagulants, antiplatelets, and non-steroidal anti-inflammatory drugs. Patients
taking warfarin and on CYP2C9 interacting drugs may experience either warfarin being eliminated by the body too quickly, thereby decreasing
its anticoagulation effect and increasing the risk of thrombotic complications, or warfarin being eliminated by the body too slowly,
resulting in excessive risk for bleeding. Other commonly appreciated drawbacks of warfarin include a relatively narrow therapeutic range,
requirements for monitoring and adjustment, slow onset (with initial paradoxical prothrombotic effects due to its early inhibition of
proteins C and S), and a relatively slow offset of action (making it difficult to manage with invasive procedures), and multiple
drug and food interactions.

DOACs are a form of treatment that inhibits certain
blood-clotting factors. While VKAs block the synthesis of vitamin K-dependent blood clotting factors (II, VII, IX, X,
protein C and protein S), DOACs block the activity of specific clotting factors. DOACs are generally more rapid in onset and
offset of action than VKAs, have few strong drug-to-drug interactions and do not require INR monitoring. DOACs have
been approved in the U.S. for the treatment of specific oral anticoagulation indications; however, there are a number of clinical
scenarios for which DOACs are contraindicated or not recommended for use, including for anticoagulation treatment in patients with LVADs,
patients with ESKD and AFib, patients with ESKD and mechanical heart valves, and patients with thrombotic APS. DOACs do not have the
same broad label indication as warfarin, and there are a number of indications where VKAs continue to be the standard of care, despite
their limitations.

Tecarfarin is a next-generation Vitamin K antagonist
that is metabolized via the human carboxylesterase 2 (“CES2”) pathway, a different metabolic pathway than warfarin, thereby
avoiding CYP450 metabolism in the liver. This CES2 pathway is abundantly distributed throughout the body, unlike CYP450, which is confined
to the liver. Although it exhibits genetic variability, the variants have not been shown to significantly alter drug clearance. In contrast,
patients taking multiple medications that interact with CYP2C9, or CYP3A4, or those with impaired kidney function, can experience an
overload in the pathway, creating a bottleneck that often leads to insufficient clearance, which results in the unstable levels of anticoagulation,
an issue well documented with warfarin use. Tecarfarin has been shown in clinical studies to result in more reliable levels of anticoagulation
in certain patient subgroups.

For chronic applications,
two specific patient groups for which we had focused our studying were tecarfarin are patients with ESKD and AFib and patients with LVADs.
Both of these clinical circumstances are particularly challenging and provide meaningful opportunities to improve care. Additionally,
DOACs like Eliquis and Xarelto have either not shown clinical benefit, or their efficacy and safety remain uncertain for both indications.

ESKD + Atrial Fibrillation

AFib is the most frequently encountered human
arrhythmia, with its incidence and prevalence increasing over the last 20 years. AFib is associated with an approximate five-fold increased
risk of stroke. The risk of developing AFib increases in patients with CKD. According to 2023 estimates by the Centers for Disease Control
and Prevention (CDC), approximately 14% of the U.S. adult population, or 35.5 million people, have CKD. An estimated 0.33% of people
in the U.S. suffer from Stage 4 CKD, and 0.14% of people in the U.S. have ESKD.

There are more than 808,000 Americans with ESKD,
with approximately 68% on dialysis, according to the United States Renal Data System 2023 Annual Report. Approximately 145,000 ESKD patients
also have AFib. AFib nearly doubles the anticipated mortality and increases the stroke risk by approximately fivefold in these patients.
There is evidence that AFib is an independent risk factor for developing ESKD in CKD patients. Both diseases share common risk factors,
including hypertension, diabetes, vascular disease, and advancing age. Cardiovascular disease contributes to more than half of all deaths
among patients with ESKD. According to the 2025 Annual Data Report published by the United States Renal Data System, total Medicare spending
for patients with ESKD reached $55.3 billion in 2023, accounting for approximately 4.7% of the Medicare-paid claims costs.

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Patients with ESKD and AFib have very high rates
of stroke and death; however, there is no standard of care for these patients since there has never been a study demonstrating the benefit
of any anticoagulant. The presence of either CKD or AFib increases the risk of serious thromboembolic adverse clinical outcomes, such
as stroke and death. Antithrombotic therapy is typically recommended to decrease this risk in AFib patients. Still, there are no approved
treatment options for patients with ESKD and AFib, and there is no standard of care for these patients. At present, there is no evidence
to support the use of any drug for the prevention of thromboembolic events in patients with ESKD and AFib.

LVAD

Anticoagulation management in patients with LVADs
remains a challenge. Recent randomized controlled trials in LVAD patients have shown that currently available VKAs (warfarin) result
in relatively poor-quality anticoagulation (as reflected by the TTR), despite efforts to manage anticoagulation tightly in clinical trials.
The ARIES-HM3 study was designed to evaluate the need for chronic aspirin treatment in patients with the newest LVAD, the HeartMate3.
The use of aspirin in LVAD patients was standard but had never been proven to be beneficial. The ARIES study randomized LVAD patients
to continue aspirin, along with warfarin, versus warfarin alone. The main finding of the study revealed that aspirin is not helpful in
LVAD patients; however, since all patients were receiving warfarin and had careful monitoring of the quality of anticoagulation, the
study also provided the opportunity to determine if the quality of anticoagulation provided by warfarin had an impact on patient outcomes.
The analysis of this carefully controlled and monitored study showed that the average TTR was only 56% with warfarin, far below the benchmark
for well-controlled anticoagulation of 70%, and that, despite the superior design of the HM3 device, poor quality anticoagulation was
associated with excess thrombotic and bleeding events.

In March of 2025, we announced the signing of
a Collaboration Agreement with Abbott Global Enterprises Limited (“Abbott”) to support the development of tecarfarin in patients
with an implanted HeartMate 3 LVAD. Under the terms of the Collaboration Agreement Abbott will support us on the planning and execution
of the TECarfarin Anticoagulation and Hemocompatibility with Left Ventricular Assist Devices (TECH-LVAD) trial to evaluate
the efficacy and safety of tecarfarin in patients with LVADs. Under the Collaboration Agreement, Abbott will share insights from recent
HeartMate trials and will support us with: trial design, site identification, trial awareness, and HeartMate expertise.

Tecarfarin Clinical Trial Summary

Tecarfarin has been evaluated in eleven (11)
human clinical trials in over 1,000 individuals (269 patients were treated for at least six months and 129 patients were treated for
one year or more). In Phase 1, Phase 2 and Phase 2/3 clinical trials conducted by third-parties, tecarfarin has generally been well-tolerated
in both healthy adult subjects and in patients with CKD.

The Phase 2/3 EMBRACE-AC study, which was conducted
by the company that owned the rights to tecarfarin at the time of the trial, was a Phase 2/3 trial multi-center, randomized, double-blind,
parallel group, active control trial that compared tecarfarin to warfarin in 607 patients with indications for chronic anticoagulation,
with a primary endpoint of TTR, which quantifies the percentage of INR values that are in the appropriate target range for an individual
patient.

Study flow diagram for EMBRACE AC (Whitlock RP et al. Thromb Haemost
2016; 116(02): 241-250)

Dosing of study drugs was managed by a centralized
dose control center. As a result of this aggressive management, the TTRs in this study were higher than in general practice. A stable
dose of tecarfarin, defined as 10 % variation in weekly dose for three consecutive weeks while the INR stays within the therapeutic range,
was attained in 94.5 % (290/307) of the tecarfarin patients during the study. There were no differences in the frequency of significant
deviations either below (tecarfarin 2.9 % vs warfarin 3.5 %, p = 0.19) or above (tecarfarin 2.0 % vs warfarin 2.3 %, p = 0.39) the targeted
therapeutic range seen between treatment groups.

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The trial did not meet its primary endpoint;
the mean TTR with tecarfarin (the primary endpoint) was numerically higher but not significantly superior to warfarin in terms of the
primary endpoint (72.3% with tecarfarin vs 71.5% with warfarin; p=0.51), but numerically virtually all subgroups favored tecarfarin,
which was especially noteworthy given the aggressiveness of INR management in the warfarin group. As part of its original analysis plan,
EMBRACE-AC also included analyses of INR measurements while patients were temporarily off their trial drug due to other medical
reasons. In a subsequent post-hoc analysis excluding these INR values while off therapy, the number of INR values in the therapeutic
range was significantly higher on tecarfarin (68.8%) than on warfarin (66.4%) (p<0.04).

% TTR and % INR Values in therapeutic Range in EMBRACE AC

Tecarfarin was well tolerated - only 1.6% of
the tecarfarin subjects had major bleeding and there were no thrombotic events. When thrombotic and major bleeding events were combined,
there was a numerical imbalance (but not statistical significance) favoring tecarfarin over warfarin was seen (warfarin 11 subjects,
3.6%; tecarfarin subjects, 1.6%).

In EMBRACE-AC there were comparable rates of
treatment emergent adverse events (“TEAEs”) (all adverse events observed, regardless of relationship to study drug) between
the two treatment groups. TEAEs were reported for 93.2% of patients who received tecarfarin and 90.5% of patients who received warfarin.
TEAEs reported by ≥10% of patients in either treatment group were nasopharyngitis (18.6% and 19.3%, blinded tecarfarin and warfarin,
respectively), contusion (15.6% and 14.8%, respectively), epistaxis (8.1% and 11.1%, respectively), upper respiratory tract infection
(10.7% and 10.8%, respectively), diarrhea (10.1% and 9.2%, respectively) and headache (10.7% and 8.9%, respectively). Most TEAEs were
mild (32.2%, tecarfarin and 30.2%, warfarin) or moderate (45.0% and 46.6%, respectively) in severity.

Five patients died during the trial, with four
deaths occurring during the double-blind period: one patient (tecarfarin; off drug) died due to mantle cell lymphoma, pneumonia
and sepsis; one patient (tecarfarin; on drug) died due to cardiorespiratory arrest and myocardial infarction; one patient (warfarin;
off drug) died due to metastatic colon cancer; one patient (warfarin; off drug) died due to lung cancer; and one patient (not randomized)
died due to intracerebral hemorrhage. The patient who died due to intracerebral hemorrhage was considered to be possibly related to the
study drug, but the remaining four deaths were not attributed to the drug. During the blinded period of the trial, five patients
on tecarfarin and six patients on warfarin experienced major bleeding events. The occurrence of major bleeding events for both tecarfarin
and warfarin was lower when compared to prior anticoagulation trials. Among warfarin-treated patients, there were five thrombotic
events (two ischemic strokes, two deep vein thromboses and one pulmonary embolism), while there were no such events among tecarfarin-treated patients.

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In a subsequent Phase 1 single-dose study comparing
13 patients with Stage 4 CKD and 10 healthy volunteers, the metabolism of warfarin was shown to be significantly inhibited, whereas tecarfarin
metabolism was not altered, in the setting of significant renal insufficiency.

Frunexian

Background

Epidemiological data and studies in established
animal models suggest that Factor XIa could have a substantially more significant effect on thrombosis than in hemostasis (preventing
bleeding in response to an injury). Patients with plasma Factor XI levels in the top 10% of the normal range are more than twice as likely
to develop deep venous thrombosis as everyone else in the study population, with a dose-response relationship between Factor XI levels
and the potential for venous thrombosis. There is also an association between high plasma Factor XI levels with increased incidences
of myocardial infarction and stroke. In contrast, Factor XI-deficient individuals exhibit no significant reduction in the rate of acute
myocardial infarctions as compared to those with normal Factor XI levels, but have a greater than eight-fold reduction in ischemic stroke
and a statistically significant reduced incidence of venous thromboembolism. Importantly, unlike hemophilia A or B, Factor XI deficiency
(Hemophilia C) rarely presents as spontaneous bleeding, though in some patients, greater-than-expected blood loss is noted after trauma,
surgery, or other challenges to hemostasis.

Small molecule inhibitors bind reversibly to
the active site of Factor XIa and block its activity. Small-molecule Factor XI inhibitors are synthetic compounds characterized by a
relatively low molecular weight, predictable potency, metabolic stability, membrane permeability, and oral bioavailability. Frunexian
is unique in being the only small molecule that is administered by continuous IV infusion and being developed for acute clinical settings.

Frunexian is a highly potent, rapid-onset, selective
small molecule inhibitor of Factor XIa, that inhibits factor XIa activity in a dose-proportional fashion, with a close correlation between
plasma concentration of frunexian and changes in aPTT over time, and no appreciable changes in prothrombin time (“PT”). The
PK and PD characteristics of frunexian — with a rapid onset of action, stable, predictable effect on coagulation, short pharmacodynamic
half-life, and apparent lack of dependence on renal clearance mechanisms—appear well-suited for use in a critical care environment.
Overall, frunexian administered as a single intravenous bolus or with continuous infusions over five consecutive days in healthy subjects
has been generally well tolerated, and the adverse event profile did not suggest any increased risk of bleeding events.

Frunexian is the only IV small molecule Factor
XIa antagonist in active development for acute indications at this time. In vivo animal studies have been conducted with frunexian
to demonstrate the ability of the molecule to inhibit thrombosis, as measured by clot size and an increase in aPTT, while minimizing
the risk of unwanted bleeding, as shown by the observation of no significant change in PT.

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Phase 1 Studies

There are two completed Phase 1 studies with
frunexian.

The first study was a placebo-controlled, randomized,
double-blind, SAD/MAD study in healthy male and female subjects evaluating the safety, tolerability, PK and PD of frunexian following
IV administration of single doses, via bolus injection, and multiple doses, via continuous infusion. There was a marked dose-proportional
increase in the aPTT for both single dose and continuous multiple doses. In Part A frunexian was generally well tolerated when administered
as single bolus IV doses of 0.01, 0.03, 0.1, 0.3, and 1.0 mg/kg. In Part B frunexian was also generally well tolerated when administered
as a 24-hour continuous IV infusion over five consecutive days at doses of 0.01, 0.03, 0.1, 0.3, and 0.6 mg/kg/h. There were no SAEs.
No bleeding or fluid loss was reported at the injection site. The score for bruising and bleeding at the blood sampling site was also
zero at the majority of time points.

The second study evaluated higher doses of frunexian
in a single-center, randomized, partially blinded, placebo-controlled, and comparator-controlled study of the safety, tolerability, PK,
and PD of frunexian administered intravenously over a 5-day period in 54 healthy subjects. The main objective of the study was to extend
the findings of the original Phase 1 study to evaluate the higher doses of frunexian which might be used for procedural anticoagulation.
The study was blinded for frunexian dose and placebo and was open-label for subjects receiving the heparin comparator infusion. When
frunexian was administered for five days, there was a strong linear relationship between exposure and dose of frunexian. After infusion,
the blood concentration of frunexian decreased rapidly. PD biomarkers (aPTT, PT and activated clotting time) and their ratios/changes
from baseline showed that aPTT was significantly prolonged with increasing doses of frunexian after five consecutive days of IV infusion.

A total of 54 subjects were entered into the
safety data set. Excluding the TEAEs of prolonged aPTT (expected with frunexian), the incidence of TEAE during the study period was 52.5%
in the frunexian group, 100% in the heparin comparator group, and 30.0% in the placebo group. TEAEs related to study drugs occurred in
10.0% of the frunexian group, 100% of the heparin group, and 10.0% of the placebo group. The TEAE associated with frunexian treatment
was primarily abnormal liver function (10.0%). In the frunexian group, there was one case (2.5%) with a grade 2 infusion site reaction
(1.5mg/kg/h group).

Veralox Purchase Agreement

On December 10, 2025, we entered into the Veralox
Purchase Agreement pursuant to which Veralox sold to us all, or substantially all, of its right title and interest in the Veralox Assets.
The Veralox Assets also included the assignment of the Old Dominion License Agreement. See, “License Agreement with Old Dominion”
below for a more detailed description of the Old Dominion License Agreement. The purchase price for the Veralox Assets consisted of (i)
a cash payment of $200,000, (ii) the assumption of certain assumed liabilities by us; (iii) contingent milestone payments in an amount
not to exceed $15 million, and (iv) royalty payments. The transactions contemplated by the Veralox Purchase Agreement were consummated
on December 10, 2025.

The contingent milestone payments, which are
payable in cash, common stock, or in any combination thereof in our sole discretion, are payable upon the achievement of the following
clinical and regulatory milestone events:

(i) $2,000,000 upon the occurrence of the
dosing of the first patient enrolled in the first clinical trial initiated after the closing
of the transaction for CAD-1005;

(ii) $8,000,000 upon approval of the first
regulatory filing seeking approval to market a pharmaceutical product for human use containing
a Compound that is covered by a patent owned or licensed by Veralox (the “Product”)
in the United States;

(iii) $2,000,000 upon
approval of the first regulatory filing seeking approval to market a Product outside the
United States;

(iv) $2,000,000 upon approval of a regulatory
filing seeking approval to market a Product for a subsequent indication in the United States;
and

(v) $1,000,000 upon approval of a regulatory
filing seeking approval to market a Product for a subsequent indication outside the United
States.

11

We will pay Veralox
royalties of 5% on the Annual Net Sales (as such term is defined in the Veralox Purchase Agreement) of each Product containing any of
the Compounds that are the subject of the Veralox Purchase Agreement which are covered by a Valid Patent Claim (as such term is defined
in the Veralox Purchase Agreement) in any country, such royalty to be payable from the first commercial sale of the Product in each country
until the expiration of the last-to-expire Valid Patent Claim that would be infringed by the commercialization of such Product in that
country, provided however that, on a Product-by-Product and country-by-country basis, in the event that, with respect to a Product in
a country, Generic Competition (as such term is defined in the Veralox Purchase Agreement) exists with respect to such Product in such
country in a calendar year, then the royalty rates in such country for such Product will thereafter be reduced by fifty percent (50%).
The Veralox Purchase Agreement also provides that in the event that Veralox or its affiliates licenses or otherwise acquires rights from
one or more third-parties in order to make, use, sell, import or otherwise exploit a Product in a country, then 50% of any amounts payable
to the third-party in such country shall be deductible from the royalty amounts payable to Veralox.

The Veralox Purchase
Agreement contains customary representations, warranties and agreements by us and Veralox, customary conditions to closing, and other
obligations of the parties. Subject to certain customary limitations, Veralox agreed to indemnify us, our affiliates and each of our
respective successors, assigns, officers, directors, shareholders, partners, employees and agents against certain losses related to,
among other things, breaches of Veralox’s representations, warranties and covenants contained in the Veralox Purchase Agreement,
as well as any retained liabilities or excluded assets described therein. Subject to certain customary limitations, we also agreed to
indemnify Veralox, its affiliates and each of their respective successors, assigns, officers, directors, shareholders, partners, employees
and agents against certain losses related to, among other things, breaches of our representations, warranties and covenants as well as
any assumed liabilities.

License Agreement with Old Dominion University

Pursuant to the Old
Dominion License Agreement, the Licensor granted Veralox an exclusive worldwide license under the EVMS Patent Rights (as such term is
defined in the Old Dominion License Agreement) related to the development and commercialization of 12-LOX. Veralox agreed to pay Licensor
certain royalties and certain milestone payments related to the first Licensed Product or Licensed Service developed, some of which were
assumed by us pursuant to the terms of the Veralox Purchase Agreement. The term “Licensed Product” is defined in the Old
Dominion License Agreement as any process or method, material, composition, drug or other product, the manufacture, use or sale of which
by Veralox, its affiliates or sublicensees would constitute, but for the license granted to Seller pursuant to the Old Dominion License
Agreement, an infringement of any Valid Claim (as such term is defined in the Old Dominion License Agreement) of any of the EVMS Patent
Rights. The term “Licensed Service” is defined in the Old Dominion License Agreement as the performance on behalf of a third-party
by Veralox, its affiliates or sublicensees of any method or the manufacture of any product or the use of any product or composition which
would constitute, but for the license granted to Veralox pursuant to the Old Dominion License Agreement, an infringement of a Valid Claim
of the EVMS Patent Rights.

Pursuant to the Old
Dominion License Agreement, we will pay Licensor milestone payments in the aggregate amount of $300,000 upon regulatory approval to market
a Licensed Product in: (i) Japan or the European Union; and (ii) the United States, provided however that irrespective of whether such
milestones are met, such milestone payments will be due in 2031 and 2032, respectively. Additionally, we will pay to Licensor royalties
of 2% on worldwide net sales of a Licensed Product or Licensed Service less than or equal to $200,000,000 and royalties of 3% on worldwide
sales greater than $200,000,000. Regardless of the commercialization status of any Licensed Product or Licensed Service, the Old Dominion
License Agreement requires a minimum annual royalty payment to be paid to Licensor within (30) days of May 1st of each
year beginning May 1, 2025, ranging between $10,000 and $50,000 per year. Such annual royalty payments have been waived by Licensor for
fiscal years 2026, 2027 and 2028, with the first payment to be made by us due May 1, 2029.

The Old Dominion License
Agreement may be terminated: (i) upon the failure of a party to perform any material obligation required of it to be performed under
the Old Dominion License Agreement and thereafter such failure to perform is not timely cured, by the non-defaulting party upon written
notice; (ii) by either party upon the bankruptcy or insolvency of the other party upon written notice: (iii) by us with or without Cause
(as such term is defined in the Old Dominion License Agreement) upon 90 days’ written notice to Licensor; and (iv) by Licensor:
(a) in the event we fail to meet any of the Milestone Deadlines (as such term is defined in the Old Dominion License Agreement) upon
90 days’ written notice; or (b) immediately in the event we or any of our affiliates brings, or assists others in bringing, a Patent
Challenge (as such term is defined in the Old Dominion License Agreement) against Licensor or any co-owner of the EVMS Patent Rights.

The foregoing descriptions
of the Veralox Purchase Agreement and Old Dominion License Agreement do not purport to be complete and are qualified in their entirety
by reference to the Veralox Purchase Agreement and Old Dominion License Agreement, copies of which are filed as exhibits to this Annual
Report and are incorporated by reference herein.

12

eXIthera Purchase Agreement

On September 12, 2025,
we entered into an asset purchase agreement (the “eXIthera Purchase Agreement”) with eXIthera Pharmaceuticals, Inc. (“eXIthera”),
to acquire its assets, including its proprietary portfolio of investigational IV and oral Factor XIa inhibitors, including the compounds
known as frunexian (EP-7041) and EP-7327 and certain other compounds, as well as all intellectual property, regulatory filings (including
two inactive Investigational New Drug Applications filed with the FDA), clinical and non-clinical data, Chemistry, Manufacturing, and
Controls materials, drug substance inventory, books and records, and the exclusive license agreement (the “Haisco License Agreement”)
with Sichuan Haisco Pharmaceutical Co., Ltd. (“Haisco”), which relates to development of eXIthera’s lead asset, frunexian,
in the Chinese market (the “eXIthera Assets”). The purchase price for the eXIthera Assets consisted of (i) $50,000 of transaction
closing costs, (ii) the assumption of specific assumed liabilities related to post-closing obligations arising from the Haisco License
Agreement, (iii) certain milestone payments, and (iv) royalty payments. The transactions contemplated by the eXIthera Purchase Agreement
were consummated on September 12, 2025.

We have agreed to pay milestone payments to eXIthera
in the aggregate amount of up to $15 million, payable in cash or in shares of our Common Stock in our sole discretion, upon the achievement
of certain clinical and regulatory milestone events. The contingent milestone payments are payable upon the achievement of the following
clinical and regulatory milestone events:

(i) $500,000 upon the occurrence of the
first patient dosed in first Phase 2 study initiated after the closing of the transaction
with respect to frunexian or an Other IV Compound (as such term is defined in the eXIthera
Purchase Agreement);

(ii) $500,000 upon the occurrence of the
first patient dosed in first Phase 1 study initiated after the closing of the transaction
with respect to EP-7327 or an Other Oral Compound (as such term is defined in the eXIthera
Purchase Agreement);

(iii) $1,000,000 upon the occurrence of
the first patient dosed in first Phase 3 study initiated after the closing of the transaction
with respect to frunexian or an Other IV Compound;

(iv) $1,000,000 upon the occurrence of the
first patient dosed in first Phase 3 study initiated after the closing of the transaction
with respect to EP-7327 or an Other Oral Compound);

(v) $6,000,000 on the
date the FDA grants approval of a New Drug Application (“NDA”) for frunexian
or an Other IV Compound;

(vi) $6,000,000 on the
date the FDA grants approval of an NDA for EP-7327 or an Other Oral Compound.

We are obligated to
pay eXIthera and its assignees, a royalty equal to 2% of the Annual Net Sales (as such term is defined in the eXIthera Purchase Agreement)
of pharmaceutical products containing any of the Compounds that are the subject of the eXIthera Purchase Agreement which are covered
by a valid patent in any country except China, such royalty to be payable from the first commercial sale of a product in each country
until the later of: (a) expiration of the last-to-expire Valid Patent Claim (as such term is defined in the eXIthera Purchase Agreement)
that would be infringed by the commercialization in that country, (b) expiration of regulatory exclusivity in that country (including
when generic competition occurs), or (c) ten years from the first commercial sale of the product in that country.

Additionally, we are
obligated to pay eXIthera 50% of all royalties actually received by us from Haisco under the existing Haisco License Agreement, without
any limitations on the total amount paid or the time period within which such payments will be made. We also agreed to assume only post-closing
obligations arising from the Haisco License Agreement, but only to the extent that such obligations do not arise from any breach or default
by eXIthera under the Haisco License Agreement on or before the closing of the transaction.

13

Manufacturing

We do not have a manufacturing
infrastructure and do not intend to develop one. With respect to tecarfarin, we have recently completed the manufacturing of tecarfarin
drug product in accordance with cGMP. We have executed contracts with third-party pharmaceutical contract development and manufacturing
organizations (“CDMOs”) for the development of validated processes and the supply of active pharmaceutical ingredients and
clinical trial material for tecarfarin in accordance with cGMP. Such CDMOs have the capability to scale-up for commercial production
of tecarfarin. However, we have not entered into any long-term supply agreements or commercialization partnerships with these vendors.
Certain material suppliers and manufacturing sites for tecarfarin are in locations outside of the U.S.

With respect to the drug candidates we acquired
from eXIthera and Veralox, we intend to execute contracts with third-party CDMOs for the supply of drug substance and drug product in
accordance with cGMP, but do not yet have such contracts in place.

While the materials and substances used in our
product candidates are manufactured by more than one supplier, the number of suppliers is limited. In the event it is necessary or advisable
to acquire drug materials, substances, and products from alternative suppliers, we might not be able to obtain them on commercially reasonable
terms, if at all. It could also require significant time and expense to transfer or redesign our manufacturing processes to work with
another company. If approved by the FDA, we anticipate that we will be able to enter into agreements with third parties to manufacture
and distribute our product candidates on commercially reasonable terms.

Sales and Marketing

If the FDA or other regulatory authorities approve
any of our product candidates, we may commercialize our products by hiring and training a small and dedicated salesforce to commercialize
our products in the U.S., and possibly other major markets. In addition, we anticipate entering into a variety of distribution agreements
and commercial partnerships in those territories where we do not establish an internal sales force, including if we expand outside of
the U.S. We expect that our specialized commercial cardiovascular team would be comprised of experienced marketing and sales management
professionals.

Competition and Market Opportunity

The development and commercialization of new
drugs is highly competitive. We face competition with respect to developing our current product candidates, and we will face competition
with respect to any products that we may seek to develop or commercialize in the future, from major pharmaceutical companies, specialty
pharmaceutical companies and biotechnology companies worldwide.

CAD-1005

We are not aware of any other 12-LOX inhibitors
currently in clinical development. CAD-1005 would be an addition to existing treatment standards, which include non-heparin anticoagulants
such as direct thrombin antagonists (bivalirudin and argatroban), fondaparinux (a direct Xa antagonist), and DOACS (direct oral anticoagulants).

Tecarfarin

We are seeking to develop tecarfarin for use
in circumstances where warfarin may still be regarded as the standard of care, but with persistent unmet medical needs that are inadequately
addressed by current alternative anticoagulants. If we succeed in developing tecarfarin, we will face substantial competition, primarily
from warfarin as the most widely used VKA, although warfarin is not specifically approved for use in our intended patient populations
– ESKD and AFib and LVADs. Additional oral anticoagulants intended for chronic use include DOACs such as Pradaxa (dabigatran),
Xarelto (rivaroxaban), Eliquis (apixaban) and Savaysa (edoxaban) for specific indications. Warfarin is a generic and is manufactured
by multiple generic pharmaceutical companies.

14

Frunexian

Frunexian is the only parenteral XIa antagonist
currently being evaluated for acute care applications. The most widely used inpatient parenteral anticoagulant is unfractionated heparin;
other alternatives include LMW heparin, direct thrombin antagonists (bivalirudin and argatroban), and direct Xa inhibitors (fondaparinux).

Many of these named competitive products are
marketed by some of the largest and most successful pharmaceutical companies worldwide, including generic pharmaceutical companies. The
companies that market these products have substantially more resources than we do and substantially more experience developing and marketing
pharmaceuticals. We may not be able to successfully compete with these existing products. Potential competitors also include academic
institutions, government agencies and other public and private research organizations that conduct research, seek patent protection and
establish collaborative arrangements for research, development, manufacturing and commercialization of competing drugs and potentially
competing drugs. Our competitors are developing or may be attempting to develop therapeutics for our target indications.

Based upon management’s analysis of market
research and external data, and assuming that we receive FDA approval of CAD-1005, we estimate that the peak annual market revenue potential
for CAD-1005 in patients with HIT will be approximately $825 million.

Based upon management’s analysis of market
research and external data, and assuming that we receive FDA approval of tecarfarin and frunexian, we estimate that the combined peak
annual U.S. market revenue potential for these product candidates in patients with orphan and high-risk cardiovascular conditions
is approximately $2 billion.

Intellectual Property

Our success will significantly depend upon our
ability to obtain and maintain patent and other intellectual property and proprietary protection for our drug candidates, including market
and data exclusivity granted by regulatory agencies and composition of matter, dosage, method of use, and formulation patents, as well
as patent and other intellectual property and proprietary protection for our novel discoveries and other important inventions and know-how.
In addition to patents, we rely upon unpatented trade secrets, know-how, and continuing technological innovation to develop and maintain
our competitive position. We protect our proprietary information, in part, using confidentiality agreements with our commercial partners,
collaborators, employees and consultants and invention assignment agreements with our employees. We also have confidentiality agreements
or invention assignment agreements with our commercial partners and selected consultants. Despite these measures, any of our intellectual
property and proprietary rights could be challenged, invalidated, circumvented, infringed, or misappropriated, or such intellectual property
and proprietary rights may not be sufficient to permit us to take advantage of current market trends or otherwise to provide competitive
advantages. For more information, please see “Risk Factors — Risks Related to Our Intellectual Property.”

We have acquired intellectual property from Veralox
that contains U.S. and foreign patents and applications directed to 12-Lox inhibitors, including particular compounds formulated for
intravenous and oral administration, and know-how regarding the design of the compounds. There are three U.S. patents and four foreign
patents for compositions of matter, including intravenous formulations, and methods of treatment. Additional patent applications are
pending in various jurisdictions and are directed to additional disease indications for treatment, aqueous formulations of CAD1005, dosing
protocols using CAD1005, oral formulations of CAD1005, and additional/secondary compounds and methods of treatment using the same. The
intravenous formulation patents will expire in 2034, and the oral formulation applications are expected to expire in 2043.

We have filed an international patent application
for the use of tecarfarin in patients having undergone implantation of a cardiac device. In addition, we have filed U.S. provisional
patent applications covering additional uses for tecarfarin and continue to monitor further patent filing opportunities. The two issued
tecarfarin U. S. patents, for both composition of matter and method of treatment, expired on April 8, 2024. Foreign patents directed
to tecarfarin, for composition of matter and use, expired in April 2025. In the absence of (i) future ODD marketing exclusivity if granted
by the FDA, (ii) future market and data exclusivity if granted by regulatory agencies and (iii) additional patent filings covering new
inventions, we would not be able to adequately protect our tecarfarin intellectual property, and competitors would be able to erode or
negate any competitive advantage we may have, which could harm our business and ability to achieve profitability.

We have acquired intellectual property from eXIthera
that contains U.S. and foreign patents and applications directed to Factor XIa inhibitors, including particular compounds formulated
for intravenous and oral delivery, and know-how regarding the design of the compounds. There are five U.S. patents and twelve foreign
patents for the intravenous formulation covering compositions of matter and methods of treatment; additional patent applications are
pending in various jurisdictions directed to methods of manufacturing, solid dosage forms, and pharmaceutical formulations. There are
two U.S. patents and three foreign patents for the oral formulation covering compositions of matter and methods of treatment, as well
as two pending foreign applications. The intravenous formulation patents will expire in 2035, and the oral formulation patents will expire
in 2039.

15

In the United States, the term of a patent covering
an FDA-approved drug may be eligible for a patent term extension under the Hatch-Waxman Act as compensation for the loss of
patent term during the FDA regulatory review process. The period of extension may be up to five years beyond the expiration of the
patent but cannot extend the remaining term of a patent beyond a total of fourteen years from the date of product approval. Only
one patent among those eligible for an extension may be extended. For patents that might expire during the 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 United States Patent and Trademark Office must determine that approval of the drug covered by the patent for which a patent
extension is being sought is likely. Interim patent extensions are not available for a drug for which an NDA has not been submitted.
Provisions are available in certain other jurisdictions to extend the term of a patent that covers an approved drug or to provide data
exclusivity. For example, data exclusivity in the European Union may be available for ten years from approval and in Japan for eight years
from approval. It is possible that issued U.S. patents covering tecarfarin may be entitled to patent term extensions. If our product
candidate receives FDA approval, we intend to apply for patent term extensions, if available, to extend the term of patents that cover
the approved product candidates. We also intend to seek patent term extensions in any jurisdictions where they are available; however,
there is no guarantee that the applicable authorities, including the FDA, will agree with our assessment of whether such extensions should
be granted, and even if granted, the length of such extensions.

Data Exclusivity

If our product candidates are approved by the
FDA, we expect to receive five years of data exclusivity, often referred to as new chemical entity exclusivity, for our NDA, so long
as the FDA has not approved a drug containing the same active moiety as such product candidate. It is possible that the FDA may disagree
with our position and not approve our product candidate or grant new chemical exclusivity to our NDA for our product candidate. Assuming
the FDA approves our product candidate and new chemical entity exclusivity is granted, during the five-year period, no generic applicant
can file an abbreviated new drug application (“ANDA”) referencing our NDA for our product candidate, unless the generic applicant
challenges a patent listed in the FDA Orange Book for the referenced NDA, in which case the generic applicant can file after four years.
If the patent is asserted against the generic applicant within 45 days of receipt of a required notice letter by the generic applicant,
the generic ANDA cannot be approved by FDA for up to thirty months.

Government Regulation

The process of obtaining regulatory approvals
and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations require the expenditure of
substantial time and financial resources. Failure to comply with the applicable requirements at any time during the product development
process, approval process or after approval, may subject an applicant to administrative or judicial sanctions. These sanctions could
include the FDA’s refusal to approve pending applications, withdrawal of an approval, a clinical hold, warning or untitled letters,
product recalls or withdrawals from the market, product seizures, total or partial suspension of production or distribution, injunctions,
fines, refusals of government contracts, restitution, disgorgement, or civil or criminal penalties.

Product development and marketing activities
are subject to extensive regulation by various government authorities, including the FDA, other federal, state and local agencies and
comparable regulatory authorities in other countries, which regulate the design, research, clinical and non-clinical development,
testing, manufacturing, storage, distribution, import, export, labeling, advertising and marketing of pharmaceutical products and devices.
Generally, before a new drug can be sold, considerable data demonstrating its quality, safety and efficacy must be obtained, organized
into a format specific to each regulatory authority, submitted for review and approved by the regulatory authority. The data are often
generated in two distinct development states: pre-clinical and clinical.

Among other matters, U.S. and foreign anti-corruption,
anti-money laundering, export control, sanctions, and other trade laws and regulations, which are collectively referred to as Trade
Laws, prohibit companies and their employees, agents, clinical research organizations, legal counsel, accountants, consultants, contractors,
and other partners from authorizing, promising, offering, providing, soliciting, or receiving directly or indirectly, corrupt or improper
payments or anything else of value to or from recipients in the public or private sector. Violations of Trade Laws can result in substantial
criminal fines and civil penalties, imprisonment, the loss of trade privileges, debarment, tax reassessments, breach of contract and
fraud litigation, reputational harm, and other consequences. We have direct or indirect interactions with officials and employees of
government agencies or government-affiliated hospitals, universities, and other organizations. We also expect our non-U.S. activities
to increase in time. We plan to engage third parties for clinical trials and/or to obtain necessary permits, licenses, patent registrations,
and other regulatory approvals and we can be held liable for the corrupt or other illegal activities of our personnel, agents, or partners,
even if we do not explicitly authorize or have prior knowledge of such activities.

16

Development of Drugs in the United States

Pharmaceutical products must be approved by the
FDA before they may be legally marketed in the United States. Pharmaceutical product development for a new product or certain changes
to an approved product in the U.S. typically involves pre-clinical laboratory and animal tests, the submission to the FDA of
an IND application, which must become effective before clinical testing may commence, and adequate and well-controlled clinical
trials to establish the safety and effectiveness of the drug for each indication for which FDA approval is sought. Satisfaction of FDA
pre-market approval requirements typically takes many years and the actual time required may vary substantially based upon
the type, complexity and novelty of the product or disease.

The pre-clinical development stage generally
involves synthesizing the active component, developing the formulation and determining the manufacturing process, as well as carrying
out non-human toxicology, pharmacology and drug metabolism trials that support subsequent clinical testing. These pre-clinical laboratory
and animal tests must comply with federal regulations and requirements, including the FDA’s good laboratory practices regulations.
A drug’s sponsor must submit the result of the pre-clinical tests, together with manufacturing information, analytical data
and any available clinical data or literature and a proposed clinical protocol to the FDA as part of an IND application. A 30-day waiting
period after the submission of each IND is required prior to the commencement of clinical testing in humans. If the FDA has neither commented
on nor questioned the IND within this 30-day period, the clinical trial proposed in the IND may begin.

Clinical trials involve the administration of
the investigational new drug to healthy volunteers or patients under the supervision of a qualified investigator. Clinical trials must
be conducted (i) in compliance with federal regulations, including good clinical practices (“GCP”), an international
standard meant to protect the rights and health of patients and to define the roles of clinical trial sponsors, administrators and monitors;
and (ii) under protocols detailing the objectives of the trial, the parameters to be used in monitoring safety, and the effectiveness
criteria to be evaluated. Each protocol involving testing on U.S. patients and subsequent protocol amendments must be submitted
to the FDA as part of the IND.

Clinical trials to support NDAs for marketing
approval can generally be divided into three sequential phases that may overlap, Phase 1, Phase 2 and Phase 3 clinical
trials. In Phase 1, generally, small numbers of healthy volunteers are initially exposed to single escalating doses and then multiple
escalating doses of the product candidate. The primary purpose of these trials is to assess the metabolism, pharmacologic action and
general safety of the drug. Phase 2 trials typically involve trials in disease-affected patients to determine the dose required
to produce the desired benefits, common short-term side effects and risks. Phase 2 trials are typically well-controlled, closely
monitored, and conducted in a relatively small number of patients, usually involving no more than several hundred patients. Phase 3
trials are intended to gather the additional information about effectiveness and safety in a larger number of patients, typically at
geographically dispersed clinical trial sites, that is needed to evaluate the overall benefit-risk relationship of the drug and
to provide an adequate basis for physician labeling. Phase 3 trials usually include from several hundred to several thousand patients
and are closely controlled and monitored. In many cases, the FDA requires two adequate and well-controlled Phase 3 clinical
trials to demonstrate the efficacy of the drug. A single Phase 3 trial with other confirmatory evidence may be sufficient in some
instances. In addition to these Phase 1-3 trials, other trials may be conducted to gather additional safety, pharmacokinetic
and pharmacodynamic information. Pharmaceutical products with active ingredients that are the same as or similar to those already approved
by the FDA may have more streamlined development programs than new chemical entities.

The FDA may order the temporary, or permanent,
discontinuation of a clinical trial at any time, or impose other sanctions, if it believes that the clinical trial either is not being
conducted in accordance with FDA requirements or presents an unacceptable risk to the clinical trial patients. Trials must be conducted
in accordance with GCP and reporting of study progress and any adverse experiences is required. The study protocol and informed consent
information for patients in clinical trials must also be submitted to an institutional review board, or IRB, responsible for overseeing
trials at particular sites and protecting human research trial patients. An independent institutional review board may also suspend or
terminate a trial once initiated, for failure to comply with the IRB’s requirements, or may impose other conditions. Accordingly,
we cannot be sure that submission of an IND, will result in the FDA allowing clinical trials to begin, or that once begun, issues will
not arise that could cause the trial to be suspended or terminated.

Post-approval trials, sometimes referred
to as Phase 4 clinical trials, may be conducted after initial marketing approval. Sometimes, these trials are used to gain additional
experience from the treatment of patients in the intended therapeutic condition. In certain instances, the FDA may mandate the performance
of Phase 4 trials. In other situations, post-approval trials aim to gain additional indications for a medication.

Changes to some of the conditions established
in an approved application, including changes in indications, labeling, or manufacturing processes or facilities, require submission
and FDA approval of a new NDA or NDA supplement before the change can be implemented. An NDA supplement for a new indication typically
requires clinical data similar to that in the original application, and the FDA uses the same procedures and actions in reviewing NDA
supplements as it does in reviewing NDAs.

17

Review and Approval in the United States

Following Phase 3 trial completion, data
are analyzed to determine safety and efficacy, with any final such determination to be made by the FDA. Data are then submitted
to the FDA in an NDA, along with proposed labeling for the product and information about the manufacturing and testing processes and
facilities that will be used to ensure product quality. The cost of preparing and submitting an NDA is substantial. Manufacturers may
be assessed up to five program fees for a fiscal year for prescription drug products identified in a single approved NDA. These
fees are typically increased annually. In the United States, FDA approval of an NDA must be obtained before marketing a new drug.

The FDA has 60 days from its receipt of
an NDA to determine whether the application will be accepted for filing based on the agency’s threshold determination that the
application is sufficiently complete to permit substantive review. Once the submission is accepted for filing, the FDA begins an in-depth review.
The FDA has agreed to certain performance goals in the review of NDAs. Most applications for standard review drug products are reviewed
within 10 to 12 months; most applications for priority review drugs are reviewed in six to eight months. Priority review can
be applied to drugs that the FDA determines offer major advances in treatment, or provide a treatment where no adequate therapy exists.
The review process for both standard and priority review may be extended by the FDA for three additional months to consider certain
late-submitted information, or information intended to clarify information already provided in the submission.

The FDA may also refer applications for novel
drug products, or drug products that present difficult questions of safety or efficacy, to an advisory committee — typically
a panel that includes clinicians and other experts — for review, evaluation, and a recommendation as to whether the application
should be approved. The FDA is not bound by the recommendations of advisory committees, but it generally follows such recommendations.
Before approving an NDA, the FDA will typically inspect one or more clinical sites to assure compliance with GCP. Additionally,
the FDA will inspect the facility or the facilities at which the drug is manufactured.

The FDA may conduct a pre-approval inspection
of the manufacturing facilities for the new product to determine whether they comply with cGMP requirements. The FDA will not approve
the product unless compliance with cGMP is satisfactory and the NDA contains data that provide substantial evidence that the drug is
safe and effective in the indication studied.

After the FDA evaluates the NDA and the manufacturing
facilities, it issues either an approval letter or a complete response letter. A complete response letter generally outlines the deficiencies
in the submission and may require substantial additional testing, or information, in order for the FDA to reconsider the application.
If, or when, those deficiencies have been addressed to the FDA’s satisfaction in a resubmission of the NDA, the FDA will issue
an approval letter. The FDA has committed to reviewing such resubmissions in two to six months depending on the type of information
included.

An approval letter authorizes commercial marketing
of the drug with specific prescribing information for specific indications. As a condition of NDA approval, the FDA may require a risk
evaluation and mitigation strategy, or REMS, to help ensure that the benefits of the drug outweigh the potential risks. REMS can include
medication guides, communication plans for healthcare professionals, and elements to assure safe use, or ETASU. ETASU can include,
but are not limited to, special training or certification for prescribing or dispensing, dispensing only under certain circumstances,
special monitoring, and the use of patient registries. The requirement for a REMS can materially affect the potential market and profitability
of the drug. Moreover, product approval may require substantial post-approval testing and surveillance to monitor the drug’s
safety or efficacy. Once granted, product approvals may be withdrawn if compliance with regulatory standards is not maintained or problems
are identified following initial marketing.

Pediatric Information

Under the Pediatric Research Equity Act (“PREA”)
NDAs or supplements to NDAs must contain data to assess the safety and effectiveness of the drug for the claimed indications in all relevant
pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the drug is safe and effective.
The FDA may grant full or partial waivers, or deferrals, for submission of data. Unless otherwise required by regulation, PREA does not
apply to any drug for an indication for which orphan designation has been granted.

The Best Pharmaceuticals for Children Act, (“BPCA”),
provides NDA holders a six-month extension of any exclusivity — patent or non-patent — for a drug
if certain conditions are met. Conditions for exclusivity include the FDA’s determination that information relating to the use
of a new drug in the pediatric population may produce health benefits in that population, the FDA’s written request for pediatric
studies, and the applicant’s agreeing to perform, and reporting on, the requested studies within the statutory timeframe. Applications
under the BPCA are treated as priority applications, with all of the benefits that designation confers.

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Orphan Drug Designation

Under the Orphan Drug Act, the FDA may grant
orphan drug designation to a drug intended to treat a rare disease or condition, which is generally a disease or condition that affects
fewer than 200,000 individuals in the United States. Orphan product designation must be requested before submitting an NDA. After
the FDA grants orphan drug designation, the identity of the therapeutic agent and its potential orphan use are disclosed publicly by
the FDA. Orphan product designation does not convey any advantage in or shorten the duration of regulatory review and approval process.
It also does not suggest FDA approval or exclusivity. The first NDA applicant to receive FDA approval for a particular active ingredient
to treat a particular disease with FDA orphan drug designation is entitled to a seven-year exclusive marketing period in the U.S. for
that product, for that indication. In addition to the potential period of exclusivity, orphan designation makes a company eligible for
grant funding of up to $500,000 per year for four years to defray costs of clinical trial expenses, tax credits for clinical research
expenses and potential exemption from the FDA application user fee.

Orphan drug exclusivity means the FDA may not
approve any other applications to market the same drug for the same indication for seven years, except in limited circumstances,
such as (i) the drug’s orphan designation is revoked; (ii) its marketing approval is withdrawn; (iii) the orphan
exclusivity holder consents to the approval of another applicant’s product; (iv) the orphan exclusivity holder is unable to
assure the availability of a sufficient quantity of drug; or (v) a showing of clinical superiority to the product with orphan exclusivity
by a competitor product. Orphan drug exclusivity does not prevent the FDA from approving a different drug for the same disease or condition,
or the same drug for a different disease or condition. If a drug designated as an orphan product receives marketing approval for an indication
broader than what is designated, it may not be entitled to orphan drug exclusivity. There has been recent litigation concerning FDA’s
interpretation of the orphan drug exclusivity provisions.

Accelerated Approval

There are a variety of pathways under which applicants
may seek expedited approval from FDA, including Fast Track, breakthrough therapy, priority review and accelerated approval. Fast Track
is a process designed to facilitate the development and expedite the review of investigational drugs to treat serious conditions and
fill an unmet medical need. Drugs that receive Fast Track designation may be eligible for more frequent communications and meetings with
the FDA to discuss the drug’s development plan, including the design of the proposed clinical trials, use of biomarkers and the
extent of data needed to support approval. Drugs with Fast Track designation may also qualify for accelerated approval and priority review
of NDAs if relevant criteria are met. However, Fast Track designation may be withdrawn by the FDA if the FDA believes that the designation
is no longer supported by data emerging in the clinical trial process.

The FDA accelerated approval program provides
for early approval of drugs based on a drug on a clinical trial(s) showing that the drug meets a surrogate or an intermediate clinical
endpoint rather than a clinical benefit endpoint. Accelerated approval is possible for drugs for serious conditions that fill an unmet
medical need. Under priority review, the FDA reviews an application in six months rather than ten months after it is accepted for filing.

A surrogate endpoint used for accelerated approval
is a marker, such as a laboratory measurement, that is thought to predict clinical benefit, but is not itself a measure of clinical benefit.
Likewise, an intermediate clinical endpoint is a measure of a therapeutic effect that is considered reasonably likely to predict the
clinical benefit of a drug, such as an effect on irreversible morbidity and mortality. Because it sometimes can take many years
for a drug trial to show a clinical benefit, the use of a surrogate endpoint or an intermediate clinical endpoint can significantly shorten
the time required to complete clinical trials and obtain FDA approval.

If a drug receives accelerated approval, the
company that sponsored the application must conduct a post-approval trial to confirm the anticipated clinical benefit. These trials
are known as Phase 4 or post-approval confirmatory trials. If the confirmatory trial shows that the drug actually provides
a clinical benefit, then the FDA grants traditional approval for the drug. Failure to conduct required post-approval studies, or
confirm a clinical benefit during post-marketing studies, will allow the FDA to withdraw the drug from the market on an expedited
basis. All promotional materials for drug candidates approved under accelerated regulations are subject to prior review by the FDA. If
the confirmatory trial does not show that the drug provides clinical benefit, FDA has regulatory procedures in place that could lead
to removing the drug from the market.

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Post-Marketing Requirements

Following approval of a new product, a pharmaceutical
company and the approved product are subject to continuing regulation by the FDA and other regulatory authorities, including, among other
things, monitoring and recordkeeping activities, reporting to applicable regulatory authorities of adverse experiences with the product,
providing the regulatory authorities with updated safety and efficacy information, product sampling and distribution requirements, and
complying with promotion and advertising requirements, which include, among others, standards for direct-to-consumer advertising,
restrictions on promoting drugs for uses or in patient populations not described in the drug’s approved labeling (known as “off-label use”),
and limitations on industry-sponsored scientific and educational activities. Although physicians may prescribe legally available
drugs for off-label uses, drugs may be marketed only for the approved indications and in accordance with the provisions of the approved
labeling. Modifications or enhancements to the products or labeling or changes of site of manufacture are often subject to the approval
of the FDA and other regulators, which may or may not be received or may result in a lengthy review process. The FDA regulations require
the products be manufactured in specific approved facilities and in accordance with cGMP, and NDA holders must list their products and
register their manufacturing establishments with the FDA. These regulations also impose certain organizational, procedural and documentation
requirements with respect to manufacturing and quality assurance activities. Drug manufacturers and other entities involved in the manufacture
and distribution of approved drugs are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance
with cGMP requirements and other laws. NDA holders using contract manufacturers, laboratories or packagers are responsible for the selection
and monitoring of qualified firms. These firms are subject to inspections by the FDA at any time, and the discovery of violative conditions
could result in enforcement actions that interrupt the operation of any such facilities or the ability to distribute products manufactured,
processed or tested by them.

Drug Development in Europe

In the European Union, our future products may
also be subject to extensive regulatory requirements. Similar to the United States, the marketing of medicinal products is subject
to the granting of marketing authorizations by regulatory agencies. Also, as in the United States, the various phases of pre-clinical and
clinical research in the European Union are subject to significant regulatory controls.

Review and Approval in the European Union

In the European Union, approval of new medicinal
products can be obtained through one of three processes: the mutual recognition procedure, the centralized procedure and the decentralized
procedure. We intend to determine which process we will follow, if any, in the future.

Mutual Recognition Procedure: An
applicant submits an application in one European Union member state, known as the reference member state. Once the reference member state
has granted the marketing authorization, the applicant may choose to submit applications in other concerned member states, requesting
them to mutually recognize the marketing authorizations already granted. Under this mutual recognition process, authorities in other
concerned member states have 55 days to raise objections, which must then be resolved by discussion among the concerned member states,
the reference member state and the applicant within 90 days of the commencement of the mutual recognition procedure. If any disagreement
remains, all considerations by authorities in the concerned member states are suspended and the disagreement is resolved through an arbitration
process. The mutual recognition procedure results in separate national marketing authorizations in the reference member state.

Centralized Procedure: This procedure
is currently mandatory for products developed by means of a biotechnological process and optional for new active substances and other
“innovative medicinal products with novel characteristics.” Under this procedure, an application is submitted to the European
Agency for the Evaluation of Medical Products. Two European Union member states are appointed to conduct an initial evaluation of each
application. These countries each prepare an assessment report that is then used as the basis of a scientific opinion of the Committee
on Proprietary Medical Products. If this opinion is favorable, it is sent to the European Commission, which drafts a decision. After
consulting with the member states, the European Commission adopts a decision and grants a marketing authorization, which is valid throughout
the European Union and confers the same rights and obligations in each of the member states as a marketing authorization granted by that
member state.

Decentralized Procedure: The most
recently introduced of the three processes for obtaining approval of new medicinal processes in the European Union, the decentralized
procedure is similar to the mutual recognition procedure described above, but with differences in the timing that key documents are provided
to concerned member states by the reference member state, the overall timing of the procedure and the possibility of, among other things,
“clock stops” during the procedure.

Orphan Designation in the European Union

In the European Union, companies are encouraged
to research and develop medicines for rare diseases that otherwise would not be developed. A medicine may be orphan-designated by the
European Commission, based on a recommendation from the EMA’s Committee for Orphan Medicinal Products, provided that certain criteria
are met, as set forth in the article entitled “Orphan medicines in the EU,” published by the Publications Office of the European
Union, 2025 (the “EU Orphan-designated Medicines Article”). Such criteria include that the medicine is intended to treat,
prevent or diagnose a disease which is life-threatening or chronically debilitating, or it is unlikely that the medicine will generate
sufficient returns to justify the investment needed for its development, and the disease must not affect more than five in 10,000 people
in the European Union. To qualify for orphan designation, the sponsor must also demonstrate that no satisfactory method of diagnosis,
prevention, or treatment of the condition exists, or that the medicine provides a significant benefit to patients affected by the condition.
Between the years 2014 and 2024, an average of 163 medicines received an orphan designation by the European Commission.

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Orphan designation in the European Union provides
several regulatory and commercial incentives, including scientific advice on study protocols from the EMA, access to European Union research
funding, reduced regulatory fees, and, upon regulatory approval, ten years of market exclusivity for the designated indication, provided
that it can be demonstrated that the criteria for their designation still apply, as described in the EU Orphan-designated Medicines Article.
The designation does not guarantee that a product will reach the marketing authorization application stage, nor does it affect the strict
safety or efficacy standards that apply to all medicines evaluated by the EMA’s Committee for Medicine Products for Human Use.

Other Regulatory Matters

Manufacturing, sales, promotion and other activities
following product approval are also subject to regulation by numerous regulatory authorities in addition to the FDA, including, in the
United States, the Centers for Medicare & Medicaid Services (“CMS”), other divisions of the Department of Health
and Human Services, the Drug Enforcement Administration, the Consumer Product Safety Commission, the Federal Trade Commission, the Occupational
Safety & Health Administration, the Environmental Protection Agency, and state and local governments. These laws and regulations
include:

●
The federal healthcare
program anti-kickback law which prohibits, among other things, persons from soliciting, receiving or providing remuneration,
directly or indirectly, to induce either the referral of an individual, for an item or service or the purchasing or ordering of a
good or service, for which payment may be made under federal healthcare programs such as the Medicare and Medicaid programs;

●
Federal false claims laws
which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment
from Medicare, Medicaid, or other government reimbursement programs that are false or fraudulent. The government may assert that
a claim including items or services resulting from a violation of the federal healthcare program anti-kickback law or related
to off-label promotion constitutes a false or fraudulent claim for purposes of the federal false claims laws;

●
The Federal Physician Payments
Sunshine Act within the Patient Protection and Affordable Care Act of 2010, as amended (the “ACA”), and its implementing
regulations, require that certain manufacturers of drugs, devices, biological and medical supplies for which payment is available
under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report on an annual basis
information related to certain payments or other transfers of value made or distributed to physicians and teaching hospitals, or
to entities or individuals at the request of, or designated on behalf of, the physicians and teaching hospitals and certain ownership
and investment interests held by physicians and their immediate family members, with the information made publicly available on a
searchable website; and

●
The Health Insurance Portability
and Accountability Act, or HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH,
and its implementing regulations, imposes certain requirements relating to the privacy, security and transmission of individually
identifiable health information. Among other things, HITECH makes HIPAA’s privacy and security standards directly applicable
to “business associates” — independent contractors or agents of covered entities that receive or obtain
protected health information in connection with providing a service on behalf of a covered entity. HITECH also created four new tiers
of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates and possibly
other persons, 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 attorneys’ fees and costs associated with pursuing federal civil actions.

●
Applicable child-resistant packaging
requirements under the U.S. Poison Prevention Packaging Act.

●
The Lanham Act and federal
antitrust laws.

●
State law equivalents of
each of the above federal laws, such as anti-kickback and false claims laws, which may apply to items or services reimbursed
by any third-party payer, including commercial insurers, and state laws governing the privacy and security of health information
in certain circumstances, many of which differ from each other in significant ways and often are not preempted by federal laws, thus
complicating compliance efforts. In addition, several states now require prescription drug companies to report expenses relating
to the marketing and promotion of drug products and to report gifts and payments to individual physicians in these states. Other
states prohibit various other marketing-related activities, and still other states require the posting of information relating
to clinical studies and their outcomes. In addition, California, Connecticut, Massachusetts and Nevada require pharmaceutical companies
to implement compliance programs and/or marketing codes. Several additional states are considering similar proposals. Compliance
with these laws is difficult and time consuming, and companies that do not comply with these state laws face civil penalties.

Distribution of pharmaceutical products is subject
to additional requirements and regulations, including extensive record-keeping, licensing, traceability, and storage and security requirements
intended to prevent the unauthorized sale of pharmaceutical products.

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Third-Party Payer Coverage and Reimbursement

Significant uncertainty exists as to the coverage
and reimbursement status of any of our drug candidates that ultimately may obtain regulatory approval. In both the United States
and foreign markets, our ability to commercialize our product candidates successfully, and to attract commercialization partners for
our product candidates, depends in significant part on the availability of adequate financial coverage and reimbursement from third-party payers,
including, in the United States, governmental payers such as the Medicare and Medicaid programs, managed care organizations, and
private health insurers. Medicare is a federally funded program managed by CMS, through local fiscal intermediaries and carriers that
administer coverage and reimbursement for certain healthcare items and services furnished to the elderly and disabled. Medicaid is an
insurance program for certain categories of patients whose income and assets fall below state defined levels and who are otherwise uninsured
that is both federally and state funded and managed by each state. The federal government sets general guidelines for Medicaid and each
state creates specific regulations that govern its individual program. Each payer has its own process and standards for determining whether
it will cover and reimburse a procedure or particular product. Private payers often rely on the lead of the governmental payers in rendering
coverage and reimbursement determinations. Therefore, achieving favorable CMS coverage and reimbursement is usually a significant gating
issue for successful introduction of a new product. The competitive position of some of our products will depend, in part, upon the extent
of coverage and adequate reimbursement for such products and for the procedures in which such products are used. Prices at which we or
our customers seek reimbursement for our products can be subject to challenge, reduction or denial by the government and other payers.

The pharmaceutical industry has been and continues
to be affected by federal and state legislation that alters the pricing, coverage, and reimbursement landscape. The United States
Congress and state legislatures may, from time to time, propose and adopt initiatives aimed at cost containment, which could impact our
ability to sell our products and product candidates profitably. For example, in the first quarter of 2018, President Trump signed a law
requiring pharmaceutical companies to pay for a substantially larger percentage of the coverage gap, or the so-called “donut hole,”
between regular and catastrophic Medicare Part D prescription drug coverage, a change that is estimated to have a multi-billion-dollar effect
on brand-name drug companies. Additional changes could be made in the future to governmental healthcare programs and many other
laws that could significantly impact the success of our products.

Additionally, in August 2022, President Biden
signed into law the Inflation Reduction Act (“IRA”), which includes provisions that effectively authorize the government
to establish prices for certain high-spend single-source drugs and biologics reimbursed by the Medicare program, starting in 2026 for
Medicare Part D drugs and 2028 for Medicare Part B drugs. It is not yet certain which products the federal government will select and
subject to government-established prices, or how the federal government will establish prices for selected products, as the IRA specifies
a ceiling price but not a minimum price. One or more of our product candidates, if approved, could be selected and subject to the government-established
price.

The IRA also contains provisions that impose
rebates if certain prices increase at a rate that outpaces the rate of inflation, beginning October 1, 2022, for Medicare Part D drugs
and January 1, 2023, for Medicare Part B drugs. Separate IRA provisions redesign the Medicare Part D benefit in various ways, including
by shifting a greater portion of costs to manufacturers within certain coverage phases and replacing the Part D coverage gap discount
program with a new manufacturer discounting program. Failure to comply with IRA provisions may subject manufacturers to various penalties,
including civil monetary penalties. The impact of the IRA on our business and the broader pharmaceutical industry remains uncertain,
as the federal government has yet to make various IRA implementation decisions.

The cost of pharmaceuticals continues to generate
substantial governmental and third-party payer interest. We expect that the pharmaceutical industry will experience pricing pressures
due to the trend toward managed healthcare, the increasing influence of managed care organizations and additional legislative proposals.
Our results of operations could be adversely affected by current and future healthcare reforms.

Some third-party payers also require pre-approval of
coverage for new or innovative devices or drugs before they will reimburse healthcare providers that use such drugs. While we cannot
predict whether any proposed cost-containment measures will be adopted or otherwise implemented in the future, the announcement
or adoption of these proposals could have a material adverse effect on our ability to obtain adequate prices for our products and product
candidates and operate profitably.

In addition, in some foreign countries, the proposed
pricing for a drug must be approved before it may be lawfully marketed. The requirements governing drug pricing vary widely from country
to country. For example, the European Union provides options for its member states to restrict the range of medicinal products for which
their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use. A member
state may approve a specific price for the medicinal product or it may instead adopt a system of direct or indirect controls on the profitability
of the company placing the medicinal product on the market. There can be no assurance that any country that has price controls or reimbursement
limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our products. Historically,
products launched in the European Union do not follow price structures of the United States and generally tend to be significantly
lower.

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Trade Laws

Among other matters, U.S. and foreign anti-corruption,
anti-money laundering, export control, sanctions, and other trade laws and regulations, which are collectively referred to as Trade
Laws, prohibit companies and their employees, agents, clinical research organizations, legal counsel, accountants, consultants, contractors,
and other partners from authorizing, promising, offering, providing, soliciting, or receiving directly or indirectly, corrupt or improper
payments or anything else of value to or from recipients in the public or private sector. Violations of Trade Laws can result in substantial
criminal fines and civil penalties, imprisonment, the loss of trade privileges, debarment, tax reassessments, breach of contract and
fraud litigation, reputational harm, and other consequences. We have direct or indirect interactions with officials and employees of
government agencies or government-affiliated hospitals, universities, and other organizations. We also expect our non-U.S. activities
to increase in time. We plan to engage third parties for clinical trials and/or to obtain necessary permits, licenses, patent registrations,
and other regulatory approvals and we can be held liable for the corrupt or other illegal activities of our personnel, agents, or partners,
even if we do not explicitly authorize or have prior knowledge of such activities.

Human Capital Employees

As of March 27, 2025, we had five employees,
all of which are full-time, and engage approximately thirty-five consultants and contractors. Our employees are not represented by labor
unions or covered by collective bargaining agreements. We consider our relationship with our employees to be good.

Corporate Information

We were incorporated as a Delaware corporation
in January 2022. Our principal executive offices are located at 822 A1A North, Suite 306, Ponte Vedra, Florida 32082, and our telephone
number is (904) 300-0701. Our website address is www.cadrenal.com. The information contained on, or that can be accessed
through, our website is not incorporated by reference into this Annual Report, and you should not consider any information contained
on, or that can be accessed through, our website as part of this Annual Report or in deciding whether to purchase our Common Stock.

Facilities

Our corporate headquarters are located at 822
A1A North, Suite 306, Ponte Vedra, Florida 32082, which are leased pursuant to a Lease Agreement, originally dated October 15, 2022 with
Veranda III Partners, Ltd. (the “Lease Agreement”), as subsequently amended. The Lease Agreement, as most recently amended
by an addendum dated October 14, 2025, has a term of 12 months commencing on November 1, 2025. The monthly rent is $2,346.
We believe that these headquarters are adequate for our current operations and needs.

Legal Proceedings

We are not currently a party to any material
legal proceedings. We may, however, in the ordinary course of business face various claims brought by third parties, and we may, from
time to time, make claims or take legal actions to assert our rights, including intellectual property rights as well as claims relating
to employment matters and the safety or efficacy of our products. Any of these claims could subject us to costly litigation. If this
were to happen, the payment of any such awards could have a material adverse effect on our business, financial condition and results
of operations. Additionally, any such claims, whether or not successful, could damage our reputation and business.

Available Information

Our website address is www.cadrenal.com. We
will file Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements and other materials
with the U.S. Securities and Exchange Commission (the “SEC”). We are subject to the informational requirements of the Exchange
Act and will file or furnish reports, proxy statements and other information with the SEC. Such reports and other information filed by
the Company with the SEC are available free of charge on our website at http://cadrenal.com/investors/SEC filings. Information contained
on, or that can be accessed through, our website is not incorporated by reference into this Annual Report, and you should not consider
information on our website to be part of this Annual Report.

The SEC also maintains a website that contains
reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov.

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Implications of Being an Emerging Growth Company
and a Smaller Reporting Company

We qualify as an “emerging growth company”
as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. For as long as we remain an emerging growth company,
we may take advantage of specified reduced reporting requirements and other burdens that are otherwise applicable generally to other
public companies. These provisions include, but are not limited to:

●
Reduced obligations with
respect to financial data, including presenting only two years of audited financial statements and selected financial data, and only
two years of related Management’s Discussion and Analysis of Financial Condition and Results of Operations disclosure in our
initial registration statement;

●
an exemption from the auditor
attestation requirement in the assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of
2002, as amended (“SOX”);

●
reduced disclosure about
executive compensation arrangements in our periodic reports, registration statements and proxy statements; and

●
exemptions from the requirements
to seek non-binding advisory votes on executive compensation or stockholder approval of any golden parachute arrangements.

We may take advantage of some or all of these
provisions until we are no longer an emerging growth company. We will remain an emerging growth company until the earliest of (i) the
last day the fiscal year following the fifth anniversary of the completion of our initial public offering, (ii) the last day of the first
fiscal year in which our annual gross revenues exceed $1.235 billion, (iii) the date on which we have, during the immediately preceding
three-year period, issued more than $1.0 billion in non-convertible debt securities and (iv) the date on which we are deemed to be a
large accelerated filer under the rules of the SEC, or the SEC. We may choose to take advantage of some but not all of these reduced
burdens. For example, we have taken advantage of the reduced reporting requirements with respect to disclosure regarding our executive
compensation arrangements, have presented only two years of audited financial statements and only two years of related “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” disclosure in this Annual Report, and have taken advantage
of the exemption from auditor attestation on the effectiveness of our internal control over financial reporting. To the extent that we
take advantage of these reduced burdens, the information that we provide stockholders may be different than you might obtain from other
public companies in which you hold equity interests.

In addition, the JOBS Act permits emerging growth
companies to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public
companies. We have elected to use this extended transition period. As a result of this election, our timeline to comply with new or revised
accounting standards will in many cases be delayed as compared to other public companies that are not eligible to take advantage of this
election or have not made this election. Therefore, our financial statements may not be comparable to those of companies that comply
with the public company effective dates for these accounting standards.

We are also a “smaller reporting company”
as defined in the Securities Exchange Act of 1934, as amended, or the Exchange Act, and have elected to take advantage of certain of
the scaled disclosures available to smaller reporting companies. To the extent that we continue to qualify as a “smaller reporting
company” as such term is defined in Rule 12b-2 under the Exchange Act, after we cease to qualify as an emerging growth company,
certain of the exemptions available to us as an “emerging growth company” may continue to be available to us as a “smaller
reporting company,” including exemption from compliance with the auditor attestation requirements pursuant to SOX and reduced disclosure
about our executive compensation arrangements. We will continue to be a “smaller reporting company” until we have $250 million
or more in public float (based on our Common Stock) measured as of the last business day of our most recently completed second fiscal
quarter or, in the event we have no public float (based on our Common Stock) or a public float (based on our Common Stock) that is less
than $700 million, annual revenues of $100 million or more during the most recently completed fiscal year.

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