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</div><p style="text-align: center; margin-top: 0; margin-bottom: 0"><b>As filed with the Securities and Exchange Commission on November 27,
2024</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right; background-color: white"><b>Registration Number
333-&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</b></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="font-size: 1pt; border-top: Black 2pt solid; border-bottom: Black 1pt solid">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right; background-color: white"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><span style="font-variant: small-caps">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="font-variant: small-caps"><b>UNITED
STATES<br/>
SECURITIES AND EXCHANGE COMMISSION<br/>
WASHINGTON, D.C. 20549</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="font-size: 8pt; font-variant: small-caps"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="font-variant: small-caps"><b>FORM&#160;<ix:nonNumeric contextRef="c0" name="dei:DocumentType" id="ixv-27556">S-1</ix:nonNumeric><br/>
REGISTRATION STATEMENT<br/>
<i>UNDER<br/>
THE SECURITIES ACT OF 1933</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="font-size: 8pt; font-variant: small-caps"><b>&#160;</b></span></p><div>

</div><p style="font: 18pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><ix:nonNumeric contextRef="c0" name="dei:EntityRegistrantName" id="ixv-45"><b>Lomond Therapeutics
Holdings, Inc.</b></ix:nonNumeric></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><b>(Exact name of registrant
as specified in its charter)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="font-size: 8pt; font-variant: small-caps"><b>&#160;</b></span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; background-color: white; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; width: 32%; text-align: center"><ix:nonNumeric contextRef="c0" format="ixt-sec:stateprovnameen" name="dei:EntityIncorporationStateCountryCode" id="ixv-58"><span style="font-size: 10pt"><b>Delaware</b></span></ix:nonNumeric></td> <td style="width: 2%; text-align: center">&#160;</td> <td style="border-bottom: Black 1.5pt solid; width: 32%; text-align: center"><span style="font-size: 10pt"><b>2834</b></span></td> <td style="width: 2%; text-align: center">&#160;</td> <td style="border-bottom: Black 1.5pt solid; width: 32%; text-align: center"><span style="font-size: 10pt"><b>87-2959575</b></span></td></tr> <tr style="vertical-align: top"> <td style="text-align: center"><span style="font-size: 10pt"><b>(State or other jurisdiction of<br/>
incorporation or organization)</b></span></td> <td style="text-align: center">&#160;</td> <td style="text-align: center"><span style="font-size: 10pt"><b>(Primary Standard Industrial<br/>
Classification Code Number)</b></span></td> <td style="text-align: center">&#160;</td> <td style="text-align: center"><span style="font-size: 10pt"><b>(I.R.S. Employer<br/>
Identification Number)</b></span></td></tr> </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><span style="font-size: 8pt; font-variant: small-caps"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><b>8 The Green Ste 8490</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><b>Dover, Delaware 19901<br/>
(212) 739-6400<br/>
(Address, including zip code, and telephone number, including area code, of registrant&#8217;s principal executive offices)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="font-size: 8pt; font-variant: small-caps"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><b>Iain Dukes<br/>
Chief Executive Officer and Chairman<br/>
8 The Green Ste 8490</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><b>Dover, Delaware 19901<br/>
(212) 739-6400 </b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><b>(Name, address, including
zip code, and telephone number, including area code, of agent for service)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="font-size: 8pt; font-variant: small-caps"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><b><i>Copies to</i>:</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="font-size: 8pt; font-variant: small-caps"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><b>Bardia Moayedi</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><b>Christopher L. Tinen</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><b>Sarah A. Hibbard<br/>
Snell &amp; Wilmer L.L.P.<br/>
12230 El Camino Real, Suite 300</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><b>San Diego, CA 92130</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><b>(858) 434-5020</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><span style="font-size: 8pt; font-variant: small-caps"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><b>From time to time after
this registration statement is declared effective.<br/>
(Approximate date of commencement of proposed sale to the public)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="font-size: 8pt; font-variant: small-caps"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">If any of the securities
being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933,
check the following box.&#160;<span style="font-family: Times New Roman, Times, Serif">&#9746;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-size: 8pt; font-variant: small-caps"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">If this Form is filed
to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and
list the Securities Act registration statement number of the earlier effective registration statement for the same offering.&#160;<span style="font-family: Times New Roman, Times, Serif">&#9744;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-size: 8pt; font-variant: small-caps"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">If this Form is a post-effective
amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering.&#160;<span style="font-family: Times New Roman, Times, Serif">&#9744;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-size: 8pt; font-variant: small-caps"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">If this Form is a post-effective
amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering.&#160;<span style="font-family: Times New Roman, Times, Serif">&#9744;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-size: 8pt; font-variant: small-caps"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Indicate by check mark
whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging
growth company. See the definitions of &#8220;large accelerated filer,&#8221; &#8220;accelerated filer,&#8221; &#8220;smaller reporting
company,&#8221; and &#8220;emerging growth company&#8221; in Rule 12b-2 of the Exchange Act.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-size: 8pt; font-variant: small-caps"><b>&#160;</b></span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; background-color: white; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 27%"><span style="font-size: 10pt">Large Accelerated filer</span></td> <td style="width: 24%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9744;</span></td> <td style="width: 25%; text-align: justify"><span style="font-size: 10pt">Accelerated filer</span></td> <td style="width: 24%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9744;</span></td></tr> <tr style="vertical-align: top"> <td><ix:nonNumeric contextRef="c0" format="ixt-sec:entityfilercategoryen" name="dei:EntityFilerCategory" id="ixv-200"><span style="font-size: 10pt">Non-accelerated filer</span></ix:nonNumeric></td> <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9746;</span></td> <td style="text-align: justify"><span style="font-size: 10pt">Smaller reporting company</span></td> <td style="text-align: justify"><ix:nonNumeric contextRef="c0" format="ixt-sec:boolballotbox" name="dei:EntitySmallBusiness" id="ixv-207"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9746;</span></ix:nonNumeric></td></tr> <tr style="vertical-align: top"> <td>&#160;</td> <td>&#160;</td> <td style="text-align: justify"><span style="font-size: 10pt">Emerging growth company</span></td> <td style="text-align: justify"><ix:nonNumeric contextRef="c0" format="ixt-sec:boolballotbox" name="dei:EntityEmergingGrowthCompany" id="ixv-215"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9746;</span></ix:nonNumeric></td></tr> </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><span style="font-size: 8pt; font-variant: small-caps"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">If an emerging growth
company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Exchange Act.&#160;<ix:nonNumeric contextRef="c0" format="ixt-sec:boolballotbox" name="dei:EntityExTransitionPeriod" id="ixv-223"><span style="font-family: Times New Roman, Times, Serif">&#9744;</span></ix:nonNumeric></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-size: 8pt; font-variant: small-caps"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>The registrant hereby
amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section
8(a) of the Securities Act of 1933, as amended, or until this Registration Statement shall become effective on such date as the Securities
and Exchange Commission, acting pursuant to said Section 8(a), may determine.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-size: 8pt; font-variant: small-caps"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="font-size: 1pt; border-top: Black 1pt solid; border-bottom: Black 2pt solid">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="margin: 0pt">&#160;</p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="color: Red"><b>The
information in this prospectus is not complete and may be changed. The selling stockholders may not sell these securities pursuant to
this prospectus until the registration statement filed with the Securities and Exchange Commission becomes effective. This preliminary
prospectus is not an offer to sell these securities and is not soliciting offers to buy these securities in any jurisdiction where the
offer or sale is not permitted.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="color: Red"><b>SUBJECT
TO COMPLETION, DATED NOVEMBER 27, 2024</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><span style="text-transform: uppercase"><b>PRELIMINARY
PROSPECTUS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><span style="text-transform: uppercase"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><span style="text-transform: uppercase"><b><img alt="" src="image_001.jpg" style="width: 208px; height: 63px"/>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><span style="text-transform: uppercase"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><b>27,473,624 Shares of
Common Stock</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">This prospectus relates
to the offering and resale by the selling stockholders identified herein of up to 27,473,624&#160;shares of common stock, par value $0.0001
per share, of Lomond Therapeutics Holdings, Inc. (the &#8220;Company&#8221;), which includes: (i) 11,402,831 shares of our common stock
issued in a private placement offering on November 1, 2024 (the &#8220;Offering&#8221;) (including 3,161,456 shares of our common stock
issued upon conversion of the SAFEs offered and sold by Lomond Operating Co., a privately held Delaware corporation (formerly known as
Lomond Therapeutics Inc.) (&#8220;Lomond&#8221;), to accredited investors); (ii) an aggregate of 275,410 shares of our common stock issuable
upon exercise of the warrants issued to certain registered broker-dealers in connection with the Offering (the &#8220;Placement Agent
Warrants&#8221;); (iii) 14,420,383 shares of our common stock privately issued to the selling stockholders on November 1, 2024 in exchange
for the capital stock of Lomond in connection with the closing of the merger between us and Lomond (the &#8220;Merger&#8221;); and (iv)
1,375,000 shares of our common stock held by the stockholders of Venetian-1 Acquisition Corp., our predecessor, prior to the Merger.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We will not receive any
proceeds from the sale of the shares of common stock by the selling stockholders. The selling stockholders may sell the shares of common
stock offered by this prospectus from time to time through the means described in this prospectus under the caption &#8220;<i>Plan of
Distribution</i>.&#8221; For a list of the selling stockholders, see the section entitled &#8220;<i>Selling Stockholders</i>&#8221; on
page 149 of this prospectus. We have borne and will continue to bear the costs relating to the registration of these shares.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">There is not currently,
and there has never been, any established public trading market for any of our securities. The common stock is not currently eligible
for trading on any national securities exchange, including The Nasdaq Stock Market, LLC, or any over-the-counter markets, including the
OTC Markets-OTCQB tier (the &#8220;OTCQB&#8221;). In connection with this offering, we intend to have a registered broker-dealer to apply
to have the common stock quoted on the OTCQB or another OTC system. We cannot assure you that the common stock will become eligible for
trading on any exchange or market. Until such time as the common stock is quoted on the OTCQB or another public trading market otherwise
develops, the selling stockholders identified herein may only sell their shares of common stock pursuant to this prospectus at a fixed
price of $4.00 per share (as may be adjusted for stock splits, stock dividends, combinations, recapitalizations or similar events), the
price per share in the offering discussed above, for a total offering amount of $109,894,496. At and after such time, the selling stockholders
may sell all or a portion of their shares through public or private transactions at prevailing market prices or at privately negotiated
prices.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We may amend or supplement
this prospectus from time to time by filing amendments or supplements as required. You should read the entire prospectus and any amendments
or supplements carefully before you make your investment decision.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>We are an &#8220;emerging
growth company&#8221; and a &#8220;smaller reporting company&#8221; as defined under the federal securities laws and, as such, are eligible
for reduced public company reporting requirements. See &#8220;<i>Prospectus Summary &#8212; Implications of Being an Emerging Growth Company
and a Smaller Reporting Company</i>.&#8221;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Investing in our common
stock involves a high degree of risk. Before making an investment decision, please read &#8220;Risk Factors&#8221; on page 9 of this
prospectus.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Neither the Securities
and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus
is truthful or complete. Any representation to the contrary is a criminal offense.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><b>The date of this prospectus
is &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;, 2024</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&#160;</p><div>


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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="font-variant: small-caps"><b>TABLE
OF CONTENTS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; background-color: white; border-collapse: collapse">
  <tr style="vertical-align: bottom">
    <td style="width: 90%; padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; width: 1%">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; width: 9%; text-align: center"><span style="font-size: 10pt"><b>Page</b></span></td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td><span style="font-size: 10pt">PRELIMINARY PROSPECTUS</span></td>
    <td>&#160;</td>
    <td>&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td><a href="#a_001"><span style="font-size: 10pt">ABOUT THIS PROSPECTUS</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">ii</span></td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td><a href="#a_002"><span style="font-size: 10pt">SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">iii</span></td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td><a href="#a_003"><span style="font-size: 10pt">PROSPECTUS SUMMARY</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">1</span></td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td><a href="#a_004"><span style="font-size: 10pt">THE OFFERING</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">6</span></td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td><a href="#a_005"><span style="font-size: 10pt">SUMMARY FINANCIAL DATA</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">7</span></td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td><a href="#a_006"><span style="font-size: 10pt">RISK FACTORS</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">9</span></td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td><a href="#a_007"><span style="font-size: 10pt">DESCRIPTION OF THE MERGER, THE OFFERING, AND RELATED TRANSACTIONS</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center">75</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td><a href="#a_008"><span style="font-size: 10pt">DESCRIPTION OF OUR BUSINESS</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">81</span></td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
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    <td>&#160;</td>
    <td style="text-align: center">117</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td><a href="#a_010"><span style="font-size: 10pt">MANAGEMENT</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center">128</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td><a href="#a_011"><span style="font-size: 10pt">EXECUTIVE COMPENSATION</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center">132</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td><a href="#a_012"><span style="font-size: 10pt">CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center">138</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td><a href="#a_013"><span style="font-size: 10pt">USE OF PROCEEDS</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center">143</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td><a href="#a_014"><span style="font-size: 10pt">DIVIDEND POLICY</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center">144</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td><a href="#a_015"><span style="font-size: 10pt">DETERMINATION OF OFFERING PRICE</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center">145</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td><a href="#a_016"><span style="font-size: 10pt">MARKET INFORMATION FOR OUR COMMON STOCK</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center">146</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td><a href="#a_017"><span style="font-size: 10pt">SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center">147</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td><a href="#a_018"><span style="font-size: 10pt">SELLING STOCKHOLDERS</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center">149</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td><a href="#a_019"><span style="font-size: 10pt">PLAN OF DISTRIBUTION</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center">151</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td><a href="#a_020"><span style="font-size: 10pt">DESCRIPTION OF CAPITAL STOCK</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center">154</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td><a href="#a_021"><span style="font-size: 10pt">SHARES ELIGIBLE FOR FUTURE SALE</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center">158</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td><a href="#a_022"><span style="font-size: 10pt">LEGAL MATTERS</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center">160</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td><a href="#a_023"><span style="font-size: 10pt">EXPERTS</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center">160</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td><a href="#a_024"><span style="font-size: 10pt">WHERE YOU CAN FIND MORE INFORMATION</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center">160</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td><a href="#a_025"><span style="font-size: 10pt">INDEX TO FINANCIAL STATEMENTS</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">F-1</span></td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td><a href="#a_026"><span style="font-size: 10pt">PART&#160;II</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">II-1</span></td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td><a href="#a_027"><span style="font-size: 10pt">EXHIBIT INDEX</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">II-4</span></td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td><a href="#a_028"><span style="font-size: 10pt">SIGNATURES</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">II-6</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"></p><div>

</div><!-- Field: Page; Sequence: 3; Options: NewSection; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: normal 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: LowerRoman; Name: PageNo -->i<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><div><a id="a_001"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>ABOUT
THIS PROSPECTUS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We have not, and the
selling stockholders have not, authorized anyone to give you any information other than the information contained in this prospectus,
the information incorporated by reference herein, any applicable prospectus supplement or any free writing prospectus filed with the U.S.
Securities and Exchange Commission (the &#8220;SEC&#8221;). We and the selling stockholders take no responsibility for, and can provide
no assurances as to the reliability of, any other information that others may give you. Neither we nor the selling stockholders have authorized
anyone to provide you with additional information or information different from that contained in this prospectus filed with the SEC.
The selling stockholders are offering to sell, and seeking offers to buy, shares of our common stock only in jurisdictions where offers
and sales are permitted. You should assume that the information appearing in this prospectus, the applicable prospectus supplement and
any related free writing prospectus is accurate only as of the respective dates of those documents. Our business, financial condition,
results of operations and prospects may have changed since those dates.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>For Non-U.S. investors</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Neither we nor the selling
stockholders have done anything that would permit this offering or possession or distribution of this prospectus, any prospectus supplement
or free writing prospectus filed with the SEC, in any jurisdiction where action for that purpose is required, other than in the United
States. Persons outside the United States who come into possession of this prospectus, any prospectus supplement or free writing prospectus
must inform themselves about, and observe any restrictions relating to, the offering of the shares of common stock and the distribution
of this prospectus, any prospectus supplement or free writing prospectus outside the United States.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

</div><!-- Field: Page; Sequence: 4; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: normal 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: LowerRoman; Name: PageNo -->ii<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><div><a id="a_002"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>Special
Note Regarding Forward-Looking Statements</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">This prospectus, including
the sections entitled &#8220;<i>Risk Factors</i>,&#8221; &#8220;<i>Management&#8217;s Discussion and Analysis of Financial Condition and
Results of Operations</i>&#8221; and &#8220;<i>Description of our Business</i>&#8221;, includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended (the &#8220;Securities Act&#8221;) and Section 21E of the Securities
Exchange Act of 1934, as amended (the &#8220;Exchange Act&#8221;). Forward-looking statements relate to, among others, our plans, objectives
and expectations for our business, operations and financial performance and condition, and can be identified by terminology such as &#8220;may,&#8221;
&#8220;should,&#8221; &#8220;expect,&#8221; &#8220;intend,&#8221; &#8220;plan,&#8221; &#8220;anticipate,&#8221; &#8220;believe,&#8221;
&#8220;estimate,&#8221; &#8220;predict,&#8221; &#8220;will,&#8221; &#8220;could,&#8221; &#8220;project,&#8221; &#8220;target,&#8221; &#8220;potential,&#8221;
&#8220;continue&#8221; and similar expressions that do not relate solely to historical matters. Forward-looking statements are based on
management&#8217;s belief and assumptions and on information currently available to management. Although we believe that the expectations
reflected in forward-looking statements are reasonable, such statements involve known and unknown risks, uncertainties and other factors
that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements
expressed or implied by forward-looking statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Forward-looking statements
contained in this prospectus include, but are not limited to, statements about:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the ability of our preclinical
studies and future clinical trials to demonstrate safety and efficacy of product candidates that we may develop, license or acquire and
other positive results;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">any action we may take in the
future with respect to our license agreements with Eil Therapeutics, Inc., or Eil, and Bala Therapeutics, Inc., or Bala, including our
obligations to pay promissory notes issued in connection with such license agreements;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the initiation, timing, progress,
results and cost of our research and development programs and our current and future preclinical studies and planned clinical trials
for our current product candidate, any licensed product candidate and any other product candidates we may develop, license or acquire,
including statements regarding the timing of initiation and completion of studies or trials and related preparatory work, the period
during which the results of the studies or trials will become available, and our current or future research and development programs;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the timing, scope and likelihood
of regulatory filings and approvals, including timing of INDs, and final FDA approval of our current product candidate, our licensed
product candidates and any future product candidates we may develop, license or acquire;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">our ability to develop and
advance our current product candidate, our licensed product candidates and development programs into, and successfully complete, clinical
trials;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">our manufacturing, commercialization,
and marketing capabilities and strategy;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">our plans relating to commercializing
our product candidate, our licensed product candidates and any other product candidates we may develop, license or acquire, if approved,
including the geographic areas of focus and sales strategy;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the need to hire additional
personnel and our ability to attract and retain such personnel;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the size of the market opportunity
for our product candidate, our licensed product candidates and any of product candidates that we develop, license or acquire, including
our estimates of the number of patients who suffer from the diseases we are targeting;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">our competitive position and
the success of competing therapies that are or may become available;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the potential beneficial characteristics,
and the potential safety, efficacy and therapeutic effects of our product candidate, our licensed product candidates and any other product
candidates we may develop, license or acquire;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">our ability to obtain and maintain
regulatory approval of product candidates;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">our plans relating to the further
development of product candidates, including additional indications we may pursue;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">existing regulations and regulatory
developments in the United States, Europe and other jurisdictions;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">our intellectual property position,
including the scope of protection we are able to establish and maintain for intellectual property rights covering our current product
candidate, our licensed product candidates and any other product candidates we may develop, license or acquire, including the extensions
of existing patent terms where available, the validity of intellectual property rights held by third parties, and our ability not to
infringe, misappropriate or otherwise violate any third-party intellectual property rights;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">our continued reliance on third
parties to conduct additional preclinical studies and planned clinical trials of our current product candidate and any product candidate
we may develop, license or acquire, and for the manufacture of product candidates for preclinical studies and clinical trials;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">our ability to obtain, and
negotiate favorable terms of, any collaboration, licensing or other arrangements that may be necessary or desirable to develop, manufacture
or commercialize product candidates;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the pricing and reimbursement
of our current product candidate, our licensed product candidates and any other product candidates we may develop, license or acquire,
if approved;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the rate and degree of market
acceptance and clinical utility of our product candidate, our licensed product candidates and any other product candidates we may develop,
license or acquire;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">our estimates regarding expenses,
capital requirements and needs for additional financing;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">our financial performance;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the period over which we estimate
our existing cash and cash equivalents will be sufficient to fund our future operating expenses and capital expenditure requirements;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">our expectations regarding
the period during which we will remain an emerging growth company under the JOBS Act;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the development of a market
for our common stock;</span></td>
</tr></table><div>

</div><p style="margin: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">our intended use of proceeds
from the Offering (as defined below);</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">developments relating to our
competitors and our industry; and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">other risks and uncertainties,
including those listed under the caption &#8220;<i>Risk Factors</i>.&#8221;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">We caution you that the foregoing list may
not contain all of the forward-looking statements made in this prospectus.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">These forward-looking
statements are subject to a number of risks, uncertainties, and assumptions, including those described in the section titled &#8220;<i>Risk
Factors</i>.&#8221; Moreover, we operate in a very competitive and rapidly changing environment, and new risks emerge from time to time.
It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent
to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking
statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this prospectus
may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">You should not rely upon
forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may
not be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot
guarantee future results, performance or achievements. We undertake no obligation to update any of these forward-looking statements for
any reason after the date of this prospectus or to conform these statements to actual results or to changes in our expectations, except
as required by law.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In addition, statements
that &#8220;we believe&#8221; and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based
upon information available to us as of the date of this prospectus, and while we believe such information forms a reasonable basis for
such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted
an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and
investors are cautioned not to unduly rely upon these statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">You should read this
prospectus and the documents we have filed with the SEC as exhibits to this prospectus with the understanding that our actual future results,
performance and events and circumstances may be materially different from what we expect.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">This prospectus contains
estimates, projections and other information concerning our industry, our business and the markets for our product candidate and development
programs, including data regarding the estimated size of such markets and the incidence of certain medical conditions. We obtained the
industry, market and similar data set forth in this prospectus from our internal estimates and research and from academic and industry
research, publications, surveys and studies conducted by third parties, including governmental agencies. The content of third-party sources,
except to the extent specifically set forth in this prospectus, does not constitute a portion of this prospectus and is not incorporated
herein. In some cases, we do not expressly refer to the sources from which this data is derived. Information that is based on estimates,
forecasts, projections, market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances
may differ materially from events and circumstances that are assumed in this information. Investors are cautioned not to give undue weight
to any such information, projections and estimates. In particular, projections, assumptions, and estimates of our future performance and
the future performance of the industry in which we operate is necessarily subject to a high degree of uncertainty and risk due to a variety
of factors, including those described in the section titled &#8220;<i>Risk Factors</i>&#8221; and elsewhere in this prospectus.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><div style="padding: 5; border: Black 1.5pt solid; width: 98%">

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p>

<a id="a_003"></a><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>PROSPECTUS
SUMMARY</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>This summary highlights
certain information about us, this offering and selected information contained elsewhere in this prospectus. This summary is not complete
and does not contain all of the information that you should consider before deciding whether to invest in the securities covered by this
prospectus. For a more complete understanding of the Company and this offering, we encourage you to read and consider carefully the more
detailed information in this prospectus, any related prospectus supplement and any related free writing prospectus, including the information
set forth in the section titled &#8220;Risk Factors&#8221; in this prospectus, any related prospectus supplement and any related free
writing prospectus in their entirety before making an investment decision.</i></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">All references to &#8220;Lomond&#8221;
refer to Lomond Operating Co. (formerly known as Lomond Therapeutics, Inc.), a privately held Delaware corporation and our direct, wholly-owned
subsidiary. Unless otherwise stated or the context otherwise indicates, references to the &#8220;Company&#8221;, &#8220;we&#8221;, &#8220;our&#8221;,
&#8220;us&#8221; or similar terms refer to Lomond Therapeutics Holdings, Inc. (formerly named Venetian-1 Acquisition Corp.) together with
its wholly-owned subsidiary, Lomond. Lomond holds all material assets and conducts all business activities and operations of Lomond Therapeutics
Holdings, Inc.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Overview</b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We are a biopharmaceutical
company focused on the discovery and development of multiple product candidates to address hematological malignancies. We were co-founded
by OrbiMed Advisors LLC, or OrbiMed, Torrey Pines Investment LLC, or Torrey Pines, and Dr.&#160;John C. Byrd. We are utilizing a platform
offered by Expert Systems Inc., or Expert Systems, which is powered by artificial intelligence and machine learning, or AI/ML, to choose
molecular mechanisms of pathology and to rationally design, accelerate discovery and optimize development of potential therapies. Our
goal is to utilize this AI/ML platform to become a leader in developing novel breakthrough medicines to maximize clinical benefit when
treating hematologic malignancies.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our initial focus is
on developing a next-generation inhibitor of FMS-like tyrosine kinase 3, or FLT3, and interleukin-1 receptor-associated kinase 4, or IRAK4,
for the treatment of acute myeloid leukemia, or AML and myelodysplastic syndrome, or MDS.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Our Strategy</b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We are a biopharmaceutical
company focused on improving the lives of cancer patients through the discovery, development and commercialization of transformative targeted
therapies. Our development programs are designed to address drug resistance mutations in key driver oncogenes, which are mutated genes
that cause cancer. The key elements of our strategy to achieve our mission are:</p>

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<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt"><b><i>Advance the clinical
development of&#160;lomonitinib.</i></b>&#160;We designed&#160;lomonitinib&#160;as a differentiated pan-FLT3/IRAK4 inhibitor for the
treatment of patients with AML with FLT3 mutations, or FLT3 AML. We believe that the lomonitinib could become a safe and effective pan-FLT3/IRAK4
inhibitor. We have conducted extensive evaluation of lomonitinib in healthy volunteers in Australia and determined what we believe to
be an effective dose that is not associated with any adverse events. We have advanced lomonitinib into previously treated FLT3 positive
AML patients in Australia. Separately, we submitted an Investigational New Drug, or IND, application to the U.S. Food and Drug Administration,
or the FDA, for&#160;lomonitinib&#160;in the first quarter of 2024, and this clinical trial, also in patients with previously treated
FLT3-positive AML is ongoing, with initial Phase 1b data expected to be announced in the fourth quarter of 2024. Our initial registration
strategy will focus on relapsed and refractory AML, or R/R AML, where there are currently no effective therapies and therefore a significant
unmet medical need. We also plan to evaluate&#160;lomonitinib&#160;in first-line FLT3-positive AML in light of this candidate&#8217;s
potential for inhibiting certain FLT3 mutations. Based on its preclinical profile, we believe&#160;lomonitinib&#160;has the potential
to deliver meaningful clinical benefits over the currently available standard of care.</span></td>
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<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt"><b><i>Advance the clinical
development of the drug products that we have licensed from Eil and Bala.</i></b>&#160;We have exclusive, perpetual, worldwide licensing
rights for the development and future ownership of (i) lonitoclax, a B-cell lymphoma 2, or BCL-2, inhibitor for the treatment of AML,
chronic lymphocytic leukemia, or CLL, which we obtained from Eil Therapeutics, Inc., or Eil, and (ii) an early-stage menin inhibitor
for the treatment of AML, which we obtained from Bala Therapeutics, Inc., or Bala. We believe that these two drug products could be synergistic
with lomonitinib and with each other.</span></td>
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<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt"><b><i>Build a leading, fully
integrated precision oncology company to maximize the clinical impact and value of our pipeline</i></b>. We believe the targeted nature
of our research and discovery approach, which is guided in part by an AI/ML platform, allows for efficient and focused clinical development.
We are building a lean, experienced team to rapidly advance product candidates in a capital-efficient manner. We intend to retain the
commercialization rights to product candidates; however, we may opportunistically enter into strategic collaborations in certain geographic
or clinical settings to maximize the value of our pipeline.</span></td>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Risks Related to Our
Business and Strategy</b></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our ability to implement
our current business strategy is subject to numerous risks, as more fully described in the section titled &#8220;<i>Risk Factors</i>.&#8221;
These risks include, among others, the following:</p>

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<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">We are very early in our development
efforts, have a limited operating history, have not conducted any late-stage clinical trials, have no products approved for commercial
sale and have not generated any revenue, which may make it difficult for investors to evaluate our current business and likelihood of
success and viability.</span></td>
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<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">There is no guarantee that
the Eil license agreement or the Bala license agreement will positively affect our business, results of operations or prospects.</span></td>
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<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">Our ability to generate revenue
and achieve profitability depends significantly on our ability to achieve in a timely manner our objectives relating to the discovery,
development and commercialization of our product candidates and development programs.</span></td>
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<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">We are very early in our development
efforts and are substantially dependent on our FLT3/IRAK4 and BCL-2 inhibitor programs. If we are unable to advance lomonitinib, our
lead product candidate from the FLT3/IRAK4 program, or lonitoclax, our lead product candidate from the BCL-2 inhibitor program licensed
from Eil, or any of the products we have licensed from Bala, through preclinical and clinical development, obtain regulatory approval
and ultimately commercialize such product candidates, or experience significant delays in doing so, our business will be materially harmed.</span></td>
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<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">In addition to our lead candidates,
lomonitinib and lonitoclax, our business depends in part upon licensing or acquiring, developing and commercializing product candidates
from other research programs, which may fail in development or suffer delays that adversely affect their commercial viability.</span></td>
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<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">We have only conducted preclinical
studies and early clinical trials to date, and the outcome of preclinical testing and early clinical trials may not be predictive of
the success of subsequent clinical trials, including in respect of demonstrating consistent or adequate efficacy and safety.</span></td>
</tr></table>
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<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">The design or our execution
of our future clinical trials may not support marketing approval.</span></td>
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<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">We have limited experience
as a company in conducting clinical trials.</span></td>
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<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">We face substantial competition
which may result in others discovering, developing or commercializing products before or more successfully than we do.</span></td>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">We have never commercialized
a product candidate as a company before and currently lack the necessary expertise, personnel and resources to successfully commercialize
any products on our own or together with suitable collaborators.</span></td>
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<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">We may be unable to obtain
U.S. or foreign regulatory approval and, as a result, may be unable to commercialize product candidates.</span></td>
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<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">If we and our licensors and
collaborators, if any, are unable to obtain and maintain sufficient patent and other intellectual property protection for product candidates
and technology, our competitors could develop and commercialize products and technology similar or identical to ours, and we may not
be able to compete effectively in our market or successfully commercialize any of our current or future product candidates.</span></td>
</tr></table>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Recent Developments</b></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Merger Agreement</i></b></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">On November 1, 2024,
we, Acquisition Sub and Lomond entered into the Merger Agreement. Pursuant to the terms of the Merger Agreement, on November 1, 2024 (the
&#8220;Closing Date&#8221;), Acquisition Sub merged with and into Lomond, with Lomond continuing as the surviving corporation and our
wholly-owned subsidiary.</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Pursuant to the terms
of the Merger Agreement, at the time the certificate of merger reflecting the Merger was filed with the Secretary of State of Delaware
(the &#8220;Effective Time&#8221;), each share of Lomond&#8217;s capital stock (comprising of Lomond common stock and Lomond preferred
stock) issued and outstanding immediately prior to the closing of the Merger was cancelled and converted into the right to receive&#160;one
share of our common stock (the &#8220;Exchange Ratio&#8221;), with the maximum number of shares of our common stock issuable to the former
holder of Lomond&#8217;s capital stock equal to 14,420,383 (which is equal to 758,967 shares of Lomond common stock and 13,661,416 shares
of Lomond preferred stock issued and outstanding immediately prior to the closing of the Merger). In addition, pursuant to the Merger
Agreement, immediately prior to the Effective Time, an aggregate of 3,625,000 shares of the 5,000,000 then-outstanding shares of our common
stock owned by our stockholders prior to the Merger were forfeited and cancelled (the &#8220;Stock Forfeiture&#8221;).</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In addition, pursuant
to the Merger Agreement, at the Effective Time, options to purchase an aggregate of 4,329,617 shares of Lomond common stock at an exercise
price of $1.30 per share issued and outstanding immediately prior to the closing of the Merger under Lomond&#8217;s 2024 Stock Plan (the
&#8220;Lomond Plan&#8221;) were assumed and converted into options to purchase 4,329,617&#160;shares of our common stock at an exercise
price of $1.30 per share.</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The issuance of shares
of our common stock to Lomond&#8217;s stockholders and the assumption of Lomond&#8217;s options outstanding immediately prior to the Effective
Time pursuant to the Merger Agreement are collectively referred to as the &#8220;Share Conversion.&#8221;</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The Merger Agreement
contained customary representations and warranties and pre- and post-closing covenants of each party and customary closing conditions.</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">As a condition to the
Merger, we entered into a Pre-Merger Indemnity Agreement with each of our former officers and directors, pursuant to which we agreed to
indemnify such individuals for actions taken by him or her in his or her official capacities relating to the consideration, approval and
consummation of the Merger and certain related transactions.</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We expect the Merger
to be treated as a recapitalization and reverse acquisition for us for financial reporting purposes. Lomond is considered the acquirer
for accounting purposes, and our historical financial statements before the Merger will be replaced with the historical financial statements
of Lomond before the Merger in future filings with the United States Securities and Exchange Commission (the &#8220;SEC&#8221;). The Merger
is intended to be treated as a tax-free reorganization under Section&#160;368(a) of the Internal Revenue Code of 1986, as amended.</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Private Placement
Offering</i></b></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Immediately following
the Effective Time of the Merger, we issued an aggregate of $43.9 million of our shares of common stock pursuant to a private placement
offering and the conversion of certain simple agreements for future equity (&#8220;SAFEs&#8221;) issued by Lomond, which included (i)
8,241,375 shares of our common stock issued and sold at a purchase price of $4.00 per share in cash (the &#8220;Offering Price&#8221;)
pursuant to the Subscription Agreement; (ii) 1,078,124 shares of our common stock at a price of $3.20 pursuant to the conversion of certain
SAFEs issued by Lomond in October 2024, and (iii) 2,083,332 shares of our common stock at a price of $3.60 pursuant to the conversion
of certain SAFEs issued by Lomond in August 2024. The private placement offering is referred to herein as the &#8220;Offering.&#8221;</p>

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</div><div style="padding: 5; border: Black 1.5pt solid; width: 98%">
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The aggregate gross proceeds
from the Offering, including the aggregate amount previously received from the issuance of the SAFEs, were $43.9&#160;million (before
deducting placement agent fees and expenses of the Offering, which are estimated at $2.6 million).</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The Offering was exempt
from registration under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated by the SEC thereunder. The common
stock was sold to &#8220;accredited investors,&#8221; as defined in Regulation D, and was conducted on a &#8220;reasonable best efforts&#8221;
basis.</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Implications of Being
an Emerging Growth Company and a Smaller Reporting Company</b></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">As a company with less
than $1.235 billion in revenue during our last fiscal year, we qualify as an &#8220;emerging growth company&#8221; as defined in the Jumpstart
Our Business Startups Act of 2012, or JOBS Act. An emerging growth company may take advantage of reduced reporting requirements that are
otherwise applicable to public companies. These provisions include, but are not limited to:</p>

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<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">being permitted to present
only two years of audited financial statements and only two years of related &#8220;Management&#8217;s Discussion and Analysis of Financial
Condition and Results of Operations&#8221; disclosure in our periodic reports and registration statements, including this prospectus;</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">reduced disclosure about our
executive compensation arrangements;</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">not being required to comply
with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, as amended, on the effectiveness of our internal
controls over financial reporting;</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">reduced disclosure obligations
regarding executive compensation arrangements in our periodic reports, proxy statements and registration statements, including this prospectus;
and</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">exemptions from the requirements
of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously
approved.</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We may use these provisions
until the last day of our fiscal year in which the fifth anniversary of the first sale of our common stock pursuant to an effective registration
statement occurs. However, if certain events occur prior to the end of such five-year period, including if we become a &#8220;large accelerated
filer,&#8221; our annual gross revenues exceed $1.235 billion or we issue more than $1.00 billion of non-convertible debt in any three-year
period, we will cease to be an emerging growth company prior to the end of such five-year period.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We have elected to take
advantage of certain of the reduced disclosure obligations in the registration statement of which this prospectus is a part and may elect
to take advantage of other reduced reporting requirements in future filings. As a result, the information that we provide to our stockholders
may be different than you might receive from other public reporting companies in which you hold equity interests.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The JOBS Act provides
that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards,
until those standards apply to private companies. We have elected to take advantage of the benefits of this extended transition period
and, therefore, we will not be subject to the same new or revised accounting standards as other public companies that are not emerging
growth companies. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised
accounting standards. Until the date that we are no longer an emerging growth company or affirmatively and irrevocably opt out of the
exemption provided by Section 7(a)(2)(B) of the Securities Act upon issuance of a new or revised accounting standard that applies to our
financial statements and that has a different effective date for public and private companies, we will disclose the date on which we will
adopt the recently issued accounting standard.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p>
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</div><div style="padding: 5; border: Black 1.5pt solid; width: 98%">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We are also a &#8220;smaller
reporting company,&#8221; meaning that the market value of our stock held by non-affiliates plus the proposed aggregate amount of gross
proceeds to us as a result of this offering is less than $700 million and our annual revenue is less than $100 million during the most
recently completed fiscal year. We may continue to be a smaller reporting company after this offering if either (i) the market value of
our stock held by non-affiliates is less than $250 million or (ii) our annual revenue is less than $100 million during the most recently
completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million. If we are a smaller reporting
company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements
that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two
most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies,
smaller reporting companies have reduced disclosure obligations regarding executive compensation.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Corporate Information</b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We were incorporated as Venetian-1 Acquisition
Corp. in the State of Delaware in September 2021. On November 1, 2024, our wholly-owned subsidiary, Lomond Acquisition Corp., a corporation
formed in the State of Delaware on October 23, 2024 (&#8220;Acquisition Sub&#8221;), merged with and into Lomond, which is developing
multiple product candidates to address hematological malignancies. Pursuant to the Merger, Lomond was the surviving corporation and became
our wholly-owned subsidiary, and all of the outstanding stock of Lomond held by a single accredited investor was converted into shares
of our common stock. Lomond&#8217;s 2024 Stock Plan and all of outstanding options granted under such plan were assumed by us. Following
the consummation of the Merger, Lomond changed its name to &#8220;Lomond Operating Co.&#8221; Immediately after completion of the Merger,
we changed our name to &#8220;Lomond Therapeutics Holdings, Inc.&#8221;</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Prior to the Merger (as
defined below), Venetian-1 Acquisition Corp. was a &#8220;shell company&#8221; (as defined in Rule 12b-2 under the Securities Exchange
Act of 1934, as amended (the &#8220;Exchange Act&#8221;)), with no specific business plan or purpose until it began operating the business
of Lomond following the closing of the Merger.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our principal executive
offices are located at 8 The Green Ste. 8490, Dover, Delaware. Our telephone number is (212) 739-6400. Our website address is&#160;<i>www.lomondther.com.</i>&#160;Information
contained on, or that can be accessed through, our website is not a part of this prospectus.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">All trademarks, service
marks and trade names appearing in this prospectus are the property of their respective holders. Use or display by us of other parties&#8217;
trademarks, trade dress, or products in this prospectus is not intended to, and does not, imply a relationship with, or endorsements or
sponsorship of, us by the trademark or trade dress owners.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p>

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    </div><div style="break-before: page; margin-top: 6pt"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>
</div><div style="padding: 5; border: Black 1.5pt solid; width: 98%">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p>

<a id="a_004"></a><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>THE
OFFERING</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>&#160;</b></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-indent: -0.125in; padding-left: 0.125in; width: 25%"><span style="font-size: 10pt"><b><i>Common stock offered by selling stockholders</i></b></span></td>
    <td style="width: 75%; text-align: justify"><span style="font-size: 10pt">27,473,624 shares (1)</span></td></tr>
  <tr style="vertical-align: top">
    <td>&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td><span style="font-size: 10pt"><b><i>Common stock outstanding</i></b></span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">27,198,214 shares</span></td></tr>
  <tr style="vertical-align: top">
    <td>&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td><span style="font-size: 10pt"><b><i>Use of proceeds</i></b></span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">We will not receive any proceeds from the sale of the shares of common stock offered by the selling stockholders.</span></td></tr>
  <tr style="vertical-align: top">
    <td>&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td><span style="font-size: 10pt"><b><i>Offering price</i></b></span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">The selling stockholders may only sell their shares of common stock pursuant to this prospectus at a fixed price of $4.00 per share (as may be adjusted for stock splits, stock dividends, combinations, recapitalizations or similar events) until such time as our common stock is quoted on the OTCQB, or another public trading market for the common stock otherwise develops. At and after such time, the selling stockholders may sell all or a portion of their shares through public or private transactions at prevailing market prices or at privately negotiated prices.</span></td></tr>
  <tr style="vertical-align: top">
    <td>&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td><span style="font-size: 10pt"><b><i>Risk factors</i></b></span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">You should read the &#8220;Risk Factors&#8221; section of this prospectus for a discussion of factors to consider carefully before deciding to invest in shares of our common stock.</span></td></tr>
  <tr style="vertical-align: top">
    <td>&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td><span style="font-size: 10pt"><b><i>Market for our shares</i></b></span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">There is not now and never has been any market for our securities and an active market may never develop. We have arranged for a broker-dealer to apply to have our common stock quoted on the OTCQB or another over-the-counter system. In the future, we intend to seek to have the common stock listed on a national securities exchange. However, we may not be successful in having our shares quoted on an over-the-counter market or listed on a national securities exchange.</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left">(1)</td><td style="text-align: justify">Includes common stock issuable upon exercise of Placement
Agent Warrants to purchase an aggregate of 275,410 shares of our common stock at an exercise price of $4.00 per share.</td>
</tr></table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The number of shares
of common stock outstanding is based on an aggregate of 27,198,214 shares outstanding as of November 21, 2024 but excludes:</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">4,329,617 shares of common
stock issuable upon the exercise of stock options outstanding that were subject to options originally granted under the Lomond&#8217;s
2024 Stock Plan, with a weighted-average exercise price of $1.30 per share; and</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">outstanding Placement Agent
Warrants to purchase an aggregate of 275,410 shares of our common stock at an exercise price of $4.00 per share.</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p>

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    </div><div style="break-before: page; margin-top: 6pt"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&#160;</p></div><div>
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</div><div style="padding: 5; border: Black 1.5pt solid; width: 98%">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p>

<a id="a_005"></a><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>SUMMARY
FINANCIAL DATA</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>The following tables
set forth summary financial data as of, and for the nine months ended, September 30, 2024 and 2023, and as of, and for the years ended,
December 31, 2023 and 2022 and should be read together with our consolidated financial statements and the related notes, as well as the
sections of this prospectus entitled &#8220;Risk Factors&#8221; and &#8220;Management&#8217;s Discussion and Analysis of Financial Condition
and Results of Operations&#8221; appearing elsewhere in this prospectus. The summary financial data in this section is not intended to
replace our financial statements and related notes. The summary consolidated financial data as of, and for the nine months ended, September
30, 2024 and 2023 are derived from our unaudited consolidated financial statements included elsewhere in this prospectus. In our opinion,
these unaudited consolidated financial statements have been prepared on a basis consistent with our audited financial statements and contain
all adjustments, consisting only of normal and recurring adjustments, necessary for a fair presentation of such consolidated financial
data. The summary financial data as of, and for the years ended, December 31, 2023 and 2022 are derived from our audited financial statements
included elsewhere in this prospectus. Our historical results are not necessarily indicative of our future results, and our operating
results for the nine-month period ended September 30, 2024 are not necessarily indicative of the results that may be expected for the
fiscal year ending December 31, 2024 or any other interim periods or any future year or period. See Unaudited Pro Forma Combined Financial
Statements on page F-45.</i></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&#160;</p>

<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-indent: -0.375in; padding-left: 0.375in">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Nine Months Ended<br/> September 30,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Years Ended<br/> December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
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    <td style="text-indent: -0.375in; padding-left: 0.375in">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td style="text-indent: -0.375in; padding-left: 0.375in">Operating expenses:</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">7,000,000</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">5,639,607</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">9,729,437</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-indent: -0.375in; padding-left: 0.375in; text-align: left">General and administrative</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">836,663</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">14,729</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">20,642</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">75,982</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(9,750,079</td><td style="text-align: left">)</td><td>&#160;</td>
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    <td style="text-indent: -0.375in; padding-left: 0.375in">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(191,205</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(114,879</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(7.65</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(13.10</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#160;</td>
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    <td style="border-bottom: Black 4pt double; text-align: left">&#160;</td><td style="border-bottom: Black 4pt double; text-align: right">758,967</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">September 30,<br/> 2024<br/> (unaudited)</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">800,728</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">694,352</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">856,144</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">919,281</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">8,424,479</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">9,675,408</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"></p>

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</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase">&#160;</span></p><div>

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    </div><div style="break-before: page; margin-top: 6pt"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase">&#160;</span></p><div>

</div><div><a id="a_006"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>RISK
FACTORS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>Investing in our common
stock is speculative and involves a high degree of risk. Before deciding whether to invest in our common stock, you should consider carefully
the risks described below, together with the other information contained in this prospectus, including our financial statements and the
section below titled &#8220;Management&#8217;s Discussion and Analysis of Financial Condition and Results of Operations.&#8221; If any
of the following risks occur, our business, financial condition, results of operations and future growth prospects could be materially
and adversely affected. In these circumstances, the market price of our common stock could decline, and you may lose all or part of your
investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business
operations and the market price of our common stock. This prospectus also contains forward-looking statements that involve risks and uncertainties.
Our actual results could differ materially from those anticipated in the forward-looking statements as a result of a number of factors,
including the risks described below. See &#8220;Special Note Regarding Forward-Looking Statements.&#8221;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><b>Summary of Principal
Risks</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="text-transform: uppercase"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Investing in our common
stock involves substantial risk. Our ability to execute our business strategy is subject to numerous risks, as more fully described in
the remainder of this section titled &#8220;<i>Risk Factors</i>&#8221; below. These risks include, among others:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">We are very early in our development
efforts, have a limited operating history, have not conducted any late-stage clinical trials, have no products approved for commercial
sale and have not generated any revenue, which may make it difficult for investors to evaluate our current business and likelihood of
success and viability.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">There is no guarantee that
the Eil license agreement or the Bala license agreement will positively affect our business, results of operations or prospects.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">We have incurred significant
net losses in each period since our inception, and we expect to continue to incur significant net losses for the foreseeable future.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">Our ability to generate revenue
and achieve profitability depends significantly on our ability to achieve in a timely manner our objectives relating to the discovery,
development and commercialization of our product candidates and development programs.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">In the future, we will need
substantial additional funding to complete the development and, if approved, any commercialization of product candidates. If we are unable
to raise this capital when needed, we may be forced to delay, reduce or eliminate our product development programs or other operations.</span></td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">We are very early in our development
efforts and are substantially dependent on our FLT3/IRAK4 and BCL-2 inhibitor programs. If we are unable to advance lomonitinib, our
lead product candidate from the FLT3/IRAK4 program, or lonitoclax, our lead product candidate from the BCL-2 inhibitor program licensed
from Eil, or any of the products we have licensed from Bala, through preclinical and clinical development, obtain regulatory approval
and ultimately commercialize such product candidates, or experience significant delays in doing so, our business will be materially harmed.</span></td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">In addition to our lead candidates,
lomonitinib and lonitoclax, our business depends in part upon licensing or acquiring, developing and commercializing product candidates
from other research programs, which may fail in development or suffer delays that adversely affect their commercial viability.</span></td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">We have only conducted preclinical
studies and early clinical trials to date, and the outcome of preclinical testing and early clinical trials may not be predictive of
the success of subsequent clinical trials, including in respect of demonstrating consistent or adequate efficacy and safety.</span></td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">The design or our execution
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

</div><!-- Field: Page; Sequence: 16 --><div>
    </div><div style="margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: normal 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->9<!-- Field: /Sequence --></p><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">We have limited experience
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

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<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">We face substantial competition
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
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any products on our own or together with suitable collaborators.</span></td>
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collaborators, if any, are unable to obtain and maintain sufficient patent and other intellectual property protection for product candidates
and technology, our competitors could develop and commercialize products and technology similar or identical to ours, and we may not
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">There is currently no market
for our common stock and there can be no assurance that any market will ever develop. You may therefore be unable to re-sell shares of
our common stock at times and prices that you believe are appropriate.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">We have identified material
weaknesses in our internal control over financial reporting in the past. If our remediation of the material weaknesses is not effective,
our ability to produce accurate and timely financial statements could be impaired, which could result in sanctions or other penalties
that would harm our business and the trading price of our common stock may decline.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">Our common stock is not listed
on a securities exchange and is not quoted on an over-the-counter trading system, and it may not ever be eligible for listing or quotation
on any securities exchange or on a given over-the-counter trading system.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Risks Related to Our
Business, Financial Position and Capital Requirements</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>We are very early
in our development efforts, have a limited operating history, have not conducted any late-stage clinical trials, have no products approved
for commercial sale and have not generated any revenue, which may make it difficult for investors to evaluate our current business and
likelihood of success and viability.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We are a biopharmaceutical
company with a limited operating history upon which investors can evaluate our business and prospects. Since our inception in 2020, our
operations have focused on organizing and staffing our company, business planning, raising capital, establishing our intellectual property
portfolio and performing research and development activities, including with respect to lomonitinib, our pan-FLT3/IRAK4 inhibitor for
the treatment of acute myeoloid leukemia, or AML. To date, we have not conducted any late-stage clinical trials, have no products approved
for commercial sale and have not generated any revenue. Drug development is a highly uncertain undertaking that involves a substantial
degree of risk.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We have not demonstrated
our ability to successfully conduct any late-stage clinical trials, obtain marketing approvals, manufacture the clinical or commercial
supply of drug product or arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful
product commercialization. As a result, it may be more difficult for investors to accurately predict our likelihood of success and viability
than if we had a longer operating history.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In addition, we may encounter
unforeseen expenses, difficulties, complications, delays and other known and unknown factors and risks frequently experienced by preclinical-stage
biopharmaceutical companies in rapidly evolving fields. We also expect that, as we advance our product candidates and development programs,
we will need to transition from a company with a research and development focus to a company capable of supporting commercial activities.
There can be no assurance that we will overcome such risks and difficulties or make such a transition. If we do not adequately address
these risks and difficulties or successfully make such a transition, our business will suffer such that we may never generate revenue
or achieve profitability.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>There is no guarantee
that the Eil license agreement or the Bala license agreement will positively affect our business, results of operations or prospects.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In October 2024, we entered
into the Eil license agreement and the Bala license agreement. Pursuant to the Eil license agreement and the Bala license agreement, we
obtained exclusive, perpetual, worldwide licensing rights for the development and future ownership of (i) lonitoclax, a BCL-2 inhibitor
for the treatment of AML and CLL from Eil, and (ii) an early-stage menin inhibitor for the treatment of AML from Bala.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The Eil license agreement
and the Bala license agreement became effective in October 2024 when we issued promissory notes to Eil and Bala, respectively. The principal
amount of the promissory notes with Eil and Bala are $1.7 million and $1.2 million, respectively. Each such promissory note bears interest
at a rate of 7% per annum, compounded annually and the principal and accrued interest under each note are due and payable on demand at
any time after October 17, 2026. Each such promissory note may be repaid without penalty. In addition, the two promissory notes each provide
for customary events of default. Upon the payment in full of the applicable promissory note, Eil and Bala have each agreed to transfer
to us all of the intellectual property rights covered by the Eil license agreement and the Bala license agreement, as the case may be.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Eil and Bala have respectively
developed lonitoclax, a BCL-2 inhibitor, and a menin inhibitor, which may in the future be used by themselves or as combinations with
each other or lomonitinib to treat acute myeloid leukemia or other cancers</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">There can be no assurance
that these license agreements and the transactions contemplated thereby will yield the return we expect or any return on investment at
all. When Lomond entered into the Eil license agreement and the Bala license agreement, it had limited information about the drug candidates
being developed by such companies. Moreover, drug development is a highly uncertain undertaking that involves a substantial degree of
risk. In fact, neither Eil nor Bala has demonstrated the ability to successfully initiate and complete any clinical trials, obtain marketing
approvals, manufacture the clinical or commercial supply of drug product or arrange for a third party to do so on its behalf, or conduct
sales and marketing activities necessary for successful product commercialization. To date, Eil and Bala have only completed certain preclinical
studies of their product candidates.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">As a result of the foregoing,
there is no guarantee that any action we take with respect to the Eil license agreement or the Bala license agreement will positively
affect our business, results of operations or prospects. To the extent that we continue developing the products pursuant to such agreements,
we would incur increased operating costs, which could materially adversely affect our business, results of operations and financial condition.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>We have incurred
significant net losses in each period since our inception, and we expect to continue to incur significant net losses for the foreseeable
future.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We have incurred significant
net losses in each reporting period since our inception, have not generated any revenue to date and have financed our operations principally
through private placements of our convertible preferred stock, a promissory note from our former parent company and SAFEs. Our net loss
was $4.1 million and $9.7 million for the years ended December 31, 2022 and 2023, respectively, and it was $8.7 million for the nine months
ended September 30, 2024. As of September 30, 2024, we had an accumulated deficit of $30.4 million. We are still in the very early stages
of development of our product candidates and development programs and have not yet initiated or completed any late-stage clinical trials.
As a result, we expect that it will be many years, if ever, before we have a commercialized product and generate revenue from product
sales. Even if we succeed in receiving marketing approval for and commercializing one or more product candidates, we expect that we will
continue to incur substantial research and development and other expenses in order to discover and develop additional potential products.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We expect to continue
to incur significant expenses and increasing operating losses for the foreseeable future. The net losses we incur may fluctuate significantly
from quarter to quarter such that a period-to-period comparison of our results of operations may not be a good indication of our future
performance. The size of our future net losses will depend, in part, on the rate of future growth of our expenses, which we expect to
increase as our development programs advance, and our ability to generate revenue. To the extent we develop the candidates licensed to
us under the Eil license agreement and the Bala license agreement, our operating costs would also be increased. Our prior losses and expected
future losses have had and will continue to have an adverse effect on our working capital, our ability to fund the development of our
product candidate and development programs, our ability to achieve and maintain profitability and the performance of our common stock.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Our ability to
generate revenue and achieve profitability depends significantly on our ability to achieve in a timely manner our objectives relating
to the discovery, development and commercialization of our product candidates and development programs.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We have no products approved
for commercial sale and do not anticipate generating any revenue from product sales for many years, if ever. We rely on our team&#8217;s
expertise and experience in biology, chemistry, drug discovery and translational research to develop our product candidate and development
programs. Identifying potential product candidates and conducting preclinical studies and clinical trials is a time consuming, expensive
and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain marketing
approval. In addition, any product candidates that we develop, if approved, may not achieve product sales or commercial success.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">As such, our ability
to generate revenue from sales of approved products and achieve profitability depends significantly on our ability to achieve several
objectives, including:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">successful and timely completion
of our ongoing and planned preclinical studies of lomonitinib, lonitoclax, our development candidates from our other programs and any
other future programs we may initiate or acquire;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">timely submission and clearance
of our investigational new drug, or IND, applications for lomonitinib, lonitoclax, or any other product candidate we may develop or license;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">timely and satisfactory responses
to any concerns or questions raised by the FDA in respect of any submitted INDs, including any concerns that could result in the imposition
of any full or partial clinical holds;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
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relationships with contract research organizations, or CROs, and clinical trial sites for the clinical development of product candidates
from any of our current programs and any other future programs both in the United States and internationally;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">timely receipt of marketing
approvals from regulatory authorities for product candidates for which we successfully complete clinical development;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
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scalable manufacturing process for product candidates, including obtaining finished products that are appropriately packaged for sale,
through manufacturing arrangements as necessary;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
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commercially viable supply and manufacturing relationships with third parties that can provide adequate, in both amount and quality,
products and services to support clinical development and meet the market demand for product candidates, if approved;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">successful commercial launch
following any marketing approval, including the development of a commercial infrastructure, whether in-house or with one or more collaborators;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
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profile following any marketing approval of product candidates;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">acceptance of product candidates,
if approved, by patients, the medical community and third-party payors;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
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studies or other commitments to applicable regulatory authorities;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">identifying, assessing and
developing new product candidates;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">obtaining, maintaining and
expanding patent protection, trade secret protection and regulatory exclusivity, both in the United States and internationally;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">defending against third-party
interference or infringement claims, if any;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">entering into, on favorable
terms, any collaboration, licensing or other arrangements that may be necessary or desirable to develop, manufacture or commercialize
product candidates;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">obtaining coverage and adequate
reimbursement by third-party payors for product candidates, if approved;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">addressing any competing therapies
and technological and market developments; and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">attracting, hiring and retaining
qualified personnel.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">See also &#8220;&#8212;<i>Risks
Related to the Discovery, Research and Development of Product Candidates</i>.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We may never be successful
in achieving our objectives and, even if we do, may never generate revenue that is significant or large enough to achieve profitability.
In addition, as a young business, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown
challenges. If we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis, and
we will continue to incur substantial research and development and other expenditures to develop and market additional product candidates.
Our failure to become and remain profitable would significantly decrease the value of our company and could impair our ability to maintain
or further our research and development efforts, raise additional necessary capital, grow our business and continue our operations. A
decline in the value of our company could also cause you to lose all or part of your investment.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>In the future,
we will need substantial additional funding to complete the development and, if approved, any commercialization of product candidates.
If we are unable to raise this capital when needed, we may be forced to delay, reduce or eliminate our product development programs or
other operations.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Since our inception,
we have used substantial amounts of cash to fund our operations, and our expenses will increase substantially in the foreseeable future
in connection with our ongoing activities, particularly as we continue the research and development of and initiate preclinical studies
and clinical trials of product candidates. The development of product candidates, including conducting preclinical studies and clinical
trials, is a very time-consuming, capital intensive and uncertain process that takes years to complete. Even if our current product candidate,
lomonitinib, any of the product candidates we have licensed, including lonitoclax, or any additional product candidates that we may develop,
license or acquire enter and advance through preclinical studies and clinical trials, we will need substantial additional funds to expand
our clinical, regulatory, quality and manufacturing capabilities. In addition, if we obtain marketing approval for product candidates,
we expect to incur significant commercialization expenses related to marketing, sales, manufacturing and distribution. Our expenses could
increase beyond expectations if we are required by the U.S. Food and Drug Administration, or FDA, or any comparable foreign regulatory
authorities to perform clinical trials or preclinical studies in addition to those that we currently anticipate. Other unanticipated costs
may also arise. Furthermore, upon the consummation of the Merger, we became a public company and expect to incur additional costs associated
with operating as a public company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">As of September 30, 2024,
we had $3.6 million in cash and cash equivalents. Based on our current operating plan, we believe that the net proceeds from the Offering,
together with our existing cash and cash equivalents, will be sufficient to fund our operations and capital expenses for at least the
next twelve months.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Advancing the development
of lomonitinib, our licensed product candidates, including lonitoclax, and our other development programs will require a significant amount
of capital. Our existing cash and cash equivalents, including the net proceeds from the Offering, will not be sufficient to fund our product
candidates through regulatory approval, and we anticipate needing to raise additional capital to complete the development of and commercialize
our product candidate and development programs. Our estimate as to how long we expect our existing cash and cash equivalents, together
with the net proceeds from the Offering, to fund our operations is based on assumptions that may prove to be incorrect, and we could utilize
our available capital resources sooner than we currently expect, particularly given that the design and outcome of our ongoing preclinical
studies and anticipated preclinical studies and clinical trials are highly uncertain. Our future capital requirements will depend on many
factors, including:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the scope, rate of progress,
success and costs of our drug discovery, preclinical development activities, laboratory testing and clinical trials for our product candidate
and our licensed product candidates;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the number and scope of clinical
programs we decide to pursue;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the scope and costs of manufacturing
development and commercial manufacturing activities for product candidates, if approved;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the extent to which we acquire
or in-license other product candidates and technologies;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the timing and amount of any
payments required to be made under the agreements governing acquired or in-licensed product candidates or technologies;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the cost, timing and outcome
of regulatory review of product candidates;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the cost and timing of establishing
sales and marketing capabilities, if any product candidate receives marketing approval;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the costs of preparing, filing
and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related
claims;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">our ability to establish and
maintain collaborations on favorable terms, if at all;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">external disruptions on our
business, results of operations and financial position;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">our efforts to enhance operational
systems and our ability to attract, hire and retain qualified personnel, including personnel to support the development of product candidates;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the costs associated with being
a public company; and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the cost associated with commercializing
product candidates, if they receive marketing approval.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In addition, pursuant
to the Subscription Agreement, we agreed that, subject to certain exceptions, we would not, without the prior written consent of a majority
of the shares held by certain outside investors who participated in the Offering, take certain capital-raising actions for a period that
would not end until the latest of (x) 180 days after the closing of the Offering, (y) the date on which a registration statement with
respect to the resale of all of the shares issued in the Offering is declared effective and (z) the date on which the common stock is
listed on a national securities exchange. Pursuant to such agreement, we also agreed that for the year following such period, we would
not raise capital by entering into certain derivative transactions. We are currently ineligible to be listed on any national securities
exchange, and there is no guarantee we ever will be eligible to do so. For more information, see the section titled &#8220;<i>Description
of the Merger, the Offering, and Related Transactions&#8212;The Subscription Agreement&#8212;Restrictions on Certain Equity Sales and
Certain Governance Changes</i>&#8221;. As a result, our ability to raise capital may be limited for the foreseeable future.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our failure to raise
capital as and when needed or on acceptable terms would have a negative impact on our financial condition and our ability to pursue our
business strategy, and we may have to delay, reduce the scope of, suspend or eliminate one or more of our research or drug development
programs, clinical trials or future commercialization efforts.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Raising additional
capital may cause dilution to our stockholders restrict our operations or require us to relinquish rights to our technologies or product
candidates.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We will need to obtain
substantial additional funding to complete the development and any commercialization of our product candidate and any additional product
candidates that we may develop. Until such time, if ever, as we can generate substantial revenue, we will be required to obtain further
funding through public or private equity financings, debt financings, collaborative agreements, licensing arrangements or other sources
of financing, which may dilute our stockholders or restrict our operating activities. In addition, we may seek additional capital due
to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current and future operating
plans.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We do not have any committed
external source of funds, and adequate additional financing may not be available to us on acceptable terms, or at all. If we are unable
to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product
development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer
to develop and market ourselves. In addition, securing financing could require a substantial amount of time and attention from our management
and may divert a disproportionate amount of their attention away from day-to-day activities, which may adversely affect our management&#8217;s
ability to oversee the development of product candidates.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">To the extent that we
raise additional capital through the sale of equity or convertible debt securities, your ownership interests will be diluted, and the
terms may include liquidation or other preferences that adversely affect your rights as a stockholder. Debt financing may result in imposition
of debt covenants, increased fixed payment obligations or other restrictions that may affect our business. If we raise additional funds
through upfront payments or milestone payments pursuant to strategic collaborations with third parties, we may have to relinquish valuable
rights to product candidates or grant licenses on terms that are not favorable to us.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Risks Related to the
Discovery, Research and Development of Product Candidates</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>We are very early
in our development efforts for and are substantially dependent on our FLT3/IRAK4 and BCL-2 inhibitor programs. If we are unable to advance
lomonitinib, our lead product candidate from the FLT3/IRAK4 program, or lonitoclax, our lead product candidate from the BCL-2 inhibitor
program licensed from Eil, or any of the products we have licensed from Bala, through preclinical and clinical development, obtain regulatory
approval and ultimately commercialize such product candidates, or experience significant delays in doing so, our business will be materially
harmed.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We are very early in
our development efforts. In fact, we have submitted only one IND to the FDA with respect to our product candidate, lomonitinib, and only
one IND has been submitted for lonitoclax, the product candidate we licensed from Eil. We have not yet demonstrated our ability to successfully
initiate or conduct any late-stage clinical trials, including large-scale, pivotal clinical trials, obtain regulatory approvals, manufacture
a commercial scale product, or arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for
successful commercialization.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">As such, our ability
to generate revenue from product sales, which we do not expect will occur for many years, if ever, will depend heavily on the successful
preclinical and clinical development and eventual commercialization of one or more product candidates, such as lomonitinib and lonitoclax,
any of the product candidates we have licensed or a development candidate from another program that we develop, license or acquire. The
success of our programs will depend on several factors, including the following:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">successful and timely completion
of preclinical studies;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">timely submission and clearance
of INDs for our anticipated clinical trials;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">successful initiation of clinical
trials;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">successful and timely study
subject selection and enrollment in and completion of clinical trials;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">maintaining and establishing
relationships with CROs and clinical trial sites for the clinical development of product candidates both in the United States and internationally;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the frequency and severity
of adverse events in clinical trials;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">demonstrating efficacy, safety
and tolerability profiles that are satisfactory to the FDA or any comparable foreign regulatory authorities for marketing approval;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the timely receipt of marketing
approvals from FDA and any comparable foreign regulatory authorities;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the extent of any required
post-marketing studies or other post-approval commitments to applicable regulatory authorities;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the timely identification,
development and approval of companion diagnostic tests, if required;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the establishment and maintenance
of supply arrangements with third-party drug product suppliers and manufacturers for clinical development and, if approved, commercialization
of product candidates;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">obtaining and maintaining patent
protection, trade secret protection and regulatory exclusivity, and the protection of our other intellectual property rights, both in
the United States and internationally;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the availability of an approved
product for evaluation as a combination therapy;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">successful commercialization
following the receipt of any marketing approval;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">a continued acceptable safety
profile following any marketing approval;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">acceptance of our products,
if approved, by patients, the medical community and third-party payors; and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">our ability to compete with
other therapies, including our ability to differentiate any product for which we receive marketing approval against other approved products
within the same class of drugs.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We do not have complete
control over many of these factors, including certain aspects of preclinical and clinical development and the regulatory submission process,
potential threats to our intellectual property rights and the manufacturing, marketing, distribution and sales efforts of any collaborator.
If we are not successful with respect to one or more of these factors in a timely manner or at all, we could experience significant delays
or an inability to successfully commercialize any product candidates from our development programs, which would materially harm our business.
If we do not receive marketing approvals for such product candidates, we may not be able to continue our operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>In addition to
our lead candidates, lomonitinib and lonitoclax, our business depends in part upon discovering, licensing or acquiring, developing and
commercializing product candidates from other research programs, which may fail in development or suffer delays that adversely affect
their commercial viability.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our future operating
results are dependent on our ability to successfully discover, license or acquire, develop, obtain regulatory approval for and commercialize
product candidates from research programs other than our FLT3/IRAK4 and BCL-2 inhibitor programs and our lead candidates from each program,
lomonitinib and lonitoclax, respectively. In addition to lomonitinib and lonitoclax, which is licensed by Eil, we currently have licensed
the rights to a series of menin inhibitors from Bala. Research programs to identify new product candidates require substantial technical,
financial and human resources.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">While the results of
preclinical studies have suggested that lomonitinib and the programs licensed from Eil and Bala may have the ability to treat AML and
certain other diseases, none of us, Eil and Bala has yet succeeded and we, Eil and Bala may not succeed in demonstrating efficacy and
safety of lomonitinib or any other development programs in clinical trials or in obtaining marketing approval thereafter. If our approach
to the discovery and design of product candidates does not lead to the development of product candidates that prove to be effective and
safe for the targeted indication, we may never generate the necessary data or results required to obtain marketing approval.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Even if identified, a
development candidate can unexpectedly fail at any stage of development. The historical failure rate for development candidates is high
due to risks relating to safety, efficacy, clinical execution, changing standards of medical care and other unpredictable variables. The
success of other development candidates we may acquire or develop will depend on many factors, including those described throughout&#160;<i>&#8220;&#8212;Risks
Related to the Discovery, Research and Development of Product Candidates</i>&#8221;.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Even if we successfully
advance any development candidates into preclinical and clinical development, their success will be subject to all of the preclinical,
clinical, regulatory and commercial risks described elsewhere in this &#8220;<i>Risk Factors</i>&#8221; section. Accordingly, there can
be no assurance that we will ever be able to acquire or discover, develop, obtain regulatory approval of, commercialize or generate significant
revenue from product candidates from any research programs.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our preclinical studies
and any clinical trials that we may commence may fail at any time, and because our only product candidates, including the ones we licensed
from Eil and Bala, are in a very early stage of development, there is a high risk of failure, and we may never succeed in developing marketable
products.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Before obtaining marketing
approval from the FDA or other comparable foreign regulatory authorities for the sale of product candidates, we must demonstrate through
lengthy, complex and expensive preclinical studies and clinical trials that such product candidates are both safe and effective for use
in each target indication. Preclinical and clinical testing is expensive, difficult to design and implement and can take many years to
complete, and its ultimate outcome is uncertain. Failure can occur at any time during the preclinical study and clinical trial processes,
and, because our only product candidate and other programs are in a very early stage of development, there is a high risk of failure and
we may never succeed in developing products that receive marketing approval.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The commencement and
completion of clinical trials can be delayed for a number of reasons, including delays related to:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">failure of product candidates
in preclinical studies or clinical trials to demonstrate safety and efficacy;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">delays with IND-enabling studies
or in analyzing the data collected from any completed clinical trials;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">negative or inconclusive clinical
trial results that may require us to conduct additional clinical trials or abandon certain research and/or drug development programs;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the number of study subjects
required for clinical trials being larger than anticipated, enrollment in these clinical trials being slower than anticipated or participants
dropping out of these clinical trials at a higher rate than anticipated;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">subjects choosing an alternative
treatment or other product candidates, or participating in competing clinical trials;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">lack of adequate funding to
continue the clinical trial;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">subjects experiencing severe
or unexpected drug-related adverse effects;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">any interruptions or delays
in the supply of product candidates for our clinical trials;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">a facility manufacturing product
candidates or any of their components being ordered by the FDA or comparable foreign regulatory authorities to temporarily or permanently
shut down due to violations of current good manufacturing practice, or cGMP, regulations or other applicable requirements, or infections
or cross-contaminations of product candidates in the manufacturing process;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">any changes to the manufacturing
process of product candidates that may be necessary or desired;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">any failure or delay in reaching
an agreement with CROs and clinical trial sites;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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    </div><div style="margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: normal 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->17<!-- Field: /Sequence --></p><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&#160;</p></div><div>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">clinical investigators losing
the licenses or permits necessary to perform our clinical trials, not performing our clinical trials on our anticipated schedule or consistent
with the clinical trial protocol, good clinical practices, or GCP, or regulatory requirements or other third parties not performing data
collection or analysis in a timely or accurate manner;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">third-party contractors becoming
debarred or suspended or otherwise penalized by the FDA or other comparable foreign regulatory authorities for violations of applicable
regulatory requirements, in which case we may need to find a substitute contractor, and we may not be able to use some or all of the
data produced by such contractors in support of our marketing applications;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">one or more institutional review
boards, or IRBs, refusing to approve, suspending or terminating the trial at a clinical trial site, precluding enrollment of additional
subjects, or withdrawing its approval of the trial; or</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">changes in regulatory requirements
and policies, which may require us to amend clinical trial protocols to comply with these changes and resubmit our clinical trial protocols
to IRBs for reexamination.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">If we are required to
conduct additional preclinical studies, clinical trials or other testing of product candidates beyond those that are contemplated, if
we are unable to successfully complete preclinical studies or clinical trials of product candidates or other testing in a timely manner,
if the results of these studies, trials or tests are not positive or are only modestly positive or if there are safety concerns, we may
incur unplanned costs, be delayed in seeking and obtaining marketing approval, if we receive such approval at all, receive more limited
or restrictive marketing approval, be subject to additional post-marketing testing requirements or have the drug removed from the market
after obtaining marketing approval.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>The deployment
of artificial intelligence in our efforts to discover and develop product candidates, could adversely affect our business, reputation,
or financial results.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We integrate artificial
intelligence and machine learning, or AI, in our efforts to discover and engineer next-generation antibodies. We are utilizing a platform
offered by Expert Systems, Inc., or Expert Systems, which is powered by AI and machine learning, or AI/ML, to choose molecular mechanisms
of pathology and to rationally design, accelerate discovery and optimize development of potential therapies. AI may be difficult to deploy
successfully due to operational issues inherent in such methods. In particular, AI algorithms utilize machine learning and predictive
analytics which may lead to flawed, biased, and inaccurate results, which could lead to ineffective product or target candidates and exposure
to competitive and reputational harm. In addition, perceived or actual technical, legal, compliance, privacy, security, ethical or other
issues relating to the use of AI may cause regulators&#8217; or the public&#8217;s confidence in AI to be undermined, which could impede
our ability to develop products using AI. In addition, any latency, disruption, or failure in our AI operations or infrastructure could
result in failures, delays or errors in our discovery and development of next-generation antibodies or other investigational products.
Developing, testing, and deploying resource-intensive AI systems may also require additional investment and increase our costs, and there
is no guarantee that our investment in such systems will lead to more effective or efficient discovery or development of antibodies or
other investigational products, or lead to eventual regulatory approval or commercialization of any new products</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>We have only conducted
preclinical studies and early clinical trials to date, and the outcome of preclinical testing and early clinical trials may not be predictive
of the success of subsequent clinical trials, including in respect of demonstrating consistent or adequate efficacy and safety.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We will be required to
demonstrate with substantial evidence through well-controlled clinical trials that our product candidate and any additional product candidates
that we may develop, license or acquire are safe and effective for use in a defined population before we can seek marketing approvals
for their commercial sale. There is typically an extremely high rate of attrition from the failure of product candidates proceeding through
preclinical studies and clinical trials. We do not know whether any preclinical studies or clinical trials we may conduct will demonstrate
consistent or adequate efficacy and safety sufficient to obtain approval to market any product candidates.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The results of preclinical
studies may not be predictive of the results of clinical trials of product candidates. Although product candidates may demonstrate promising
results in preclinical studies, they may not prove to be safe or effective in subsequent clinical trials. Favorable results from certain
animal studies may not accurately predict the results of other animal studies or of human trials due to the inherent biologic differences
in species, the differences between testing conditions in animal studies and human trials, and the particular goals, purposes and designs
of the relevant studies and trials.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Moreover, the results
of preclinical studies and any early clinical trials we complete may not be predictive of the results of later-stage clinical trials.
A number of companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in advanced clinical trials,
notwithstanding promising results in earlier trials. Clinical trial failure, including with respect to achieving the desired safety and
efficacy profile, and the failure to obtain regulatory approval may result from a multitude of factors, including those described under
&#8220;&#8212;<i>Risks Related to the Discovery, Research and Development of Product Candidates&#8212;The design or our execution of our
future clinical trials may not support marketing approval</i>.&#8221; In particular, early, smaller-scale clinical trials may not be predictive
of eventual safety or effectiveness in large-scale pivotal clinical trials. See&#160;<i>&#8220;&#8212;Risks Related to the Discovery, Research
and Development of Product Candidates&#8212;Product candidates may cause significant adverse events, toxicities or other undesirable side
effects when used alone or in combination with other approved products or investigational new drugs.</i>&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The development and regulatory
approval of product candidates may also be impacted by inferences, whether correct or not, that are drawn between the success or failure
of preclinical studies or clinical trials of our competitors or other companies in the pharmaceutical and biotechnology industries, in
addition to our own preclinical studies and clinical trials.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">If the results of our
ongoing or future preclinical studies and any future clinical trials are inconclusive with respect to the safety and efficacy of product
candidates, if we do not meet the clinical endpoints with statistical or clinically meaningful significance, or if there are safety concerns
associated with product candidates or those of our competitors, we may be prevented or delayed in obtaining marketing approval for product
candidates.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>The design or our
execution of our future clinical trials may not support marketing approval.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The design or execution
of a clinical trial can determine whether its results will support marketing approval, and flaws in the design or execution of a clinical
trial may not become apparent until the clinical trial is well-advanced and significant resources have been expended.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In some instances, there
can be significant variability in safety and efficacy results between different clinical trials of the same product candidate due to numerous
factors, including changes in trial protocols, differences in size and type of the patient populations, differences in and adherence to
the dose and dosing regimen and other trial protocols and the rate of dropout among clinical trial participants. Assessments of safety
and efficacy can therefore vary widely for a particular patient, and from patient to patient and site to site within a clinical trial.
As a result, we do not know whether any clinical trials we conduct will demonstrate consistent or adequate efficacy and safety to obtain
marketing approval to market our product candidate and any additional product candidates that we may develop. See&#160;<i>&#8220;&#8212;Risks
Related to the Discovery, Research and Development of Product Candidates&#8212;Product candidates may cause significant adverse events,
toxicities or other undesirable side effects when used alone or in combination with other approved products or investigational new drugs.</i>&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Additionally, even if
the FDA or a comparable foreign regulatory authority agrees with the design and implementation of the clinical trials set forth in an
IND or comparable foreign regulatory submission, there is no guarantee such regulatory authority will not change its requirements in the
future. The FDA and comparable foreign regulatory authorities have substantial discretion in the product approval process and in determining
when or whether to approve product candidates. For example, as more product candidates within a particular class of drugs proceed through
clinical development to regulatory review and approval, the amount and type of clinical data that may be required by regulatory authorities
may increase or change. Moreover, data obtained from clinical trials are susceptible to varying interpretations, and regulators may not
interpret our data as favorably as we do. Regulators may require us to conduct additional clinical trials or preclinical studies due to
negative or inconclusive results. Any changes in requirements for the approval of product candidates made by these regulatory authorities
may occur even after they have reviewed and provided comments or advice on a protocol for a planned clinical trial, including a registrational
trial, and irrespective of whether product candidates achieve their primary endpoints in such trials.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Any of these regulatory
authorities may also approve a product candidate for fewer or more limited indications than we request, or with other limitations, or
may grant approval contingent on the performance of costly post-marketing clinical trials. The FDA or comparable foreign regulatory authorities
may not approve the labeling claims that we believe would be necessary or desirable for the successful commercialization of product candidates,
if approved.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>We have limited
experience as a company in conducting clinical trials.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Although many of our
personnel have experience in clinical development and manufacturing at other companies, we have limited experience as a company in conducting
clinical trials. Moreover, we do not currently operate our own laboratory facilities, and we rely completely on the services of independent
contractors and consultants to conduct our preclinical studies. In part because of this lack of experience as a company and our limited
infrastructure, we cannot be certain that our ongoing preclinical studies will be completed on time or that our planned or anticipated
preclinical studies and clinical trials will begin or be completed on time, if at all. Human clinical trials require significant additional
financial and management resources and reliance on third-party investigators and collaborators, such as medical institutions, CROs, clinical
trial sites, contract manufacturing organizations, or CMOs, and potentially strategic collaborators. Although we have succeeded in identifying
third-party investigators and collaborators to date, we may in the future be unable to identify and contract with sufficient third parties,
or on terms that are acceptable to us. See &#8220;&#8212;<i>Risks Related to Our Reliance on Third Parties</i>&#8212;<i>We rely on third
parties to conduct our preclinical studies, and rely on third parties to conduct clinical trials, and those third parties may not perform
satisfactorily, including failing to meet deadlines for the completion of such trials, research and studies</i>.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>We may expend our
limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications that
may be more profitable or for which there is a greater likelihood of success.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Because we have limited
financial, managerial and research and development resources, we must prioritize our research programs and will need to focus product
candidates on the potential treatment of certain indications. As a result, we may forego or delay pursuit of opportunities with other
product candidates or for other indications that later prove to have greater commercial potential. Our resource allocation decisions may
cause us to fail to capitalize on viable commercial products or profitable market opportunities. Our spending on current and future research
and development programs and product candidates for specific indications may not yield any commercially viable products. If we do not
accurately evaluate the commercial potential or target market for a particular product candidate, we may also relinquish valuable rights
to that product candidate through collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous
for us to retain sole development and commercialization rights to such product candidate.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>We face substantial
competition which may result in others discovering, developing or commercializing products before or more successfully than we do.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The pharmaceutical and
biotechnology industries, particularly the field of oncology, are characterized by rapidly advancing technologies, intense competition
and a strong emphasis on proprietary and novel products and product candidates. We have competitors in the United States and internationally,
including major multinational pharmaceutical companies, established biotechnology companies, specialty pharmaceutical companies, emerging
and start-up companies, universities and other research institutions. For example, several biopharmaceutical companies, including Beigene,
Ltd, Curis, Inc., Aptose Biosciences Inc., Biomea Fusion, Inc. or PharsoBio, Ryvu Therapeutics S.A., Ellipses Pharma Limited, Sunshine
Lake Co., Ltd, AROG Pharmaceuticals, Inc., Nerviana, A.Menarini Industrie Farmaceutiche Riunite S.r.l., Fujifilm Corporation, Maxinovel
Co., Ltd., LaNova Medicines Ltd., Beijing Novruns, Tarapeutics, Haihe Biopharma Co., Ltd., Oscotec Inc., Shanghai Fosun Pharmaceutical
Co., Ltd., and Tyligand Bioscience (Shanghai) Limited, are also developing FLT3 inhibitors for the treatment of AML.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our competitors have
developed, are developing or may develop products, product candidates and processes competitive with our product candidate. Any product
candidates that we successfully develop and commercialize will compete with existing therapies and new therapies that may become available
in the future. There are several approved therapies for the treatment of conditions for which we are attempting or may attempt to develop
product candidates. In addition, we believe that a significant number of product candidates are currently under development, and may become
commercially available in the future. We also compete to recruit and retain qualified scientific and management personnel, which could
negatively affect our level of expertise and our ability to execute our business plan. As a result, our potential commercial opportunity
could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer or less
severe side effects or are more convenient than any products that we may develop.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">For example, with respect
to one of our lead product candidates, lomonitinib, there are several large pharmaceutical companies and biotechnology companies marketing
drugs for the treatment of AML, including Astellas Pharma Inc., Novartis AG and Daiichi Sankyo, Inc.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our potential commercial
opportunity could also be reduced or eliminated if our competitors develop products that obtain marketing approval from the FDA or other
comparable foreign regulatory authorities for their products more rapidly than we do. Likewise, our competitors may commercialize products
that have a broader label, are marketed more effectively, are more widely reimbursed or are less expensive than any products that we may
develop. Any of these could result in our competitors establishing a strong market position before we are able to enter the market or
make our development and commercialization more complicated. For example, we will face competition in establishing clinical trial sites
and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs, which
may delay or prevent the development of product candidates. Further, our competitors may obtain patent protection or other intellectual
property rights that limit our ability to develop or commercialize product candidates. Even if our current product candidate or any other
product candidates we may develop achieves marketing approval, technological advances or products developed by our competitors may render
our technologies or product candidates obsolete, less competitive or not economical. Our product candidate and any other product candidates
we may develop may also be priced at a significant premium over competitive products if any have been approved by then, resulting in reduced
competitiveness. The availability of reimbursement from government and other third-party payors will also significantly affect the pricing
and competitiveness of our products.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Many of our competitors,
either alone or with their collaborators, have significantly greater financial resources, established presence in the market and expertise
in research and development, manufacturing, preclinical and clinical testing, obtaining regulatory approvals and reimbursement and marketing
approved products than we do. Large pharmaceutical and biotechnology companies, in particular, have extensive experience in clinical testing,
obtaining regulatory approvals, recruiting patients and manufacturing biopharmaceutical product candidates. These companies also have
significantly greater research and marketing capabilities than we do and may also have product candidates that have been approved or are
in late stages of development, and collaborative arrangements in our target markets with leading companies and research institutions.
Established pharmaceutical and biotechnology companies may also invest heavily to accelerate discovery and development of novel compounds
or to in-license novel compounds that could make product candidates that we develop obsolete. Smaller or early-stage companies may also
prove to be significant competitors, particularly through collaborative arrangements with large and established companies, as well as
in acquiring technologies complementary to, or necessary for, our programs.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We also face competition
more broadly across the oncology market for cost-effective and reimbursable cancer treatments. There are a variety of available drug therapies
marketed for cancer. In many cases, these drugs are administered in combination to enhance efficacy. While product candidates, if any
are approved, may compete with these existing drugs and other therapies, to the extent they are ultimately used in combination with or
as an adjunct to these therapies, product candidates may not be competitive with them. Some of these drugs are branded and subject to
patent protection, and others are available on a generic basis. Insurers and other third-party payors may also encourage the use of generic
products or other specific branded products. As a result, obtaining market acceptance of, and gaining significant share of the market
for, any product candidates that we successfully introduce to the market may pose challenges. Additionally, product candidates may need
to compete with drugs physicians use off-label to treat the indications for which we seek approval. This may make it difficult for us
to replace existing therapies with our product candidate and any additional product candidates that we may develop. Moreover, many companies
are developing new oncology therapeutics, and we cannot predict what the standard of care will be as product candidates progress through
clinical development.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">If we are unable to compete
effectively, our opportunity to generate revenue from the sale of any product candidates we may develop, if approved, could be adversely
affected.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Interim, topline
and preliminary data from our preclinical studies and clinical trials that we announce or publish from time to time may change as more
data become available and are subject to audit and verification procedures that could result in material changes in the final data.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">From time to time, we
may publicly disclose preliminary, interim or topline data from our preclinical studies and clinical trials. These updates are based on
a preliminary analysis of then-available data. These data should be viewed with caution as they may differ from future results of the
same studies or trials, or different conclusions or considerations may qualify such results, once additional data have been received and
fully evaluated. For example, we may report responses in certain patients that are unconfirmed at the time and which do not ultimately
result in confirmed responses to treatment after follow-up evaluations. We also make assumptions, estimations, calculations and conclusions
as part of our analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate all data. Certain
data may also be subject to audit and verification procedures that may result in the final data being materially different from the preliminary
data we previously published. In addition, we may report interim analyses of only certain endpoints rather than all endpoints. Interim
data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change
as patient enrollment continues and more patient data become available.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Further, regulatory agencies
and others, may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the
importance of data differently, which could adversely impact the potential of the particular program, the likelihood of obtaining regulatory
approval of the particular product candidate, commercialization of any approved product and the business prospects of our company in general.
In addition, the information we choose to publicly disclose regarding a particular study or trial is typically selected from a more extensive
amount of available information. Investors may not agree with what we determine is the material or otherwise appropriate information to
include in our disclosure, and any information we determine not to disclose may ultimately be deemed significant with respect to future
decisions, conclusions, views, activities or otherwise regarding a particular product candidate or our business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">If the preliminary, interim
or topline data that we report differ from late, final or actual results, or if others, including regulatory authorities, disagree with
the conclusions reached, our ability to obtain approval for, and commercialize, any product candidates may be harmed.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Product candidates
may cause significant adverse events, toxicities or other undesirable side effects when used alone or in combination with other approved
products or investigational new drugs.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We, the FDA or other
comparable foreign regulatory authorities or an IRB may suspend or terminate clinical trials of a product candidate at any time for various
reasons, including a belief that subjects in such trials are being exposed to unacceptable safety risks or adverse side effects. For example,
some potential therapeutics that initially showed therapeutic promise in early-stage trials have later been found to cause side effects
that prevented their further development.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">While we have not yet
conducted late-stage clinical trials for our product candidates, it is likely that there will be side effects associated with their use
and the use of any additional product candidates that we may develop, as is typically the case with oncology drugs. Results of our studies
or trials could reveal a high and unacceptable severity and prevalence of these or other side effects or adverse events. In addition,
product candidates may be studied in combination with other therapies, which may exacerbate adverse events associated with the therapy.
Patients treated with product candidates may also be undergoing surgical, radiation and chemotherapy treatments, which can cause side
effects or adverse events that are unrelated to product candidates but may still impact the success of our clinical trials. The inclusion
of critically ill patients in our clinical trials may result in deaths or other adverse medical events due to other therapies or medications
that such patients may be using or due to the gravity of such patients&#8217; illnesses. For example, it is expected that some of the
patients to be enrolled in our future clinical trials will die or experience major clinical events either during the course of our clinical
trials or after participating in such trials for non-treatment related reasons. Moreover, product candidates may be used in populations
for which safety concerns may be particularly scrutinized by regulatory agencies.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">If product candidates
are associated with undesirable side effects or have unexpected characteristics in preclinical studies or clinical trials when used alone
or in combination with other approved products or investigational new drugs, we may need to interrupt, delay or abandon their development
or limit development to more narrow uses or subpopulations in which the undesirable side effects or other characteristics are less prevalent,
less severe or more acceptable from a risk-benefit perspective. Drug-related side effects could also result in potential product liability
claims.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Even if the side effects
do not preclude the product candidate from obtaining or maintaining marketing approval, undesirable side effects may inhibit market acceptance
due to its tolerability versus other therapies. Further, if product candidates obtain marketing approval, toxicities associated with such
product candidates previously not seen during clinical testing may also develop after such approval and lead to a requirement to conduct
additional clinical safety trials, additional contraindications, warnings and precautions being added to the drug label, significant restrictions
on the use of the product or the withdrawal of the product from the market. We cannot predict whether our product candidates and any additional
product candidates that we may develop will cause toxicities in humans that would preclude or lead to the revocation of regulatory approval
based on preclinical studies or early-stage clinical trials.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Any of these occurrences
may prevent us from obtaining or maintaining regulatory approvals or achieving or maintaining market acceptance of the affected product
candidate and, accordingly, may harm our business, financial condition and prospects significantly.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>If we encounter
difficulties enrolling study subjects in our clinical trials, our clinical development activities could be delayed or otherwise be adversely
affected.</i></b></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Identifying and qualifying
study subjects to participate in clinical trials of product candidates is critical to our success. The timing of initiation and completion
of our clinical trials depends in part on the speed at which we can recruit study subjects to participate in testing product candidates.
We may not be able to initiate or continue clinical trials for product candidates if we are unable to locate and enroll a sufficient number
of eligible study subjects to participate in these clinical trials to their conclusion as required by the FDA or other comparable foreign
regulatory authorities.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Study subjects enrollment
for clinical trials and the ability to initiate or continue clinical trials for product candidates may be affected by many factors, including:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">size and nature of the patient
population;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">severity of the disease under
investigation;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">availability and efficacy of
approved drugs for the disease under investigation;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">study subject eligibility criteria
for the trial in question as defined in the clinical trial protocol;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">clinicians&#8217; and patients&#8217;
perceptions as to the potential advantages of the product candidate being studied in relation to other available therapies, including
any new products that may be approved or other product candidates being investigated for the indications we are investigating;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">invasive procedures required
to enroll patients and to obtain evidence of the product candidate&#8217;s performance during the clinical trial;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">study subject referral practices
of physicians;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">ability to monitor patients
adequately during and after treatment, including through any follow-up periods;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">ability to recruit clinical
trial investigators of appropriate competencies and experience;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">negative results that we may
report in clinical trials of product candidates, which may make it difficult or impossible to recruit and retain subjects in other clinical
trials of that same product candidate;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">ability to obtain and maintain
study subject consents; and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">risk that study subjects enrolled
in clinical trials will drop out of the trials before completion or, because they may be late-stage cancer patients, will not survive
the full terms of the clinical trials.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our clinical trials will
compete with other clinical trials for product candidates that are in the same therapeutic areas as our current and potential future product
candidates. This competition will reduce the number and types of patients available to us because some patients who might have opted to
enroll in our trials may instead opt to enroll in a trial conducted by one of our competitors. Since the number of qualified clinical
investigators is limited, we expect to conduct some of our clinical trials at the same clinical trial sites that some of our competitors
use, which will reduce the number of patients who are available for our clinical trials at such sites.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our inability to enroll
a sufficient number of patients for our clinical trials would result in significant delays or may require us to abandon one or more clinical
trials altogether. Enrollment delays in our clinical trials may result in increased development costs for product candidates or may affect
the timing or outcome of our clinical trials, which could prevent completion of these trials and adversely affect our ability to advance
the development of product candidates, if at all, thereby jeopardize our ability to obtain regulatory approval and the commercialization
of product candidates.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Changes in methods
of product candidate formulation may result in additional costs or delay.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">As product candidates
progress through preclinical and clinical trials to marketing approval and commercialization, it is common that various aspects of the
development program are altered along the way in an effort to optimize yield and manufacturing batch size, minimize costs and achieve
consistent quality and results. For example, we may introduce an alternative formulation of one or more product candidates during the
course of our clinical trials. Such changes carry the risk that they will not achieve these intended objectives. Any of these changes
could cause product candidates to perform differently and affect the results of clinical trials conducted with the altered materials.
This could delay completion of clinical trials, require the conduct of bridging clinical trials or the repetition of one or more clinical
trials, increase clinical trial costs, delay approval of product candidates and jeopardize our ability to commercialize product candidates,
if approved.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Risks Related to the
Manufacturing, Commercialization and Marketing of Product Candidates</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>We have never commercialized
a product candidate as a company before and currently lack the necessary expertise, personnel and resources to successfully commercialize
any products on our own or together with suitable collaborators.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We have never commercialized
a product candidate as a company. For product candidates for which we retain commercialization rights and marketing approval, we will
have to develop our own sales, marketing and supply organization or outsource these activities to a third party. We may also license certain
rights with respect to product candidates to collaborators, and, if so, we will rely on the assistance and guidance of those collaborators.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Factors that may affect
our ability to commercialize product candidates, if approved, on our own include recruiting and retaining adequate numbers of effective
sales and marketing personnel, developing adequate educational and marketing programs to increase public acceptance of our approved product
candidates, ensuring regulatory compliance of our company, employees and third parties under applicable healthcare laws, and other unforeseen
costs associated with creating an independent sales and marketing organization.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Establishing an internal
sales or marketing team with technical expertise and supporting distribution capabilities to commercialize product candidates will be
expensive and time-consuming and will require significant attention of our executive officers to manage. Any failure or delay in the development
of our internal sales, marketing and distribution capabilities could adversely impact the commercialization of any product candidates
that we obtain approval to market if we do not have arrangements in place with third parties to provide such services on our behalf. Alternatively,
if we choose to collaborate, either globally or on a territory-by-territory basis, with third parties that have direct sales forces and
established distribution systems, either to augment our own sales force and distribution systems or in lieu of our own sales force and
distribution systems, we will be required to negotiate and enter into arrangements with such third parties relating to the proposed collaboration
and such arrangements may prove to be less profitable than commercializing the product on our own. If we are unable to enter into such
arrangements when needed, on acceptable terms or at all, we may not be able to successfully commercialize any product candidates that
receive regulatory approval, or any such commercialization may experience delays or limitations. If we are unable to successfully commercialize
our approved product candidates, either on our own or through collaborations with one or more third parties, our future revenue will suffer,
and we may incur significant additional losses.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>The manufacture
of drugs is complex, and our third-party manufacturers may encounter difficulties in production, which may delay or prevent our ability
to provide adequate supply of product candidates for clinical trials or our products for patients, if approved.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Manufacturing drugs,
especially in large quantities, is complex and may require the use of innovative technologies. Each lot of an approved drug product must
undergo thorough testing for identity, strength, quality, purity and potency. Manufacturing drugs requires facilities specifically designed
for and validated for this purpose, as well as sophisticated quality assurance and quality control procedures. Slight deviations anywhere
in the manufacturing process, including filling, labeling, packaging, storage and shipping and quality control and testing, may result
in lot failures, product recalls or spoilage. When changes are made to the manufacturing process, we may be required to provide preclinical
and clinical data showing the comparable identity, strength, quality, purity or potency of the products before and after such changes.
If microbial, viral or other contaminations are discovered at the facilities of our manufacturer, such facilities may need to be closed
for an extended period of time to investigate and remedy the contamination, which could delay clinical trials and adversely harm our business.
The use of biologically derived ingredients can also lead to allegations of harm, including infections or allergic reactions, or closure
of product facilities due to possible contamination. If our third-party manufacturers are unable to produce sufficient quantities for
clinical trials or for commercialization as a result of these challenges, or otherwise, our development and commercialization efforts
would be impaired, which would have an adverse effect on our business, financial condition, results of operations and growth prospects.
See &#8220;<i>&#8212;Risks Related to Our Reliance on Third Parties&#8212;We contract with third parties for the manufacture of our only
product candidate for preclinical studies and expect to continue to do so for additional preclinical studies, anticipated clinical trials
and ultimately for commercialization. This reliance on third parties increases the risk that we will not have sufficient quality and quantities
of product candidates or such quantities at an acceptable cost, which could delay, prevent or impair our development or commercialization
efforts.</i>&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>The market opportunities
for any product candidates we develop, if approved, may be limited to certain smaller patient subsets and may be smaller than we estimate
them to be.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">When cancer is detected
early (referred to as localized disease), conventional treatments, which include chemotherapy, hormone therapy, surgery and radiation
therapy and/or selected targeted therapies, may be adequate to cure the patient in many cases. However, if cancer has spread to other
areas (advanced or metastatic disease), initial cancer treatments may not be sufficient and other cancer therapies may be considered.
Cancer therapies are sometimes characterized by line of therapy (for example, first-, second-, third-, fourth- or fifth-line). The FDA
and other comparable foreign regulatory authorities often approve cancer therapies for a particular line of treatment. Typically, drug
approvals are initially granted for use in later lines of treatment. With additional evidence of significant efficacy and safety from
clinical trials, pharmaceutical and biotechnology companies can seek, and sometimes gain, approval for use in earlier lines of treatment.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We plan to initially
seek approval of our product candidates and, in most instances, any additional product candidates that we may develop, license or acquire
where prior therapies have had limited clinical benefit or lost their effectiveness. For those product candidates that prove to be sufficiently
safe and effective, if any, we would expect to seek approval as earlier lines of therapy. For example, our initial registration strategy
with respect to&#160;lomonitinib&#160;will focus on relapsed and refractory AML, or R/R AML, where there is currently no available therapy
and therefore a significant unmet medical need. There is no guarantee that&#160;lomonitinib, our licensed product candidates, including
lonitoclax,&#160;or any product candidates we may develop in the future, even if approved in later lines of therapy, would be approved
for an earlier line of therapy, and prior to any such approvals we may have to conduct additional clinical trials that may be costly,
time-consuming and subject to risk.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our projections of both
the number of people who have AML, MDS, CLL and the cancers we may target in the future, as well as the subset of people with these cancers
in a position to receive a particular line of therapy and who have the potential to benefit from treatment with product candidates, are
based on our beliefs and estimates. These estimates have been derived from a variety of sources, which could include scientific literature,
surveys of clinics or market research, and may prove to be incorrect. Further, new studies may change the estimated incidence or prevalence
of the cancers that we are targeting. The potentially addressable patient population for product candidates may be limited or may not
be amenable to treatment with product candidates, particularly if product candidates are only approved for later lines of treatment.
Consequently, even if product candidates are approved, the number of patients that may be eligible for treatment with product candidates
may turn out to be much lower than expected. In addition, we have not conducted market research to determine how treating physicians
would expect to prescribe a product that is approved for multiple tumor types if there are different lines of approved therapies for
each such tumor type.</p><div>

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    </div><div style="break-before: page; margin-top: 6pt"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Product candidates, if approved, may not achieve adequate market acceptance among physicians, patients, healthcare payors and others
in the medical community necessary for commercial success.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Even if product candidates
ultimately receive regulatory approval, they may not gain adequate market acceptance among physicians, patients, third-party payors and
others in the medical community. The degree of market acceptance of any product candidates that may be approved in the future will depend
on a number of factors, including:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the efficacy and safety profile
as demonstrated in clinical trials compared to alternative treatments;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the timing of market introduction
of the product candidate, if approved, as well as competitive products;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the indications for which a
product candidate is approved;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">restrictions on the use of
product candidates in the labeling approved by regulatory authorities, such as boxed warnings or contraindications in labeling, or a
risk evaluation and mitigation strategy, or REMS, if any, which may not be required of alternative treatments and competitor products;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the potential and perceived
advantages of product candidates over alternative treatments;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the cost of product candidates,
if approved, in relation to alternative treatments;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the availability of coverage
and adequate reimbursement by third-party payors, including government authorities;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the availability of an approved
product for evaluation as a combination therapy;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">relative convenience and ease
of administration;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the willingness of the target
patient population to try new therapies and undergo required diagnostic screening to determine treatment eligibility and of physicians
to prescribe these therapies and diagnostic tests;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the effectiveness of sales
and marketing efforts;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">unfavorable publicity relating
to product candidates; and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the approval of other new therapies
for the same indications.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">If any product candidates
are approved but do not achieve an adequate level of acceptance by physicians, hospitals, healthcare payors and patients, we may not generate
or derive sufficient revenue from that product candidate, and our financial results could be negatively impacted.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Lomonitinib, our
licensed product candidates, including lonitoclax, and any product candidates we develop, license or acquire may become subject to unfavorable
third-party coverage and reimbursement practices.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The availability and
extent of coverage and adequate reimbursement by third-party payors, including government health care programs, private health insurers,
managed care organizations and other third-party payors is essential for most patients to be able to afford expensive treatments. Sales
of any product candidates that receive marketing approval will depend substantially, both in the United States and internationally, on
the extent to which the costs of such product candidates will be covered and reimbursed by third-party payors. If coverage is not available,
or is available only in limited circumstances, we may not be able to successfully commercialize product candidates.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">There is significant
uncertainty related to third-party payor coverage and reimbursement of newly approved products. Reimbursement by a third-party payor may
depend upon a number of factors, including the third-party payor&#8217;s determination that use of a product is (1) a covered benefit
under its health plan; (2) safe, effective and medically necessary; (3) appropriate for the specific patient; (4) cost-effective; and
(5) neither experimental nor investigational. For example, in order to obtain reimbursement, physicians may need to show that patients
have superior treatment outcomes with our products compared to standard of care drugs, including lower-priced generic versions of standard
of care drugs. Additionally, eligibility for coverage does not imply that any drug will be paid for in all cases or at a rate that covers
our costs, including research, development, manufacture, sale and distribution. Interim reimbursement levels for new drugs, if applicable,
may also not be sufficient to cover our costs and may not be made permanent. Reimbursement rates may vary according to the use of the
drug and the clinical setting in which it is used, may be based on reimbursement levels already set for lower cost drugs and may be incorporated
into existing payments for other services.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Moreover, in the United
States, principal decisions about Medicare reimbursement for new products are typically made by or on behalf of the Centers for Medicare
&amp; Medicaid Services, or CMS, an agency within the U.S. Department of Health and Human Services, or HHS. CMS and regional contractors
responsible for administering the Medicare program decide whether and to what extent a new product will be covered and reimbursed under
Medicare, and private third-party payors often follow these decisions regarding coverage and reimbursement to a substantial degree. However,
one third-party payor&#8217;s determination to provide coverage for a product candidate does not ensure that other payors will also provide
coverage for the product candidate. No uniform policy of coverage and reimbursement for products exists among third-party payors, and
coverage and reimbursement levels for products can differ significantly from payor to payor. As a result, the coverage determination process
is often time-consuming and costly. This process may require us to provide scientific and clinical support for the use of our products
to each third-party payor separately, with no assurance that coverage and adequate reimbursement will be available consistently or obtained
in the first instance. Reimbursement agencies in Europe may be more conservative than CMS. For example, a number of cancer drugs have
been approved for reimbursement in the United States and have not been approved for reimbursement in certain European countries.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Third-party payors are
increasingly examining the medical necessity and reviewing the cost effectiveness of medical product candidates. There may be especially
significant delays in obtaining coverage and reimbursement for newly approved drugs. Third-party payors may limit coverage to specific
product candidates on an approved list, known as a formulary, which might not include all FDA-approved drugs for a particular indication.
We may need to conduct expensive pharmaco-economic studies to demonstrate the cost effectiveness of our products. Notwithstanding the
results of these studies, product candidates may not be considered medically necessary or cost effective. We cannot be sure that coverage
and reimbursement will be available for any product that we commercialize and, if reimbursement is available, what the level of reimbursement
will be.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In addition, companion
diagnostic tests require coverage and reimbursement separate and apart from the coverage and reimbursement for their companion pharmaceutical
or biological products. Similar challenges to obtaining coverage and reimbursement, applicable to pharmaceutical or biological products,
will apply to companion diagnostics. Further, if any companion diagnostic provider is unable to obtain reimbursement or is inadequately
reimbursed, that may limit the availability of such companion diagnostic, which would negatively impact prescriptions for product candidates,
if approved</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">If we are unable to establish
or sustain coverage and adequate reimbursement for any product candidates from third-party payors, the adoption of those products and
sales revenue will be adversely affected, which, in turn, could adversely affect the ability to market or sell those product candidates,
if approved. Coverage policies and third-party payor reimbursement rates may change at any time. Any of these could have a material and
adverse effect on our business, financial condition, results of operations and prospects.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Downward pressure
on healthcare costs may negatively affect the coverage and pricing of product candidates.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The downward pressure
on healthcare costs in general, particularly prescription drugs and surgical procedures and other treatments, has become very intense.
Legislative or regulatory requirements related to pricing and reimbursement may limit our ability to recoup our investment in one or more
product candidates and therefore affect such product candidate&#8217;s commercial viability, if approved. Moreover, third-party payors
are increasingly requiring that drug companies provide them with predetermined discounts from list prices and are challenging the prices
charged for medical products. We expect to experience pricing pressures in connection with the commercialization of any product candidates,
which could have a material and adverse effect on our business, financial condition, results of operations and prospects.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">As federal and state
governments implement additional health care cost containment measures, including measures related to prescription drug pricing or reimbursement,
we cannot be sure that product candidates, if approved, will be covered by private or public payors, and if covered, whether the reimbursement
will be adequate or competitive with other marketed products. Moreover, net prices for drugs may be reduced by mandatory discounts or
rebates required by government healthcare programs or private payors or other changes such as relaxation of restrictions on imports of
drugs from countries where they may be sold at lower prices than in the United States. These and other actions by federal and state governments
and health plans may put additional downward pressure on pharmaceutical pricing and health care costs, which could negatively impact coverage
and reimbursement for our products if approved, our revenue, and our ability to compete with other marketed products and to recoup the
costs of our research and development. For further discussion, see &#8220;&#8212;We may face difficulties from changes to current regulations
and future legislation. Healthcare legislative measures aimed at reducing healthcare costs may have a material adverse effect on our business
and results of operations.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Outside the United States,
the commercialization of therapeutics is generally subject to extensive governmental price controls as part of national health systems
and other market regulations, and we believe the increasing emphasis on cost containment initiatives in Europe, Canada and other countries
has and will continue to put pressure on the pricing and usage of therapeutics, such as our product candidate and any additional product
candidates that we may develop. For example, to obtain reimbursement or pricing approval in some countries, we may be required to conduct
a clinical trial that compares the cost-effectiveness of our product candidate to other available therapies. In general, product prices
under such systems are substantially lower than in the United States. Prescription pharmaceutical pricing may also remain subject to continuing
governmental control even after initial approval is granted. Some countries that allow companies to fix their own prices for products
continue to monitor and control company profits. Additional foreign price controls or other changes in pricing regulation could restrict
the amount that we are able to charge for product candidates. Additionally, pricing negotiations with governmental authorities can take
considerable time after a product receives marketing approval. As a result, we might obtain marketing approval for a product in a particular
country, but then be subject to price regulations that delay our commercial launch of the product, possibly for lengthy time periods.
Accordingly, in markets outside the United States, the pricing and reimbursement for our products may be reduced compared with the United
States and may be insufficient to generate commercially reasonable revenue and profits.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>A variety of risks
associated with marketing product candidates internationally could materially adversely affect our business.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We may seek regulatory
approval of product candidates outside of the United States and, accordingly, we expect that we will be subject to additional risks related
to operating in foreign countries if we obtain the necessary approvals, including:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">differing regulatory requirements
and reimbursement regimes in foreign countries, such as the lack of pathways for accelerated drug approval, may result in foreign regulatory
approvals taking longer and being more costly than obtaining approval in the United States;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">foreign regulatory authorities
may disagree with the design, implementation or results of our clinical trials or our interpretation of data from nonclinical studies
or clinical trials;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">approval policies or regulations
of foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">unexpected changes in tariffs,
trade barriers, price and exchange controls and other regulatory requirements;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">economic weakness, including
inflation, or political instability in particular foreign economies and markets;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">compliance with legal requirements
applicable to privacy, data protection, information security and other matters;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">compliance with tax, employment,
immigration and labor laws for any employee living or traveling abroad;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">foreign taxes, including withholding
of payroll taxes;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">foreign currency fluctuations,
which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">difficulties staffing and managing
foreign operations;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">complexities associated with
managing multiple payor reimbursement regimes and government payors in foreign countries;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">workforce uncertainty in countries
where labor unrest is more common than in the United States;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">potential liability under the
Foreign Corrupt Practices Act or comparable foreign regulations;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">challenges enforcing our contractual
and intellectual property rights, especially in those foreign countries that do not recognize and protect intellectual property rights
to the same extent as the United States;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">production shortages resulting
from any events affecting raw material supply or manufacturing capabilities abroad; and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">business interruptions resulting
from geo-political actions, including war, terrorism and the outbreak of other hostilities, trade policies, treaties and tariffs.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">These and other risks
associated with international operations may materially adversely affect our ability to attain or maintain profitable operations, our
product development efforts or our potential clinical trials.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Risks Related to Regulatory
Approval Process and Other Healthcare Compliance Matters</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>We may be unable
to obtain U.S. or foreign regulatory approval and, as a result, may be unable to commercialize product candidates.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We have not submitted
for, or obtained, regulatory approval for any product candidate, and it is possible that none of our product candidates will ever obtain
regulatory approval.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Product candidates are
and will continue to be subject to extensive governmental regulations relating to, among other things, research, testing, development,
manufacturing, safety, efficacy, approval, recordkeeping, reporting, labeling, storage, packaging, advertising and promotion, pricing,
marketing and distribution of drugs. Rigorous preclinical testing and clinical trials and an extensive regulatory approval process must
be successfully completed in the United States and in many foreign jurisdictions before a new drug can be approved for marketing. Satisfaction
of these and other regulatory requirements is costly, time-consuming, uncertain and subject to unanticipated delays.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Moreover, the standards
that the FDA and its foreign counterparts use when evaluating clinical trial data can, and often do, change during drug development, which
makes it difficult to predict with any certainty how they will be applied. We may also encounter unexpected delays or increased costs
due to new government regulations, including future legislation or administrative action, or changes in applicable FDA or any other regulatory
policy during the period of drug development, clinical trials and regulatory review and approval. Accordingly, the time required to obtain
approvals from the FDA or any other regulatory authorities is unpredictable and will take many years, depending upon the type, complexity
and novelty of the product candidate. We cannot provide any assurance that any of our current or future product candidate will progress
through required clinical testing and obtain the regulatory approvals necessary for us to begin selling them.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Regulatory authorities
have substantial discretion in the approval process. Applications for product candidates could fail to receive regulatory approval for
many reasons, including the following:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the FDA or other comparable
foreign regulatory authorities may disagree with the design, implementation or results of our clinical trials;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the FDA or other comparable
foreign regulatory authorities may determine that product candidates are not safe and effective or have undesirable or unintended side
effects, toxicities or other characteristics that preclude our obtaining marketing approval or prevent or limit commercial use;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the population studied in the
clinical trial may not be sufficiently broad or representative to assure efficacy and safety in the full population for which we seek
approval;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the FDA or other comparable
foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials or may decide
that our data are insufficient for approval and require additional preclinical, clinical or other data;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">we may be unable to demonstrate
to the FDA or other comparable foreign regulatory authorities that our product candidate&#8217;s risk-benefit ratio for its proposed
indication is acceptable;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the FDA or other comparable
foreign regulatory authorities may fail to approve the manufacturing processes, test procedures and specifications or facilities of third-party
manufacturers with which we contract for clinical and commercial supplies; and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the approval policies or regulations
of the FDA or other comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient
for approval.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Any delay or failure
in seeking or obtaining required approvals would have a material and adverse effect on our ability to generate revenue from any particular
product candidates we are developing and for which we are seeking approval. Furthermore, any regulatory approval to market a drug may
be approved for a narrower patient population than we originally requested or subject to significant limitations on the approved uses
or indications for which we may market, promote and advertise the drug or the labeling or other restrictions. In addition, the FDA has
the authority to require a REMS as part of approving an NDA, or after approval, which may impose further requirements or restrictions
on the distribution or use of an approved drug. These requirements or restrictions might include limiting prescribing to certain physicians
or medical centers that have undergone specialized training, limiting treatment to patients who meet certain safe-use criteria and requiring
treated patients to enroll in a registry. These limitations and restrictions may significantly limit the size of the market for the drug
and affect reimbursement by third-party payors.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">There are also numerous
foreign regulatory requirements governing, among other things, the conduct of clinical trials, manufacturing and marketing authorization,
pricing and third-party reimbursement. The foreign regulatory approval process varies among countries, and generally includes all of the
risks associated with FDA approval described above as well as risks attributable to the satisfaction of local regulations in foreign jurisdictions.
Moreover, the time required to obtain approval may differ from that required to obtain FDA approval.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>We may develop
our current or future product candidates in combination with other therapies, which would expose us to additional risks.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We may develop our current
or future product candidates in combination with one or more currently approved cancer therapies or therapies in development. Even if
any of our current or future product candidates were to receive marketing approval or be commercialized for use in combination with other
existing therapies, we would continue to be subject to the risks that the FDA or other comparable foreign regulatory authorities could
revoke approval of the therapy used in combination with any product candidates, or safety, efficacy, manufacturing or supply issues could
arise with these existing therapies. In addition, it is possible that existing therapies with which product candidates are approved for
use could themselves fall out of favor or be relegated to later lines of treatment. This could result in the need to identify other combination
therapies for product candidates or our own products being removed from the market or being less successful commercially.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We may also evaluate
our current or future product candidates in combination with one or more other cancer therapies that have not yet been approved for marketing
by the FDA or other comparable foreign regulatory authorities. We will not be able to market and sell any product candidate in combination
with any such unapproved cancer therapies that do not ultimately obtain marketing approval.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">If the FDA or other comparable
foreign regulatory authorities do not approve or withdraw their approval of these other therapies, or if safety, efficacy, commercial
adoption, manufacturing or supply issues arise with the therapies we choose to evaluate in combination with any of our current or future
product candidates, we may be unable to obtain approval of or successfully market any one or all of the current or future product candidates
we develop. Additionally, if the third-party providers of therapies or therapies in development used in combination with our current or
future product candidates are unable to produce sufficient quantities for clinical trials or for commercialization of our current or future
product candidates, or if the cost of combination therapies are prohibitive, our development and commercialization efforts would be impaired,
which would have an adverse effect on our business, financial condition, results of operations and growth prospects.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>The FDA and other
comparable foreign regulatory authorities may not accept data from trials conducted in locations outside of their jurisdiction.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We anticipate we will
conduct clinical trials of our product candidate and any additional product candidates that we may develop both in and outside the United
States. The acceptance of study data by the FDA or other comparable foreign regulatory authority from clinical trials conducted outside
of their respective jurisdictions may be subject to certain conditions. In cases where data from United States clinical trials are intended
to serve as the basis for marketing approval in the foreign countries outside the United States, the standards for clinical trials and
approval may be different. There can be no assurance that any United States or foreign regulatory authority would accept data from trials
conducted outside of its applicable jurisdiction. If the FDA or other comparable foreign regulatory authority does not accept such data,
it would result in the need for additional trials, which would be costly and time-consuming and delay aspects of our business plan, and
which may result in product candidates not receiving approval or clearance for commercialization in the applicable jurisdiction.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Obtaining and maintaining
regulatory approval of product candidates in one jurisdiction does not mean that we will be successful in obtaining regulatory approval
of product candidates in other jurisdictions.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Obtaining and maintaining
regulatory approval of product candidates in one jurisdiction does not guarantee that we will be able to obtain or maintain regulatory
approval in any other jurisdiction. For example, even if the FDA grants marketing approval of a product candidate, comparable regulatory
authorities in foreign jurisdictions must also approve the manufacturing, marketing and promotion and reimbursement of the product candidate
in those countries. However, a failure or delay in obtaining regulatory approval in one jurisdiction may have a negative effect on the
regulatory approval process in others. Approval procedures vary among jurisdictions and can involve requirements and administrative review
periods different from those in the United States, including additional preclinical studies or clinical trials as clinical trials conducted
in one jurisdiction may not be accepted by regulatory authorities in other jurisdictions. In many jurisdictions outside the United States,
a product candidate must be approved for reimbursement before it can be approved for sale in that jurisdiction. In some cases, the price
that we intend to charge for our products is also subject to governmental approval.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Obtaining foreign regulatory
approvals and establishing and maintaining compliance with foreign regulatory requirements could result in significant delays, difficulties
and costs for us and could delay or prevent the introduction of our products in certain countries. If we or any collaborator fails to
comply with the regulatory requirements in international markets or fail to receive applicable marketing approvals, our target market
will be reduced and our ability to realize the full market potential of our potential product candidates will be harmed.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Even if product
candidates receive regulatory approval, they will be subject to significant post-marketing regulatory requirements and oversight.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Any regulatory approvals
that we may receive for product candidates will require the submission of reports to regulatory authorities and on-going surveillance
to monitor the safety and efficacy of the product candidate, may contain significant limitations related to use restrictions for specified
age groups, warnings, precautions or contraindications, and may include burdensome post-approval study or risk management requirements
and regulatory inspection. In addition, if the FDA or other comparable foreign regulatory authorities approve product candidates, the
manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion, import, export and
recordkeeping for product candidates will be subject to extensive and ongoing regulatory requirements. These requirements include submissions
of safety and other post-marketing information and reports, as well as on-going compliance with cGMPs and GCPs for any clinical trials
that we conduct post-approval. In addition, manufacturers of drug products and their facilities are subject to continual review and periodic,
unannounced inspections by the FDA and other comparable foreign regulatory authorities for compliance with cGMP regulations and standards.
If we or a regulatory agency discover previously unknown problems with a product, such as adverse events of unanticipated severity or
frequency, or problems with the facilities where the product is manufactured, a regulatory agency may impose restrictions on that product,
the manufacturing facility or us, including requiring recall or withdrawal of the product from the market or suspension of manufacturing.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Later discovery of previously
unknown problems with any approved candidate, including adverse events of unanticipated severity or frequency, or with our third-party
manufacturers or manufacturing processes, or failure to comply with FDA and other comparable foreign regulatory requirements may subject
our company to administrative or judicially imposed sanctions, including:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">delays in or the rejection
of product approvals;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">restrictions on our ability
to conduct clinical trials, including full or partial clinical holds on ongoing or planned trials;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">restrictions on the products,
manufacturers or manufacturing process;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">warning or untitled letters;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">civil and criminal penalties;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">injunctions;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">suspension or withdrawal of
regulatory approvals;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">product seizures, detentions
or import bans;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">voluntary or mandatory product
recalls and publicity requirements;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">total or partial suspension
of production;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">imposition of restrictions
on operations, including costly new manufacturing requirements;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">revisions to the labeling,
including limitation on approved uses or the addition of additional warnings, contraindications or other safety information, including
boxed warnings;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">imposition of a REMS, which
may include distribution or use restrictions; and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">requirements to conduct additional
post-market clinical trials to assess the safety of the product.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The FDA and any other
regulatory authorities&#8217; policies may change and additional government regulations may be enacted that could prevent, limit or delay
regulatory approval of product candidates. We cannot predict the likelihood, nature or extent of government regulation that may arise
from future legislation or administrative action, either in the United States or abroad. If we are slow or unable to adapt to changes
in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we
may lose any marketing approval that we may have obtained and we may not achieve or sustain profitability. The occurrence of any event
or penalty described above may inhibit our ability to commercialize product candidates, if approved, and generate revenue from sales of
approved products.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>The FDA and other
comparable foreign regulatory agencies actively enforce the laws and regulations governing advertising and promotion, including those
prohibiting the promotion of off-label uses.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The FDA and other comparable
foreign regulatory agencies strictly regulate the promotion and advertisement of prescription products, such as our products, if approved.
In particular, a product may not be promoted in the United States for uses that are not approved by the FDA as reflected in the product&#8217;s
approved labeling, or in other jurisdictions for uses that differ from the labeling or uses approved by the applicable regulatory agencies.
While physicians may prescribe products for off-label uses, the FDA and any other regulatory agencies actively enforce laws and regulations
that prohibit the promotion of off-label uses by manufacturers, including promotional communications made by companies&#8217; sales force
with respect to off-label uses that are not consistent with the approved labeling. If we are found to have promoted such off-label uses,
we may become subject to significant liability. The U.S. federal government has levied large civil and criminal fines against companies
for alleged improper promotion of off-label use and has enjoined several companies from engaging in off-label promotion. The U.S. federal
government and state governments have also required that drug manufacturers enter into consent decrees or permanent injunctions under
which specified promotional conduct is changed or curtailed. If we cannot successfully manage the promotion of product candidates, if
approved, we could become subject to significant liability, which would materially adversely affect our business and financial condition.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>If we are required
by the FDA or other comparable foreign regulatory authority to obtain approval of a companion diagnostic test in connection with approval
of any product candidates or a group of therapeutic products, and we do not obtain or we face delays in developing and obtaining approval
of a diagnostic test, we will not be able to commercialize the product candidate and our ability to generate revenue will be materially
impaired.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">If we are required by
the FDA or other comparable foreign regulatory authority to obtain approval of a companion diagnostic test in connection with approval
of any product candidates, such companion diagnostic test would be used during our more advanced phase clinical trials as well as in connection
with the commercialization of product candidates. Companion diagnostics are regulated as medical devices by FDA and, unless an exemption
applies, require premarket clearance or approval by FDA. The two primary types of FDA marketing authorization applicable to a medical
device are clearance of a premarket notification under section 510(k) of the Federal Food, Drug, and Cosmetic Act, as amended, or the
FDCA, or 510(k), and approval of a premarket approval application, or PMA. According to FDA guidance, if the FDA determines that a companion
diagnostic device is essential to the safe and effective use of a novel therapeutic product or indication, the FDA generally will not
approve the therapeutic product or new therapeutic product indication if the companion diagnostic is not also approved or cleared at the
same time the product candidate is approved. To date, the FDA has required PMA approval of all companion diagnostic tests for cancer therapies.
Various foreign regulatory authorities, including the EMA in Europe, also regulate in vitro companion diagnostics as medical devices and,
under those regulatory frameworks, will likely require the conduct of clinical trials to demonstrate the safety and effectiveness of our
current diagnostics and any future diagnostics we may develop, which we expect will require separate regulatory clearance or approval
prior to commercialization.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The approval of a companion
diagnostic as part of the therapeutic product&#8217;s labeling limits the use of the therapeutic product to only those patients who express
certain biomarkers or the specific genomic alteration that the companion diagnostic was developed to detect. If the FDA or other comparable
foreign regulatory authority requires approval of a companion diagnostic for any product candidates, whether before or concurrently with
approval of the product candidate, we and our collaborators, may encounter difficulties in developing and obtaining approval for these
companion diagnostics. Any delay or failure by us or third-party collaborators to develop or obtain regulatory approval of a companion
diagnostic could cause or contribute to delayed enrollment of our clinical trials, may prevent us from initiating a pivotal trial or may
delay or prevent approval or continued marketing of our related product candidates.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Further, in April 2020,
the FDA issued new guidance on developing and labeling companion diagnostics for a specific group of oncology therapeutic products, including
recommendations to support a broader labeling claim rather than individual therapeutic products. We will continue to evaluate the impact
of this guidance on our companion diagnostic development and strategy. This guidance and future issuances from the FDA and other comparable
foreign regulatory authorities may impact our development of a companion diagnostic for product candidates and result in delays in regulatory
approval. We may be required to conduct additional studies to support a broader labeling claim. Also, to the extent other approved diagnostics
are able to broaden their labeling claims to include our approved drug products, we may be forced to abandon our companion diagnostic
development plans or we may not be able to compete effectively upon approval, which could adversely impact our ability to generate revenue
from the sale of our approved products and our business operations.&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">To be successful in developing,
validating, obtaining approval of and commercializing a companion diagnostic, we or our collaborators will need to address a number of
scientific, technical, regulatory and logistical challenges. We have no prior experience with medical device or diagnostic test development.
If we choose to develop and seek FDA approval for companion diagnostic tests on our own, we will require additional personnel. Additionally,
we may rely on third parties for the design, development and manufacture of companion diagnostic tests for product candidates that may
require such tests. If we enter into such collaborative agreements, we will be dependent on the sustained cooperation and effort of our
collaborators in developing and obtaining approval for these companion diagnostics. It may be necessary to resolve issues such as selectivity/specificity,
analytical validation, reproducibility, or clinical validation of companion diagnostics during the development and regulatory approval
processes. Moreover, even if data from preclinical studies and early clinical trials appear to support development of a companion diagnostic
for a product candidate, data generated in later clinical trials may fail to support the analytical and clinical validation of the companion
diagnostic. We and our collaborators may encounter difficulties in developing, obtaining regulatory approval for, manufacturing and commercializing
companion diagnostics similar to those we face with respect to product candidates themselves, including issues with achieving regulatory
clearance or approval, production of sufficient quantities at commercial scale and with appropriate quality standards, and in gaining
market acceptance. In addition, a diagnostic company with whom we contract may decide to discontinue selling or manufacturing the companion
diagnostic test that we anticipate using in connection with development and commercialization of product candidates or our relationship
with such diagnostic company may otherwise terminate. We may not be able to enter into arrangements with another diagnostic company to
obtain supplies of an alternative diagnostic test for use in connection with the development and commercialization of product candidates
or do so on commercially reasonable terms, which could adversely affect and/or delay the development or commercialization of product candidates.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">If we are unable to successfully
develop companion diagnostics for product candidates, or experience delays in doing so, the development of product candidates may be adversely
affected, product candidates may not obtain marketing approval, and we may not realize the full commercial potential of any product candidates
that obtain marketing approval. As a result, our business, results of operations and financial condition could be materially harmed.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Even if we seek
and receive accelerated approval from the FDA or other comparable foreign regulatory authorities, the FDA or such other comparable foreign
regulatory authorities may seek to withdraw accelerated approval in certain circumstances.</i></b></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Where possible, we plan
to pursue accelerated development strategies in areas of high unmet need. We may seek an accelerated approval pathway for one or more
product candidates from the FDA or other comparable foreign regulatory authorities. Under the accelerated approval provisions in the Federal
Food, Drug, and Cosmetic Act, and the FDA&#8217;s implementing regulations, the FDA may grant accelerated approval to a product candidate
designed to treat a serious or life-threatening condition that provides meaningful therapeutic benefit over available therapies upon a
determination that the product candidate has an effect on a surrogate endpoint or intermediate clinical endpoint that is reasonably likely
to predict clinical benefit. The FDA considers a clinical benefit to be a positive therapeutic effect that is clinically meaningful in
the context of a given disease, such as irreversible morbidity or mortality.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">For the purposes of accelerated
approval, a surrogate endpoint is a marker, such as a laboratory measurement, radiographic image, physical sign, or other measure that
is thought to predict clinical benefit, but is not itself a measure of clinical benefit. An intermediate clinical endpoint is a clinical
endpoint that can be measured earlier than an effect on irreversible morbidity or mortality that is reasonably likely to predict an effect
on irreversible morbidity or mortality or other clinical benefit. The accelerated approval pathway may be used in cases in which the advantage
of a new drug over available therapy may not be a direct therapeutic advantage, but is a clinically important improvement from a patient
and public health perspective. If granted, accelerated approval is usually contingent on the sponsor&#8217;s agreement to conduct, in
a diligent manner, additional post-approval confirmatory studies to verify and describe the drug&#8217;s clinical benefit. If such post-approval
studies fail to confirm the drug&#8217;s clinical benefit, the FDA may withdraw its approval of the drug.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Prior to seeking accelerated
approval, we will seek feedback from the FDA or other comparable foreign regulatory authorities and will otherwise evaluate our ability
to seek and receive such accelerated approval. There can be no assurance that after our evaluation of the feedback and other factors we
will decide to pursue or submit an NDA for accelerated approval or any other form of expedited development, review or approval. Similarly,
there can be no assurance that after subsequent feedback from the FDA or other comparable foreign regulatory authorities, we will continue
to pursue or apply for accelerated approval, even if we initially decide to do so. Furthermore, if we decide to submit an application
for accelerated approval or under another expedited regulatory designation (for example, Fast Track designation, Breakthrough Therapy
designation), there can be no assurance that such submission or application will be accepted or that any expedited development, review
or approval will be granted on a timely basis, or at all. The FDA or other comparable foreign regulatory authorities could also require
us to conduct further studies prior to considering our application or granting approval of any type. A failure to obtain accelerated approval
or any other form of expedited development, review or approval for our product candidate would result in a longer time period to commercialization
of such product candidate, could increase the cost of development of such product candidate and could harm our competitive position in
the marketplace.&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>We may seek Fast
Track designation from the FDA for one or more product candidates. Even if one or more product candidates receive Fast Track designation,
we may be unable to obtain or maintain the benefits associated with the Fast Track designation.</i></b></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Fast Track designation
is designed to facilitate the development and expedite the review of therapies for serious conditions and fill an unmet medical need.
Programs with Fast Track designation may benefit from early and frequent communications with the FDA, potential priority review and the
ability to submit a rolling application for regulatory review. Fast Track designation applies to both the product candidate and the specific
indication for which it is being studied. If any product candidates receive Fast Track designation but do not continue to meet the criteria
for Fast Track designation, or if our clinical trials are delayed, suspended or terminated, or put on clinical hold due to unexpected
adverse events or issues with clinical supply, we will not receive the benefits associated with the Fast Track program. Furthermore, Fast
Track designation does not change the standards for approval. Fast Track designation alone does not guarantee qualification for the FDA&#8217;s
priority review procedures.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Fast Track designation
is within the discretion of the FDA. Accordingly, even if we believe that a product candidate meets the criteria for this designation,
the FDA may disagree and instead determine not to make such designation. Further, even if we receive a designation, the receipt of such
designation for a product candidate may not result in a faster development or regulatory review or approval process compared to products
considered for approval under conventional FDA procedures and does not assure ultimate approval by the FDA. In addition, even if any product
candidate qualifies for Fast Track designation, the FDA may later decide that the product candidates no longer meet the conditions for
qualification or decide that the time period for FDA review or approval will not be shortened.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>A Breakthrough
Therapy designation by the FDA, even if granted for any product candidates, may not lead to a faster development or regulatory review
or approval process and it does not increase the likelihood that product candidates will receive marketing approval.</i></b></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We may seek Breakthrough
Therapy designation for one or more of our current or future product candidates. A breakthrough therapy is defined as a drug or biologic
that is intended, alone or in combination with one or more other drugs or biologics, to treat a serious or life-threatening disease or
condition and preliminary clinical evidence indicates that the drug or biologic may demonstrate substantial improvement over existing
therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Designation as a Breakthrough
Therapy is largely within the discretion of the FDA. Accordingly, even if we believe that a product candidate meets the criteria for designation
as a Breakthrough Therapy, the FDA may disagree and instead determine not to make such designation. In any event, the receipt of a Breakthrough
Therapy designation for a product candidate may not result in a faster development process, review or approval compared to candidate products
considered for approval under non-expedited FDA review procedures and does not assure ultimate approval by the FDA. In addition, even
if one or more product candidates qualify as breakthrough therapies, the FDA may later decide that the product no longer meets the conditions
for qualification and revoke the designation.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>We may not be able
to obtain orphan drug designation or obtain or maintain orphan drug exclusivity for product candidates and, even if we do, that exclusivity
may not prevent the FDA or other comparable foreign regulatory authorities, from approving competing products.</i></b></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Regulatory authorities
in some jurisdictions, including the United States and the EU, may designate drugs for relatively small patient populations as orphan
drugs. Under the Orphan Drug Act, the FDA may designate a product candidate as an orphan drug if it is a drug intended to treat a rare
disease or condition, which is generally defined as a patient population of fewer than 200,000 individuals annually in the United States,
or a patient population greater than 200,000 in the United States where there is no reasonable expectation that the cost of developing
the drug will be recovered from sales in the United States. Our target indications may include diseases with large patient populations
or may include orphan indications.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In the United States,
orphan drug designation entitles a party to financial incentives such as opportunities for grant funding towards clinical trial costs,
tax advantages and user-fee exemptions. In addition, if a product candidate that has orphan drug designation subsequently receives the
first FDA approval for the disease for which it has such designation, the product candidate is entitled to orphan drug exclusivity. Orphan
drug exclusivity in the United States provides that the FDA may not approve any other applications, including a full NDA, to market the
same drug for the same indication for seven years, except in limited circumstances. The applicable exclusivity period is 10 years in Europe.
The European exclusivity period can be reduced to six years if a drug no longer meets the criteria for orphan drug designation or if the
drug is sufficiently profitable so that market exclusivity is no longer justified.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">There can be no assurances
that we will be able to obtain orphan designations for product candidates. Even if we obtain orphan drug designation for a product candidate,
we may not be able to obtain or maintain orphan drug exclusivity for that product candidate. We may not be the first to obtain marketing
approval of any product candidate for which we have obtained orphan drug designation for the orphan-designated indication due to the uncertainties
associated with developing pharmaceutical products. In addition, exclusive marketing rights in the United States may be limited if we
seek approval for an indication broader than the orphan-designated indication or may be lost if the FDA later determines that the request
for designation was materially defective or if we are unable to ensure that we will be able to manufacture sufficient quantities of the
product to meet the needs of patients with the rare disease or condition. Further, even if we obtain orphan drug exclusivity for a product,
that exclusivity may not effectively protect the product from competition because different drugs with different active moieties may be
approved for the same condition. Even after an orphan drug is approved, the FDA can subsequently approve the same drug with the same active
moiety for the same condition if the FDA concludes that the later drug is clinically superior in that it is shown to be safer, more effective
or makes a major contribution to patient care or the manufacturer of the product with orphan exclusivity is unable to maintain sufficient
product quantity. Orphan drug designation neither shortens the development time or regulatory review time of a drug nor gives the product
candidate any advantage in the regulatory review or approval process or entitles the product candidate to priority review.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>We may face difficulties
from changes to current regulations and future legislation. Healthcare legislative measures aimed at reducing healthcare costs may have
a material adverse effect on our business and results of operations.</i></b></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Existing regulatory policies
may change, and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of product candidates.
We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action,
either in the United States or abroad. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements
or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained, and
we may not achieve or sustain profitability.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In March 2010, the Patient
Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010, or, collectively,
the ACA, was passed, which substantially changed the way healthcare is financed by both the government and private insurers, and continues
to significantly impact the U.S. pharmaceutical industry. Certain provisions have been subject to judicial and Congressional challenges,
as well as efforts by a past U.S. presidential administration to repeal or replace certain aspects of the ACA. The Tax Cuts and Jobs Act
of 2017, or the TCJA, for example, included a provision repealing, effective January 1, 2019, the tax-based shared responsibility payment
imposed by the ACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred
to as the &#8220;individual mandate.&#8221; The ACA has been challenged numerous times in various court cases, including challenges before
the U.S. Supreme Court. In the most recent case (decided in June 2021) the Supreme Court held that the individual plaintiffs and states
lacked standing to challenge the constitutionality of the ACA.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Other legislative changes
have been proposed and adopted in the United States since the ACA was enacted. These changes included reductions of Medicare payments
to providers of up to 2%, effective April 1, 2013, which, due to subsequent legislative amendments, will stay in effect through 2030 unless
additional congressional action is taken (including, for example, the temporary suspension due to the COVID-19 pandemic). Additionally,
in January 2013, President Obama signed into law the American Taxpayer Relief Act of 2012, which, among other things, reduced Medicare
payments to several providers, and increased the statute of limitations period for the government to recover overpayments to providers
from three to five years.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="background-color: white">Most
recently, on August 16, 2022, President Biden signed the Inflation Reduction Act, or the IRA which provides for (i) the government to
set or negotiate prices for select high-cost Medicare Part D (beginning in 2026) and Medicare Part B drugs (beginning in 2028) that are
more than nine years (for small-molecule drugs) or 13 years (for biological products) from their FDA approval, (ii) manufacturers to pay
a rebate for Medicare Part B and Part D drugs when prices increase faster than inflation beginning in 2022 for Medicare Part D and 2023
for Medicare Part B drugs, and (iii) Medicare Part D redesign which replaces the current coverage gap provisions and establishes a $2,000
cap for out-of-pocket limits costs for Medicare beneficiaries beginning in 2025, with manufacturers being responsible for 10% of costs
up to the $2,000 cap and 20% after that cap is reached. Implementation of the IRA is expected to be carried out through upcoming actions
by regulatory authorities, the outcome of which is uncertain.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">It is possible that new
laws that would result in additional reductions in Medicare and other healthcare funding, may be enacted, which could have a material
adverse effect on customers for our drugs, if approved, and accordingly, our financial operations.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Further, there has been
heightened governmental scrutiny over the manner in which drug manufacturers set prices for their marketed products, which has resulted
in numerous Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more
transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program
reimbursement methodologies for drug products. At the federal level, former President Trump used several means to propose or implement
drug pricing reform, including through federal budget proposals, executive orders, and policy initiatives. It is unclear whether the Biden
administration will reverse those measures or pursue similar or other policy initiatives, for example related to an independent review
board or other mechanisms that would impact drug pricing and reimbursement. On March 11, 2021, President Biden signed the American Rescue
Plan Act of 2021 into law, which eliminates the statutory Medicaid drug rebate cap, currently set at 100% of a drug&#8217;s average manufacturer
price, for single source and innovator multiple source drugs, beginning January 1, 2024. In addition, at the state level, individual states
have increasingly proposed or adopted legislation and regulations related to pharmaceutical and biological product pricing, including
price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency
measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We expect that additional
state and federal healthcare reform measures will be adopted in the future. Such reform measures may result in more rigorous coverage
criteria and in additional downward pressure on the price that we receive for any approved product. Any reduction in reimbursement from
Medicare or other government programs may result in a similar reduction in payments from private payors. We are, however, unable to predict
the future course of federal or state healthcare legislation in the United States directed at broadening the availability of healthcare
and containing or lowering the cost of healthcare, particularly in light of the new presidential administration. These and any further
changes in the law or regulatory framework that reduce our revenue or increase our costs could also have a material and adverse effect
on our business, financial condition and results of operations. The continuing efforts of the government, insurance companies, managed
care organizations and other payors of healthcare services to contain or reduce costs of healthcare and/or impose price controls may adversely
affect:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the demand for product candidates,
if we obtain regulatory approval;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">our ability to set a price
that we believe is fair for our products;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">our ability to obtain coverage
and reimbursement for a product;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">our ability to generate revenue
and achieve or maintain profitability;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the level of taxes that we
are required to pay; and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the availability of capital.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Inadequate funding
for the FDA and other U.S. government agencies or other comparable foreign regulatory authorities could hinder their ability to hire and
retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner
or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could
negatively impact our business.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The ability of the FDA
and other U.S. government agencies or other comparable foreign regulatory authorities to review and approve new products can be affected
by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and accept the payment
of user fees, and statutory, regulatory, and policy changes. Average review times at the agency have fluctuated in recent years as a result.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In addition, government
funding of government agencies on which our operations may rely, including those that fund research and development activities, is subject
to the political process, which is inherently fluid and unpredictable. For example, in recent years, including in 2018 and 2019, the U.S.
government shut down several times and certain regulatory agencies, such as the FDA, had to furlough critical employees and stop critical
activities.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Separately, since March
2020 when foreign and domestic inspections were largely placed on hold due to the COVID-19 pandemic, the FDA has been working to resume
routine surveillance, bioresearch monitoring and pre-approval inspections on a prioritized basis. The FDA has developed a rating system
to assist in determining when and where it is safest to conduct prioritized domestic inspections and resumed inspections in China and
India in early 2021. In April 2021, the FDA issued guidance for industry formally announcing plans to employ remote interactive evaluations,
using risk management methods, to meet user fee commitments and goal dates, and in May 2021 announced plans to continue progress toward
resuming standard operational levels. Should FDA determine that an inspection is necessary for approval and an inspection cannot be completed
during the review cycle due to restrictions on travel, and the FDA does not determine a remote interactive evaluation to be appropriate,
the agency has stated that it generally intends to issue a complete response letter. Further, if there is inadequate information to make
a determination on the acceptability of a facility, FDA may defer action on the application until an inspection can be completed. In 2020,
several companies announced receipt of complete response letters due to the FDA&#8217;s inability to complete required inspections for
their applications. Regulatory authorities outside the U.S. may adopt similar restrictions or other policy measures in response to the
COVID-19 pandemic and may experience delays in their regulatory activities.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Disruptions at the FDA
and other comparable foreign regulatory authority may also slow the time necessary for new drugs to be reviewed and/or approved by necessary
government agencies, which would adversely affect our business. If a prolonged government shutdown occurs, or if global health concerns
continue to prevent the FDA or other regulatory authorities from conducting business as usual or conducting inspections, reviews or other
regulatory activities, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions. Further,
in our operations as a public company, future government shutdowns could impact our ability to access the public markets and obtain necessary
capital in order to properly capitalize and continue our operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"></p><div>

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    </div><div style="margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: normal 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->38<!-- Field: /Sequence --></p><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>We and our third-party
business partners may be subject to federal and state healthcare fraud and abuse laws, false claims laws, transparency laws, government
price reporting, and health information privacy and security laws, which could each have a material and adverse impact on us.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Healthcare providers
and third-party payors play a primary role in the recommendation and prescription of any product candidates for which we obtain marketing
approval. Our current and future arrangements with healthcare professionals, clinical investigators, CROs, third-party payors and customers
may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial
arrangements and relationships through which we research, as well as market, sell and distribute product candidates for which we obtain
marketing approval.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The laws that may affect
our ability to operate include, but are not limited to: (i) the federal Anti-Kickback Statute; (ii) federal civil and criminal false claims
law; (iii) the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, relating to schemes to defraud any healthcare
benefit program; (iv) HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH,
relating to the privacy, security and transmission of individually identifiable health information without appropriate authorization;
(v) the federal Physician Payments Sunshine Act, created under the ACA and its implementing regulations, relating to reporting obligations
to HHS in respect of information related to payments or other transfers of value made to physicians and teaching hospitals; (vi) federal
consumer protection and unfair competition laws; and (vii) analogous state and foreign laws and regulations. See &#8220;Business&#8212;Government
Regulation&#8212;Healthcare Laws.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Federal and state enforcement
bodies have recently increased their scrutiny of interactions between healthcare companies and healthcare providers, which has led to
a number of investigations, prosecutions, convictions and settlements in the healthcare industry. Because of the breadth of these laws
and the narrowness of the statutory exceptions and safe harbors available, it is possible that governmental authorities will conclude
that our business practices do not comply with current or future statutes, regulations, agency guidance or case law involving applicable
fraud and abuse or other healthcare laws and regulations. The scope and enforcement of each of these laws is uncertain and subject to
rapid change in the current environment of healthcare reform, especially in light of the lack of applicable precedent and regulations.
Ensuring that our business arrangements with third parties comply with applicable healthcare and data privacy laws and regulations, as
well as responding to investigations by government authorities, can be time- and resource-consuming and can divert management&#8217;s
attention from the business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">If our operations are
found to be in violation of any of the federal and state healthcare laws described above or any other governmental regulations that apply
to us, we may be subject to penalties, including without limitation, civil, criminal and/or administrative penalties, damages, fines,
disgorgement, imprisonment, exclusion from participation in government programs, such as Medicare and Medicaid, injunctions, private actions
brought by individual whistleblowers in the name of the government, exclusion, debarment or refusal to allow us to enter into government
contracts, contractual damages, reputational harm, administrative burdens, diminished profits and future earnings, additional reporting
requirements and/or oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance
with these laws, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our
business and our results of operations. Defending against any such actions can be costly, time-consuming and may require significant financial
and personnel resources. Therefore, even if we are successful in defending against any such actions that may be brought against us, our
business may be impaired. Further, if any of the physicians or other healthcare providers or entities with whom we expect to do business
is found to be not in compliance with applicable laws, they may be subject to significant criminal, civil or administrative sanctions,
including exclusions from government funded healthcare programs, which could have a material adverse effect on our business, results of
operations, financial condition and prospects.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"></p><div>

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    </div><div style="margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: normal 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->39<!-- Field: /Sequence --></p><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Any of our employees
that we may hire, independent contractors, consultants, collaborators, principal investigators, CROs, suppliers and vendors may engage
in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We are exposed to the
risk that any of our employees that we may hire, independent contractors, consultants, collaborators, principal investigators, CROs, suppliers
and vendors may engage in misconduct or other improper activities. Misconduct by these parties could include intentional, reckless and/or
negligent conduct or disclosure of unauthorized activities to us that violates: (1) the Federal Food, Drug and Cosmetic Act, FDA regulations
or those of comparable foreign regulatory authorities , (2) cGMP, (3) federal and state health and data privacy, security, fraud and abuse,
government price reporting, transparency reporting requirements, and other healthcare laws and regulations in the United States and abroad,
(4) sexual harassment and other workplace misconduct, or (5) laws that require the true, complete and accurate reporting of financial
information or data. In particular, research, sales, marketing and business arrangements in the health care industry are subject to extensive
laws and regulations intended to prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices. These laws and regulations
may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs
and other business arrangements. Misconduct by these parties could also involve the improper use of information obtained in the course
of clinical trials, which could result in regulatory sanctions and serious harm to our reputation.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We plan to adopt a code
of conduct following the Merger, but it is not always possible to identify and deter misconduct by these parties, and the precautions
we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting
us from governmental investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations. If
any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could
have a significant impact on our business, including the imposition of significant penalties, including civil, criminal and administrative
penalties, damages, fines, disgorgement, imprisonment, exclusion from participation in government funded healthcare programs, such as
Medicare and Medicaid, integrity oversight and reporting obligations, contractual damages, reputational harm, diminished profits and future
earnings and the curtailment or restructuring of our operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Risks Related to Employee
Matters, Managing Our Growth and Other Risks Related to Our Business</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Our success is
highly dependent on our ability to attract, hire and retain highly skilled executive officers, and we rely and will continue to rely on
our services agreement with Abet Solutions.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We currently have a small
team focused on research and development of small-molecule inhibitors. To succeed, we must recruit, hire, retain, manage and motivate
qualified clinical, scientific, technical and management personnel, and we face significant competition for experienced personnel. We
are highly dependent on the principal members of our management and scientific and medical staff, including Dr. Dukes and Dr. Savchuk.
We have historically relied on our services agreement with Eil, which we replaced with our services agreement with Abet Solutions in connection
with the Merger. We rely and will continue to rely on our consulting agreements with Dr. Dukes and Dr. Savchuk and on our services agreement
with Abet Solutions to support our operations. The loss of services from our consultants, our executive officers or Abet Solutions could
be detrimental to us if we cannot recruit suitable replacements in a timely manner. In particular, our research and development approach
was developed over years of our team&#8217;s experience in developing approved therapeutics at other pharmaceutical companies. The loss
of any of these personnel could result in delays in our product development efforts and have a material adverse effect on our financial
condition, results of operations and prospects.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Moreover, if we do not
succeed in attracting and retaining qualified personnel, particularly at the management level, it could adversely affect our ability to
execute our business plan and harm our operating results. We could in the future have difficulty attracting and retaining experienced
personnel and may be required to expend significant financial resources in our employee recruitment and retention efforts. Many of the
pharmaceutical and biotechnology companies that we compete against for qualified personnel have greater financial and other resources,
different risk profiles and a longer history in the industry than we do. They also may provide higher compensation, more diverse opportunities
and better prospects for career advancement. Some of these characteristics may be more appealing to high-quality candidates than what
we have to offer. If we are unable to continue to attract and retain high-quality personnel, the rate and success at which we can discover,
develop and commercialize product candidates will be limited and the potential for successfully growing our business will be harmed.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>We will need to
grow the size and capabilities of our organization, and we may experience difficulties in managing this growth.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Immediately after the
closing of the Merger, we had two consultants and rely on our services agreement with Abet Solutions to support our operations. In order
to successfully implement our development and clinical trial plans and strategies, and as we transition into operating as a public company,
we expect to need significant additional managerial, operational, sales, marketing, financial and other personnel. Future growth will
impose significant added responsibilities on members of management, including:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">identifying, recruiting, integrating,
maintaining, retaining and motivating our current service providers and any additional employees;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">managing our internal development
efforts effectively, including the preclinical, clinical, FDA and other comparable foreign regulatory agencies&#8217; review process
for our FLT3/IRAK4 inhibitor program, our in-licensed programs or other programs we may develop, license or acquire, while complying
with any contractual obligations to contractors and other third parties;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">managing increasing operational
and managerial complexity; and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">improving our operational,
financial and management controls, reporting systems and procedures.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our future financial
performance and our ability to successfully develop and, if approved, commercialize product candidates developed from our current and
future programs will depend, in part, on our ability to effectively manage any future growth, and our management may also have to divert
a disproportionate amount of its attention away from day-to-day activities in order to devote a substantial amount of time to managing
these growth activities.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We currently rely, and
for the foreseeable future will continue to rely, in substantial part on Abet Solutions and certain independent organizations, advisors
and consultants to provide certain services, including key aspects of research, clinical development, manufacturing and regulatory approval.
In particular, we do not currently operate our own laboratory facilities, and we rely completely on the services of independent contractors
and consultants for the conduct of preclinical studies. There can be no assurance that the services of independent organizations, advisors
and consultants will continue to be available to us on a timely basis when needed, or that we can find qualified replacements. In addition,
if we are unable to effectively manage our outsourced activities or if the quality or accuracy of the services provided by third-party
service providers is compromised for any reason, our preclinical studies and clinical trials may be extended, delayed or terminated, and
we may not be able to obtain marketing approval for any product candidates or otherwise advance our business. There can be no assurance
that we will be able to manage our existing third-party service providers or find other competent outside contractors and consultants
on economically reasonable terms, or at all.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">If we are not able to
effectively expand our organization by hiring new employees, receiving adequate support from Abet Solutions under our services agreement
and/or engaging additional third-party service providers, we may not be able to successfully implement the tasks necessary to further
develop and commercialize lomonitinib or lonitoclax, or any of our other product candidates and, accordingly, may not achieve our research,
development and commercialization goals.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Our management
has limited experience in operating a public company.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our executive officers
have limited experience in the management of a public company. Our management team may not successfully or effectively manage our transition
to a public company that will be subject to significant regulatory oversight and reporting obligations under federal securities laws.
Their limited experience in dealing with the increasingly complex laws pertaining to public companies could be a significant disadvantage
in that it is likely that an increasing amount of their time may be devoted to these activities which will result in less time being devoted
to the management and growth of our business. We may not have adequate personnel with the appropriate level of knowledge, experience,
and training in the accounting policies, practices or internal controls over financial reporting required of public companies in the United
States. The development and implementation of the standards and controls necessary for us to achieve the level of accounting standards
required of a public company in the United States may require costs greater than expected. It is possible that we will be required to
expand our employee base and hire additional employees to support our operations as a public company which will increase its operating
costs in future periods.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Requirements associated
with being a public company will increase our costs significantly, as well as divert significant company resources and management attention.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We are subject to the
reporting requirements of the Exchange Act, the other rules and regulations of the SEC relating to public companies and expect to be subject
to the rules and regulations of the OTC. Compliance with the various reporting and other requirements applicable to public companies requires
considerable time and attention of management. We cannot assure you that we will satisfy our obligations as a public company on a timely
basis.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In addition, as a public
company, it may be more difficult or more costly for us to obtain certain types of insurance, including directors&#8217; and officers&#8217;
liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the
same or similar coverage. The impact of these events could also make it more difficult for us to attract and retain qualified personnel
to serve on our board of directors, our board committees or as executive officers.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Our internal computer
systems, or those of any of our CROs, manufacturers, other contractors or consultants or collaborators, may fail or suffer actual or suspected
security or data privacy breaches or other unauthorized or improper access to, use of, or destruction of our proprietary or confidential
data, employee data, or personal data, which could result in additional costs, loss of revenue, significant liabilities, harm to our brand
and material disruption of our operations, and potentially significant delays in our delivery to market.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We are increasingly dependent
upon information technology systems, infrastructure and data to operate our business. In the ordinary course of business, we collect,
store and transmit confidential information (including but not limited to intellectual property, proprietary business information and
personal information). It is critical that we do so in a secure manner to maintain the confidentiality and integrity of such confidential
information. We also have outsourced elements of our operations to third parties, and as a result we manage a number of third-party CROs,
other contractors (including sites performing our anticipated clinical trials) and consultants who have access to our confidential information.
Our internal information technology systems and infrastructure are also vulnerable to damage from natural disasters, terrorism, war, telecommunication
and electrical failures. System failures or outages, including any potential disruptions due to significantly increased global demand
on certain cloud-based systems arising after the COVID-19 pandemic, could compromise our ability to perform these functions in a timely
manner, which could harm our ability to conduct business or delay our financial reporting. Such failures could materially adversely affect
our operating results and financial condition.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Despite the implementation
of security measures in an effort to protect systems that store our information, given their size and complexity and the increasing amounts
of information maintained on our internal information technology systems and external processing and storage systems (for example, cloud),
and those of our third-party CROs, other contractors and consultants, these systems are potentially vulnerable to breakdown or other damage
or interruption from service interruptions, system malfunction, natural disasters, terrorism, war and telecommunication and electrical
failures, as well as security breaches from inadvertent or intentional actions by our employees, contractors, consultants, business partners,
and/or other third parties, or from cyber-attacks by malicious third parties (including the deployment of harmful malware, ransomware,
denial-of-service attacks, social engineering and other means to affect service reliability and threaten the confidentiality, integrity
and availability of information), which may compromise our system infrastructure or lead to the loss, destruction, alteration or dissemination
of, or damage to, our data. The risk of a security breach or disruption, particularly through cyber-attacks or cyber intrusion, including
by computer hackers, foreign governments, and cyber terrorists, has generally increased as the number, intensity and sophistication of
attempted attacks and intrusions from around the world have increased. The COVID-19 pandemic generally increased the attack surface available
for exploitation, as more companies and individuals work online and work remotely, and as such, the risk of a cybersecurity incident potentially
occurring, and our investment in risk mitigations against such an incident, is increasing. For example, there has been an increase in
phishing and spam emails as well as social engineering attempts from &#8220;hackers&#8221; hoping to use the recent COVID-19 pandemic
to their advantage.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We may not be able to
anticipate all types of security threats, nor may we be able to implement preventive measures effective against all such security threats.
The techniques used by cyber criminals change frequently, may not be recognized until launched and can originate from a wide variety of
sources, including outside groups such as external service providers, organized crime affiliates, terrorist organizations or hostile foreign
governments or agencies. While we have not experienced any such system failure, accident or security breach to date, we cannot assure
you that our data protection efforts and our investment in information technology will prevent significant breakdowns, data leakages,
breaches in our systems, or those of our third-party CROs, other contractors and consultants, or other cyber incidents that could have
a material adverse effect upon our reputation, business, operations or financial condition.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

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    </div><div style="break-before: page; margin-top: 6pt"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">For example, if such
an event were to occur and cause interruptions in our operations, or those of our third-party CROs, other contractors and consultants,
it could result in a material disruption of our programs and the development of product candidates could be delayed. In addition, the
loss of data from preclinical studies or clinical trial data could result in delays in our marketing approval efforts and significantly
increase our costs to recover or reproduce the data. Furthermore, significant disruptions of our internal information technology systems
or those of our third-party CROs, other contractors and consultants, or security breaches could result in the loss, misappropriation,
and/or unauthorized access, use, or disclosure of, or the prevention of access to, data (including trade secrets or other confidential
information, intellectual property, proprietary business information, and personal information). Any such event that leads to unauthorized
access, use, or disclosure of personal information, including personal information regarding our clinical trial subjects or employees,
could harm our reputation directly, compel us to comply with federal and/or state breach notification laws and foreign law equivalents,
subject us to financial exposure related to investigation of the incident (including cost of forensic examinations), subject us to mandatory
corrective action, and otherwise subject us to liability under laws and regulations that protect the privacy and security of personal
information (including under HIPAA), which could result in significant legal and financial exposure and reputational damages that could
potentially have an adverse effect on our business. Moreover, if the information technology systems of our third-party CROs, other contractors
and consultants become subject to disruptions or security breaches, we may have insufficient recourse against such third parties and we
may have to expend significant resources to mitigate the impact of such an event, and to develop and implement protections to prevent
future events of this nature from occurring.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our insurance policies
may not be adequate to compensate us for the potential losses arising from any such disruption in or, failure or security breach of our
systems or third-party systems where information important to our business operations or commercial development is stored. In addition,
such insurance may not be available to us in the future on economically reasonable terms, or at all. Further, our insurance may not cover
all claims made against us and could have high deductibles in any event, and defending a suit, regardless of its merit, could be costly
and divert management attention.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Accordingly, significant
breakdowns or breaches in systems or other cyber incidents that cause loss, destruction, unavailability, alteration or dissemination of,
or damage to, our data could have a material adverse effect upon our reputation, business, operations or financial condition.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Our business entails
a significant risk of product liability and if we are unable to obtain sufficient insurance coverage such inability could have an adverse
effect on our business and financial condition.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our business exposes
us to significant product liability risks inherent in the development, testing, manufacturing and marketing of therapeutic treatments.
Product liability claims could delay or prevent completion of our development programs. If we succeed in marketing products, such claims
could result in an investigation by the FDA or any other regulatory authority of the safety and effectiveness of our products, our manufacturing
processes and facilities or our marketing programs. FDA or any other regulatory authority investigations could potentially lead to a recall
of our products or more serious enforcement action, limitations on the approved indications for which they may be used or suspension or
withdrawal of approvals. Regardless of the merits or eventual outcome, liability claims may also result in decreased demand for our products,
injury to our reputation, costs to defend the related litigation, a diversion of management&#8217;s time and our resources and substantial
monetary awards to trial participants or patients. We currently have product liability insurance that we believe is appropriate for our
stage of development and may need to obtain higher levels prior to advancing product candidates into clinical trials or marketing any
product candidates, if approved. Any insurance we have or may obtain may not provide sufficient coverage against potential liabilities.
Furthermore, clinical trial and product liability insurance is becoming increasingly expensive. As a result, we may be unable to obtain
sufficient insurance at a reasonable cost to protect us against losses caused by product liability claims that could have an adverse effect
on our business and financial condition.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>The amount of our
future losses is uncertain and our quarterly operating results may fluctuate significantly, which will make our future results difficult
to predict and may cause our results to fall below the expectations of investors or securities analysts, each of which may cause our stock
price to fluctuate or decline.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our quarterly and annual
operating results may fluctuate significantly in the future due to a variety of factors, many of which are outside of our control and
may be difficult to predict, including the following:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
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of preclinical studies and clinical trials for product candidates or competing product candidates, or any other change in the competitive
landscape of our industry, including consolidation among our competitors or partners;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">our ability to successfully
recruit and retain subjects for clinical trials, and any delays caused by difficulties in such efforts;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">our ability to obtain marketing
approval for product candidates, and the timing and scope of any such approvals we may receive;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the timing and cost of, and
level of investment in, research and development activities relating to product candidates, which may change from time to time;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
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expenses;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
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candidates, which may vary depending on the quantity of production and the terms of our agreements with manufacturers;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">our ability to attract, hire
and retain qualified personnel;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">expenditures that we will or
may incur to develop additional product candidates;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the level of demand for product
candidates should they receive approval, which may vary significantly;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
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and reimbursement policies with respect to product candidates, if approved, and existing and potential future therapeutics that compete
with product candidates;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
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and global economic environments, including the impact of inflation, instability in the banking sector, war or the outbreak of other
hostilities; and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
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or changes in our accounting policies.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The cumulative effects
of these factors could result in large fluctuations and unpredictability in our quarterly and annual operating results. As a result, comparing
our operating results on a period-to-period basis may not be meaningful. This variability and unpredictability could also result in our
failing to meet the expectations of industry or financial analysts or investors for any period. If our revenue or operating results fall
below the expectations of analysts or investors or below any forecasts we may provide to the market, or if the forecasts we provide to
the market are below the expectations of analysts or investors, the price of our common stock could decline substantially. Such a stock
price decline could occur even when we have met any previously publicly stated guidance we may provide.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>We may not be able
to utilize a significant portion of our net operating loss carryforwards.</i></b></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We have generated, and
expect to continue to generate in the future, significant federal and state net operating loss, or NOL, carryforwards. At December 31,
2023, we had federal and state NOL carryforwards of approximately $9.6 million and $2.6 million, respectively, which may be available
to offset future taxable income. We do not anticipate generating revenue from sales of product candidates for the foreseeable future,
if ever, and we may never achieve profitability. These NOL carryforwards could expire unused and be unavailable to offset future income
tax liabilities because of their limited duration or because of restrictions under U.S. tax law. The state NOL carryforwards will begin
to expire in 2037. Additionally, under the TCJA, as modified by the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act,
although federal NOL carryforwards incurred in taxable years beginning after December 31, 2017 and in future taxable years may be carried
forward indefinitely, the deductibility of such federal NOL carryforwards incurred in the taxable year beginning after December 31, 2020
is limited. In particular, the deductibility of such federal NOL carryforwards may be limited to 80% of current year taxable income for
tax years beginning after December 31, 2020. In addition, at the state level, there may be periods during which the use of NOL carryforwards
is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed. It is uncertain how various states
will respond to the TCJA and CARES Act.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In addition, under Section
382 of the Internal Revenue Code of 1986, as amended, or the Code, and corresponding provisions of state law, if a corporation undergoes
an &#8220;ownership change,&#8221; which is generally defined as a greater than 50% change, by value, in its equity ownership over a three-year
period, the corporation&#8217;s ability to use its pre-change NOL carryforwards and other pre-change tax attributes to offset its post-change
income or taxes may be limited. The amount of the annual limitation is determined based on the value of a company immediately prior to
the ownership change. Subsequent ownership changes may further affect the limitation in future years. The completion of the Merger and
the Offering, together with private placements and other transactions that have occurred since our inception, may trigger such an ownership
change pursuant to Section 382 of the Code. We have not yet completed a Section 382 analysis. We may experience ownership changes as a
result of subsequent shifts in our stock ownership, some of which may be outside of our control. If an ownership change occurs or our
ability to use our NOL carryforwards is otherwise materially limited, it would harm our future operating results by effectively increasing
our future tax obligations. We have a full valuation allowance for deferred tax assets including NOLs.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Comprehensive tax
reform legislation could adversely affect our business and financial condition.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The rules dealing with
United States federal, state and local income taxation are constantly under review by persons involved in the legislative process and
by the Internal Revenue Service, or IRS, and the United States Treasury Department. Changes to tax laws (which changes may have retroactive
application) could adversely affect us or holders of our common stock. In recent years, many such changes have been made and changes are
likely to continue to occur in the future. For example, the TCJA was enacted in 2017 and made significant changes to corporate taxation,
including the reduction of the corporate tax rate from a top marginal rate of 35% to a flat rate of 21%, the limitation of the tax deduction
for net interest expense to 30% of adjusted taxable income (except for certain small businesses), the limitation of the deduction for
net operating losses from taxable years beginning after December 31, 2017 to 80% of current year taxable income and the elimination of
net operating loss carrybacks generated in taxable years ending after December 31, 2017 (though any such net operating losses may be carried
forward indefinitely), and the modification or repeal of many business deductions and credits, including a reduction of the business tax
credit for certain clinical testing expenses incurred in the testing of certain drugs for rare diseases or conditions generally referred
to as &#8220;orphan drugs.&#8221;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Additionally, on March
27, 2020, former President Trump signed into law the CARES Act, which, among other things, suspends the 80% limitation on the deduction
for net operating losses in taxable years beginning before January 1, 2021, permits a 5-year carryback of net operating losses arising
in taxable years beginning after December 31, 2017 and before January 1, 2021, and generally caps the limitation on the deduction for
net interest expense at 50% of adjusted taxable income for taxable years beginning in 2019 and 2020.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The recent and upcoming
presidential and congressional elections in the United States could also result in significant changes in, and uncertainty with respect
to, tax legislation, regulation and government policy directly affecting us and our business. For example, the United States government
may enact significant changes to the taxation of business entities including, among others, a permanent increase in the corporate income
tax rate, an increase in the tax rate applicable to the global intangible low-taxed income and elimination of certain exemptions, and
the imposition of minimum taxes or surtaxes on certain types of income. The likelihood of these changes being enacted or implemented is
unclear.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">It cannot be predicted
whether, when, in what form, or with what effective dates, new tax laws may be enacted, or regulations and rulings may be promulgated
or issued under existing or new tax laws, which could result in an increase in our or our stockholders&#8217; tax liability or require
changes in the manner in which we operate in order to minimize or mitigate any adverse effects of changes in tax law or in the interpretation
thereof.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Data collection
is governed by restrictive regulations governing the use, processing and cross-border transfer of personal information.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We are, and may increasingly
become, subject to various laws and regulations, as well as contractual obligations and mandatory industry standards relating to privacy
and security in the jurisdictions in which we operate. The regulatory environment related to data privacy and security is increasingly
rigorous, with new and constantly changing requirements applicable to our business, and enforcement practices are likely to remain uncertain
for the foreseeable future. These laws and regulations may be interpreted and applied differently over time and from jurisdiction to jurisdiction,
and it is possible that they will be interpreted and applied in ways that may have a material adverse effect on our business, financial
condition, results of operations and prospects.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In the United States,
various federal and state regulators, including governmental agencies like the Federal Trade Commission, have adopted, or are considering
adopting, laws and regulations concerning personal information and data security. Certain state laws may be more stringent or broader
in scope, or offer greater individual rights, with respect to personal information than federal, international or other state laws, and
such laws may differ from each other, all of which may complicate compliance efforts. For example, the California Consumer Privacy Act
of 2018, or the CCPA, which increases privacy rights for California residents and imposes obligations on companies that process their
personal information and meet certain revenue or volume processing thresholds, came into effect on January 1, 2020, and was further amended
by the California Privacy Rights Act, or the CPRA, on November 3, 2020. Among other things, the CCPA requires covered companies to provide
new disclosures to California residents and provide such residents new data protection and privacy rights, including the ability to opt-out
of certain sales of personal information. The CPRA significantly modifies the CCPA by expanding residents&#8217; rights with respect to
certain personal information and creates a new state agency to oversee implementation and enforcement efforts. Many of the CPRA&#8217;s
provisions will become effective on January 1, 2023. The CCPA provides for civil penalties for violations, as well as a private right
of action for certain data breaches. This private right of action may increase the likelihood of, and risks associated with, data breach
litigation, including class action litigation. In addition, laws in all 50 U.S. states require businesses to provide notice to individuals
if certain of their personal information has been disclosed as a result of a qualifying data breach.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Moreover, the CCPA has
prompted a number of proposals for new federal and state-level privacy legislation. State laws and regulations are not necessarily preempted
by federal laws and regulations, such as HIPAA, particularly if a state affords greater protection to individuals than federal law. Where
state laws are more protective, we have to comply with the stricter provisions. In addition to fines and penalties imposed upon violators,
some of these state laws also afford private rights of action to individuals who believe their personal information has been misused.
The interplay of federal and state laws may be subject to varying interpretations by courts and government agencies, creating complex
compliance issues for us and data we receive, use and share, potentially exposing us to additional expense, adverse publicity and liability.
Legal requirements relating to the collection, storage, handling, and transfer of personal information and personal data continue to evolve
and may result in increased public scrutiny and escalating levels of enforcement, sanctions and increased costs of compliance. This legislation
may add additional complexity, variation in requirements, restrictions and potential legal risk, require additional investment of resources
in compliance programs, impact strategies and the availability of previously useful data and could result in increased compliance costs
and/or changes in business practices and policies.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Internationally, laws,
regulations and standards in many jurisdictions apply broadly to the collection, use, retention, security, disclosure, transfer, marketing
or other processing of personal data. For example, the EU General Data Protection Regulation, or GDPR, which became effective on May 25,
2018, is wide-ranging in scope and imposes numerous requirements on companies that process personal data. Specifically, the GDPR greatly
increased the European&#8217;s Commission&#8217;s jurisdictional reach of its data privacy and security laws and introduced a broad array
of requirements for handling personal data, including, for example, requirements to establish a legal basis for processing, higher standards
for obtaining consent from individuals to process their personal data, more robust disclosures to individuals, a strengthened individual
data rights regime, requirements to implement safeguards to protect the security and confidentiality of personal data that requires the
adoption of administrative, physical and technical safeguards, shortened timelines for data breach notifications to appropriate data protection
authorities or data subjects, limitations on retention and secondary use of information, increased requirements pertaining to health data
and obligations to take certain measures when engaging third party processors in connection with the processing of personal data. EU member
states are tasked under the GDPR to enact, and have enacted, certain implementing legislation that adds to and/or further interprets the
GDPR requirements and potentially extends our obligations and potential liability for failing to meet such obligations. The GDPR, together
with national legislation, regulations and guidelines of the EU member states governing the processing of personal data, impose strict
obligations and restrictions on the ability to collect, use, retain, disclose, transfer and otherwise process personal data. In particular,
the GDPR also imposes strict obligations, restrictions and rules concerning the rights of individuals to whom the personal data relates,
the transfer of personal data to countries outside the European Economic Area, including the United States, security breach notifications
and the security and confidentiality of personal data. The GDPR permits data protection authorities to impose large penalties for violations
of the GDPR, including potential fines of up to &#8364;20 million or 4% of annual global revenues, whichever is greater, and other administrative
penalties. The GDPR also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory
authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the GDPR. Compliance with the GDPR
will be a rigorous and time-intensive process that may increase our cost of doing business or require us to change our business practices,
and despite those efforts, there is a risk that we may be subject to fines and penalties, litigation, and reputational harm in connection
with our European activities. Following the withdrawal of the United Kingdom from the European Union, data privacy and security laws that
are substantially similar to the GDPR are in effect in the United Kingdom, which carry similar risks and authorize similar fines for certain
violations.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Certain legal regimes
outside of the United States, including in the United Kingdom and under the GDPR, prohibit the transfer of personal data to the United
States unless certain measures are in place, including, for example, executing Standard Contractual Clauses, or historically, relying
on the receiving entity&#8217;s certification under the EU-US and/or Swiss-US Privacy Shield Frameworks, or, collectively, the Privacy
Shield Frameworks. The Privacy Shield Frameworks were invalidated, and the adequacy of Standard Contractual Clauses is now in question,
following the Court of Justice of the European Union&#8217;s July 2020 decision in the so-called Schrems II case (Data Protection Commissioner
v. Facebook Ireland Limited, Maximillian Schrems (Case C-311/18)). There is no guarantee that any transfer mechanism upon which we rely
will be deemed to be valid by the relevant legal authorities, or that mechanisms that are currently deemed to be valid will remain valid
in the future. This uncertainty, and its eventual resolution, may increase our costs of compliance, impede our ability to transfer data
and conduct our business and harm our business or results of operations.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Compliance with U.S.
and international data protection laws and regulations could require us to take on more onerous obligations in our contracts, restrict
our ability to collect, use and disclose data, or in some cases, impact our ability to operate in certain jurisdictions. Any actual or
alleged failure to comply with U.S. or international laws and regulations relating to privacy, data protection, and data security could
result in governmental investigations, proceedings and enforcement actions (which could include civil or criminal penalties), private
litigation or adverse publicity, harm to our reputation, and could negatively affect our operating results and business. Moreover, clinical
trial subjects about whom we or our potential collaborators obtain information, as well as the providers who share this information with
us, may contractually limit our ability to use and disclose the information or impose other obligations or restrictions in connection
with our use, retention and other processing of information, and we may otherwise face contractual restrictions applicable to our use,
retention, and other processing of information. Claims that we have violated individuals&#8217; privacy rights, failed to comply with
data protection laws, or breached our contractual obligations, even if we are not found liable, could be expensive and time-consuming
to defend and could result in adverse publicity that could harm our business.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Risks Related to Intellectual
Property</b></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>We depend on intellectual
property licensed from Eil and Bala, the termination of which could result in the loss of significant rights, which would harm our business.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We are dependent on technology,
patents, know-how and proprietary materials, both our own and licensed from Eil and Bala. We entered into the Eil license agreement and
the Bala license agreement pursuant to which we obtained exclusive, perpetual, worldwide licensing rights for the development and future
ownership of (i) lonitoclax, a BCL-2 inhibitor for the treatment of AML and CLL from Eil, and (ii) an early-stage menin inhibitor for
the treatment of AML from Bala. See &#8220;<i>Business&#8212;License Agreement</i>s&#8221; for a description of the Eil license agreement
and the Bala license agreement.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Any termination of this
license will result in the loss of significant rights and will restrict our ability to develop and commercialize lonitoclax or a menin
inhibitor. For example, under such license agreements, we, but not Eil or Bala, as the case may be, have the right to terminate the applicable
license agreement for convenience upon 30 days&#8217; written notice. If we or Eil or Bala, as the case may be, materially breaches the
applicable license agreement, and such breach is not cured within 90 days after the receipt of notice of such breach, then the non-defaulting
party may terminate such license agreement. In addition, upon the occurrence of an event of default under the applicable promissory note,
the Eil license agreement or the Bala license agreement shall be terminated. See &#8220;&#8212;<i>Risks Related to Intellectual Property&#8212;Our
rights to develop and commercialize our technology and product candidates may be subject, in part, to the terms and conditions of licenses
granted to us by others&#8221; and &#8220;&#8212;Risks Related to Intellectual Property&#8212;If we fail to comply with our obligations
in the agreements under which we license intellectual property rights from third parties or otherwise experience disruptions to our business
relationships with our licensors, we could lose license rights that are important to our business.</i>&#8221;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; background-color: white">Notwithstanding the foregoing, upon the payment
in full of the applicable promissory note, Eil and Bala have each agreed to transfer to us all of the intellectual property rights covered
by the Eil license agreement and the Bala license agreement, as applicable.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>If we and our licensors
and collaborators, if any, are unable to obtain and maintain sufficient patent and other intellectual property protection for product
candidates and technology, our competitors could develop and commercialize products and technology similar or identical to ours, and we
may not be able to compete effectively in our market or successfully commercialize any of our current or future product candidates.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our commercial success
depends in part on our ability and the ability of our licensors and collaborators, if any, to obtain, maintain, enforce and defend patents
and other intellectual property rights with respect to product candidates and technology and to operate our business without infringing,
misappropriating, or otherwise violating the intellectual property rights of others. If we and our licensors and our collaborators, if
any, are unable to obtain and maintain sufficient intellectual property protection for our product candidate, our licensed product candidates
and any additional product candidates that we may develop, or if the scope of the intellectual property protection obtained is not sufficiently
broad, our competitors and other third parties could develop and commercialize product candidates similar or identical to ours, and our
ability and the ability of our collaborators to successfully commercialize product candidates that we and our collaborators may pursue
may be impaired.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">To establish our proprietary
position, we have filed patent applications in the United States related to our FLT3/IRAK4 program, our lead product candidate from this
program, lomonitinib, and other development candidates that are important to our business, and we have exclusively licensed certain patent
applications from Eil, including lonitoclax, and Bala; we may in the future also license or purchase issued patents or pending patent
applications filed by others. Given the very early stage of development of our only product candidate and development programs and our
licensed product candidates, our patent portfolio is similarly at a very early stage. In particular, as of June 30, 2024 we owned two
pending U.S. patent applications and pending patent applications in 16 jurisdictions outside the U.S.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Accordingly, our current
patent rights provide us with limited legal right to prevent third parties from competing with us in any way. If we do not obtain additional
meaningful patent coverage for product candidates, their respective components, formulations, combination therapies, methods used to manufacture
them and methods of treatment, competitors may be able to erode or negate any competitive advantage we may have, which would likely harm
our business and ability to achieve profitability. U.S. provisional patent applications are not eligible to become issued patents until,
among other things, we file a non-provisional patent application within 12 months of filing of one or more of our related provisional
patent applications. With regard to such U.S. provisional patent applications, if we do not timely file any non-provisional patent applications,
we may lose our priority date with respect to our provisional patent applications and any patent protection on the inventions disclosed
in our provisional patent applications. While we intend to timely file non-provisional patent applications relating to our provisional
patent applications, we cannot predict whether any such patent applications will result in the issuance of patents that provide us with
any competitive advantage. If we are unable to secure or maintain patent protection with respect to product candidates, our business,
financial condition, results of operations, and prospects could be materially harmed.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We cannot be certain
that the claims in U.S. patent applications (including provisional and non-provisional), corresponding international patent applications
and patent applications in certain foreign territories, or those of our licensors and collaborators, will be considered patentable by
the United States Patent and Trademark Office, or the USPTO, courts in the United States or by the patent offices and courts in foreign
countries, nor can we be certain that the claims in our future issued patents will not be found invalid or unenforceable if challenged.
Moreover, the patent application process is subject to numerous risks and uncertainties, and there can be no assurance that we, any licensors
or any collaborators will be successful in protecting product candidates by obtaining and defending patents. These risks and uncertainties
include the following:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the USPTO and various foreign
governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other provisions during the
patent process, the noncompliance with which can result in abandonment or lapse of a patent or patent application, and partial or complete
loss of patent rights in the relevant jurisdiction;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">patent applications may not
result in any patents being issued;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">patents may be challenged,
invalidated, modified, revoked, circumvented, found to be unenforceable or otherwise may not provide any competitive advantage;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">our competitors, many of whom
have substantially greater resources than we do and many of whom have made significant investments in competing technologies, may seek
or may have already obtained patents that will limit, interfere with or eliminate our ability to make, use and sell our potential product
candidates;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">there may be significant pressure
on the U.S. government and international governmental bodies to limit the scope of patent protection both inside and outside the United
States for disease treatments that prove successful, as a matter of public policy regarding worldwide health concerns; and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">countries other than the United
States may have patent laws less favorable to patentees than those upheld by U.S. courts, allowing foreign competitors a better opportunity
to create, develop and market competing product candidates.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Pending patent applications
cannot be enforced against third parties practicing the technology claimed in such applications unless, and until, patents issue from
such applications, and then only to the extent the issued claims cover the technology. There can be no assurance that our patent applications
or the patent applications of our licensors and collaborators will result in patents being issued or that issued patents will afford sufficient
protection against competitors with similar technology.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The patent prosecution
process is also expensive and time-consuming, and we and our licensors and collaborators may not be able to file and prosecute all necessary
or desirable patent applications at a reasonable cost or in a timely manner or in all jurisdictions where protection may be commercially
advantageous. It is possible that we or our licensors and collaborators, if any, will fail to identify important patentable aspects of
our research and development efforts in time to obtain appropriate or any patent protection or fail to file patent applications covering
inventions made in the course of development and commercialization activities before a competitor or another third party files a patent
application covering, or publishes information disclosing, a similar, independently-developed invention. Such competitor&#8217;s or other
third party&#8217;s patent application may pose obstacles to our ability to obtain patent protection or limit the scope of the patent
protection we or our licensors and collaborators may obtain. In addition, although we enter into non-disclosure and confidentiality agreements
with parties who have access to patentable aspects of our research and development output, such as our employees, outside scientific collaborators,
CROs, third-party manufacturers, consultants, advisors and other third parties, any of these parties may breach such agreements and disclose
such output before a patent application is filed, thereby jeopardizing our ability to seek patent protection.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Furthermore, our ability
to obtain and maintain valid and enforceable patents depends on whether the differences between our technology and the prior art allow
our technology to be patentable over the prior art. Since patent applications in the United States and most other countries are confidential
for a period of time after filing or until issuance, we may not be certain that we or our licensors are the first to either (1) file any
patent application related to product candidates or (2) invent any of the inventions claimed in the patents or patent applications. Similarly,
publications of discoveries in the scientific and scholarly literature often lag behind the actual discoveries, and patent applications
in the United States and other jurisdictions are typically not published until 18 months after filing, or in some cases not at all. Consequently,
we cannot be certain that we or our licensors and collaborators were the first to make the inventions claimed in our owned or in-licensed
patent rights and patent applications or were the first to file for patent protection on the inventions claimed in our pending patent
applications. Further, given the amount of time required for the development, testing and regulatory review of new product candidates,
patents protecting such candidates might expire before or shortly after such candidates are commercialized.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The degree of future
protection for our and our licensors&#8217; proprietary rights is uncertain. Only limited protection may be available. Even issued patents
may later be found invalid or unenforceable or may be modified or revoked in proceedings instituted by third parties before various patent
offices or in courts, as described further throughout &#8220;<i>&#8212;Risks Related to Intellectual Property</i>.&#8221; As a result,
our intellectual property may not provide us with sufficient rights to exclude others from commercializing products similar or identical
to ours, and may not adequately protect our rights or permit us to gain or keep any competitive advantage. These uncertainties and/or
limitations in our ability to properly protect the intellectual property rights relating to product candidates could have a material adverse
effect on our financial condition and results of operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>If the scope of
any patent protection we obtain is not sufficiently broad, or if we lose any of our patent protection, our ability to prevent our competitors
from commercializing similar or identical product candidates would be adversely affected.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The patent position of
pharmaceutical and biotechnology companies generally is highly uncertain, involves complex legal and factual questions, and has been the
subject of much litigation in recent years. As a result, the issuance, scope, validity, enforceability and commercial value of our patent
rights are highly uncertain. Our pending and future patent applications and those of our licensors and collaborators may not result in
patents being issued that protect product candidates or which effectively prevent others from commercializing competitive product candidates.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Moreover, the coverage
claimed in a patent application can be significantly reduced before the patent is issued, and its scope can be reinterpreted after issuance.
Even if patent applications we own, have licensed or in-license in the future issue as patents, they may not issue in a form that will
provide us with any meaningful protection, prevent competitors or other third parties from competing with us, or otherwise provide us
with any competitive advantage. Any patents that we own or in-license may be challenged or circumvented by third parties or may be narrowed
or invalidated as a result of challenges by third parties. Consequently, we do not know whether product candidates will be protectable
or remain protected by valid and enforceable patents. Our competitors or other third parties may be able to circumvent our patents or
the patents of our licensors and collaborators by developing similar or alternative technologies or products in a non-infringing manner,
which could materially adversely affect our business, financial condition, results of operations and prospects.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The issuance of a patent
is not conclusive as to its inventorship, scope, validity or enforceability, and our patents or the patents of our licensors may be challenged
in the courts or patent offices in the United States and abroad. We may be subject to a third-party pre-issuance submission of prior art
to the USPTO or third-party observations at the European Patent Office, or become involved in opposition, derivation, revocation, reexamination,
post-grant review, or PGR, and inter partes review, or IPR, or other similar proceedings challenging our owned patent rights. An adverse
determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate or render unenforceable, our patent
rights, allow third parties to commercialize product candidates and compete directly with us, without payment to us, or result in our
inability to manufacture or commercialize products without infringing third-party patent rights. Moreover, our patents or the patents
of our licensors may become subject to post-grant challenge proceedings, such as oppositions in a foreign patent office, that challenge
our priority of invention or other features of patentability with respect to our patents and patent applications and those of our licensors.
Such challenges may result in loss of patent rights, loss of exclusivity or in patent claims being narrowed, invalidated or held unenforceable,
which could limit our ability to stop others from using or commercializing similar or identical technology and products, or limit the
duration of the patent protection of product candidates. Such proceedings also may result in substantial cost and require significant
time from our scientists and management, even if the eventual outcome is favorable to us. In addition, if the breadth or strength of protection
provided by our patents and patent applications or the patents and patent applications of our licensors is threatened, regardless of the
outcome, it could dissuade companies from collaborating with us to license, develop or commercialize current or future product candidates.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Intellectual property
rights do not necessarily address all potential threats to our competitive advantage.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The degree of future
protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations, and may not
adequately protect our business or permit us to maintain our competitive advantage. For example:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">others may be able to make
products that are similar to any of our current or future product candidates or utilize similar technology but that are not covered by
the claims of our patents or the patents that we license or may own in the future;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">we or our licensors might not
have been the first to make the inventions covered by an issued patent or pending patent application that we license or may own in the
future;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">we or our licensors or collaborators
might not have been the first to file patent applications covering certain of our inventions;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">others may independently develop
similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">it is possible that our pending
owned or licensed patent applications or those that we may own or license in the future will not lead to issued patents;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">issued patents that we own
or license may be held invalid or unenforceable, as a result of legal challenges by our competitors;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">our competitors might conduct
research and development activities in countries where we do not have patent rights and then use the information learned from such activities
to develop competitive products for sale in our major commercial markets;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">we may not develop additional
proprietary technologies that are patentable;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the patents of others may have
an adverse effect on our business; and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">we may choose not to file a
patent in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent covering such intellectual
property.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">If any of these events
occurred, there could be a material and adverse effect on our business, results of operations and prospects.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Our commercial
success depends significantly on our ability to operate without infringing the patents and other proprietary rights of third parties.
Claims by third parties that we infringe their proprietary rights may result in liability for damages or prevent or delay our developmental
and commercialization efforts.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our commercial success
depends significantly on avoiding infringement of the patents and proprietary rights of third parties. Numerous third-party U.S. and foreign
issued patents and pending patent applications exist in the fields in which we are developing product candidates. There may be third-party
patents or patent applications with claims to materials, formulations, methods of manufacture or methods for treatment related to the
use or manufacture of product candidates. There is a substantial amount of litigation, both within and outside the United States, involving
patent and other intellectual property rights in the pharmaceutical and biotechnology industries, including patent infringement lawsuits,
oppositions, reexaminations, IPR proceedings and PGR proceedings before the USPTO and/or corresponding foreign patent offices. Accordingly,
our research, development and commercialization activities may be subject to claims that we infringe or otherwise violate patents or other
intellectual property rights owned or controlled by third parties.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">As the pharmaceutical
and biotechnology industries expand and more patents are issued, the risk increases that product candidates may be subject to claims of
infringement of the patent rights of third parties. Patent applications are maintained as confidential for a certain period of time, until
the relevant application is published. Moreover, because patent applications can take many years to issue, there may be currently-pending
patent applications that may later result in issued patents that product candidates may infringe. In addition, identification of third-party
patent rights that may be relevant to our technology is difficult because patent searching is imperfect due to differences in terminology
among patents, incomplete databases and the difficulty in assessing the meaning of patent claims. There is also no assurance that there
is not prior art of which we are aware, but which we do not believe is relevant to our business, which may, nonetheless, ultimately be
found to limit our ability to make, use, sell, offer for sale or import our products that may be approved in the future, or impair our
competitive position. In addition, third parties may obtain patents in the future and claim that use of our technologies infringes upon
these patents. Thus, we may be unaware of third-party patents that may be infringed by commercialization of any product candidates, and
we cannot be certain that we were the first to file a patent application related to a product candidate or technology.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Any claims of patent
infringement asserted by third parties would be time consuming and could:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">result in costly litigation
that may cause negative publicity;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">divert the time and attention
of our technical personnel and management;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">cause development delays;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">prevent us from commercializing
any product candidates until the asserted patent expires or is held finally invalid or not infringed in a court of law;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">require us to develop non-infringing
technology, which may not be possible on a cost-effective basis;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">subject us to significant liability
to third parties; or</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">require us to enter into royalty
or licensing agreements, which may not be available on commercially reasonable terms, or at all, or which might be non-exclusive, which
could result in our competitors gaining access to the same technology.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Although no third party
has asserted a claim of patent infringement against us as of the date of this prospectus, it is possible that a third party may assert
a claim of patent infringement directed at any product candidates in the future. Any patent-related legal action against us claiming damages
and seeking to enjoin commercial activities relating to product candidates, treatment indications, or processes could subject us to significant
liability for damages, including treble damages if we were determined to willfully infringe, and require us to obtain a license to manufacture
or market product candidates. Defense of these claims, regardless of their merit, would involve substantial litigation expense and would
be a substantial diversion of employee resources from our business. We cannot predict whether we would prevail in any such actions or
that any license required under any of these patents would be made available on commercially acceptable terms, if at all. Moreover, even
if we or our strategic partners or collaborators were able to obtain a license, the rights may be nonexclusive, which could result in
our competitors gaining access to the same intellectual property. In addition, we cannot be certain that we could redesign product candidates,
treatment indications, or processes to avoid infringement, if necessary. Accordingly, an adverse determination in a judicial or administrative
proceeding, or the failure to obtain necessary licenses, could prevent us from developing and commercializing product candidates, which
could harm our business, financial condition and operating results. In addition, intellectual property litigation, regardless of its outcome,
may cause negative publicity and could prohibit us from marketing or otherwise commercializing product candidates and technology.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Even if resolved in our
favor, litigation or other legal proceedings could cause us to incur significant expenses, distract our technical and management personnel
from their normal responsibilities, delay development of product candidates, subject us to significant uncertainties and harm our reputation,
all of which could have a material adverse effect on our business, financial condition, results of operations and prospects. See &#8220;<i>&#8212;Risks
Related to Intellectual Property&#8212;Intellectual property litigation could cause us to spend substantial resources and distract our
personnel from their normal responsibilities&#8221; and &#8220;&#8212;Risks Related to Intellectual Property&#8212;Intellectual property
litigation may lead to unfavorable publicity that harms our reputation and causes the market price of our common shares to decline.</i>&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Our rights to develop
and commercialize our technology and product candidates are subject, in part, to the terms and conditions of licenses granted to us by
others.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We have licensed patent
and intellectual rights from Eil and Bala, and we may in the future license, patent and other intellectual property rights from other
parties. We may enter into additional license agreements in the future with others to advance our existing or future research or allow
commercialization of our existing or future product candidates. These licenses may not provide exclusive rights to use such intellectual
property and technology in all relevant fields of use and in all territories in which we may wish to develop or commercialize our technology
and products in the future. We may also need to devote substantial time and attention to ensuring that we successfully integrate these
transactions into our existing operations and are compliant with our obligations under these agreements, which may divert management&#8217;s
time and attention away from our research and development programs or other day-to-day activities.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In addition, subject
to the terms of any such license agreements, we may not have the right to control the preparation, filing, prosecution, maintenance, enforcement,
and defense of patents and patent applications covering the technology that we license from third parties. Accordingly, we cannot be certain
that these patents and patent applications will be prepared, filed, prosecuted, maintained, enforced, and defended in a manner consistent
with the best interests of our business. If our licensors fail to prosecute, maintain, enforce, and defend such patents or patent applications,
or lose rights to those patents or patent applications, the rights we have licensed may be reduced or eliminated, and our right to develop
and commercialize any of our future product candidates that are subject of such licensed rights could be adversely affected. See &#8220;<i>&#8212;Risks
Related to Intellectual Property&#8212;The patent protection and patent prosecution for some of product candidates may be dependent on
third parties.</i>&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our licensors may rely
on third-party consultants or collaborators or on funds from third parties such that our licensors are not the sole and exclusive owners
of the patents we in-license. If other third parties have ownership rights to our future in-licensed patents, they may be able to license
such patents to our competitors, and our competitors could market competing products and technology. This could have a material adverse
effect on our competitive position, business, financial conditions, results of operations, and prospects.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">It is possible that we
may be unable to obtain licenses at a reasonable cost or on reasonable terms, if at all. Even if we are able to obtain a license, it may
be non-exclusive, thereby giving our competitors access to the same technologies licensed to us. In that event, we may be required to
expend significant time and resources to redesign our technology, product candidates, or the methods for manufacturing them or to develop
or license replacement technology, all of which may not be feasible on a technical or commercial basis. If we are unable to do so, we
may be unable to develop or commercialize the affected product candidates, which could harm our business, financial condition, results
of operations, and prospects significantly.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>If we fail to comply
with our obligations in the agreements under which we license intellectual property rights from third parties or otherwise experience
disruptions to our business relationships with our licensors, we could lose license rights that are important to our business.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Disputes may arise between
us and our licensors regarding intellectual property subject to a license agreement, including:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the scope of rights granted
under the license agreement and other interpretation-related issues;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">whether and the extent to which
our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">our right to sublicense patents
and other rights to third parties;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">our diligence obligations under
the license agreement and what activities satisfy those diligence obligations;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">our right to transfer or assign
the license;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the inventorship and ownership
of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners;
and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the priority of invention of
patented technology.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In addition, the agreements
under which we license intellectual property or technology from third parties are complex, and certain provisions in such agreements may
be susceptible to multiple interpretations. In the event of any disagreement about the interpretation of these provisions, our management
may need to devote a disproportionate amount of its attention to resolving these disagreements. Such disruptions may cause delays in our
research and development programs and other business objectives. Additionally, the resolution of any contract interpretation disagreement
that may arise could narrow what we believe to be the scope of our rights to the relevant intellectual property or technology, or increase
what we believe to be our financial or other obligations under the relevant agreement, either of which could have a material adverse effect
on our business, financial condition, results of operations, and prospects. Moreover, if disputes over intellectual property that we license
in the future prevent or impair our ability to maintain our licensing arrangements on commercially acceptable terms, we may be unable
to successfully develop and commercialize the affected product candidates, which could have a material adverse effect on our business,
financial conditions, results of operations, and prospects.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In spite of our best
efforts, our licensors might conclude that we materially breached our license agreements and might therefore terminate the license agreements,
thereby removing our ability to develop and commercialize products and technology covered by these license agreements. If these in-licenses
are terminated, or if the underlying patents fail to provide the intended exclusivity, competitors would have the freedom to seek regulatory
approval of, and to market, products identical to ours. This could have a material adverse effect on our competitive position, business,
financial conditions, results of operations, and prospects.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>We may not be successful
in obtaining or maintaining necessary rights to product candidates through acquisitions and in-licenses.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Because our development
programs may in the future require the use of proprietary rights held by third parties, the growth of our business may depend in part
on our ability to acquire, in-license, or use these third-party proprietary rights. As of this date, we do not believe that Bala and Eil
rely on, or infringe, material intellectual property rights owned by third parties, but there is no assurance that our belief will prove
to be correct. We may be unable to acquire or in-license any compositions, methods of use, processes or other third-party intellectual
property rights from third parties that we identify as necessary for product candidates. The licensing and acquisition of third-party
intellectual property rights is a competitive area, and a number of more established companies may pursue strategies to license or acquire
third-party intellectual property rights that we may consider attractive or necessary. These established companies may have a competitive
advantage over us due to their size, capital resources and greater clinical development and commercialization capabilities. In addition,
companies that perceive us to be a competitor may be unwilling to assign or license rights to us. We also may be unable to license or
acquire third-party intellectual property rights on terms that would allow us to make an appropriate return on our investment or at all.
Even if we are able to obtain a license, it may be non-exclusive, thereby giving our competitors access to the same technologies licensed
to us. If we are unable to successfully obtain rights to required third-party intellectual property rights or maintain the existing intellectual
property rights we have, we may have to abandon development of the relevant program or product candidate, which could have a material
adverse effect on our business, financial condition, results of operations, and prospects.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>We may be involved
in lawsuits to protect or enforce our patents or our licensors&#8217; patents, which could be expensive, time consuming and unsuccessful.
Further, our issued patents or our licensors&#8217; patents could be found invalid or unenforceable if challenged in court.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Competitors and other
third parties may infringe or otherwise violate our patents or other intellectual property or the patents or other intellectual property
of our licensors. In addition, our patents or the patents of our licensors may become involved in inventorship or priority disputes. Our
pending patent applications cannot be enforced against third parties practicing the technology claimed in such applications unless and
until a patent issues from such applications. To counter infringement or other unauthorized use, we may be required to file infringement
claims, which can be expensive and time-consuming. Our ability to enforce patent rights also depends on our ability to detect infringement.
It may be difficult to detect infringers who do not advertise the components or methods that are used in connection with their products
and services. Moreover, it may be difficult or impossible to obtain evidence of infringement in a competitor&#8217;s or potential competitor&#8217;s
product or service. Any claims we assert against perceived infringers could provoke these parties to assert counterclaims against us alleging
that we infringe their patents or that our patents are invalid or unenforceable. In a patent infringement proceeding, a court may decide
that a patent of ours is invalid or unenforceable, in whole or in part, construe the patent&#8217;s claims narrowly or refuse to stop
the other party from using the technology at issue on the grounds that our patents do not cover the technology. An adverse result in any
litigation proceeding could put one or more of our owned or licensed patents at risk of being invalidated, held unenforceable or interpreted
narrowly. We may find it impractical or undesirable to enforce our intellectual property against some third parties.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">If we or our licensors
were to initiate legal proceedings against a third party to enforce a patent directed to our product candidate or any additional product
candidates that we may develop, license or acquire, the defendant could counterclaim that our patent or that of our licensor is invalid
or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity or unenforceability are commonplace.
Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty,
obviousness, non-enablement or insufficient written description. Grounds for an unenforceability assertion could be an allegation that
someone connected with prosecution of the patent withheld relevant information from the USPTO or made a misleading statement during prosecution.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Third parties may also
raise similar claims before the USPTO or an equivalent foreign body, even outside the context of litigation. Potential proceedings include
re-examination, PGR, IPR, interference proceedings, derivation proceedings and equivalent proceedings in foreign jurisdictions (for example,
opposition proceedings). Such proceedings could result in the revocation of, cancellation of, or amendment to our patents in such a way
that they no longer cover our technology or any of our current or future product candidates. The outcome following legal assertions of
invalidity and unenforceability is unpredictable. With respect to the validity question, for example, we cannot be certain that there
is no invalidating prior art of which we and the patent examiner were unaware during prosecution. If a defendant were to prevail on a
legal assertion of invalidity or unenforceability, we would lose at least part, and perhaps all, of the patent protection on the applicable
product candidates or technology covered by the patent rendered invalid or unenforceable.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Some of our competitors
are larger than we are and have substantially greater resources. They are, therefore, likely to be able to sustain the costs of complex
patent litigation or proceedings more effectively than we can because of their greater financial resources and more mature and developed
intellectual property portfolios. Accordingly, despite our efforts, we may not be able to prevent third parties from infringing upon,
misappropriating or otherwise violating our intellectual property.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Even if resolved in our
favor, litigation or other legal proceedings could cause us to incur significant expenses, distract our technical and management personnel
from their normal responsibilities, delay development of product candidates, subject us to significant uncertainties and harm our reputation,
all of which could have a material adverse effect on our business, financial condition, results of operations and prospects. See &#8220;<i>&#8212;Risks
Related to Intellectual Property&#8212;Intellectual property litigation could cause us to spend substantial resources and distract our
personnel from their normal responsibilities&#8221; and &#8220;&#8212;Risks Related to Intellectual Property&#8212;Intellectual property
litigation may lead to unfavorable publicity that harms our reputation and causes the market price of our common shares to decline.</i>&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Intellectual property
litigation could cause us to spend substantial resources, distract our personnel from their normal responsibilities and subject us to
significant uncertainties.</i></b></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Even if resolved in our
favor, litigation or other legal proceedings relating to intellectual property claims may cause us to incur significant expenses, and
could distract our technical and management personnel from their normal responsibilities. Such litigation or proceedings could substantially
increase our operating losses and reduce the resources available for development activities or any future sales, marketing or distribution
activities. Moreover, some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than
we can because of their greater financial resources.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In addition, the uncertainties
associated with litigation could compromise our ability to raise the funds necessary to continue our preclinical studies or initiate clinical
trials, continue our internal research programs, in-license needed technology or other product candidates or enter into development collaborations
that would help us commercialize product candidates, if approved. If the breadth or strength of protection provided by our patents and
patent applications or the patents and patent applications of our licensors is threatened, it could dissuade companies from collaborating
with us to license, develop or commercialize current or future product candidates. Accordingly, these uncertainties could compromise our
ability to compete in the marketplace. Furthermore, because of the substantial amount of discovery required in connection with intellectual
property litigation or other legal proceedings relating to our intellectual property rights, there is a risk that some of our confidential
information could be compromised by disclosure during this type of litigation or other proceedings. These uncertainties could cause the
price of shares of our common stock to decline, as well as have a material adverse effect on our business, financial condition, results
of operations and prospects.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Intellectual property
litigation may lead to unfavorable publicity that harms our reputation and business.</i></b></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">During the course of
any intellectual property litigation, there could be public announcements of the initiation of the litigation as well as results of hearings,
rulings on motions, and other interim proceedings or developments in the litigation. If securities analysts or investors regard these
announcements as negative, the perceived value of our existing product candidates, approved products, programs or intellectual property
could be diminished. Such announcements could harm our reputation or the market for our future products, which could have a material adverse
effect on our business.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Derivation proceedings
may be necessary to determine priority of inventions, and an unfavorable outcome may require us to cease using the related technology
or to attempt to license rights from the prevailing party.</i></b></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Derivation proceedings
provoked by third parties or brought by us or declared by the USPTO may be necessary to determine the priority of inventions with respect
to our patents or patent applications or those of our licensors. An unfavorable outcome could require us to cease using the related technology
or to attempt to license rights to it from the prevailing party. Our business could be harmed if the prevailing party does not offer us
a license on commercially reasonable terms. Our defense of derivation proceedings may fail and, even if successful, may result in substantial
costs and distract our management and other employees. In addition, the uncertainties associated with such proceedings could have a material
adverse effect on our ability to raise the funds necessary to continue our clinical trials, continue our development programs, license
necessary technology from third parties or enter into development or manufacturing partnerships that would help us bring product candidates
to market.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Changes in patent
law could diminish the value of patents in general, thereby impairing our ability to protect product candidates.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Obtaining and enforcing
patents in the pharmaceutical and biotechnology industries is inherently uncertain, due in part to ongoing changes in the patent laws.
Changes in either the patent laws or in the interpretations of patent laws in the United States and other countries may diminish the value
of our intellectual property and may increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement
or defense of issued patents. In the United States, depending on decisions by Congress, the federal courts, and the USPTO, the laws and
regulations governing patents, and interpretation thereof, could change in unpredictable ways that could weaken our and our licensors&#8217;
or collaborators&#8217; ability to obtain new patents or to enforce existing or future patents. Moreover, we cannot predict the breadth
of claims that may be allowed or enforced in our patents or in third-party patents. For example, the U.S. Supreme Court has ruled on several
patent cases in recent years, either narrowing the scope of patent protection available in certain circumstances or weakening the rights
of patent owners in certain situations. Therefore, there is increased uncertainty with regard to our and our licensors&#8217; or collaborators&#8217;
ability to obtain patents in the future, as well as uncertainty with respect to the value of patents once obtained.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In addition, Congress
or other foreign legislative bodies may pass patent reform legislation that is unfavorable to us. Patent reform legislation could increase
the uncertainties and costs surrounding the prosecution of our and our licensors&#8217; or collaborators&#8217; patent applications and
the enforcement or defense of our or our licensors&#8217; or collaborators&#8217; issued patents. For example, in the United States, the
Leahy-Smith America Invents Act, or the Leahy-Smith Act, which was signed into law in September 2011, includes a number of significant
changes to U.S. patent law. These include provisions that affect the way patent applications will be prosecuted and may also affect patent
litigation. In particular, under the Leahy-Smith Act, the United States transitioned in March 2013 to a &#8220;first inventor to file&#8221;
system in which, assuming that other requirements of patentability are met, the first inventor to file a patent application will be entitled
to the patent regardless of whether a third party was first to invent the claimed invention. A third party that files a patent application
in the USPTO after March 2013 but before us could therefore be awarded a patent covering an invention of ours even if we had made the
invention before it was made by such third party. This will require us to be cognizant going forward of the time from invention to filing
of a patent application.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The Leahy-Smith Act also
includes a number of significant changes that affect the way patent applications will be prosecuted and also may affect patent litigation.
These include allowing third-party submission of prior art to the USPTO during patent prosecution and additional procedures to attack
the validity of a patent by USPTO administered post-grant proceedings, including PGR, IPR, and derivation proceedings. An adverse determination
in any such submission or proceeding could reduce the scope or enforceability of, or invalidate, our patent rights, which could adversely
affect our competitive position. Because of a lower evidentiary standard in USPTO proceedings compared to the evidentiary standard in
United States federal courts necessary to invalidate a patent claim, a third party could potentially provide evidence in a USPTO proceeding
sufficient for the USPTO to hold a claim invalid even though the same evidence would be insufficient to invalidate the claim if first
presented in a district court action. Accordingly, a third party may attempt to use the USPTO procedures to invalidate our patent claims
that would not have been invalidated if first challenged by the third party as a defendant in a district court action.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The USPTO has developed
regulations and procedures to govern administration of the Leahy-Smith Act, and many of the substantive changes to patent law associated
with the Leahy-Smith Act, particularly the first inventor-to-file provisions. Accordingly, it is not clear what, if any, impact the Leahy-Smith
Act will have on the operation of our business. However, the Leahy-Smith Act and its implementation could increase the uncertainties and
costs surrounding the prosecution of our or our licensors&#8217; patent applications and the enforcement or defense of our or our licensors&#8217;
issued patents, including for the reasons described above. Similarly, statutory or judicial changes to the patent laws of other countries
may increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of issued patents.
Any of these could have a material adverse effect on our business, financial condition, results of operations and prospects.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>We may be subject
to claims challenging the inventorship or ownership of our patents and other intellectual property.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We or our licensors may
be subject to claims that former employees, collaborators or other third parties have an interest in our owned or in-licensed patents,
trade secrets, or other intellectual property as an inventor or co-inventor. For example, we or our licensors may have inventorship disputes
arise from conflicting obligations of employees, consultants or others who are involved in developing product candidates. While it is
our policy to require our employees and contractors who may be involved in the development of intellectual property to execute agreements
assigning this intellectual property to us, we may be unsuccessful in executing such an agreement with each party who in fact develops
intellectual property that we regard as our own. Our and their assignment agreements may not be self-executing or may be breached, and
litigation may be necessary to defend against these and other claims challenging inventorship or our or our licensors&#8217; ownership
of our owned or in-licensed patents, trade secrets or other intellectual property. If we or our licensors fail in defending any such claims,
in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to
use, intellectual property that is important to product candidates. Even if resolved in our favor, litigation or other legal proceedings
could cause us to incur significant expenses, distract our technical and management personnel from their normal responsibilities, delay
development of product candidates, subject us to significant uncertainties and harm our reputation, all of which could have a material
adverse effect on our business, financial condition, results of operations and prospects. See&#160;<i>&#8220;&#8212;Risks Related to Intellectual
Property&#8212;Intellectual property litigation could cause us to spend substantial resources and distract our personnel from their normal
responsibilities&#8221; and &#8220;&#8212;Risks Related to Intellectual Property&#8212;Intellectual property litigation may lead to unfavorable
publicity that harms our reputation and business.</i>&#8221;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Patent terms may
be inadequate to protect our competitive position on product candidates for an adequate amount of time.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Patents have a limited
lifespan. In the United States, if all maintenance fees are timely paid, the natural expiration of a patent is generally 20 years from
its earliest U.S. non-provisional filing date. Various extensions may be available, but the life of a patent, and the protection it affords,
is limited. Even if patents covering product candidates are obtained, once the patent life has expired, we may be open to competition
from competitive products. Given the amount of time required for the development, testing and regulatory review of new product candidates,
patents protecting such candidates might expire before or shortly after such candidates are commercialized. In addition, the issuance
of a patent does not give us the right to practice the patented invention. Third parties may have blocking patents that could prevent
us from marketing our own patented product and practicing our own patented technology. As a result, our owned and licensed patent portfolio
may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>If we or our licensors
do not obtain patent term extension for product candidates, our business may be materially harmed.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Depending upon the timing,
duration and specifics of FDA marketing approval of product candidates, one or more of our U.S. patents or those of our licensors may
be eligible for limited patent term restoration under the Drug Price Competition and Patent Term Restoration Act of 1984, or the Hatch-Waxman
Amendments. The Hatch-Waxman Amendments permit a patent restoration term of up to five years as compensation for patent term lost during
product development and the FDA regulatory review process. A maximum of one patent may be extended per FDA approved product as compensation
for the patent term lost during the FDA regulatory review process. A patent term extension cannot extend the remaining term of a patent
beyond a total of 14 years from the date of product approval and only those claims covering such approved drug product, a method for using
it or a method for manufacturing it may be extended. Patent term extension may also be available in certain foreign countries upon regulatory
approval of product candidates. However, we may not be granted an extension because of, for example, failing to apply within applicable
deadlines, failing to apply prior to expiration of relevant patents or otherwise failing to satisfy applicable requirements. Moreover,
the applicable time period or the scope of patent protection afforded could be less than we request. If we are unable to obtain patent
term extension or restoration or the term of any such extension is less than we request, our competitors may obtain approval of competing
products following our patent expiration, and our revenue could be reduced, possibly materially. Further, if this occurs, our competitors
may take advantage of our investment in development and trials by referencing our clinical and preclinical data and launch their product
earlier than might otherwise be the case.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>We and our licensors
may not be able to protect intellectual property rights throughout the world.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Although we or our licensors
have pending patent applications in the United States and other countries, filing, prosecuting and defending patents in all countries
throughout the world would be prohibitively expensive, and our intellectual property rights and those of our licensors in some countries
outside the United States can be less extensive than those in the United States. In addition, the laws of some foreign countries do not
protect intellectual property rights to the same extent as federal and state laws in the United States. Consequently, we may not be able
to prevent third parties from practicing our inventions in all countries outside the United States or from selling or importing products
made using our inventions in and into the United States or other jurisdictions. Competitors may use our intellectual property in jurisdictions
where we have not obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories
where we have patent protection, but enforcement is not as strong as that in the United States. These products may compete with our product
candidate and any additional product candidates that we may develop, and our patents, the patents of our licensors, or other intellectual
property rights may not be effective or sufficient to prevent them from competing.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Many companies have encountered
significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of many foreign
countries do not favor the enforcement of patents and other intellectual property protection, which could make it difficult for us to
stop the infringement of our patents or our licensors&#8217; patents or marketing of competing products in violation of our proprietary
rights. Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and
attention from other aspects of our business, could put our patents or the patents of our licensors at risk of being invalidated or interpreted
narrowly and our patent applications or the patent applications of our licensors at risk of not issuing and could provoke third parties
to assert claims against us. We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may
not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate
to obtain a significant commercial advantage from the intellectual property that we develop or license.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Many countries have compulsory
licensing laws under which a patent owner may be compelled to grant licenses to third parties. In addition, many countries limit the enforceability
of patents against government agencies or government contractors. In those countries, we may have limited remedies if patents are infringed
or if we are compelled to grant a license to a third party, which could materially diminish the value of the applicable patents. This
could limit our potential revenue opportunities. Accordingly, our efforts to enforce our intellectual property rights around the world
may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Obtaining and
maintaining our patent protection depends on compliance with various procedural, documentary, fee payment and other requirements imposed
by regulations and governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these
requirements.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Periodic maintenance
fees, renewal fees, annuity fees and various other governmental fees on patents and/or applications will be due to the USPTO and various
foreign patent offices at various points over the lifetime of our patents and/or applications and those of our licensors. Additionally,
the USPTO and various foreign patent offices require compliance with a number of procedural, documentary, fee payment and other similar
provisions during the patent application process. Non-compliance events that could result in abandonment or lapse of a patent or patent
application include failure to respond to official communications within prescribed time limits, non-payment of fees and failure to properly
legalize and submit formal documents. While an inadvertent lapse can in some cases be cured by payment of a late fee or by other means
in accordance with the applicable rules, there are situations in which non-compliance can result in irrevocable abandonment or lapse of
the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. If we or our licensors
or collaborators fail to maintain the patents and patent applications covering product candidates, our competitors might be able to enter
the market with similar or identical products or technology, which would harm our business, financial condition, results of operations
and prospects.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>If our trademarks
and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business
may be adversely affected.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We use and intend to
use registered or unregistered trademarks or trade names to brand and market ourselves and our products. Our trademarks or trade names
may be challenged, infringed, circumvented or declared generic or determined to be infringing on other marks. We may not be able to protect
our rights to these trademarks and trade names, which we need to build name recognition among potential partners or customers in our markets
of interest. At times, competitors may adopt trade names or trademarks similar to ours, thereby impeding our ability to build brand identity
and possibly leading to market confusion. In addition, there could be potential trade name or trademark infringement claims brought by
owners of other registered trademarks or trademarks that incorporate variations of our registered or unregistered trademarks or trade
names. Over the long term, if we are unable to establish name recognition based on our trademarks and trade names, then we may not be
able to compete effectively, and our business may be adversely affected. Our efforts to enforce or protect our proprietary rights related
to trademarks, trade secrets, domain names, copyrights or other intellectual property may be ineffective and could result in substantial
costs and diversion of resources and could adversely affect our financial condition or results of operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>If we are unable
to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We rely on the protection
of our trade secrets, including unpatented know-how, technology and other proprietary information to maintain our competitive position.
Although we have taken steps to protect our trade secrets and unpatented know-how, including entering into confidentiality agreements
with third parties, and confidential information and inventions agreements with service providers, employees, consultants and advisors,
we cannot provide any assurances that all such agreements have been duly executed, and any of these parties may breach the agreements
and disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches.
Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the
outcome is unpredictable. In addition, some courts inside and outside the United States are less willing or unwilling to protect trade
secrets.</p><div>

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    </div><div style="break-before: page; margin-top: 6pt"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Moreover, third parties
may still obtain this information or may come upon this or similar information independently, and we would have no right to prevent them
from using that technology or information to compete with us. If any of these events occurs or if we otherwise lose protection for our
trade secrets, the value of this information may be greatly reduced, and our competitive position would be harmed. If we do not apply
for patent protection prior to such publication or if we cannot otherwise maintain the confidentiality of our proprietary technology and
other confidential information, then our ability to obtain patent protection or to protect our trade secret information may be jeopardized.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>We may be subject
to claims that we or our service providers have wrongfully used or disclosed alleged confidential information or trade secrets.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We have entered into
and may in the future enter into non-disclosure and confidentiality agreements to protect the proprietary positions of third parties,
such as outside scientific collaborators, CROs, third-party manufacturers, consultants, advisors, potential partners, and other third
parties. We may become subject to litigation where a third party asserts that we or our service providers inadvertently or otherwise breached
the agreements and used or disclosed trade secrets or other information proprietary to the third parties. Failure to successfully defend
against any such claim could subject us to significant liability for monetary damages or prevent or delay our developmental and commercialization
efforts, which could adversely affect our business. Even if resolved in our favor, litigation or other legal proceedings could cause us
to incur significant expenses, distract our technical and management personnel from their normal responsibilities, delay development of
product candidates, subject us to significant uncertainties and harm our reputation, all of which could have a material adverse effect
on our business, financial condition, results of operations and prospects. See &#8220;<i>&#8212;Risks Related to Intellectual Property&#8212;Intellectual
property litigation could cause us to spend substantial resources and distract our personnel from their normal responsibilities&#8221;
and &#8220;&#8212;Risks Related to Intellectual Property&#8212;Intellectual property litigation may lead to unfavorable publicity that
harms our reputation and causes the market price of our common shares to decline.</i>&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>We may be subject
to claims that we have wrongfully hired an employee from a competitor or that we or our employees have wrongfully used or disclosed alleged
confidential information or trade secrets of their former employers.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Many of our consultants,
advisors and service providers were previously employed at other biotechnology or pharmaceutical companies and our consultants and advisors
may work for other biotechnology or pharmaceutical companies in addition to us. Although we try to ensure that our employees, consultants
and advisors do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or
these individuals have used or disclosed intellectual property, including trade secrets or other proprietary information, of any of these
individuals&#8217; former or concurrent employers or clients. We may also be subject to claims that patents and applications we have filed
to protect inventions of our employees, consultants and advisors, even those related to one or more product candidates, are rightfully
owned by their former or concurrent employer. Litigation may be necessary to defend against these claims.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">If we fail in defending
any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. Even if resolved
in our favor, litigation or other legal proceedings could cause us to incur significant expenses, distract our technical and management
personnel from their normal responsibilities, delay development of product candidates, subject us to significant uncertainties and harm
our reputation, all of which could have a material adverse effect on our business, financial condition, results of operations and prospects.
See&#160;<i>&#8220;&#8212;Risks Related to Intellectual Property&#8212;Intellectual property litigation could cause us to spend substantial
resources and distract our personnel from their normal responsibilities&#8221; and &#8220;&#8212;Risks Related to Intellectual Property&#8212;Intellectual
property litigation may lead to unfavorable publicity that harms our reputation and business.</i>&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>The patent protection
and patent prosecution for some product candidates may be dependent on third parties.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">While we normally seek
to obtain the right to control prosecution, maintenance and enforcement of the patents relating to product candidates, there may be times
when the filing and prosecution activities for patents and patent applications relating to product candidates are controlled by our licensors
or collaboration partners. If any of our licensors or collaboration partners fail to prosecute, maintain and enforce such patents and
patent applications in a manner consistent with the best interests of our business, including by payment of all applicable fees for patents
covering product candidates, we could lose our rights to the intellectual property or our exclusivity with respect to those rights, our
ability to develop and commercialize those product candidates may be adversely affected and we may not be able to prevent competitors
from making, using and selling competing products. In addition, even where we have the right to control patent prosecution of patents
and patent applications we have licensed from third parties, we may still be adversely affected or prejudiced by actions or inactions
of our licensors and their counsel that took place prior to the date upon which we assumed control over patent prosecution.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Risks Related to Our
Reliance on Related Parties and Third Parties</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>We rely on third
parties and related parties to conduct preclinical studies and clinical trials, and those parties may not perform satisfactorily, including
failing to meet deadlines for the completion of such trials, research and studies.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We do not have the ability
to independently conduct all aspects of our preclinical studies or clinical trials ourselves. We utilize and depend upon related and third-party
investigators and collaborators, such as medical institutions, CROs, clinical trial sites and CMOs, to conduct and support our preclinical
studies under agreements with us and also do so for our current and anticipated clinical trials. These related and third parties have
had and will continue to have a significant role in the conduct of our preclinical studies and anticipated clinical trials and the subsequent
collection and analysis of data.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">These related and third
parties are not our employees, and except for remedies available to us under our agreements with such parties, we have limited ability
to control the amount or timing of resources that any such party will devote to our preclinical studies or our clinical trials. The related
and third parties we rely on for these services may also have relationships with other entities, some of which may be our competitors,
for whom they may also be conducting preclinical studies, clinical trials or other drug development activities, which could affect their
performance on our behalf. Some of these related and third parties may terminate their engagements with us at any time. We also expect
to have to negotiate budgets and contracts with CROs, clinical trial sites and CMOs and we may not be able to do so on favorable terms,
which may result in delays to our development timelines and increased costs. If we need to enter into alternative arrangements with, or
replace or add any related or third parties, it would involve substantial cost and require extensive management time and focus, or involve
a transition period, and may delay our drug development activities, as well as materially impact our ability to meet our desired clinical
development timelines.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our heavy reliance on
these related and third parties for such drug development activities will reduce our control over these activities. As a result, we will
have less direct control over the conduct, timing and completion of preclinical studies and clinical trials and the management of data
developed through preclinical studies and clinical trials than would be the case if we were relying entirely upon our own staff. Nevertheless,
we are responsible for ensuring that each of our studies and trials is conducted in accordance with applicable protocol, legal and regulatory
requirements and scientific standards, and our reliance on third parties does not relieve us of our regulatory responsibilities. For example,
we will remain responsible for ensuring that each of our clinical trials is conducted in accordance with the general investigational plan
and protocols for the trial. Moreover, the FDA requires us to comply with GCP standards, regulations for conducting, recording and reporting
the results of clinical trials to assure that data and reported results are reliable and accurate and that the rights, integrity and confidentiality
of trial participants are protected. Regulatory authorities enforce these GCP requirements through periodic inspections of trial sponsors,
principal investigators and trial sites. If we or any of our CROs or any clinical trial sites fail to comply with applicable GCP requirements,
the clinical data generated in our clinical trials may be deemed unreliable and the FDA or other comparable foreign regulatory authorities
may require us to perform additional clinical trials before approving our marketing applications. There can be no assurance that upon
inspection by a given regulatory authority, such regulatory authority will determine that any of our clinical trials substantially comply
with GCP regulations. In addition, our clinical trials must be conducted with product produced under current cGMP regulations and will
require a large number of test patients. Our failure or any failure by these third parties to comply with these regulations or to recruit
a sufficient number of study subject, may require us to repeat clinical trials, which would delay the regulatory approval process. Moreover,
our business may be implicated if any of these third parties violates federal or state fraud and abuse or false claims laws and regulations
or healthcare privacy and security laws.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">There is no guarantee
that any CROs, clinical trial investigators or other third parties on which we rely will devote adequate time and resources to our development
activities or perform as contractually required. If any of these third parties fail to meet expected deadlines, adhere to our clinical
protocols or meet regulatory requirements, otherwise perform in a substandard manner, or terminate their engagements with us, the timelines
for our development programs may be extended or delayed or our development activities may be suspended or terminated. If our clinical
trial site terminates for any reason, we may experience the loss of follow-up information on subjects enrolled in such clinical trial
unless we are able to transfer those subjects to another qualified clinical trial site, which may be difficult or impossible.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Accordingly, if these
related or third parties do not successfully carry out their contractual duties, meet expected deadlines or conduct our clinical trials
in accordance with regulatory requirements or our stated protocols, or if these third parties need to be replaced, we will not be able
to obtain, or may be delayed in obtaining, marketing approvals for product candidates and will not be able to, or may be delayed in our
efforts to, successfully commercialize product candidates. As a result, our financial results and the commercial prospects for product
candidates would be harmed, our costs could increase and our ability to generate revenue could be delayed.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>We contract with
related and third parties for the manufacture of our only product candidate for preclinical studies and expect to continue to do so for
additional preclinical studies, anticipated clinical trials and ultimately for commercialization. This reliance on related and third parties
increases the risk that we will not have sufficient quality and quantities of product candidates or such quantities at an acceptable cost,
which could delay, prevent or impair our development or commercialization efforts.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We do not currently have
the infrastructure or internal capability to manufacture supplies of product candidates for use in development and commercialization.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We rely, and expect to
continue to rely, on both related and third-party manufacturers for the production of product candidates for preclinical studies and anticipated
clinical trials under the guidance of members of our organization. We do not have long-term supply agreements, and we purchase our required
drug product on a purchase order basis, which means that aside from any binding purchase orders we have from time to time, our supplier
could cease supplying to us or change the terms on which it is willing to continue supplying to us at any time. Even if we are able to
replace any raw materials or other materials with an alternative, such alternatives may cost more, result in lower yields or not be as
suitable for our purposes. In addition, some of the materials that we use to manufacture product candidates are complex materials, which
may be more difficult to substitute. If we were to experience an unexpected loss of supply of any product candidates for any reason, whether
as a result of manufacturing, supply or storage issues or otherwise, we could experience delays, disruptions, suspensions or terminations
of, or be required to restart or repeat, any pending or ongoing preclinical studies or anticipated clinical trials, which could result
in delays and additional regulatory submissions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">If we obtain marketing
approval for any product candidates, given that our limited existing supply arrangements do not extend to commercial supply, we will need
to establish one or more agreements with third parties to develop and scale up the drug manufacturing process. We may be unable to maintain
or establish required agreements with our manufacturers or to do so on acceptable terms. Our product candidates and any additional product
candidates that we may develop may compete with other product candidates and products for access to manufacturing facilities. As a result,
we may not obtain access to these facilities on a priority basis or at all. There are a limited number of manufacturers that operate under
cGMP regulations and that might be capable of manufacturing for us.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Even if we are able to
establish agreements with third-party manufacturers, they may be unable to successfully increase the manufacturing capacity for any product
candidates in a timely or cost-effective manner, or at all. In addition, quality issues may arise during scale-up or commercial activities.
Reliance on related and third-party manufacturers also entails additional risks, including:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the failure of the party to
manufacture product candidates according to our schedule and specifications, or at all, including if our contractors give greater priority
to the supply of other products over product candidates or otherwise do not satisfactorily perform according to the terms of the agreements
between us and them;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the reduction or termination
of production or deliveries by suppliers, or the raising or prices or renegotiation of terms;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the termination or nonrenewal
of arrangements or agreements by our contractors at a time that is costly or inconvenient for us;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the breach by the contractors
of our agreements with them;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the failure of contractors
to comply with applicable regulatory requirements, including cGMPs;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the breach by the contractors
of our agreements with them;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the failure of the to manufacture
product candidates according to our specifications;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the mislabeling of clinical
supplies, potentially resulting in the wrong dose amounts being supplied or active drug or placebo not being properly identified;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">clinical supplies not being
delivered to clinical sites on time, leading to clinical trial interruptions, or of drug supplies not being distributed to commercial
vendors in a timely manner, resulting in lost sales; and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the misappropriation of our
proprietary information, including our trade secrets and know-how.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our anticipated future
dependence upon others for the manufacture of product candidates may adversely affect our future profit margins and our ability to commercialize
any product candidates that receive marketing approval on a timely and competitive basis.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Our manufacturing
process needs to comply with FDA regulations relating to the quality and reliability of such processes. Any failure to comply with relevant
regulations could result in delays in or termination of our clinical programs and suspension or withdrawal of any regulatory approvals.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Third-party manufacturers
may not be able to comply with cGMP regulations or similar regulatory requirements outside of the United States. If our contract manufacturers
cannot successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the FDA or other
comparable foreign regulatory authorities, they will not be able to secure and/or maintain marketing approval for their manufacturing
facilities. In addition, we do not have control over the ability of our contract manufacturers to maintain adequate quality control, quality
assurance and qualified personnel. If the FDA or other comparable foreign regulatory authority does not approve these facilities for the
manufacture of product candidates or if it withdraws any such approval in the future, we will need to find alternative manufacturing facilities,
and those new facilities would need to be inspected and approved by FDA or other comparable foreign regulatory authority prior to commencing
manufacturing, which would significantly impact our ability to develop, obtain marketing approval for or market product candidates, if
approved. Our failure, or the failure of our third-party manufacturers, to comply with applicable regulations could result in sanctions
being imposed on us, including fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation,
seizures or recalls of product candidates or drugs, operating restrictions and criminal prosecutions, any of which could significantly
and adversely affect supplies of product candidates or drugs and harm our business and results of operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>If our related
or third-party manufacturers use hazardous materials in a manner that causes injury or violates applicable law, we may be liable for damages.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our research and development
activities involve the controlled use of potentially hazardous substances, including chemical materials, by our third-party manufacturers.
Our manufacturers are subject to federal, state and local laws and regulations in the United States governing the use, manufacture, storage,
handling and disposal of medical and hazardous materials. Although we believe that our manufacturers&#8217; procedures for using, handling,
storing and disposing of these materials comply with legally prescribed standards, we cannot completely eliminate the risk of contamination
or injury resulting from medical or hazardous materials. As a result of any such contamination or injury, we may incur liability or local,
city, state or federal authorities may curtail the use of these materials and interrupt our business operations. In the event of an accident,
we could be held liable for damages or penalized with fines, and the liability could exceed our resources. Compliance with applicable
environmental laws and regulations is expensive, and current or future environmental regulations may impair our research, development
and production efforts, which could harm our business, prospects, financial condition or results of operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>We have entered
into certain&#160;related party&#160;transactions and may continue to rely on&#160;related parties&#160;for certain development and support
activities.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We have entered into,
and may continue to enter into, transactions with affiliates for certain development and support activities. For example, have entered
into a services agreement with Abet Solutions, pursuant to which Abet Solutions provides us, administrative support services, including
general management and operations services, as well as financial and accounting services, among other items. Dr. Savchuk, our President
and Chief Operating Officer, has a material direct interest in Abet Solutions. For additional information related to this and other related
party transactions, please see the section entitled &#8220;<i>Certain Relationships and Related Party Transactions.</i>&#8221; Such related
party transactions may not have been entered into on an arm&#8217;s-length basis, and we may have achieved more favorable terms because
such transactions were entered into with our&#160;related parties. We rely on, and will continue to rely on, our&#160;related parties&#160;to
maintain these services. If the pricing for these services changes, or if our&#160;related parties&#160;cease to provide these services,
including by terminating agreements with us, we may be unable to obtain replacements for these services on the same terms without disruption
to our business. This could have a material effect on our business, results of operations and financial condition.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>If we decide to
establish collaborations, but are not able to establish those collaborations on commercially reasonable terms, we may have to alter our
development and commercialization plans.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our drug development
programs and the potential commercialization of product candidates will require substantial additional cash to fund expenses. Although
we have not entered into any collaborations to date, we may seek to selectively form collaborations to expand our capabilities, potentially
accelerate research and development activities and provide for commercialization activities by third parties. Any of these relationships
may require us to incur non-recurring and other charges, increase our near- and long-term expenditures, issue securities that dilute our
existing stockholders, or disrupt our management and business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We face significant competition
in seeking appropriate collaborators and the negotiation process is time-consuming and complex. Whether we reach a definitive agreement
for a collaboration depends, among other things, upon our assessment of the collaborator&#8217;s resources and expertise, the terms and
conditions of the proposed collaboration and the proposed collaborator&#8217;s evaluation of a number of factors. Those factors may include
the design or results of preclinical studies or clinical trials, the likelihood of approval by the FDA or other comparable foreign regulatory
authorities, the potential market for the subject product candidate, the costs and complexities of manufacturing and delivering such product
candidate to patients, the potential of competing drugs, the existence of uncertainty with respect to our ownership of intellectual property
and industry and market conditions generally. The potential collaborator may also consider alternative product candidates or technologies
for similar indications that may be available to collaborate on and whether such collaboration could be more attractive than the one with
us for our product candidate. Further, we may not be successful in our efforts to establish a collaboration or other alternative arrangements
for product candidates because they may be deemed to be at too early of a stage of development for collaborative effort and third parties
may not view them as having the requisite potential to demonstrate safety and efficacy.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In addition, there have
been a significant number of recent business combinations among large pharmaceutical companies that have resulted in a reduced number
of potential collaborators. Even if we are successful in entering into a collaboration, the terms and conditions of that collaboration
may restrict us from entering into future agreements on certain terms with potential collaborators.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">If and when we seek to
enter into collaborations, we may not be able to negotiate collaborations on a timely basis, on acceptable terms, or at all. If we are
unable to do so, we may have to curtail the development of a product candidate, reduce or delay its development program or one or more
of our other research programs, delay its potential commercialization or reduce the scope of any sales or marketing activities, or increase
our expenditures and undertake development or commercialization activities at our own expense. If we elect to increase our expenditures
to fund development or commercialization activities on our own, we may need to obtain additional capital, which may not be available to
us on acceptable terms or at all. If we do not have sufficient funds, we may not be able to further develop product candidates or bring
them to market and generate revenue.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>If conflicts arise
between us and our collaborators or strategic partners, these parties may act in a manner adverse to us and could limit our ability to
implement our strategies.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">If conflicts arise between
any corporate or academic collaborators or strategic partners and us, the other party may act in a manner adverse to us and could limit
our ability to implement our strategies. Collaborators or strategic partners may develop, either alone or with others, products in related
fields that are competitive with the products or potential products that are the subject of these collaborations. Competing products,
either developed by the collaborators or strategic partners or to which the collaborators or strategic partners have rights, may result
in the withdrawal of partner support for product candidates. Our collaborators or strategic partners may preclude us from entering into
collaborations with their competitors, fail to obtain timely regulatory approvals, terminate their agreements with us prematurely, or
fail to devote sufficient resources to the development and commercialization of products. Any of these developments could harm our product
development efforts.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>We may not realize
the benefits of any acquisitions, in-license or other collaborations or strategic alliances that we enter into.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We entered into the Eil
license agreement and Bala license agreement in October 2024, and in the future, we may seek and form strategic alliances, create joint
ventures or collaborations, or enter into acquisitions or additional licensing arrangements with third parties that we believe will complement
or augment our development and commercialization efforts with respect to our product candidate and any additional product candidates that
we may develop.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">These transactions can
entail numerous operational and financial risks, including exposure to unknown liabilities, disruption of our business and diversion of
our management&#8217;s time and attention in order to manage a collaboration or develop acquired products, product candidates or technologies,
incurrence of substantial debt or dilutive issuances of equity securities to pay transaction consideration or costs, higher than expected
collaboration, acquisition or integration costs, write-downs of assets or goodwill or impairment charges, increased amortization expenses,
difficulty and cost in facilitating the collaboration or combining the operations and personnel of any acquired business, impairment of
relationships with key suppliers, manufacturers or customers of any acquired business due to changes in management and ownership and the
inability to retain key employees of any acquired business. We may agree to and be bound by negative covenants which may limit our development
and commercial opportunities. As a result, if we enter into collaboration agreements, strategic partnerships or license our products,
we may not be able to realize the benefit of such transactions if we are unable to successfully integrate them with our existing operations
and company culture, which could delay our timelines or otherwise adversely affect our business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We also cannot be certain
that, following a strategic transaction or license, we will achieve the revenue or specific net income that justifies such transaction
or such other benefits that led us to enter into the arrangement. Failure to realize the benefits of any collaborations or strategic alliances
may further cause us to curtail the development of a product candidate, reduce or delay its development program or one or more of our
other development programs, delay its potential commercialization or reduce the scope of any planned sales or marketing activities, or
increase our expenditures and undertake development or commercialization activities at our own expense. If we elect to fund and undertake
development or commercialization activities on our own, we will need to obtain additional expertise and additional capital, which may
not be available to us on acceptable terms or at all. If we fail to enter into collaborations and do not have sufficient funds or expertise
to undertake the necessary development and commercialization activities, we may not be able to further develop product candidates or bring
them to market and generate product sales revenue, which would harm our business prospects, financial condition and results of operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Risks Related to Our
Common Stock</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>There is currently
no market for our common stock and there can be no assurance that any market will ever develop. You may therefore be unable to re-sell
shares of our common stock at times and prices that you believe are appropriate.&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our common stock is not
listed on a national securities exchange or any other exchange, or quoted on an over-the-counter market. Furthermore, we will not be able
to apply to list our common stock on any national securities exchange until the one-year anniversary of the filing of the closing 8-K
on the Merger, at the earliest. Therefore, there is no trading market, active or otherwise, for our common stock and our common stock
may never be included for trading on any stock exchange, automated quotation system or any over-the-counter market. Accordingly, our common
stock is highly illiquid and you will likely experience difficulty in re-selling such shares at times and prices that you may desire.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Our common stock
is not listed on a securities exchange and is not quoted on an over-the-counter trading system, and it may not ever be eligible for listing
or quotation on any securities exchange or on a given over-the-counter trading system.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We do not currently meet
the initial quantitative listing standards of any national securities exchange and certain over-the-counter trading systems. For example,
we have very few stockholders, and therefore do not have sufficient round lot holders to meet the initial listing requirements of the
New York Stock Exchange or The Nasdaq Stock Market LLC. We cannot assure you that we will be able to meet the initial listing standards
of any national securities exchange, or, if we do meet such initial listing standards, that we will be able to maintain any such listing.
Further, the national securities exchanges have adopted so-called &#8220;seasoning&#8221; rules that will require that we meet certain
requirements, including prescribed periods of time trading over-the-counter and minimum filings of periodic reports with the SEC, before
we are eligible to apply for listing on such national securities exchanges. We intend to contact an authorized market maker for an over-the-counter
quotation system for sponsorship of our common stock, but we cannot guarantee that such sponsorship will be approved and our common stock
listed and quoted for sale. Even if our common stock is quoted for sale on an over-the-counter quotation system, buyers may be insufficient
in numbers to allow for a robust market and it may prove impossible to sell your shares. In addition, an investor may find it difficult
to obtain accurate quotations as to the market value of our common stock. In addition, if we fail to meet the criteria set forth in SEC
regulations, various requirements would be imposed by law on broker-dealers who sell our securities to persons other than established
customers and accredited investors. Consequently, such regulations may deter broker-dealers from recommending or selling our common stock,
which may further affect its liquidity. This would also make it more difficult for us to raise additional capital.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>The designation
of our common stock as a &#8220;penny stock&#8221; would limit the liquidity of our common stock.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our common stock may
be deemed a &#8220;penny stock&#8221; (as that term is defined under Rule 3a51-1 of the Exchange Act) in any market that may develop in
the future. Generally, a &#8220;penny stock&#8221; is a common stock that is not listed on a securities exchange and trades for less than
$5.00 a share. Prices often are not available to buyers and sellers and the market may be very limited. Penny stock in start-up companies
is among the riskiest equity investments. Broker-dealers who sell penny stock must provide purchasers with a standardized risk-disclosure
document prepared by the SEC. The document provides information about penny stock and the nature and level of risks involved in investing
in the penny stock market. A broker must also provide purchasers with bid and offer quotations and information regarding broker and salesperson
compensation and make a written determination that the penny stock is a suitable investment for the purchaser and obtain the purchaser&#8217;s
written agreement to the purchase. Many brokers choose not to participate in penny stock transactions. If our common stock is deemed &#8220;penny
stock&#8221;, because of penny stock rules, there may be less trading activity in any market that develops for our common stock in the
future and stockholders are likely to have difficulty selling their shares.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>FINRA sales practice
requirements may limit a stockholder&#8217;s ability to buy and sell our common stock.&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The Financial Industry
Regulatory Authority, or FINRA, has adopted rules requiring that, in recommending an investment to a customer, a broker-dealer must have
reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative or low-priced securities
to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer&#8217;s financial
status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA has indicated its belief
that there is a high probability that speculative or low-priced securities will not be suitable for at least some customers. If these
FINRA requirements are applicable to us or our securities, they may make it more difficult for broker-dealers to recommend that at least
some of their customers buy our common stock, which may limit the ability of our stockholders to buy and sell our common stock and could
have an adverse effect on the market for and price of our common stock.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>The trading price
of our common stock may be volatile and may fluctuate substantially or may decline regardless of our operating performance and you may
not be able to resell your shares for a profit, if at all.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">There is currently no public market for Lomond&#8217;s common stock.
The market price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control,
including:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">overall performance of the
equity markets;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">our operating performance and
the performance of other similar companies;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">results from any clinical trials
with our current and future product candidates or those of our competitors;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">changes in recommendations
by securities analysts that elect to follow our common stock;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">regulatory or legal developments
in the United States and other countries;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the level of expenses related
to future product candidates or clinical development programs;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">our failure to achieve product
development goals in the timeframe we announce;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">announcements of acquisitions,
strategic alliances or significant agreements by us or by our competitors;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">recruitment or departure of
key personnel;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the economy as a whole and
market conditions in our industry, including inflation and instability in the banking sector;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">trading activity by a limited
number of stockholders who together beneficially own a significant amount of our outstanding common stock;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the expiration of market standoff
or contractual lock-up agreements;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the size of our market float;
and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">any other factors discussed
in this prospectus.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In addition, the stock
markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities
of many biotechnology companies. Stock prices of many biotechnology companies have fluctuated in a manner unrelated or disproportionate
to the operating performance of those companies. In the past, securities class-action litigation has often been instituted against companies
following periods of volatility in the market price of their shares. This type of litigation could result in substantial costs and divert
our management&#8217;s attention and resources, which could have a material adverse effect on us.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">As a result of these
factors, you may not be able to resell your shares of our common stock for a profit, or at all.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>The shares of common
stock issued in the Merger and the Offering are &#8220;restricted securities&#8221; and, as such, may not be sold except in limited circumstances.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">None of the shares of
common stock issued in the Merger and the Offering were registered under the Securities Act of 1933, as amended, or the Securities Act,
or registered or qualified under any state securities laws. The shares of common stock issued in the Merger and the Offering were sold
and/or issued pursuant to exemptions contained in and under those laws. Accordingly, these shares are deemed &#8220;restricted securities&#8221;
under Rule 144 of the Securities Act, until the effectiveness of this registration statement and must, therefore, be held indefinitely
unless registered under applicable federal and state securities laws, or an exemption is available from the registration requirements
of those laws. The book entries representing the shares of common stock issued in the Merger reflect their restricted status.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We are registering the
shares of common stock issued in the Merger and the Offering. There can be no assurance, however, that the SEC will declare this registration
statement effective, thereby enabling the shares of common stock issued in the Merger or the Offering to be freely tradable, subject to
restrictions arising under lock-up agreements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Venetian-1 Acquisition
Corp. was a shell company under the federal securities laws, and Rule 144 is not available for the resale of securities initially issued
by shell companies or issuers that have been at any time previously a shell company. However, Rule 144 also includes an important exception
to this prohibition if the following conditions are met:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the issuer of the securities
that was formerly a shell company has ceased to be a shell company;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the issuer of the securities
is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the issuer of the securities
has filed all Exchange Act reports and materials required to be filed, as applicable, during the preceding 12 months (or such shorter
period that the issuer was required to file such reports and materials), other than Current Reports on Form 8-K; and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">at least one year has elapsed
from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell
company.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Because we are a former
shell company, the reporting requirements of Rule 144(i) will apply regardless of holding period. Therefore, the restrictive legends on
the shares of common stock issued in the Merger and the Offering cannot be removed except in connection with an actual sale that is effected
pursuant to an effective registration statement or under an applicable exemption from the registration requirements of the Securities
Act.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>If we are unable
to register in a timely manner the shares of common stock issued to stockholders in the Merger or the Offering, then the stockholders
holding those shares may not be able to resell those shares on the timeline they expect.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In connection with the Merger, we agreed, at our expense, to prepare
this registration statement, or the resale registration statement, and to file it with the SEC in order to register the resale of an aggregate
of 27,473,624 shares of our common stock issued in connection with the Merger and the Offering.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">There are many reasons,
including some over which we have little or no control, which could keep the resale registration statement from being declared effective
by the SEC, including delays resulting from the SEC review process and comments raised by the SEC during that process. In fact, the SEC
may subject the resale registration statement to heightened scrutiny because the Merger was a reverse merger with a shell company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The shares of common
stock covered by the resale registration statement will not be eligible for resale until the resale registration statement is declared
effective or a valid exemption from registration, such as Rule 144, becomes available. See the section above titled &#8220;<i>Description
of the Merger, the Offering, and Related Transactions&#8212;Registration Rights Agreement</i>&#8221; for more information.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>If securities or
industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading
volume could decline.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The trading market for
our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business.
Securities and industry analysts do not currently, and may never, publish research on our company. This risk is heightened because Lomond
became public by a reverse merger instead of by some other means and because we are not listed on a national securities exchange. In addition,
investment banks may be less likely to agree to underwrite securities offerings on our behalf or on behalf of our stockholders than they
might if we became a public reporting company by means of an underwritten initial public offering, because they may be less familiar with
our company as a result of more limited coverage by analysts and the media, and because we became public at an early stage in our development.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The failure to receive
research coverage would be likely to have an adverse effect on our ability to develop a liquid market for our common stock. If no or only
very few securities analysts commence coverage of us, or if industry analysts cease coverage of us, the trading volume in our common stock
may decline, which would negatively affect the trading price for our common stock. If one or more of the analysts who covers us downgrades
our common stock or publishes inaccurate or unfavorable research about our business, our common stock price would likely decline. If one
or more of these analysts cease coverage of us or fails to publish reports on us regularly, demand for our common stock could decrease,
which might cause our common stock price and trading volume to decline. &#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Sales of a substantial
number of shares of our common stock in the public market could cause our stock price to fall.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The price of our common
stock could decline if there are substantial sales of our common stock, particularly sales by our directors, executive officers and significant
stockholders, or if there is a large number of shares of our common stock available for sale and the market perceives that sales will
occur.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Upon the consummation
of the Merger and the Offering, there were 27,198,214 outstanding shares of our common stock and warrants to purchase 275,410 shares of
our common stock. Of the shares outstanding as of the Closing Date and shares underlying warrants outstanding as of the Closing Date,
27,473,624 are currently restricted from resale as a result of securities laws. Once the resale registration statement is effective, 27,198,214
shares of our common stock will be able to be sold freely in the public market, subject to lock-up agreements, if applicable. Sales of
a substantial number of such shares, the perception that such sales may occur, or early release of these agreements, could cause the market
price of our common stock to fall or make it more difficult for you to sell your common stock at a time and price that you deem appropriate.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In addition, we also
intend to register shares of common stock that we have issued and may issue under our employee equity plans. As of November 1, 2024, there
were 4,329,617 shares of common stock that were subject to outstanding options under Lomond&#8217;s 2024 Stock Plan, or the Lomond Plan,
which we assumed effective upon the closing of the Merger. We adopted our 2024 Equity Incentive Plan, or the 2024 Plan, in November 2024,
which became effective upon the closing of the Merger, pursuant to which 1,759,608 shares were reserved for future issuance. The number
of shares of our common stock that may be issued under the 2024 Plan is equal to the sum of (x) 1,759,608 shares, plus (y) up to 4,329,627
shares subject to the awards granted under the Lomond Plan that were outstanding on the date of the Merger and that are subsequently forfeited,
expire or lapse unexercised or unsettled or are reacquired by us, plus (z) the annual increase in shares described in the section entitled
&#8220;<i>Executive Compensation - Equity Plans - 2024 Equity Incentive Plan</i>.&#8221; Accordingly, these will be available for sale
in the open market, subject to Rule 144 volume limitations applicable to affiliates, and subject to any vesting restrictions and lock-up
agreements applicable to these shares.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The sale or possibility
of sale of these additional securities trading in the public market may negatively impact the market price of our common stock.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>We may issue additional
shares of common stock or other equity securities without your approval, which would dilute your ownership interests and may depress the
market price of our common stock.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We may issue additional
shares of common stock or other equity securities without your approval, subject to the restrictions set forth in the Subscription Agreement.
For example, we may issue an aggregate of up to 1,759,608 shares of our common stock pursuant to the 2024 Plan, which amount may be subject
to increase from time to time. For additional information about this plan, please read the discussion under the headings &#8220;<i>Executive
Compensation&#8201;&#8212;&#8201;Equity Plans</i>.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Subject to the restrictions
set forth in the Subscription Agreement, we may also issue additional shares of common stock or other equity securities of equal or senior
rank in the future in connection with, among other things, future acquisitions or repayment of outstanding indebtedness, without stockholder
approval, in a number of circumstances.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The issuance of additional
shares or other equity securities of equal or senior rank would have the following effects:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">existing stockholders&#8217;
proportionate ownership interest in our company will decrease;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the amount of cash available
per share, including for payment of dividends in the future, may decrease;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the relative voting strength
of each previously outstanding common stock may be diminished; and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the market price of our common
stock may decline.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>We have identified
material weaknesses in our internal control over financial reporting in the past. If our remediation of the material weaknesses is not
effective, our ability to produce accurate and timely financial statements could be impaired, which could result in sanctions or other
penalties that would harm our business and the trading price of our common stock may decline.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Prior to the Closing,
Lomond was a private company with limited accounting personnel to adequately execute its accounting processes and limited supervisory
resources with which to address its internal control over financial reporting. In connection with the audits of our financial statements
as of and for each of the years ended December 31, 2022 and 2023, we identified material weaknesses in our internal control over financial
reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that
there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected
on a timely basis. The material weaknesses related to having inadequate accounting personnel and controls over the recording of transactions,
including those with related parties, to achieve complete, accurate and timely financial accounting, reporting and disclosures, resulting
in adjustments to several accounts and disclosures.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We have taken and are
taking steps to remediate this material weakness, including through the hiring of external financial consultants and finance personnel
to provide needed levels of expertise in our internal accounting function and to implement appropriate controls over the financial reporting.
However, we are still in the process of implementing these steps and cannot assure you that these measures will significantly improve
or remediate the material weaknesses described above. We have identified other deficiencies in our internal control over financial reporting
that have not risen to the level of a material weakness, which we are in the process of remediating. We expect to incur additional costs
to remediate these control deficiencies, though there can be no assurance that our efforts will be successful or avoid potential future
material weaknesses.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We, and our independent
registered public accounting firm, were not required to perform an evaluation of our internal control over financial reporting as of December
31, 2023 in accordance with the provisions of the Sarbanes-Oxley Act. Accordingly, we cannot assure you that we have identified all, or
that we will not in the future have additional, material weaknesses. A material weakness may still exist when we report on the effectiveness
of our internal control over financial reporting for purposes of our attestation when required by reporting requirements under the Securities
Exchange Act of 1934, as amended, or the Exchange Act, or Section 404 of the Sarbanes-Oxley Act.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">If we are unable to successfully
remediate our existing or any future material weaknesses in our internal control over financial reporting, or if we identify any additional
material weaknesses, the accuracy and timing of our financial reporting may be adversely affected, we may be unable to maintain compliance
with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements,
investors may lose confidence in our financial reporting, and our stock price may decline as a result. We also could become subject to
investigations by the SEC or other regulatory authorities.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>If we fail to maintain
proper and effective internal controls, our ability to produce accurate and timely financial statements could be impaired, which could
result in sanctions or other penalties that would harm our business and the trading price of our common stock may decline.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We are subject to the
reporting requirements of the Exchange Act, the Sarbanes-Oxley Act and, if approved, the rules and regulations of the OTC. The Sarbanes-Oxley
Act requires, among other things, that we maintain effective disclosure controls and procedures and internal controls over financial reporting.
We must perform system and process design evaluation and testing of the effectiveness of our internal controls over financial reporting
to allow management to report on the effectiveness of our internal controls over financial reporting in our Form 10-K filing for that
year, as required by Section 404 of the Sarbanes-Oxley Act. To achieve compliance with Section 404 within the prescribed period, we will
be engaged in a process to document and evaluate our internal control over financial reporting, which is both costly and challenging.
In this regard, we will need to continue to dedicate internal resources, including through hiring additional financial and accounting
personnel, potentially engage outside consultants and adopt a detailed work plan to assess and document the adequacy of internal control
over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning
as documented and implement a continuous reporting and improvement process for internal control over financial reporting. This will require
that we incur substantial additional professional fees and internal costs to expand our accounting and finance functions and that we expend
significant management efforts. Prior to the Merger, Lomond was never required to test its internal controls within a specified period
and, as a result, we may experience difficulty in meeting these reporting requirements in a timely manner.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We have identified material
weaknesses in our internal control over financial reporting, and we may in the future discover additional weaknesses in our system of
internal financial and accounting controls and procedures that could result in a material misstatement of our financial statements. Our
internal control over financial reporting will not prevent or detect all errors and all fraud. A control system, no matter how well designed
and operated, can provide only reasonable, not absolute, assurance that the control system&#8217;s objectives will be met. Because of
the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error
or fraud will not occur or that all control issues and instances of fraud will be detected.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">If we are not able to
comply with the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner, or if we are unable to maintain proper and effective
internal controls over financial reporting, we may not be able to produce timely and accurate financial statements. If that were to happen,
our investors could lose confidence in our reported financial information, the market price of our stock could decline and we could be
subject to sanctions or investigations by the SEC or other regulatory authorities, including equivalent foreign authorities.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Our disclosure
controls and procedures may not prevent or detect all errors or acts of fraud.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Upon the consummation
of the Merger, we became subject to the periodic reporting requirements of the Exchange Act. We designed our disclosure controls and procedures
to reasonably assure that information we must disclose in reports we file or submit under the Exchange Act is accumulated and communicated
to management, and recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. We
believe that any disclosure controls and procedures or internal controls and procedures, no matter how well-conceived and operated, can
provide only reasonable, not absolute, assurance that the objectives of the control system are met. These inherent limitations include
the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. For example,
our directors or executive officers could inadvertently fail to disclose a new relationship or arrangement causing us to fail to make
any related party transaction disclosures. Additionally, controls can be circumvented by the individual acts of some persons, by collusion
of two or more people or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in our control
system, misstatements due to error or fraud may occur and not be detected.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>We are an &#8220;emerging
growth company&#8221; as defined in the JOBS Act and a &#8220;smaller reporting company&#8221; as defined in the Exchange Act, and any
decision on our part to take advantage of the reduced reporting requirements applicable to emerging growth companies and smaller reporting
companies could make our common stock less attractive to investors.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We are an &#8220;emerging
growth company&#8221; as defined in the Jumpstart Our Business Startups Act of 2012, as amended, or the JOBS Act, and we intend to take
advantage of some of the exemptions from reporting requirements that are applicable to other public companies that are not emerging growth
companies, including:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">being permitted to provide
only two years of audited financial statements, in addition to any required unaudited interim financial statements, with correspondingly
reduced &#8220;Management&#8217;s Discussion and Analysis of Financial Condition and Results of Operations&#8221; disclosure;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">not being required to comply
with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act in the assessment of our internal control over
financial reporting;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">not being required to comply
with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or
a supplement to the auditor&#8217;s report providing additional information about the audit and the financial statements;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">reduced disclosure obligations
regarding executive compensation; and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">not being required to hold
a non-binding advisory vote on executive compensation or obtain stockholder approval of any golden parachute payments not previously
approved.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In addition, as an emerging
growth company, the JOBS Act allows us to delay adoption of new or revised accounting pronouncements applicable to public companies until
such pronouncements are made applicable to private companies. We have elected to use this extended transition period under the JOBS Act.
As a result, our financial statements may not be comparable to the financial statements of issuers who are required to comply with the
effective dates for new or revised accounting standards that are applicable to public companies, which may make comparison of our financials
to those of other public companies more difficult.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We cannot predict if
investors will find our common stock less attractive because we will rely on these exemptions. If some investors find our common stock
less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.
We may take advantage of these reporting exemptions until we are no longer an emerging growth company. We will remain an emerging growth
company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the first sale of our common equity
securities pursuant to an effective registration statement under the Securities Act of 1933, as amended, (b) in which we have total annual
gross revenue of at least $1.235 billion or (c) in which we are deemed to be a large accelerated filer, which means, among other things,
the market value of our common stock that is held by non-affiliates exceeds $700.0 million as of the prior June 30th and (2) the date
on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Even after we no longer
qualify as an emerging growth company, we may still qualify as a &#8220;smaller reporting company,&#8221; as defined in the Exchange Act,
which would allow us to continue to take advantage of many of the same exemptions from disclosure requirements, including not being required
to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and reduced disclosure obligations regarding
executive compensation in our periodic reports and proxy statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We cannot predict if
investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock
less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>We do not intend
to pay dividends for the foreseeable future.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Neither Venetian-1 Acquisition
Corp. nor Lomond ever declared or paid cash dividends on their respective capital stock, and we currently intend to retain any future
earnings to finance the operation and expansion of our business, and we do not expect to declare or pay any dividends in the foreseeable
future. Consequently, stockholders must rely on sales of their common stock after price appreciation, which may never occur, as the only
way to realize any future gains on their investment.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>The concentration
of our stock ownership will likely limit your ability to influence corporate matters, including the ability to influence the outcome of
director elections and other matters requiring stockholder approval.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">As of November 1, 2024,
after giving effect to the Merger and the closing of the Offering, our executive officers, directors and principal stockholders, together
with their respective affiliates, beneficially owned approximately 89.1% of our outstanding common stock. As a result, these stockholders,
acting together, will have significant influence over all matters that require approval by our stockholders, including the election of
directors and approval of significant corporate transactions. Corporate actions might be taken even if other stockholders oppose them.
This concentration of ownership might also have the effect of delaying or preventing a change of control of our company that other stockholders
may view as beneficial.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Delaware law and
provisions in our amended and restated certificate of incorporation and amended and restated bylaws could make a merger, tender offer
or proxy contest difficult, thereby depressing the trading price of our common stock.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our status as a Delaware
corporation and the anti-takeover provisions of the Delaware General Corporation Law may discourage, delay or prevent a change in control
by prohibiting us from engaging in a business combination with an interested stockholder for a period of three years after the person
becomes an interested stockholder, even if a change of control would be beneficial to our existing stockholders. In addition, our amended
and restated certificate of incorporation and amended and restated bylaws contain provisions that may make the acquisition of our company
more difficult, including the following:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">a classified board of directors
with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of our board of
directors;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the ability of our board of
directors to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting
rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquiror;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the exclusive right of our
board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death
or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">a prohibition on stockholder
action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the requirement that a special
meeting of stockholders may be called only by a majority vote of our entire board of directors, the chairman of our board of directors
or our chief executive officer, which could delay the ability of our stockholders to force consideration of a proposal or to take action,
including the removal of directors;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the requirement for the affirmative
vote of holders of at least 66 2/3% of the voting power of all of the then-outstanding shares of the voting stock, voting together as
a single class, to amend the provisions of our amended and restated certificate of incorporation relating to the management of our business
or our amended and restated bylaws, which may inhibit the ability of an acquiror to effect such amendments to facilitate an unsolicited
takeover attempt; and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">advance notice procedures with
which stockholders must comply to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders&#8217;
meeting, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror&#8217;s own
slate of directors or otherwise attempting to obtain control of us.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In addition, as a Delaware
corporation, we are subject to Section 203 of the Delaware General Corporation Law. These provisions may prohibit large stockholders,
in particular those owning 15% or more of our outstanding voting stock, from merging or combining with us for a certain period of time.
A Delaware corporation may opt out of this provision by express provision in its original certificate of incorporation or by amendment
to its certificate of incorporation or bylaws approved by its stockholders. However, we have not opted out of this provision.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">These and other provisions
in our amended and restated certificate of incorporation, amended and restated bylaws and Delaware law could make it more difficult for
stockholders or potential acquirors to obtain control of our board of directors or initiate actions that are opposed by our then-current
board of directors, including delay or impede a merger, tender offer or proxy contest involving our company. The existence of these provisions
could negatively affect the price of our common stock and limit opportunities for you to realize value in a corporate transaction.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">For information regarding
these and other provisions, see the section titled &#8220;<i>Description of Capital Stock</i>.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Our amended and
restated certificate of incorporation designates the Court of Chancery of the State of Delaware and federal court within the State of
Delaware as the exclusive forum for certain types of actions and proceedings that our stockholders may initiate, which could limit a stockholder&#8217;s
ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our amended and restated
certificate of incorporation provides that, subject to limited exceptions, the Court of Chancery of the State of Delaware and federal
court within the State of Delaware will be exclusive forums for any:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">derivative action or proceeding
brought on our behalf;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">action asserting a claim of
breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">action asserting a claim against
us arising pursuant to any provision of the Delaware General Corporation Law, our amended and restated certificate of incorporation or
bylaws; or</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">other action asserting a claim
against us that is governed by the internal affairs doctrine.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">This choice of forum
provision does not apply to actions brought to enforce a duty or liability created under the Exchange Act. Our amended and restated certificate
of incorporation also provides that the federal district courts of the United States are the exclusive forum for the resolution of any
complaint asserting a cause of action arising under the Securities Act. We intend for this provision to apply to any complaints asserting
a cause of action under the Securities Act despite the fact that Section 22 of the Securities Act creates concurrent jurisdiction for
the federal and state courts over all actions brought to enforce any duty or liability created by the Securities Act or the rules and
regulations promulgated thereunder. There is uncertainty as to whether a court would enforce such a provision with respect to claims under
the Securities Act, and our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules
and regulations thereunder. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be
deemed to have notice of and to have consented to the provisions of our amended and restated certificate of incorporation described above.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">These choice of forum
provisions may limit a stockholder&#8217;s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or
our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and employees. Alternatively,
if a court were to find these provisions of our amended and restated certificate of incorporation inapplicable to, or unenforceable in
respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such
matters in other jurisdictions, which could adversely affect our business and financial condition.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>We could be subject
to securities class action litigation.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In the past, securities
class action litigation has often been brought against a company following a decline in the market price of its securities. This risk
is especially relevant for us because biotechnology companies have experienced significant stock price volatility in recent years and
because the trading price of our common stock may be very volatile due to there not being an active trading market. If we face such litigation,
it could result in substantial costs and a diversion of management&#8217;s attention and resources, which could harm our business.&#160;</p><div>




</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"></p><div>

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    </div><div style="margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: normal 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->74<!-- Field: /Sequence --></p><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"></p></div><div>
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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>&#160;</b></span></p><div>

</div><div><a id="a_007"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>DESCRIPTION
OF THE MERGER, THE OFFERING, AND RELATED TRANSACTIONS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>&#160;</b></span><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b>Merger Agreement</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">On November 1, 2024,
we, Acquisition Sub and Lomond entered into the Merger Agreement. Pursuant to the terms of the Merger Agreement, on November 1, 2024 (the
&#8220;Closing Date&#8221;), Acquisition Sub merged with and into Lomond, with Lomond continuing as the surviving corporation and our
wholly-owned subsidiary.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Pursuant to the terms
of the Merger Agreement, at the time the certificate of merger reflecting the Merger was filed with the Secretary of State of Delaware
(the &#8220;Effective Time&#8221;), each share of Lomond&#8217;s capital stock (comprising of Lomond common stock and Lomond preferred
stock) issued and outstanding immediately prior to the closing of the Merger was cancelled and converted into the right to receive&#160;one
share of our common stock (the &#8220;Exchange Ratio&#8221;), with the maximum number of shares of our common stock issuable to the former
holder of Lomond&#8217;s capital stock equal to 14,420,383 (which is equal to 758,967 shares of Lomond common stock and 13,661,416 shares
of Lomond preferred stock issued and outstanding immediately prior to the closing of the Merger). In addition, pursuant to the Merger
Agreement, immediately prior to the Effective Time, an aggregate of 3,625,000 shares of the 5,000,000 then-outstanding shares of our common
stock owned by our stockholders prior to the Merger were forfeited and cancelled (the &#8220;Stock Forfeiture&#8221;).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In addition, pursuant
to the Merger Agreement, at the Effective Time, options to purchase an aggregate of 4,329,617 shares of Lomond common stock at an exercise
price of $1.30 per share issued and outstanding immediately prior to the closing of the Merger under Lomond&#8217;s 2024 Stock Plan (the
&#8220;Lomond Plan&#8221;) were assumed and converted into options to purchase 4,329,617&#160;shares of our common stock at an exercise
price of $1.30 per share.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The issuance of shares
of our common stock to Lomond&#8217;s stockholders and the assumption of Lomond&#8217;s options outstanding immediately prior to the Effective
Time pursuant to the Merger Agreement are collectively referred to as the &#8220;Share Conversion.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The Merger Agreement
contained customary representations and warranties and pre- and post-closing covenants of each party and customary closing conditions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">As a condition to the
Merger, we entered into a Pre-Merger Indemnity Agreement with each of our former officers and directors, pursuant to which we agreed to
indemnify such individuals for actions taken by him or her in his or her official capacities relating to the consideration, approval and
consummation of the Merger and certain related transactions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We expect the Merger
to be treated as a recapitalization and reverse acquisition for us for financial reporting purposes. Lomond is considered the acquirer
for accounting purposes, and our historical financial statements before the Merger will be replaced with the historical financial statements
of Lomond before the Merger in future filings with the United States Securities and Exchange Commission (the &#8220;SEC&#8221;). The Merger
is intended to be treated as a tax-free reorganization under Section&#160;368(a) of the Internal Revenue Code of 1986, as amended.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b>The Subscription Agreement</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b><i>The Offering</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Immediately following
the Effective Time of the Merger, we issued an aggregate of $43.9 million of our shares of common stock pursuant to a private placement
offering and the conversion of certain simple agreements for future equity (&#8220;SAFEs&#8221;) issued by Lomond, which included (i)
8,241,375 shares of our common stock issued and sold at a purchase price of $4.00 per share in cash (the &#8220;Offering Price&#8221;)
pursuant to the Subscription Agreement; (ii) 1,078,124 shares of our common stock at a price of $3.20 pursuant to the conversion of certain
SAFEs issued by Lomond in October 2024, and (iii) 2,083,332 shares of our common stock at a price of $3.60 pursuant to the conversion
of certain SAFEs issued by Lomond in August 2024. The private placement offering is referred to herein as the &#8220;Offering.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The aggregate gross proceeds
from the Offering, including the aggregate amount previously received from the issuance of the SAFEs, were $43.9&#160;million (before
deducting placement agent fees and expenses of the Offering, which are estimated at $2.6 million).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Pursuant to the Subscription
Agreement, we may hold one or more subsequent closings prior to November 30, 2024, to sell up to an additional 4,021,125 shares at the
Offering Price. Each investor in any subsequent closing will be required to represent that, as of the date of entering into the Subscription
Agreement and the date of the applicable closing, it (i) has a substantive, pre-existing relationship with us or has direct contact with
us or the Placement Agents outside of the Offering, and (ii) did not independently contact us or a Placement Agent or become interested
in the Offering as a result of reading or otherwise being aware of this prospectus, any press release or any other public disclosure disclosing
the terms of the Offering. In connection with the Offering and subject to the closing of the Offering, we agreed to pay the placement
agents, Raymond James &amp; Associates, Inc. (&#8220;Raymond James&#8221;), Wedbush &amp; Co., LLC (&#8220;Wedbush&#8221; and with Raymond
James, the &#8220;Lead Placement Agents&#8221;) and Aegis Capital Corp. (&#8220;Aegis&#8221; and together with Raymond James and Wedbush,
the &#8220;Placement Agents&#8221;), each a U.S. registered broker-dealer a cash placement fee and issue Placement Agent Warrants to the
Placement Agents as follows. The Lead Placement Agents will be paid a cash placement fee equal to the sum of (x) 4% of the gross proceeds
raised from OrbiMed Advisors LLC (&#8220;OrbiMed&#8221;) and Torrey Pines Investment LLC and/or their respective affiliates and/or certain
other investors (collectively &#8220;Insider Investors&#8221;), (y) 6% of the gross proceeds raised from certain other investors introduced
by Lomond or its affiliates (&#8220;Lomond Investors&#8221;) and (z) 8% of the gross proceeds raised from all other Purchasers resulting
from the efforts of the Lead Placement Agents (other than Co-Agent Investors (as defined below), the &#8220;Lead Placement Agent Investors&#8221;).
Aegis will be paid a cash placement fee equal to 8% of the gross proceeds raised from Purchasers resulting from the efforts of Aegis (the
&#8220;Co-Agent Investors&#8221;). Further, we agreed to issue Placement Agent Warrants to the Placement Agents covering a number of shares
of our common stock equal to 8% of the number of shares of Common Stock sold in the Offering to the Lead Placement Agent Investors and
Co-Agent Investors, as applicable, with a term of four years and an exercise price of $4.00 per share (as may be adjusted for stock splits,
stock dividends, combinations, recapitalizations or similar events).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">As a result of the foregoing,
in connection with the closing of the Offering, we paid the Placement Agents an aggregate cash commission of $2.5 million and issued Placement
Agent Warrants to purchase an aggregate of 275,410 shares of our Common Stock. We have also reimbursed or will reimburse the Placement
Agents for approximately $0.1 million of expenses incurred in connection with the Offering.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Subject to certain customary
exceptions,&#160;we have agreed to indemnify the Placement Agents to the fullest extent permitted by law against certain liabilities that
may be incurred in connection with the Offering, including certain civil liabilities under the Securities Act, and, where such indemnification
is not available, to contribute to the payments the Placement Agents and their sub-agents may be required to make in respect of such liabilities.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Restrictions on
Certain Equity Sales and Certain Governance Changes</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Pursuant to the Subscription
Agreement, we agreed that without the prior written consent of holders of at least a majority of the shares sold in the Offering, including
at least a majority of the shares held by certain outside investors who participated in the Offering (the &#8220;Requisite Holders&#8221;),
we will not, for a period commencing on the date of the Subscription Agreement until the date that is the latest of (x) 180 days after
the closing of the Offering, (y) the date on which a registration statement with respect to the resale of all of the shares issued in
the Offering is declared effective by the SEC and (z) the date on which the common stock is listed on a national securities exchange (such
period, the &#8220;Restricted Period&#8221;), cause or direct any of our affiliates to (i) offer, sell, contract to sell, pledge, grant
any option to purchase, make any short sale or otherwise transfer or dispose of, directly or indirectly, any shares of our common stock
or any securities convertible into or exchangeable for, or that represent the right to receive, shares of our common stock, or (B) file
with the SEC a registration statement under the Securities Act relating to any shares of our common stock or any securities convertible
into or exchangeable for, or that represent the right to receive, shares of our common stock, except pursuant to the terms of the Registration
Rights Agreement and a registration statement on Form S-8 to register under the Securities Act the offer and sale of securities under
the 2024 Plan. Notwithstanding anything to the contrary contained in the Subscription Agreement, such restrictions do not apply to (i)
our issuance and sale of shares in the Offering, (ii) our issuance and sale of the Placement Agent Warrants, (c) the issuance of shares
of our common stock upon exercise of the Placement Agent Warrants (without amendment or modification, (iv) the issuance of awards (and
shares of our common stock in respect thereof) pursuant to the 2024 Plan in accordance with its terms (without amendment or modification),
(v) the issuance of our common stock upon the conversion, exercise or vesting of equity incentive awards outstanding as of the date hereof
under the 2024 Plan and (f) the issuance of our common stock in respect of Lomond&#8217;s SAFEs.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In addition, pursuant
to the Subscription Agreement, we agreed that without the prior written consent of the Requisite Holders, we will not, for a period commencing
on the date of the Subscription Agreement until the date that is one year after the end of the Restricted Period, effect or enter into
any agreement to effect any issuance by us of any shares of our common stock, or any&#160;securities convertible into or exchangeable
for, or that represent the right to receive, shares of common stock, involving a transaction in which we:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">issue or sell any debt or equity
securities that are convertible into, exchangeable or exercisable for, or include the right to receive, additional shares of our common
stock either (i) at a conversion price, exercise price or exchange rate or other price that is based upon, and/or varies with, the trading
prices of or quotations for our common stock at any time after the initial issuance of such debt or equity securities, or (ii) with a
conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or
equity security or upon the occurrence of specified or contingent events directly or indirectly related to our business or the market
for our common stock, or</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">enter into, or effect a transaction
under, any agreement, including, but not limited to, an equity line of credit, whereby we may issue securities at a future determined
price.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Moreover, we agreed that,
without the prior written consent of the Requisite Holders, we would not at any time during the Restricted Period amend or otherwise modify
our certificate of incorporation or bylaws in any manner that adversely affects, or could reasonably be deemed to adversely affect, any
of the rights or benefits of any investor participating in the Offering or any other holder of shares of our common stock (in his, her
or its capacity as such) or that imposes any obligation on such stockholders (in his, her or its capacity as such) or any rights of exculpation
and indemnification of any of our directors. Pursuant to the Subscription Agreement, such restrictions did not apply to the amendment
and restatement of our certificate of incorporation or our bylaws in connection with the Merger as disclosed in this prospectus.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Conversion of SAFEs
upon the Closing of the Offering</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">As described above, in
connection with the closing of the Offering, an aggregate of 3,161,456 shares of our common stock were issued to the holders of SAFEs
issued by Lomond in August 2024 and October 2024, in each case, in accordance with the terms of such instruments.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Lock-Up Agreements</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">As a condition to the
closing of the Offering pursuant to the Subscription Agreement, our directors and officers entered into the Lock-Up Agreements. Pursuant
to such Lock-Up Agreements, our directors and officers each agreed that, subject to certain exceptions, they will not, for a period commencing
on the closing date of the Merger and ending on the earlier of: (i) 60 days after the common stock is listed on a National Securities
Exchange (as defined in the Registration Rights Agreement) and (ii) the later of (A) 18 months after the final closing of the Offering
and (B) 60 days after the first day on which both the common stock is traded on an Approved OTC Market (as defined in the Registration
Rights Agreement) and a registration statement with respect to the resale of all of the Shares and Other Shares (as defined in the Subscription
Agreement) has been declared effective by the SEC, exchange, dispose of, or enter into any swap, hedge or similar arrangement regarding,
any shares of common stock or securities convertible into or exercisable or exchangeable for shares of common stock in each case held
immediately following the closing of the private placement offering or thereafter acquired by any means (including, for the avoidance
of doubt, through the receipt of equity incentive awards from us), and whether held beneficially or of record, but excluding (i) any shares
of common stock purchased such persons or their affiliates in the private placement offering, and (ii) any shares of common stock received
by such persons or their affiliates upon the conversion of the SAFEs. The Lock-Up Agreements contain customary transfer exceptions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Registration Rights
Agreement</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In connection with the
Merger and the Offering, we entered into a registration rights agreement (the &#8220;Registration Rights Agreement&#8221;), pursuant to
which we have agreed that promptly, but no later than 20 trading days from the closing date of the Offering, we will file, subject to
customary exceptions, a registration statement with the SEC (the &#8220;Registration Statement&#8221;), covering the reoffer and resale
of (i)&#160;the shares of our common stock issued in the Offering, (ii) the shares of our common stock issuable upon exercise of the Placement
Agent Warrants, (iii) the shares of our common stock issued to Lomond stockholders as Merger consideration; (iv)&#160;the shares of our
common stock held by our stockholders prior to the Merger, and (v) any other shares of our common stock held that are subject to resale
restrictions pursuant to the Securities Act acquired or issuable in respect of the foregoing shares of our common stock by way of conversion,
dividend, stock-split, distribution or exchange, merger, consolidation, recapitalization or reclassification or similar transaction ((i)-(v)
collectively, the &#8220;Registrable Shares&#8221;). We will use our commercially reasonable efforts to ensure that such Registration
Statement is declared effective within 90 calendar days after the closing of the Offering (the &#8220;Registration Effectiveness Date&#8221;).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Subject to customary
exceptions, if (i) we are late in filing the Registration Statement, (ii) the Registration Statement is not declared effective by the
Registration Effectiveness Date, (iii) we are late in filing any additional registration statement to cover Registrable Shares required
by the Registration Rights Agreement (a &#8220;New Registration Statement&#8221;), (iv) any New Registration Statement has not been declared
effective by the date set forth in the Registration Rights Agreement, (v) the Registration Statement or any New Registration Statement
ceases for any reason to remain effective or the holders of Registrable Shares are otherwise not permitted to utilize the prospectus therein
to resell the Registrable Shares for a period of more than five consecutive trading days except for during specified blackout periods
set forth in the Registration Rights Agreement, (vi) following the inclusion for quotation on the OTCQB or OTCQX market of OTC Markets
Group (each such market, the &#8220;OTC Markets), the Registrable Shares, if issued and outstanding, are not listed or included for quotation
on the OTC Markets or a national securities exchange, or the trading of our common stock is suspended or halted for more than three full,
consecutive trading days on the OTC Markets, which at the time serves as the principal market for our common stock, other than as a result
of suspension or halt of substantially all trading in equity securities in such marketplace, or (vii) following the inclusion for quotation
on the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, the NYSE American
and any other U.S. national securities exchange which the holder of a majority of the Registrable Shares then issuable and/or outstanding
identify in writing as a national securities exchange (each such exchange, a &#8220;National Securities Exchange&#8221;), the Registrable
Shares, if issued and outstanding, are not listed on such National Securities Exchange, or the, trading of our common stock is suspended
or halted for more than three full, consecutive trading days other than as a result of suspension or halt of substantially all trading
in equity securities in such marketplace ((i)-(vii) collectively, &#8220;Registration Events&#8221;), we will make payments to each holder
of Registrable Shares as monetary penalties at a rate equal to 12% per annum of the total value of Registrable Shares held or purchased
by such holder and affected during the period, based on the Offering Price; provided that the maximum amount of monetary penalties paid
by us will not exceed 5% of such total value. No penalties will accrue with respect to (1) any Registrable Shares required to be removed
from the Registration Statement in response to a comment from the SEC limiting the number of shares of Registrable Securities which may
be included in the Registration Statement, (2) if the Registrable Shares cease to be Registrable Shares, or (3) any Registrable Shares
excluded from a Registration Statement because a holder fails to provide information concerning the holder and the manner of distribution
of the holder&#8217;s Registrable Shares that is required by the SEC or in response to SEC comments to be disclosed. In addition, if we
are unable to file a New Registration Statement in certain circumstances, then our compliance in such circumstances with such limitation
shall not be deemed a failure to use reasonable efforts and shall not require the payment of liquidated damages under the Registration
Rights Agreement.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We must use reasonable
efforts to keep the Registration Statement effective for five years from the date it is declared effective by the SEC or until the date
on which all Registrable Shares have been sold or otherwise transferred other than to assignees pursuant to the Registration Rights Agreement.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We will pay all expenses
in connection with the registration obligations provided in the Registration Rights Agreement, including, without limitation, all registration,
filing, and stock exchange fees, printing expenses, all fees and expenses of complying with applicable securities laws, the fees and disbursements
of our counsel and of our independent public accountants, and the reasonable fees and disbursements of a single counsel to the holders
of the Registrable Securities, not to exceed $35,000 per registration statement. Each holder will be responsible for its own sales commissions,
if any, transfer taxes and the expenses of any other attorney or advisor such holder decides to employ.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b>OTC Quotation</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our common stock is currently
not listed on a national securities exchange or any other exchange, or quoted on an over-the-counter market. We intend to cause our common
stock to be quoted on the OTC Markets QB or QX tier as soon as practicable. However, we cannot assure you that we will be able to do so
and, even if we do so, there can be no assurance that our common stock will continue to be quoted on the OTC Markets or quoted or listed
on any other market or exchange, or that an active trading market for our common stock will develop or continue. See &#8220;<i>Risk Factors&#8212;There
is currently no market for our common stock and there can be no assurance that any market will ever develop. You may therefore be unable
to re-sell shares of our common stock at times and prices that you believe are appropriate</i>.&#8221; above.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b>&#160;&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b>The Lomond Plan and Outstanding Awards
Thereunder</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Pursuant to the Merger
Agreement and upon the closing of the Merger, we assumed each option to purchase Lomond common stock that remained outstanding under the
Lomond Plan, whether vested or unvested, and we converted it into an option to purchase such number of shares of our common stock equal
to the number of Lomond common stock subject to the option immediately prior to the Merger, multiplied by the Exchange Ratio applicable
to outstanding common stock, with any fraction rounded down to the nearest whole number. The exercise price per share of each such assumed
option is equal to the exercise price of the Lomond option prior to the assumption, divided by the Exchange Ratio applicable to outstanding
common stock (rounded up to the nearest whole cent). Otherwise, each assumed option continues to have, and will be subject to, substantially
the same terms and conditions as applied to the Lomond option immediately prior to the Merger, including the same vesting schedule. The
terms of the Lomond Plan continue to govern the options covering an aggregate of 4,329,617 shares of our common stock subject to awards
assumed by us, except that all references in the Lomond Plan to Lomond will now be deemed to refer to us. No additional awards will be
issued under the Lomond Plan. See &#8220;<i>Executive Compensation&#8212;Equity Plans</i>&#8221; below for more information about the
Lomond Plan and the outstanding awards thereunder.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b>Our 2024 Equity Incentive Plan</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Pursuant to the Merger
Agreement and upon the closing of the Merger, we adopted our 2024 Equity Incentive Plan (the &#8220;2024 Plan&#8221;), which provides
for the issuance of incentive awards of stock options, restricted stock awards, restricted stock units, stock appreciation rights, performance
awards, cash awards, and stock bonus awards. We reserved 1,759,608 shares for future issuance under the 2024 Plan. The number of shares
of our common stock that may be issued under the 2024 Plan is equal to the sum of (x) 1,759,608 shares, plus (y) up to 4,329,617 shares
subject to awards granted under the Lomond Plan that were outstanding on the date of the Merger and that are subsequently forfeited, expire
or lapse unexercised or unsettled or are reacquired by us. Further, the number of shares reserved for issuance under our 2024 Plan will
increase automatically on January 1 of each of 2026 through 2034 by the number of shares equal to the lesser of 5% of the total number
of outstanding shares of our common stock as of the immediately preceding December 31, or a number as may be determined by our board of
directors. See &#8220;<i>Executive Compensation&#8212;Equity Plans</i>&#8221; below for more information about the 2024 Plan.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Indemnification Agreements</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In connection with the
Closing, we entered into indemnification agreements with each of its directors and executive officers. Each indemnification agreement
provides for indemnification and advancements by us of certain expenses and costs relating to claims, suits or proceedings arising from
his or her service to us or, at our request, service to other entities, as officers or directors to the maximum extent permitted by applicable
law.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Agreements with Eil
and Bala</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In October 2024, we
entered into the Eil License Agreement and the Bala License Agreement. Pursuant to the Eil License Agreement and the Bala License Agreement,
we obtained exclusive, perpetual, worldwide licensing rights for the development and future ownership of (i) lonitoclax, a BCL-2, inhibitor
for the treatment of acute myeloid leukemia &#8220;AML&#8221; and chronic lymphocytic leukemia &#8220;CLL&#8221; from Eil Therapeutics,
Inc. (&#8220;Eil&#8221;), and (ii) an early-stage menin inhibitor for the treatment of AML from Bala Therapeutics, Inc. (&#8220;Bala&#8221;).</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The Eil License Agreement
and the Bala License Agreement became effective in October 2024 when we issued promissory notes to Eil and Bala, respectively. The principal
amount of the promissory notes with Eil and Bala are $1.7 million and $1.2 million, respectively. Each such promissory note bears interest
at a rate of 7% per annum, compounded annually and the principal and accrued interest under each note are due and payable on demand at
any time after October 17, 2026. Each such promissory note may be prepaid without penalty. In addition, the two promissory notes each
provide for customary events of default.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Upon the payment in full
of the applicable promissory note, Eil and Bala have each agreed to transfer to us all of the intellectual property rights covered by
the Eil License Agreement and the Bala License Agreement, as the case may be.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The license rights are
sublicensable at our option. Under such license agreements, we, but not Eil or Bala, as the case may be, have the right to terminate the
applicable license agreement for convenience upon 30 days&#8217; written notice. If we or Eil or Bala, as the case may be, materially
breaches the applicable license agreement, and such breach is not cured within 90 days after the receipt of notice of such breach, then
the non-defaulting party may terminate such license agreement. In addition, upon the occurrence of an event of default under the applicable
promissory note, the Eil License Agreement or the Bala License Agreement shall be terminated.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Eil and Bala, related
parties, are each wholly-owned by Eilean Therapeutics, LLC, Lomond&#8217;s former parent company, which beneficially owned 53.0% of our
common stock upon the closing of the Merger and the Offering.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Departure and Appointment
of Directors and Officers</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our board of directors
consists of four members. As of the Effective Time, Mark Tompkins and Ian Jacobs resigned from our board of directors, and Iain Dukes,
Nikolay Savchuk, Carl Gordon and Eddie Wang Rodriguez were appointed to our board of directors.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Also, as of the Effective
Time, Ian Jacobs resigned from all officer positions with us, and Iain Dukes and Nikolay Savchuk were appointed as our Chief Executive
Officer and Chairman and President and Chief Operating Officer, respectively.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">See &#8220;<i>Management</i>&#8221;
below for information about our current directors and executive officers.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Pro Forma Ownership</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Immediately after giving
effect to the Merger (and the issuance of an aggregate of 14,420,383 shares of our common stock in the Merger), the Stock Forfeiture,
and the closing of the Offering, there were 27,198,214 shares of our common stock issued and outstanding as of the Closing Date, as follows:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the stockholder of Lomond prior
to the Merger held 14,420,383&#160;shares of our common stock;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">investors in the Offering held
8,241,375 shares of our common stock;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">holders of Lomond&#8217;s SAFEs
held 3,161,456 shares of our common stock, and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">1,375,000 shares are held by
persons who held stock in us prior to the Merger.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In addition, there were
outstanding as of the Closing Date:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">options to purchase an aggregate
of 4,329,617 shares of our common stock at an exercise price of $1.30 per share that were subject to options originally granted under
the Lomond Plan to former Lomond option holders and assumed by us in connection with the Merger; and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">Placement Agent Warrants to
purchase an aggregate of 275,410 shares of our common stock at an exercise price of $4.00 per share.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In addition, as of the
Closing Date, there were&#160;1,759,608 shares of our common stock reserved for future issuance under the 2024 Plan, subject to adjustment
as provided above.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">No other securities convertible
into or exercisable or exchangeable for our common stock are outstanding as of the date of this prospectus.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Accounting Treatment</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The Merger is expected
to be accounted for as a &#8220;reverse merger&#8221; or &#8220;reverse acquisition,&#8221; and Lomond is deemed to be the acquirer in
the reverse merger. Consequently, the assets and liabilities and the historical operations that will be reflected in our financial statements
relating to periods prior to the Merger will be those of Lomond, and will be recorded at the historical cost basis of Lomond, and the
consolidated financial statements after completion of the Merger will include the assets and liabilities of Lomond, historical operations
of Lomond, and operations of the Company from the Closing Date. As a result of the issuance of the shares of our common stock pursuant
to the Merger, a change in control of the Company occurred as of the date of consummation of the Merger.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="text-transform: uppercase"><b>&#160;</b></span></p><div>

</div><div><a id="a_008"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>DESCRIPTION
OF OUR BUSINESS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b>Company Overview</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We are a biopharmaceutical
company focused on the discovery and development of multiple product candidates to address hematological malignancies. We were co-founded
by OrbiMed Advisors LLC, or OrbiMed, Torrey Pines Investment LLC, or Torrey Pines, and Dr.&#160;John C. Byrd. We are utilizing a platform
offered by Expert Systems Inc., or Expert Systems, which is powered by artificial intelligence and machine learning, or AI/ML, to choose
molecular mechanisms of pathology and to rationally design, accelerate discovery and optimize development of potential therapies. Our
goal is to utilize this AI/ML platform to become a leader in developing novel breakthrough medicines to maximize clinical benefit when
treating hematologic malignancies.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our initial focus is
on developing a next-generation inhibitor of FMS-like tyrosine kinase 3, or FLT3, and interleukin-1 receptor-associated kinase 4, or IRAK4,
for the treatment of acute myeloid leukemia, or AML and myelodysplastic syndrome, or MDS.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Our History and Team</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our management and leadership
are composed of individuals with extensive experience in the discovery, development and commercialization of cancer therapeutics and specifically
in developing novel therapeutics.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our Chief Executive Officer
and Chairman, Iain Dukes, MA DPhil., most recently served as Chairman of the Board for Theseus Pharmaceuticals, where he was also a co-founder,
Iovance Biotherapeutics and Angiex Inc. Our President and Chief Operating Officer, Nikolay Savchuk, Ph.D., is the Managing Director and
Partner of Torrey Pines Investment and Teal Ventures Fund. Our Chief Scientific Officer Amy Burd, PhD was previously senior director of
the Leukemia and Lymphoma Society&#8217;s, or LLS, Therapy Acceleration Program, a strategic initiative whereby LLS partners directly
with biotechnology companies to help accelerate development of promising new therapies. Our co-founder and acting Chief Medical Officer,
Dr. John C. Byrd, MD, is Chairman of Internal Medicine at the University of Cincinnati. Our Head of CMC, Fraser Pickersgill, Ph.D., was
the VP of Pharmaceutical Sciences at Galera Therapeutics. Our Head of Clinical Operations, Kate DoKukina, was Head of Clinical Operations
at ChemDiv. Our Chief Development Officer, Brian Ledwith, Ph.D., was previously Vice President and Global Team leader at Alexion Pharmaceuticals.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">As of October 17, 2024,
we have raised approximately $16.5&#160;million, including our Series Seed preferred stock financing, which was completed in August 2021
and from the sale of &#8220;simple agreements for future equity,&#8221; or SAFEs, in August 2024 and October 2024. Our investors include
entities affiliated with OrbiMed and Torrey Pines Investment.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Our Strategy</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We are a biopharmaceutical
company focused on improving the lives of cancer patients through the discovery, development and commercialization of transformative targeted
therapies. Our development programs are designed to address drug resistance mutations in key driver oncogenes, which are mutated genes
that cause cancer. The key elements of our strategy to achieve our mission are:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt"><b><i>Advance the clinical
development of&#160;lomonitinib.</i></b>&#160;We designed&#160;lomonitinib&#160;as a differentiated pan-FLT3/IRAK4 inhibitor for the
treatment of patients with AML with FLT3 mutations, or FLT3 AML. We believe that the lomonitinib could become a safe and effective pan-FLT3/IRAK4
inhibitor. We have conducted extensive evaluation of lomonitinib in healthy volunteers in Australia and determined what we believe to
be an effective dose that is not associated with any adverse events. We have advanced lomonitinib into previously treated FLT3 positive
AML patients in Australia. Separately, we submitted an Investigational New Drug, or IND, application to the U.S. Food and Drug Administration,
or the FDA, for&#160;lomonitinib&#160;in the first quarter of 2024, and this clinical trial, also in patients with previously treated
FLT3-positive AML is ongoing, with initial Phase 1b data expected to be announced in the fourth quarter of 2024. Our initial registration
strategy will focus on relapsed and refractory AML, or R/R AML, where there are currently no effective therapies and therefore a significant
unmet medical need. We also plan to evaluate&#160;lomonitinib&#160;in first-line FLT3-positive AML in light of this candidate&#8217;s
potential for inhibiting certain FLT3 mutations. Based on its preclinical profile, we believe&#160;lomonitinib&#160;has the potential
to deliver meaningful clinical benefits over the currently available standard of care.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; background-color: white">&#160;</p><div>

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<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt"><b><i>Advance the clinical
development of the drug products that we have licensed from Eil and Bala.</i></b>&#160;We have exclusive, perpetual, worldwide licensing
rights for the development and future ownership of (i) lonitoclax, a B-cell lymphoma 2, or BCL-2, inhibitor for the treatment of AML,
chronic lymphocytic leukemia, or CLL, which we obtained from Eil Therapeutics, Inc., or Eil, and (ii) an early-stage menin inhibitor
for the treatment of AML, which we obtained from Bala Therapeutics, Inc., or Bala. We believe that these two drug products could be synergistic
with lomonitinib and with each other.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt"><b><i>Build a leading, fully
integrated precision oncology company to maximize the clinical impact and value of our pipeline</i></b>. We believe the targeted nature
of our research and discovery approach, which is guided in part by an AI/ML platform, allows for efficient and focused clinical development.
We are building a lean, experienced team to rapidly advance product candidates in a capital-efficient manner. We intend to retain the
commercialization rights to product candidates; however, we may opportunistically enter into strategic collaborations in certain geographic
or clinical settings to maximize the value of our pipeline.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Our Research and Discovery
Approach</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our approach to drug
discovery is characterized by the identification of therapeutic solutions responsive to resistance mutations in certain cancers with clear
unmet need. Our drug discovery approach is built on three pillars:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt"><b><i>Clinically validated
targets with clear unmet need.&#160;</i></b>We are focused exclusively on well validated targets in hematological malignancies that are
directly linked to the proliferation and survival of a tumor, known as driver oncogenes, for which the clinical activity of inhibitors
has already been established, and where there is a clear unmet need. We believe this approach can allow us to more reliably identify
targets for our programs since data in patients have shown that successful inhibition of these targets will typically have the intended
biological effect. We focus on target selectivity to minimize side effects and allow optimal target engagement. We further focus on targets
where there is documented observation of resistance mutations, providing further treatment options for patients that have failed existing
standard of care. These settings have a clear unmet need with a strong rationale for the development of safe and effective&#160;inhibitors.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt"><b><i>Structure-guided drug
design integrated with predictive screening methodologies.&#160;</i></b>We design small molecule inhibitors based on deep structural
knowledge of our targets and candidate molecules at the molecular level. We utilize a hybrid AI/ML platform to choose potentially highly
valuable molecular mechanism of pathology, to rationally design, accelerate discovery and optimize development. We use these approaches
to guide iterative rounds of synthesis and testing of molecules. This allows us to design novel small molecule inhibitors that target
major activating and resistance mutations.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt"><b><i>Translationally-driven,
biomarker-guided clinical development.&#160;</i></b>We design clinical development programs that are intended to supply rich biomarker
datasets to provide us with an early assessment of activity against the desired targets. Our initial assessment of our drugs in healthy
volunteers enable us to determine that off-target toxicities can be mitigated. By monitoring mutational status of patients before and
during treatment, we aim to validate the inhibition of individual mutant forms of the target protein, then correlate this with overall
clinical response. We believe this will provide us with insights of potential clinical&#160;activity and inform our investment decisions
given that the process of clinical development is inherently uncertain.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b>Our Pipeline</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our current program focuses
on developing lomonitinib, a potentially next-generation pan-FLT3/IRAK4 inhibitor, to address the key limitation of drug safety and resistance.
As discussed below, we have exclusive, worldwide perpetual rights to research, develop, manufacture, use and commercialize inhibitors
developed by Eil and Bala that may complement lomonitinib and each other.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; background-color: white; border-collapse: collapse">
  <tr>
    <td style="border-bottom: Black 1.5pt solid; text-align: center; padding-top: 0pt; padding-right: 0pt; padding-left: 0pt; vertical-align: top; width: 18%">
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    <b>(product candidate)</b>
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    <td style="border-bottom: Black 1.5pt solid; padding-top: 0pt; padding-right: 0pt; padding-left: 0pt; vertical-align: bottom; width: 20%; font-size: 10pt; text-align: center"><span style="font-size: 10pt"><b>Targeted<br/>
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    <td style="border-bottom: Black 1.5pt solid; padding-top: 0pt; padding-right: 0pt; padding-left: 0pt; vertical-align: bottom; width: 20%; font-size: 10pt; text-align: center"><span style="font-size: 10pt"><b>Current Stage</b></span></td>
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Milestone</b></span></td>
    <td style="padding-bottom: 1.5pt; width: 1%">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; padding-top: 0pt; padding-right: 0pt; padding-left: 0pt; vertical-align: bottom; width: 18%; font-size: 10pt; text-align: center"><span style="font-size: 10pt"><b>Product Rights</b></span></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="text-align: center; padding: 0pt">
   Lomonitinib<br/>

    (ZE46-0134)
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    <td style="padding: 0pt; font-size: 10pt; text-align: center"><span style="font-size: 10pt">AML, MDS</span></td>
    <td>&#160;</td>
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    Phase 1b
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    <td style="padding: 0pt; font-size: 10pt; text-align: center"><span style="font-size: 10pt">Initial Phase 1b data expected in Q4 2024</span></td>
    <td>&#160;</td>
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  <tr style="vertical-align: top; background-color: White">
    <td style="text-align: center; padding: 0pt">&#160;</td>
    <td>&#160;</td>
    <td style="padding: 0pt; font-size: 10pt; text-align: center">&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center; padding: 0pt">&#160;</td>
    <td>&#160;</td>
    <td style="padding: 0pt; font-size: 10pt; text-align: center">&#160;</td>
    <td>&#160;</td>
    <td style="padding: 0pt; font-size: 10pt; text-align: center">&#160;</td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="text-align: center; padding: 0pt">
    Lonitoclax
   <br/>
(ZE50-0134)
    </td><td>&#160;</td>
    <td style="padding: 0pt; font-size: 10pt; text-align: center"><span style="font-size: 10pt">AML, CLL</span></td>
    <td>&#160;</td>
    <td style="padding: 0pt; text-align: center">
    Phase 1
    </td><td>&#160;</td><td style="padding: 0pt; font-size: 10pt; text-align: center"><span style="font-size: 10pt">Data from healthy volunteer study expected in Q4 2024</span></td>
    <td>&#160;</td>
    <td style="padding: 0pt; font-size: 10pt; text-align: center"><span style="font-size: 10pt">Eil #</span></td></tr>
  <tr style="vertical-align: top; background-color: White">
    <td style="text-align: center; padding: 0pt">&#160;</td>
    <td>&#160;</td>
    <td style="padding: 0pt; font-size: 10pt; text-align: center">&#160;</td>
    <td>&#160;</td>
    <td style="padding: 0pt; text-align: center">&#160;</td>
    <td>&#160;</td><td style="padding: 0pt; font-size: 10pt; text-align: center">&#160;</td>
    <td>&#160;</td>
    <td style="padding: 0pt; font-size: 10pt; text-align: center">&#160;</td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="padding: 0pt; font-size: 10pt; text-align: center"><span style="font-size: 10pt">Lead Menin<br/>
Inhibitor</span></td>
    <td>&#160;</td>
    <td style="padding: 0pt; font-size: 10pt; text-align: center"><span style="font-size: 10pt">AML</span></td>
    <td>&#160;</td>
    <td style="padding: 0pt; font-size: 10pt; text-align: center"><span style="font-size: 10pt">Pre-clinical</span></td>
    <td>&#160;</td>
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    <td>&#160;</td>
    <td style="padding: 0pt; font-size: 10pt; text-align: center; text-indent: 0pt"><span style="font-size: 10pt">Bala *</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.25in; font-size: 10pt"><span style="font-size: 10pt">#</span></td>
    <td style="font-size: 10pt; text-align: justify"><span style="font-size: 10pt">For more information about Eil&#8217;s license to us, see the subsection &#8220;<i>License Agreements</i>&#8221; below.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
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    <td style="font-size: 10pt; text-align: justify"><span style="font-size: 10pt">For more information about Bala&#8217;s license to us, see the subsection titled &#8220;<i>License Agreements</i>&#8221; below.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b><i>Pan-FLT3/IRAK4&#160;Program &#8211;&#160;Lomonitinib</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">One of our lead product
candidates,&#160;lomonitinib (ZE46-0134),&#160;is a&#160;pan-FLT3/ IRAK4 inhibitor, for the treatment of patients with AML and MDS. Lomonitinib&#160;is
a novel small molecule inhibitor that has been designed to block activity of all major known resistance mutations of FLT3 that drive AML
as well as IRAK4, a significant known compensatory escape pathway. Existing FLT3 inhibitors are limited by the emergence of resistance
mutations or escape pathways, lack of selectivity and safety profile, as clinical data have demonstrated their inability to inhibit disease
progression.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The compound for lomonitinib
is derived from intellectual property owned by us, utilizing a third-party hybrid AI/ML platform. Lomonitinib has completed single and
multiple dose escalation stages of a Phase 1 trial in healthy volunteers in Australia, and in the second quarter of 2024, we initiated
a Phase 1b clinical trial in Australia and the United States to assess the safety, tolerability, pharmacokinetics, pharmacodynamic responses,
and efficacy of lomonitinib as a single agent in patients with R/R AML who test positive for a FLT3 mutation.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In addition, we plan
to test lomonitinib for efficacy and safety in patients with MDS, due to the importance of IRAK4 amplification in this disease setting,
which would present an additional market opportunity for us.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Based on the preliminary
safety and efficacy profile of lomonitinib that has been generated to date, we believe that lomonitinib, if approved, could do the following:
(1) it could serve as an agent for the treatment of R/R FLT3-positive patients with the potential for improved durability of response
and a high rate of complete remissions (2) it could become the preferred FLT3/IRAK4 inhibitor in front line AML patients with FLT3 positive
disease (3) it could become the preferred kinase inhibitor for inclusion in doublet combinations with venetoclax or other BCL 2 agents
(including lonitoclax) for second line R/R AML patients, and (4) it could serve as an effective agent for maintenance therapy to prevent
relapse in patients who achieved a complete remission through a stem cell transplant or through drug-based therapy.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b><i>Overview of AML and FLT3 Mutations</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">AML comprises a heterogeneous
group of aggressive blood cell cancers that arise from clonal expansion of malignant hematopoietic precursor cells in the bone marrow
and is the most commonly diagnosed adult leukemia with approximately 20,000 new cases and 11,000 deaths in the United States in 2022.
The median age at diagnosis is 68 years of age, with an overall survival, or OS, of 29.8%. As patients age, there is a 10% decrease in
5-year OS for every additional decade of life, with a 5-year OS of 0.4% in patients older than 85 years old. Along with age, remission
rates and OS depend on a number of other factors, including cytogenetics, previous bone marrow disorders and comorbidities.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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    </div><div style="margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: normal 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->83<!-- Field: /Sequence --></p><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">FLT3 is a receptor tyrosine
kinase mainly expressed on immature hematopoietic progenitors and hematopoietic stem cells. FLT3 signaling is initiated when a FLT3 ligand
binds to FLT3. This event leads to cell proliferation and suppression of apoptosis (Figure 1A).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">FLT3 is the major driver
mutation underlying AML, and it is also directly implicated in the causation of other hematological malignancies. FLT3 mutations are the
most frequently identified mutations in AML patients. Activating mutations in FLT3, which are FLT3 Internal Tandem Duplication, or FLT3-ITD,
and FLT3 Tyrosine Kinase Domain, or FLT3-TKD, mutations, account for 30% of all AML cases Figure 1B. The most common FLT3-ITD mutation
is the substitution of tyrosine or histidine at residue 590-592 and substitution of asparagine or aspartic acid of TKD1 and TKD2 at residues
of 676 and 835, respectively. The acquired resistant mutation, F691 in TKD1, the &#8220;gatekeeper&#8221; mutation, confers resistance
to certain FDA-approved FLT3 inhibitors. Patients with FLT3-ITD mutations have shown increased relapse and decreased OS compared to patients
without a FLT3-ITD mutation.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">As a result of these
mutations, the FLT3 receptor is continuously activated leading to the continuous activation of downstream signaling pathways, which in
turn results in increased cell proliferation and decreased apoptosis.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 49%; font-size: 10pt; text-align: justify"><span style="font-size: 10pt"><b>A.</b></span></td>
    <td style="width: 2%; font-size: 10pt">&#160;</td>
    <td style="width: 49%; font-size: 10pt; text-align: justify"><span style="font-size: 10pt"><b>B.</b></span></td></tr>
  <tr style="vertical-align: top">
    <td style="font-size: 10pt; text-align: center"><img alt="" src="image_002.jpg" style="width: 350px; height: 302px"/><span style="font-size: 10pt">&#160;</span></td>
    <td style="font-size: 10pt">&#160;</td>
    <td style="font-size: 10pt; text-align: center"><img alt="" src="image_003.jpg" style="width: 303px; height: 350px"/><span style="font-size: 10pt">&#160;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><b>Figure 1: A. Schematic
of FLT3 signaling; B. FLT3 mutations.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b><i>Market Opportunity in AML</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Front-line intervention
in FLT3-driven AML is treated with two available FLT3 inhibitors, midostaurin and quizartinib. FLT3-positive R/R AML is treated with a
different FLT3 inhibitor, gilteritinib. The lack of uniform approval of FLT3 inhibitors independent of line is partly due to the differing
mechanism of action of the respective drugs. Midostaurin and quizartinib predominantly block FLT3 ITD and are less effective against FLT3
TKD mutations. The latter occur with greater frequency in the R/R setting. Hence these drugs failed to show good efficacy. Gilteritinib
is effective against both ITD and TKD mutations but is too myelosuppressive because of overlapping off-target toxicities so that the drug
failed in front-line studies when combined with the more intensive chemotherapy regimen used during the disease induction phase of treatment.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Most patients receiving
commercially available FLT3 inhibitors relapse due to disease progression resulting from insufficient target coverage (due to dose limiting,
off-target toxicities), development of FLT3 resistance mutations, or the development of escape pathways independent of FLT3 signaling.
Each year, nearly 20,000 patients are diagnosed with AML in the United States, and about half of the AML patients have a FLT3 or an IRAK4
mutation. We estimate that in the United States, there are 7,700 R/R AML patients who have been previously treated with a FLT3 inhibitor.
In addition, we estimate that in the United States, there are approximately 38,000 patients who have not been treated with a FLT3 inhibitor
before. We therefore believe that lomonitinib&#8217;s current addressable market in AML consists of approximately 45,000 patients in the
United States.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b><i>Current Treatment Paradigm in FLT3 AML
and Its Limitations</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">To date, drugs have been
developed and approved to inhibit FLT3&#8217;s primary mutation, known as FLT3-ITD, as well as its secondary mutation, known as FLT3-TKD.
In one clinical trial, midostaurin, an approved small molecule that inhibits multiple receptor tyrosine kinases including wild type, or
wt, FLT3, FLT3-ITD and FLT3-TKD, demonstrated a median OS of 74.7 months while a placebo demonstrated a median OS of 25.6 months when
administered in combination with standard cytarabine and daunorubicin induction and cytarabine consolidation. Similarly, in a separate
clinical trial for FLT3-positive R/R AML, gilteritinib, another approved small molecule inhibitor of FLT3-ITD and FLT3-TKD, demonstrated
an OS of 9.3 months while salvage therapy demonstrated an OS of 5.6 months.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">However, patients often
develop drug resistance, which is a persistent limitation to their long-term use. In addition, FLT3 inhibitors often have poor selectivity
against other kinases, which means that they cause side effects by inhibiting kinases other than FLT3. As a result, FLT3 inhibitors have
safety and tolerability concerns that narrow the number of effective treatment options available to patients with AML FLT3 AML. Drug resistance
occurs through two major mechanisms. First, patients may develop drug resistance to a FLT3 inhibitor due to incomplete suppression of
target FLT3-ITD and FLT3-ITD mutations because of that inhibitor&#8217;s narrow therapeutic margins or because of the development of drug-resistant
mutations in FLT3-TKD, such as the T691X, gatekeeper mutation. Second, patients may develop drug resistance to a FLT3 inhibitor because
that inhibitor activates accessory escape pathways for cancer cells that are independent of FLT3 mutations. A gene known as NRAS provides
one such escape pathway. IRAK4 is a predominantly immune cell-expressed kinase that regulates the activation of several cell signaling
pathways, including NRAS. It is currently believed that the overactivation of IRAK4 provides an escape mechanism for FLT3-driven malignancies.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In addition to drug resistance,
the other major limitation of current approved FLT3 inhibitors is their limited efficacy. The most common response among AML patients
treated with current FLT3 inhibitors is a Complete Remission with incomplete recovery of the bone marrow or, alternatively, a Complete
Remission with incomplete recovery of blood platelets. We believe that these results occur due to two mechanisms: off-target kinase activity,
leading to myelosuppression or potent inhibition of wt FLT3, which is important for normal bone marrow regeneration and recovery. In addition,
we believe that FDA approval of a FLT3 inhibitor will require the submission of data relating to Complete Remission.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Newly diagnosed, FLT3
positive AML adult patients are treated with either quizartinib, which targets FLT3-ITD and wt FLT3, in combination with induction therapy
or midostaurin, which targets FLT3-ITD, FLT3-TKD and wt FLT3, in combination with induction therapy. For FLT3-positive R/R AML, patients
are treated with gilteritinib, which targets FLT3-ITD, FLT3-TKD and wt FLT3. As summarized in Figure 2 below, the majority of patients
receiving a FLT3 inhibitor or venetoclax combination therapy will experience disease progression due to either acquired resistant FLT3
mutations or an escape pathway via IRAK4 activity.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="border-bottom: Black 1.5pt solid; padding-top: 0pt; padding-right: 0pt; padding-left: 0pt; width: 21%; font-size: 10pt; text-align: center"><span style="font-size: 10pt"><b>Line</b></span></td>
    <td style="padding: 0pt 0pt 1.5pt; text-align: center; width: 2%; font-size: 10pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; padding-top: 0pt; padding-right: 0pt; padding-left: 0pt; width: 21%; font-size: 10pt; text-align: center"><span style="font-size: 10pt"><b>Therapy</b></span></td>
    <td style="padding: 0pt 0pt 1.5pt; text-align: center; width: 2%; font-size: 10pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; padding-top: 0pt; padding-right: 0pt; padding-left: 0pt; width: 31%; font-size: 10pt; text-align: center"><span style="font-size: 10pt"><b>Target</b></span></td>
    <td style="padding: 0pt 0pt 1.5pt; text-align: center; width: 2%; font-size: 10pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; padding-top: 0pt; padding-right: 0pt; padding-left: 0pt; width: 21%; font-size: 10pt; text-align: center"><span style="font-size: 10pt"><b>Median OS</b></span></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="padding: 0pt; font-size: 10pt; text-align: center"><span style="font-size: 10pt"><b>First-line</b></span></td>
    <td style="text-align: center; padding: 0pt; font-size: 10pt">&#160;</td>
    <td style="padding: 0pt; font-size: 10pt; text-align: center"><span style="font-size: 10pt">Quizartinib</span></td>
    <td style="text-align: center; padding: 0pt; font-size: 10pt">&#160;</td>
    <td style="padding: 0pt; font-size: 10pt; text-align: center"><span style="font-size: 10pt">FLT3-ITD, wt FLT3</span></td>
    <td style="text-align: center; padding: 0pt; font-size: 10pt">&#160;</td>
    <td style="padding: 0pt; font-size: 10pt; text-align: center"><span style="font-size: 10pt">18.9 months</span></td></tr>
  <tr style="vertical-align: top; background-color: White">
    <td style="padding: 0pt; font-size: 10pt; text-align: center"><span style="font-size: 10pt"><b>First-line</b></span></td>
    <td style="text-align: center; padding: 0pt; font-size: 10pt">&#160;</td>
    <td style="padding: 0pt; font-size: 10pt; text-align: center"><span style="font-size: 10pt">Midostaurin</span></td>
    <td style="text-align: center; padding: 0pt; font-size: 10pt">&#160;</td>
    <td style="padding: 0pt; font-size: 10pt; text-align: center"><span style="font-size: 10pt">FLT3-ITD, FLT3-TKD, wt FLT3</span></td>
    <td style="text-align: center; padding: 0pt; font-size: 10pt">&#160;</td>
    <td style="padding: 0pt; font-size: 10pt; text-align: center"><span style="font-size: 10pt">74.7 months</span></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="padding: 0pt; font-size: 10pt; text-align: center"><span style="font-size: 10pt"><b>Second-line</b></span></td>
    <td style="text-align: center; padding: 0pt; font-size: 10pt">&#160;</td>
    <td style="padding: 0pt; font-size: 10pt; text-align: center"><span style="font-size: 10pt">Gilteritinib</span></td>
    <td style="text-align: center; padding: 0pt; font-size: 10pt">&#160;</td>
    <td style="padding: 0pt; font-size: 10pt; text-align: center"><span style="font-size: 10pt">FLT3-ITD, FLT3-TKD, wt FLT3</span></td>
    <td style="text-align: center; padding: 0pt; font-size: 10pt">&#160;</td>
    <td style="padding: 0pt; font-size: 10pt; text-align: center"><span style="font-size: 10pt">9.3 months</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b><span style="text-decoration:underline">Figure 2. Median Overall of FLT3 targeted
therapies for newly diagnosed for FLT3 AML and R/R AML</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In addition, the toxicity
profile of some of these therapies also significantly limits their utility in treating patients with FLT3-positive AML. In particular,
quizartinib and gilteritinib are associated with cardiac toxicity and myelosuppression, which we believe is due to the inhibition of wt
FLT3.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b><i>Our Solution:&#160; Lomonitinib,&#160;a&#160;Pan-FLT3/IRAK4&#160;Inhibitor</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We believe that a selective
pan-FLT3/IRAK4 inhibitor that spares both wt FLT3, and other myelosuppressive kinases could inhibit the heterogeneous mix of FLT3 resistance
mutations found in patients as well as accessory escape pathways. As a result, we believe that such an inhibitor can limit the emergence
of new FLT3 mutations whether it is used in early or later lines of therapy.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Lomonitinib&#160;is a
novel small molecule inhibitor that has been designed to block activity of all major known resistance mutations of FLT3 that drive AML
as well as IRAK4, a significant known compensatory escape pathway. Existing FLT3 inhibitors are limited by the emergence of resistance
mutations or escape pathways, lack of selectivity and safety profile, as clinical data have demonstrated their inability to inhibit disease
progression.&#160;Lomonitinib has demonstrated anti-tumor activity in cellular assays and in animal models against both activating and
resistance mutations. We believe&#160;lomonitinib,&#160;if approved, could become a next-generation FLT3 inhibitor based on its inhibitory
profile and favorable properties, as well as its ability to achieve predicted&#160;pan-FLT3&#160;inhibitory blood concentrations at tolerable
doses in healthy volunteers.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Broad FLT3 Mutation
Coverage Supported by In Vitro Data</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We performed in vitro
preclinical studies to evaluate the selectivity of lomonitinib and gilteritinib for FLT3 mutants in cell lines engineered with FLT3 mutations
over 72 hours. Table 1 shows results from this preclinical study. Lower IC<sub>50</sub>&#160;numbers indicate greater potency as they
represent the concentration of a substance required to inhibit a biological process by half. As shown by Table 1 below, this preclinical
study showed that lomonitinib was more potent than gilteritinib in inhibiting cell lines except in the wt FLT3 cell line, which suggests
that lomonitinib covers many mutations without necessarily inhibiting wt FLT3.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top; background-color: white">
    <td style="border-bottom: Black 1.5pt solid; padding-top: 0pt; padding-right: 0pt; padding-left: 0pt; width: 32%; text-align: center; text-indent: 0pt"><span style="font-size: 10pt"><b>BaF3 Cell Line</b></span></td>
    <td style="padding: 0pt 0pt 1.5pt; width: 2%; text-indent: 0pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; padding-top: 0pt; padding-right: 0pt; padding-left: 0pt; width: 32%; text-align: center; text-indent: 0pt"><span style="font-size: 10pt"><b>Lomonitinib IC<sub>50</sub>, nM</b></span></td>
    <td style="padding: 0pt 0pt 1.5pt; width: 2%; text-indent: 0pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; padding-top: 0pt; padding-right: 0pt; padding-left: 0pt; width: 32%; text-align: center; text-indent: 0pt"><span style="font-size: 10pt"><b>Gilteritinib IC<sub>50</sub>, nM</b></span></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="padding: 0pt; text-align: center; text-indent: 0pt"><span style="font-size: 10pt"><b>ITD F691L</b></span></td>
    <td style="padding: 0pt; text-indent: 0pt">&#160;</td>
    <td style="padding: 0pt; text-align: center; text-indent: 0pt"><span style="font-size: 10pt">4.7</span></td>
    <td style="padding: 0pt; text-indent: 0pt">&#160;</td>
    <td style="padding: 0pt; text-align: center; text-indent: 0pt"><span style="font-size: 10pt">18.49</span></td></tr>
  <tr style="vertical-align: top; background-color: White">
    <td style="padding: 0pt; text-align: center; text-indent: 0pt"><span style="font-size: 10pt"><b>ITD D835H</b></span></td>
    <td style="padding: 0pt; text-indent: 0pt">&#160;</td>
    <td style="padding: 0pt; text-align: center; text-indent: 0pt"><span style="font-size: 10pt">0.61</span></td>
    <td style="padding: 0pt; text-indent: 0pt">&#160;</td>
    <td style="padding: 0pt; text-align: center; text-indent: 0pt"><span style="font-size: 10pt">10.26</span></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="padding: 0pt; text-align: center; text-indent: 0pt"><span style="font-size: 10pt"><b>ITD D835Y</b></span></td>
    <td style="padding: 0pt; text-indent: 0pt">&#160;</td>
    <td style="padding: 0pt; text-align: center; text-indent: 0pt"><span style="font-size: 10pt">1.32</span></td>
    <td style="padding: 0pt; text-indent: 0pt">&#160;</td>
    <td style="padding: 0pt; text-align: center; text-indent: 0pt"><span style="font-size: 10pt">7.75</span></td></tr>
  <tr style="vertical-align: top; background-color: White">
    <td style="padding: 0pt; text-align: center; text-indent: 0pt"><span style="font-size: 10pt"><b>D835Y</b></span></td>
    <td style="padding: 0pt; text-indent: 0pt">&#160;</td>
    <td style="padding: 0pt; text-align: center; text-indent: 0pt"><span style="font-size: 10pt">1.40</span></td>
    <td style="padding: 0pt; text-indent: 0pt">&#160;</td>
    <td style="padding: 0pt; text-align: center; text-indent: 0pt"><span style="font-size: 10pt">7.42</span></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="padding: 0pt; text-align: center; text-indent: 0pt"><span style="font-size: 10pt"><b>D835H</b></span></td>
    <td style="padding: 0pt; text-indent: 0pt">&#160;</td>
    <td style="padding: 0pt; text-align: center; text-indent: 0pt"><span style="font-size: 10pt">0.32</span></td>
    <td style="padding: 0pt; text-indent: 0pt">&#160;</td>
    <td style="padding: 0pt; text-align: center; text-indent: 0pt"><span style="font-size: 10pt">2.05</span></td></tr>
  <tr style="vertical-align: top; background-color: White">
    <td style="padding: 0pt; text-align: center; text-indent: 0pt"><span style="font-size: 10pt"><b>ITD</b></span></td>
    <td style="padding: 0pt; text-indent: 0pt">&#160;</td>
    <td style="padding: 0pt; text-align: center; text-indent: 0pt"><span style="font-size: 10pt">0.36</span></td>
    <td style="padding: 0pt; text-indent: 0pt">&#160;</td>
    <td style="padding: 0pt; text-align: center; text-indent: 0pt"><span style="font-size: 10pt">3.81</span></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="padding: 0pt; text-align: center; text-indent: 0pt"><span style="font-size: 10pt"><b>GFP + IL-3 (FLT3 WT)</b></span></td>
    <td style="padding: 0pt; text-indent: 0pt">&#160;</td>
    <td style="padding: 0pt; text-align: center; text-indent: 0pt"><span style="font-size: 10pt">88.43</span></td>
    <td style="padding: 0pt; text-indent: 0pt">&#160;</td>
    <td style="padding: 0pt; text-align: center; text-indent: 0pt"><span style="font-size: 10pt">45.95</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><b>Table 1. List of clinically
relevant activating and resistant FLT3 mutations in AML incorporated into our engineered Ba/F3 cell lines.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In addition, we performed&#160;<i>in
vitro</i>&#160;studies to observe the effect of lomonitinib on a variety of genes, including a variety of FLT3 mutations, IRAK4 and others.
As demonstrated by Table 2, lomonitinib&#8217;s dissociation constant, or Kd, was less than 1 nanomolar, or nM, across all but 2 FLT3
genes in the study and IRAK4. In this&#160;<i>in vitro&#160;</i>study, lomonitinib&#8217;s Kd was 8.1 nM or higher across a variety of
other genes, which indicates lomonitinib&#8217;s selectivity profile. Based on third party studies, gilteritinib and quizartinib have
appeared to have overlapping effects on other genes.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"></p><div>

</div><!-- Field: Page; Sequence: 93 --><div>
    </div><div style="margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: normal 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->86<!-- Field: /Sequence --></p><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 49%; text-align: center"><span style="font-family: Sans-Serif; font-size: 9pt; color: Red"><b><img alt="" src="image_004.jpg" style="width: 295px; height: 176px"/></b></span></td>
    <td style="width: 2%">&#160;</td>
    <td style="width: 49%; text-align: center"><span style="font-family: Sans-Serif; font-size: 9pt; color: Red"><b><img alt="" src="image_005.jpg" style="width: 323px; height: 170px"/></b></span><span style="font-size: 10pt">&#160;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><b>Table 2. Lomonitinib
Dissociation Constant for Kinases.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b><i>Tumor Regression in In Vivo Mouse Models
Harboring FLT3-ITD Activating and Resistance Mutations</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Lomonitinib demonstrated
potent antitumor efficacy in different murine xenograft and models of disseminated AML. MOLM-13 or MV-4;11 are human AML cell lines harboring
FLT3-ITD aberration. The MOLM-14-ITD-F691L is a human AML cell line derived from parent MOLM-14 (harboring FLT33-ITD) and expressing FLT33
with gatekeeper mutation F691L, the acquired resistance to Gilteritinib. A second model demonstrating the FLT3 gatekeeper mutation, a
syngeneic Mx1<sup>Cre</sup>; Npm1<i><sub>CA</sub></i>; FLT3-ITD model harboring the FLT3-F691L mutation was also used. In this preclinical
study, lomonitinib demonstrated a two-times survival benefit compared to the mouse maximum tolerated dose of gilteritinib.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="font-family: Sans-Serif; font-size: 9pt; color: Red"><b><img alt="" src="image_006.jpg" style="width: 596px; height: 165px"/></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right; background-color: white"><b>Figure 2: Lomonitinib
extends survival compared in gilteritinib in FLT3-ITD AML model</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">As shown in Figures 3
and 4, lomonitinib demonstrated&#160;<i>in vivo</i>&#160;activity in two separate FLT3-ITD-gatekeeper AML models. In the study underlying
Figure 3, MOLM-14 cells were engineered with FLT3-F691L creating MOLM-14-F691L cells that also harbor the FLT3-ITD.&#160;<i>In vivo</i>&#160;activity
was measured by the percentage of MOLM-14-F691L cells in bone marrow and the graph showed differences in % hCD45+ cells in bone marrow
aspirates. Lomonitinib dose-dependently decreased the tumor burden in bone marrow early, after 8 days of treatment, with highest effect
at a dose of 20 mg/kg compared to vehicle. Gilteritinib tested at the same dose did not affect the tumor burden in bone marrow.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&#160;</p><div>

</div><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><img alt="" src="image_007.jpg" style="width: 350px; height: 316px"/></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><b>Figure 3: Lomonitinib
demonstrated superior potency compared to gilteritinib activity in FLT3-ITD-gatekeeper model</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In a second FLT3-ITD-gatekeeper
AML model (CD45.2 Mx1<sup>cre</sup>; Npm1<sup>c+</sup>; FLT3<sup>ITD</sup>&#160;murine model, SJL-<i>Ptprc<sup>a</sup>&#160;Pepc<sup>b</sup></i>/BoyJ
(also known as B6 CD45.1 and Pep Boy)), lomonitinib demonstrated superior in vivo activity over gilteritinib. The results of this second
study are shown in Figure 4 and showed that mice with FLT3-ITD-gatekeeper mutations treated with lomonitinib had a higher chance of surviving
than the other mice in the trial which were treated with gilteritinib or with a placebo.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center; background-color: white"><img alt="" src="image_008.jpg"/></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><b>Figure 4: Lomonitinib
demonstrated superior potency compared to gilteritinib activity in FLT3-ITD-gatekeeper model</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Based on the results
of our preclinical study shown in Figure 5, we believe that lomonitinib has synergistic activity with venetoclax. In that study, we analyzed
mice that were treated with a combination of lomonitinib and venetoclax and compared to either lomonitinib or venetoclax alone. The mice
that were treated with venetoclax and lomonitinib survived longer than the mice that were treated with lomonitinib or venetoclax alone.
These preclinical results are consistent with third-party clinical trials that have reported synergistic activity of FLT3 inhibitors,
on the one hand, and BCL2 inhibitors or menin inhibitors, on the other hand in AML patients.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><img alt="" src="image_009.jpg"/></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center; background-color: white"><b>Figure 5. Efficacy
of lomonitinib in combination with BCL-2 Inhibitor (venetoclax) in MOLM-13 Model</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>IRAK4 Activity</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We performed a preclinical
study of mice with high leukemic burden in their bone marrow. On day 19 of this study, four mice were treated with lomonitinib in doses
equal to 20 mg/kg over 8 days. Figure 6 shows the percentage of cells suffering from leukemic burden in the two populations of mice. The
average percentage in the population of mice treated with lomonitinib was approximately 20% of the percentage in the population of mice
that was not treated. WE believe that the mechanism of action in this study related to IRAK4 inhibition because existing FLT3 inhibitors
have not been reported to affect leukemic burden in bone marrow. In addition, a known IRAK4 inhibitor has been reported to have a similar
effect on bone marrow.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="font-family: Sans-Serif; font-size: 9pt; color: Red"><b><img alt="" src="image_010.jpg"/></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center; background-color: white"><b>Figure 6. Percentages
of MOLM-14-F691L Cells in Bone Marrow &#8220;Rescue&#8221; Treatment.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Healthy Volunteer
Study</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In the healthy volunteers
studied in our Phase 1 trial in Australia, there were no dose limiting toxicities or adverse events at all four dose levels, and there
was no significant food effect among the six patients treated with lomonitinib. To date, lomonitinib has caused no QTc prolongations or
differentiation syndrome in treated patients and has caused no myelosuppression with continuous dosing of patients, unlike gilteritinib
and quizartinib, which are approved FLT3 inhibitors. This study also provided findings that FLT3-ITD was inhibited in the healthy volunteers.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">During the healthy volunteer
study, lomonitinib showed strong exposures and had a long half-life following a single dose in healthy volunteers. The increase in exposure
appeared to be proportional to increases in doses as can be seen in Figure 7. In particular, we examined exposure from plasma samples
taken from the healthy volunteers across all three dose levels, 2 mg, 10 mg and 50 mg. The graph shows pharmacokinetics.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><img alt="" src="image_011.jpg"/></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center; background-color: white"><b>Figure 7. Pharmacokinetics
of Lomonitinib Following Single Dose in Healthy Volunteers.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Loading Doses</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Based on our preclinical
and healthy volunteer studies, we believe that lomonitinib could be administered using a loading dose, which is a dose taken before the
beginning of a regular cycle of treatment. The use of a loading dose reduces the amount of time required to expose a patient to a steady
state of a given drug, which provides the opportunity for earlier and more sustainable anti-tumor activity. We extrapolated from our findings
in the healthy volunteer study to estimate that patients taking lomonitinib with a loading dose would reach steady state exposures fifteen
to twenty days earlier than if they had taken gilteritinib or quizartinib.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Clinical Development
Plan for&#160;Lomonitinib in AML</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In the second quarter
of 2024, we initiated our initial, first-in-human phase 1b clinical trial in Australia, which has expanded to the United States, with
the goal of evaluating monotherapy lomonitinib in patients with FLT3 positive R/R AML. This clinical trial consists of two phases:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">Phase 1 &#8211; Dose Escalation:
patients with FLT3-positive R/R AML will be enrolled in order to evaluate lomonitinib&#8217;s safety profile and preliminary efficacy
of lomonitinib as well as to determine a recommended phase 2 dose.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><p style="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">Phase 2 &#8211; Dose Expansion: patients with FLT3 positive R/R AML
will be enrolled at two doses to determine the recommended phase 2 dose. The phase 1b portion of the clinical trial will further characterize
the efficacy and safety profile of lomonitinib and potentially lead to a Phase 2 study designed for accelerated approval, which we anticipate
could occur as early as the first half of 2026.</p></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our initial registration
strategy is focused on FLT3 gatekeeper R/R AML, where there is currently no available therapy and therefore a significant unmet medical
need, as well as on R/R AML patients who have already received prior lines of FLT3 inhibitors, where resistance has emerged rendering
existing therapeutic options ineffective.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We expect to have initial,
topline data from the ongoing Phase 1b trial in the fourth quarter of 2024.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The data from the ongoing
phase 1b clinical trial and feedback from regulatory authorities will inform the design of a potential initial registration trial. Gilteritinib
is currently the only FDA approved FLT3 inhibitor for FLT3-positive R/R AML patients. The FLT3-gatekeeper mutation confers resistance
to gilteritinib. By selecting patients with FLT3-gatekeeper mutation, a randomized trial may not be needed, and an accelerated approval
could be possible with a single arm study.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We also plan to prioritize
the evaluation of lomonitinib in first-line AML, where we believe our pan-FLT3/IRAK4 inhibitor could deliver meaningful clinical benefit
over the current standard of care due to its activity against relevant classes of activating and resistance mutations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Given its broad mutational
coverage as a&#160;pan-FLT3 and IRAK4&#160;inhibitor, we also plan to evaluate&#160;lomonitinib in newly diagnosed AML patients as monotherapy
and combination, as well as MDS based on the IRAK4 inhibitory activity observed by others for those cancers. Based on the preclinical
profile, we believe&#160;lomonitinib&#160;has the potential to deliver meaningful clinical benefit over the currently available standard
of care in FLT3 positive AML and MDS.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Programs That We
Have Licensed</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In October 2024, we entered
into a license agreement with Eil, or the Eil license agreement, and a license agreement with Bala, or the Bala license agreement. Pursuant
to the Eil license agreement and the Bala license agreement, we obtained exclusive, perpetual, worldwide licensing rights for the development
and future ownership of (i) lonitoclax, a BCL-2 inhibitor for the treatment of AML and CLL from Eil, and (ii) an early-stage menin inhibitor
for the treatment of AML from Bala.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">As discussed below, we
believe that lonitoclax, the BCL-2 inhibitor we licensed from Eil, and the menin inhibitor we licensed from Bala could complement lomonitinib
and each other.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>Lonitoclax (ZE50-0134)</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Eil has developed, and
we plan to continue developing, lonitoclax (ZE50-0134), which is an inhibitor of the anti-apoptotic protein BCL-2 for the treatment of
patients with AML and CLL. Currently, venetoclax is the only approved inhibitor of BCL2 for the indications of AML and CLL. The phase
3 studies underlying these two approvals reported an 82% rate of Grade 3 or higher hematological toxicities, comprising neutropenia, thrombocytopenia
and anemia. We believe this toxicity profile stemmed from its incomplete selectivity against a related BCL-2 homology, or BH3, family
member known as BCLXL. Unlike BCL2, BCLXL is highly expressed in normal human hematopoietic cells. Based on our analysis of venetoclax
using our hybrid AI/ML platform, we believe that we have determined the molecular basis of the lack of selectivity of venetoclax. Based
on these molecular docking simulations, we believe that other BCL2 inhibitors in clinical development, which are chemically similar to
venetoclax also lack sufficient selectivity against BCLXL. Venetoclax has an extremely long half life of 26 hours and is susceptible to
inhibitors of microsomal drug metabolism that are commonly used in the treatment of AML, necessitating dose reduction or dose holidays.
In the treatment of CLL, initial therapy with venetoclax (and other BCL2 inhibitors) causes tumor lysis syndrome, or TLS, a potentially
life threatening condition which can be obviated by therapeutic interventions and obviated by slow titration, usually over multiple weeks.
Whether TLS is related to the drug&#8217;s prolonged exposure or its lack of selectivity to BCLXL remains undetermined. Escape mutations
to venetoclax, particularly in residue 101 can occur and render patients insensitive to therapy. Whether the incidence of these mutations
is hastened by the necessary slow sub-therapeutic titration protocol of existing BCL-2 inhibitors remains unclear</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Lonitoclax was designed
to avoid binding to a specific pocket that is shared by BCL2 and BCLXL. Eil&#8217;s preclinical studies have indicated that lonitoclax
is much more selective for BCL2 than it is for BCLXL. In Eil&#8217;s preclinical studies, loniticlax also showed similar activity as venetoclax
in inhibiting the proliferation of primary CLL cells. Moreover, in Eil&#8217;s preclinical studies of lonitoclax and venetoclax in animal
models, there were smaller decreases in B cells and T cells in the animals treated with lonitoclax. In addition, the drug-like properties
were enhanced by design to limit susceptibility to microsomal drug metabolism and to reduce the half-life of the drug. A reduced half-life
should still result in acceptable efficacy as once intracellular caspase enzymes are activated following BCL-2 inhibition- an irreversible
commitment to apoptosis or cell death results. Pre-clinical studies suggest the optimal time of drug exposure to be several hours. In
support of this contention we showed equivalent efficacy to venetoclax when dosing lonitoclax once daily in mice where the half-life was
several hours</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">A single ascending dose
study of lonitoclax in healthy volunteers is in progress in Australia, and it has been designed to measure safety, exposure and&#160;<i>ex
vivo</i>&#160;target engagement. Initial data from this trial is expected to be announced in the fourth quarter of 2024. Early results
have confirmed a much shorter half-life than venetoclax, nine hours as opposed to 26 hours, and&#160;<i>ex vivo</i>&#160;target engagement
(caspase activation) over only several hours. An IND to examine the effect of lonitoclax in CLL patients was submitted in September 2024
and was cleared by the FDA in October 2024.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Going forward, we expect
that a clinical trial for lonitoclax would consist of two phases:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">Phase 1 &#8211; Dose Escalation:
CLL patients that have never been treated with venetoclax will be enrolled in order to evaluate lonitoclax&#8217;s safety profile and
lonitoclax&#8217;s preliminary efficacy of as well as to determine a recommended phase 2 dose.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">Phase 2 &#8211; Dose Expansion:
a similar population of patients will be enrolled at two doses to determine the recommended phase 2 dose. The phase 1b portion of the
clinical trial will further characterize the efficacy and safety profile of lonitoclax in combination with other drugs to treat AML.
Such trials in patients who were not previously treated with venetoclax could lead to a Phase 2 study designed for accelerated approval.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The data from the ongoing
healthy volunteer study and feedback from regulatory authorities will inform the design of a potential initial registration trial.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>Lead Series Menin
Inhibitor</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Bala has developed, and
we expect to continue developing, a class of menin inhibitors for the treatment of NPM-1 and MLL-rearranged AML. Menin is a central player
in cells that brings other proteins together to regulate the expression of genes thar are key to cell growth. Menin has been validated
as a target for AML in the clinic by two menin inhibitors, revumenib and ziftomenib. Both agents have reported meaningful clinical efficacy
responses both as a monotherapy and in combination studies with venetoclax for the treatment of AML. However, clinical trials have also
demonstrated certain limitations of these two agents. In clinical trials involving revemenib, 14% of patients experienced dose-limiting
toxicities related to QTc prolongation , and revemenib is susceptible to inhibitors of cyp3A4. In clinical trials involving ziftomenib
in MLL-rearranged AML, 31% of patients experienced differentiation syndrome, which is linked to toxicity, and a zero CR rate. Both agents
have also been reported to be susceptible to drug-induced mutations in menin following several cycles of therapy.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Bala used an AI/ML platform
to design its menin inhibitors to mitigate the risk of QTc prolongation risk, to have low cyp3A4 liability, and to have reduced susceptibility
to hot spot mutation-induced decreases in drug efficacy. In preclinical studies, two of Bala&#8217;s menin inhibitors were shown to have
dose proportional exposure in multiple species, and our GLP toxicology studies preliminarily indicated a favorable safety profile.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In the fourth quarter
of 2024, we expect to select one of Bala&#8217;s menin inhibitors as a candidate for further preclinical study and, if the results are
supportive, potentially clinical study.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Competition</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The pharmaceutical and
biotechnology industries, particularly the field of oncology, are characterized by rapidly advancing technologies, intense competition
and a strong emphasis on proprietary and novel products and product candidates. We believe that our pipeline, knowledge, experience and
scientific resources provide us with differentiated competitive advantages. However, we have competitors both in the United States and
internationally, which include major multinational pharmaceutical companies, established biotechnology companies, specialty pharmaceutical
companies, emerging and start-up companies, universities and other research institutions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">There are several approved
therapies for the treatment of conditions for which we are attempting or may attempt to develop product candidates. In addition, we believe
that a significant number of product candidates are currently under development, and may become commercially available in the future.
We expect lomonitinib to compete against approved drugs from various pharmaceutical companies, including Astellas Pharma Inc.&#8217;s
gilteritinib, Novartis AG&#8217;s midostaurin and Daiichi Sankyo, Inc.&#8217;s quizartinib. In addition, several biopharmaceutical companies,
including Beigene, Ltd, Curis, Inc., Aptose Biosciences Inc., Biomea Fusion, Inc. or PharsoBio, Ryvu Therapeutics S.A., Ellipses Pharma
Limited, Sunshine Lake Co., Ltd, AROG Pharmaceuticals, Inc., Nerviana, A.Menarini Industrie Farmaceutiche Riunite S.r.l., Fujifilm Corporation,
Maxinovel Co., Ltd., LaNova Medicines Ltd., Beijing Novruns, Tarapeutics, Haihe Biopharma Co., Ltd., Oscotec Inc., Shanghai Fosun Pharmaceutical
Co., Ltd., and Tyligand Bioscience (Shanghai) Limited, are also developing FLT3 inhibitors for the treatment of AML.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The key competitive factors
that will affect the success of product candidates, if approved, are likely to be their efficacy, safety, convenience, price, the level
of generic competition and the availability of reimbursement from government and other third-party payors. We also compete with these
organizations to recruit and retain qualified scientific and management personnel. We will also face competition in establishing clinical
trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our
programs.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our competitors have
developed, are developing, or may develop products, product candidates and processes competitive with ours. Any product candidates that
we successfully develop and commercialize will compete with existing therapies and new therapies that may become available in the future.
Many of our competitors, either alone or with their collaborators, have significantly greater financial resources, established presences
in markets, expertise in research and development, manufacturing, preclinical and clinical testing, obtaining regulatory approvals, gaining
reimbursement and marketing approved products than we do. Our competitors may succeed in obtaining approval from the FDA or other comparable
foreign regulatory authorities or in discovering, developing and commercializing product candidates in our field before we do.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We also face competition
broadly across the oncology market for cost-effective and reimbursable cancer treatments. There are a variety of available drug therapies
marketed for cancer. In many cases, these drugs are administered in combination to enhance efficacy. While product candidates, if any
are approved, may compete with these existing drugs and other therapies, to the extent they are ultimately used in combination with or
as an adjunct to these therapies, product candidates may not be competitive with them. Additionally, product candidates may need to compete
with drugs that physicians use off-label to treat the indications for which we seek approval. Moreover, many companies are developing
new oncology therapeutics, and we cannot predict what the standard of care will be as product candidates progress through clinical development.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>License Agreements</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In October 2024, we entered
into a license agreement with Eil, or the Eil license agreement, and a license agreement with Bala, or the Bala license agreement. Pursuant
to the Eil license agreement and the Bala license agreement, we obtained exclusive, perpetual, worldwide licensing rights for the development
and future ownership of (i) lonitoclax a BCL-2 inhibitor for the treatment of AML and CLL from Eil, and (ii) an early-stage menin inhibitor
for the treatment of AML from Bala.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The Eil license agreement
and the Bala license agreement became effective in October 2024 when we issued promissory notes to Eil and Bala, respectively. The principal
amount of the promissory notes with Eil and Bala are $1.7 million and $1.2 million, respectively. Each such promissory note bears interest
at a rate of 7% per annum, compounded annually and the principal and accrued interest under each note are due and payable on demand at
any time after October 17, 2026. Each such promissory note may be repaid without penalty. In addition, the two promissory notes each provide
for customary events of default.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Upon the payment in full
of the applicable promissory note, Eil and Bala have each agreed to transfer to us all of the intellectual property rights covered by
the Eil license agreement and the Bala license agreement, as the case may be.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The license rights are
sublicensable at our option through multiple tiers, in whole or in part. Under such license agreements, we, but not Eil or Bala, as the
case may be, have the right to terminate the applicable license agreement for convenience upon 30 days&#8217; written notice. If we or
Eil or Bala, as the case may be, materially breaches the applicable license agreement, and such breach is not cured within 90 days after
the receipt of notice of such breach, then the non-defaulting party may terminate such license agreement. In addition, upon the occurrence
of an event of default under the applicable promissory note, the Eil license agreement or the Bala license agreement shall be terminated.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Eil and Bala are each
wholly-owned by Eilean Therapeutics, LLC, our former parent company, which beneficially owned 53.0% of our common stock upon the closing
of the Merger and the Offering. Further, Dr. Savchuk is the President and CEO of each of Bala and Eil.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Intellectual Property</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We seek to protect the
intellectual property and proprietary technology that we consider important to our business, including by pursuing patent applications
that cover our product candidates and any additional product candidates we may develop, and methods of using the same, as well as any
other relevant inventions and improvements that we believe to be commercially important to the development of our business. Our policy
is to seek to protect our proprietary position by, among other methods, filing patent applications in the United States and in jurisdictions
outside of the United States directed to our proprietary technology, inventions, improvements and product candidates (including compositions,
methods of use, dosing and formulations) that are important to the development and implementation of our business. We may also pursue
patent protection with respect to manufacturing and drug development processes and technologies. We also rely on trade secrets, know-how
and continuing technological innovation to develop and maintain our proprietary and intellectual property position. We also plan to rely
on data exclusivity, market exclusivity and patent term extensions when available. Our commercial success depends, in part, on our ability
to obtain, maintain, enforce and protect our intellectual property and other proprietary rights for the technology, inventions and improvements
we consider important to our business, and to defend any patents we may own or in-license in the future, prevent others from infringing
any patents we may own or in-license in the future, preserve the confidentiality of our trade secrets, and operate without infringing,
misappropriating or otherwise violating the valid and enforceable patents and proprietary rights of third parties.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">As of June 30, 2024,
Lomond owned two pending U.S. patent applications. As of June 30, 2024, Lomond owned pending patent applications in 16 jurisdictions outside
the U.S. Any patents that may issue from our pending patent applications are expected to have nominal expiration dates ranging from October
2042 to April 2044, absent any patent term adjustments or patent term extensions for regulatory delay. Our patent portfolio includes filings
covering compositions of matter and methods of using one of our lead product candidates, lomonitinib, as well as exclusively-licensed
rights to patents and patent applications related to our other lead product candidate, lonitoclax, and Bala&#8217;s menin inhibitors.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Issued patents can provide
protection for varying periods of time, depending upon the date of filing of the patent application, the date of patent issuance and the
legal term of patents in the countries in which they are obtained. In the United States, if all maintenance fees are timely paid, the
natural expiration of a patent is generally 20 years from its earliest U.S. non-provisional filing date. In addition, in certain instances,
the term of an issued U.S. patent that covers or claims an FDA approved product can be extended to recapture a portion of the term effectively
lost as a result of the FDA regulatory review period, which is called patent term extension. The restoration period cannot be longer than
five years and the total patent term, including the restoration period, must not exceed 14 years following FDA approval. The term of patents
outside of the United States varies in accordance with the laws of the foreign jurisdiction, but typically is also 20 years from the earliest
effective filing date. However, the actual protection afforded by a patent varies on a product-by-product basis, from country-to-country
and depends upon many factors, including the type of patent, the scope of its coverage, the availability of regulatory-related extensions,
the availability of legal remedies in a particular country and the validity and enforceability of the patent.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The patent position of
pharmaceutical and biotechnology companies generally is highly uncertain, involves complex legal and factual questions, and has been the
subject of much litigation in recent years. As a result, the issuance, scope, validity, enforceability and commercial value of our patent
rights are highly uncertain. Our pending and future patent applications and those of our licensors and collaborators may not result in
patents being issued which protect product candidates or which effectively prevent others from commercializing competitive product candidates.
Moreover, obtaining and enforcing patents in the pharmaceutical and biotechnology industries is inherently uncertain, due in part to ongoing
changes in the patent laws. Changes in either the patent laws or in the interpretations of patent laws in the United States and other
countries may diminish the value of our intellectual property and may increase the uncertainties and costs surrounding the prosecution
of patent applications and the enforcement or defense of issued patents. Even if resolved in our favor, litigation or other legal proceedings
relating to intellectual property claims may cause us to incur significant expenses, and could distract our technical and management personnel
from their normal responsibilities.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Commercial Strategy</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We intend to retain significant
development and commercial rights to product candidates and, if marketing approval is obtained, to commercialize product candidates on
our own, or potentially with a partner, in the United States and other regions. We currently have no sales, marketing or commercial product
distribution capabilities. However, we intend to build a focused sales and marketing organization and the necessary infrastructure and
capabilities over time in the United States, and potentially other regions, following further advancement of product candidates. We believe
that such an organization will be able to address the community of oncologists who are the key specialists in treating the patient populations
for which product candidates and programs are being developed. The responsibilities of the marketing organization would include developing
educational initiatives with respect to approved products and establishing relationships with researchers and practitioners in relevant
fields of medicine. Clinical data, the size of the addressable patient population, the size of the commercial infrastructure and manufacturing
needs may all influence or alter our commercialization plans.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Manufacturing</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We do not own or operate,
and currently have no plans to establish, any manufacturing facilities. We rely, and expect to continue to rely, on third parties for
the manufacture of our small molecule product candidate, our in-licensed product candidates as well as any other product candidates we
may develop through our programs, for preclinical and clinical testing. We also expect to rely on third parties for the manufacture of
our product candidate and any other product candidates we may acquire or develop through our programs for commercial supply, if any product
candidates obtain marketing approval. We also rely, and expect to continue to rely, on third parties to package, label, store and distribute
our product candidate and any other product candidates we may develop through our programs and, if marketing approval is obtained, our
commercial products.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">For our initial clinical
trials, we plan to rely on sole source suppliers. However, as we progress towards commercialization of product candidates, we anticipate
expanding the supply chain to include multiple contract manufacturing organizations, or CMOs. We believe this strategy will allow us to
maintain a more efficient infrastructure by eliminating the need for us to invest in our own manufacturing facilities and equipment, while
also enabling us to focus our expertise and resources on the development of product candidates.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Manufacturing is subject
to extensive regulations that impose procedural and documentation requirements. These regulations govern record keeping, manufacturing
processes and controls, personnel, quality control and quality assurance. Our CMOs are required to comply with these regulations and are
assessed through regular monitoring and formal audits. Our third-party manufacturers are required to manufacture any product candidates
we develop under current Good Manufacturing Practice, or cGMP, requirements and other applicable laws and regulations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We generally expect to
rely on third parties for the manufacture of companion diagnostics, which are assays or tests that identify an appropriate patient population,
if needed for any product candidates that receive marketing approval.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b>Government&#160;Regulation</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The U.S. Food and Drug
Administration, or FDA, and other regulatory authorities at federal, state and local levels, as well as outside the United States, extensively
regulate, among other things, the research, development, testing, manufacture, quality control, import, export, safety, effectiveness,
labeling, packaging, storage, distribution, recordkeeping, approval, advertising, promotion, marketing, post-approval monitoring and post-approval
reporting of drugs and biologics. We, along with our vendors, CROs, clinical investigators, clinical trial sites and CMOs, will be required
to navigate the various preclinical, clinical, manufacturing and commercial approval requirements of the governing regulatory agencies
of the countries in which we wish to conduct studies or seek marketing approval of product candidates. The process of obtaining regulatory
approvals of drugs and biologics and ensuring subsequent compliance with appropriate federal, state, local and foreign statutes and regulations
requires the expenditure of substantial time and financial resources.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In the United States
where we are initially focusing our drug commercialization, we believe our product candidates, as small molecule drugs, would be regulated
as new drugs rather than biologics. The FDA regulates new drug products under the FDCA, and its implementing regulations. New drug products
are also subject to other federal, state and local statutes and regulations. If we fail to comply with applicable FDA or other requirements
at any time with respect to product development, clinical testing, approval or any other regulatory requirements relating to product manufacture,
processing, handling, storage, quality control, safety, marketing, advertising, promotion, packaging, labeling, export, import, distribution,
or sale, we may become subject to administrative or judicial sanctions or other legal consequences. These sanctions or consequences could
include, among other things, the FDA&#8217;s refusal to approve pending applications, issuance of clinical holds for proposed or ongoing
studies, suspension or revocation of approvals, warning or untitled letters, product withdrawals or recalls, product seizures, relabeling
or repackaging, total or partial suspensions of manufacturing or distribution, injunctions, fines, civil penalties or criminal prosecution.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Product candidates must
be approved for therapeutic indications by the FDA before they may be marketed in the United States. For new drug products regulated under
the FDCA such as our lead product candidates, a sponsor must submit a New Drug Application, or NDA, to FDA for review and approval. The
NDA review and approval process may take multiple years and involves the following steps:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">completion of extensive preclinical
studies in accordance with applicable regulations, including studies conducted in accordance with GLP requirements;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">completion of the manufacture,
under cGMP conditions of the drug substance, drug product, and labeling and packaging that the sponsor intends to use in human clinical
trials along with required analytical and stability testing;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">submission to the FDA of an
IND, which must become effective before clinical trials may begin and must be updated annually and amended when certain changes are made;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">approval by an institutional
review board, or IRB, or independent ethics committee, or IEC, at each clinical trial site before each trial may be initiated;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">performance of adequate and
well-controlled clinical trials in accordance with applicable IND regulations, good clinical practice, or GCP, requirements, including
informed consent, financial disclosure by investigators and other clinical trial-related regulations, to establish the safety and efficacy
of the investigational product for each proposed indication and other condition of use;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">preparation and submission
to the FDA of an NDA;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">a determination by the FDA
within 60 days of its receipt of an NDA to file the application for review;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">satisfactory completion of
one or more FDA pre-approval inspections of the manufacturing facility or facilities where the drug will be produced to assess compliance
with cGMP requirements to assure that the facilities, methods and controls are adequate to preserve the drug product&#8217;s identity,
strength, quality and purity;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">satisfactory completion of
FDA inspection of select clinical trial sites involved in conducting pivotal studies that generated the data in support of the NDA;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">payment of user fees for FDA
review of the NDA; and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">FDA review and approval of
the NDA, including of the proposed prescribing information and, where applicable, consideration of the views of any FDA advisory committee,
prior to any commercial marketing or sale of the drug in the United States.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Preclinical Studies
and Clinical Trials for Drugs</i></b></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Before testing any drug
in humans, the product candidate must undergo rigorous preclinical testing. Preclinical studies include laboratory evaluations of product
chemistry, formulation and stability, as well as&#160;<i>in vitro</i>&#160;and animal studies to assess safety and in some cases to establish
the rationale for therapeutic use. The conduct of preclinical studies is subject to federal and state regulation and requirements, including
GLP requirements under 21 C.F.R. Part 58 and animal testing requirements under the Animal Welfare Act Amendments of 1976 (7 U.S.C. 2131
et seq.). The results of the preclinical studies, together with manufacturing information and analytical data, must be submitted to the
FDA as part of an IND.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">An IND is a submission
to the FDA under which a sponsor proposes to administer an investigational product to humans. An IND must become effective before the
proposed clinical trials may begin. The central focus of an IND submission is on the general investigational plan and the protocol(s)
for clinical studies. The IND also includes the results of animal and&#160;<i>in vitro</i>&#160;studies assessing the toxicology, pharmacokinetics,
pharmacology, and pharmacodynamic characteristics of the product; chemistry, manufacturing, and controls information; and any available
human data or literature to support the use of the investigational product. Some long-term preclinical testing may continue after the
IND is submitted. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day time period,
raises concerns or questions about the conduct of the proposed clinical trial, including concerns that human research subjects will be
exposed to unreasonable health risks, refuses to allow the IND to take effect until the FDA&#8217;s concerns and questions have been addressed
and/or imposes a full or partial clinical hold. The FDA must notify the sponsor of the grounds for the hold, and any identified deficiencies
must be resolved before the clinical trial can begin. Submission of an IND may result in the FDA not allowing clinical trials to commence
or not allowing clinical trials to commence on the terms originally specified in the IND. A clinical hold can also be imposed once a trial
has already begun, thereby halting the trial until the deficiencies articulated by FDA are corrected.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The clinical stage of
development involves the administration of the product candidate to healthy volunteers or patients under the supervision of qualified
investigators, who generally are physicians not employed by or under the trial sponsor&#8217;s control, in accordance with GCP requirements,
which include the requirements that all research subjects provide their informed consent for their participation in any clinical trial.
Clinical trials are conducted under protocols detailing, among other things, the objectives of the clinical trial, dosing procedures,
subject selection and exclusion criteria, and the parameters and criteria to be used in monitoring safety and evaluating effectiveness.
Each protocol, and any subsequent amendments to the protocol, must be submitted to the FDA as part of the IND.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Furthermore, each clinical
trial must be reviewed and approved by an IRB or IEC for each institution at which the clinical trial will be conducted to ensure that
the risks to individuals participating in the clinical trials are minimized and are reasonable compared to the anticipated benefits. The
IRB or IEC also approves the informed consent form that must be provided to each clinical trial subject or his or her legal representative
and must monitor the clinical trial until completed. The FDA, the IRB or IEC, or the sponsor may suspend or discontinue a clinical trial
at any time on various grounds, including a finding that the subjects are being exposed to an unacceptable health risk. There also are
requirements governing the reporting of ongoing clinical trials and completed clinical trials to public registries. Information about
clinical trials, including results for clinical trials other than phase 1 investigations, must be submitted within specific timeframes
for publication on www.ClinicalTrials.gov, a clinical trials database maintained by the National Institutes of Health.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">A sponsor who wishes
to conduct a clinical trial outside of the United States is subject to the requirements of the applicable jurisdiction and may, but need
not, obtain FDA authorization to conduct the clinical trial under an IND. If a foreign clinical trial is not conducted under an IND, the
FDA will nevertheless accept the results of the study in support of an NDA if the study was conducted in accordance with GCP requirements,
and the FDA is able to validate the data through an onsite inspection if deemed necessary.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Clinical trials to evaluate
therapeutic indications to support NDAs for marketing approval are typically conducted in three sequential phases, which may overlap.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">Phase 1&#8212;Phase 1 clinical
trials involve initial introduction of the investigational product in a limited population of healthy human volunteers or patients with
the target disease or condition. These studies are typically designed to test the safety, dosage tolerance, absorption, metabolism and
distribution of the investigational product in humans, evaluate the side effects associated with increasing doses, and, if possible,
to gain early evidence of effectiveness.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">Phase 2&#8212;Phase 2 clinical
trials typically involve administration of the investigational product to a limited patient population with a specified disease or condition
to evaluate the drug&#8217;s potential efficacy, to determine the optimal dosages and dosing schedule, and to identify possible adverse
side effects and safety risks.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">Phase 3&#8212;Phase 3 clinical
trials typically involve administration of the investigational product to an expanded patient population to further evaluate dosage,
to provide statistically significant evidence of clinical efficacy, and to further test for safety, generally at multiple geographically
dispersed clinical trial sites. These clinical trials are intended, with the other available evidence, to establish the overall risk/benefit
ratio of the investigational product and to provide an adequate basis for product approval and physician labeling. Generally, two adequate
and well-controlled phase 3 trials are required by the FDA for approval of an NDA. Under certain circumstances, FDA can conclude that
one adequate and well-controlled clinical investigation plus confirmatory evidence is sufficient to establish effectiveness.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Post-approval trials,
sometimes referred to as phase 4 clinical trials or post-marketing studies, may be conducted after initial marketing approval. These trials
are used to gain additional evidence from the treatment of study subjects in the intended therapeutic indication and are commonly intended
to generate additional safety data regarding use of the product in a clinical setting, or in some cases to confirm clinical benefit. In
certain instances, the FDA may mandate the performance of phase 4 clinical trials as a condition of NDA approval.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Progress reports detailing
the results of the clinical trials, among other information, must be submitted at least annually to the FDA. Written IND safety reports
must be submitted to the FDA and the investigators fifteen days after the trial sponsor determines the information qualifies for reporting
for serious and unexpected suspected adverse events, findings from other studies or animal or&#160;<i>in vitro</i>&#160;testing that suggest
a significant risk for human volunteers, and any clinically important increase in the rate of a serious suspected adverse reaction over
that listed in the protocol or investigator brochure. The sponsor must also notify the FDA of any unexpected fatal or life-threatening
suspected adverse reaction as soon as possible but in no case later than seven calendar days after the sponsor&#8217;s initial receipt
of the information.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Concurrent with clinical
trials, companies usually complete additional animal studies and must also develop additional information about the chemistry and physical
characteristics of the product candidate and finalize a process for manufacturing the drug product in commercial quantities in accordance
with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the product candidate and
manufacturers must develop, among other things, methods for testing the identity, strength, quality and purity of the final drug product.
Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the product
candidate does not undergo unacceptable deterioration over its shelf life.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b><i>Expanded Access</i></b></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Expanded access, sometimes
called &#8220;compassionate use,&#8221; is the use of investigational products outside of controlled clinical trials to treat patients
with serious or immediately life-threatening diseases or conditions when there are no comparable or satisfactory alternative treatment
options. FDA regulations allow access to investigational products under an IND by the sponsor or the treating physician for treatment
purposes on a case-by-case basis for the following groups: individual patients (single-patient IND applications for treatment in emergency
settings and non-emergency settings); intermediate-size patient populations; and larger populations for use of the investigational product
under a treatment protocol or treatment IND.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">A clinical trial sponsor
is not obligated under the law to provide expanded access to its investigational product. However, if a sponsor decides to make its investigational
product available for expanded access, FDA reviews each request for expanded access and determines if treatment may proceed. Expanded
access may be appropriate when all of the following criteria apply: the patient has a serious or immediately life-threatening disease
or condition, and there is no comparable or satisfactory alternative therapy to diagnose, monitor, or treat the disease or condition;
the potential patient benefit justifies the potential risks of the treatment and the potential risks are not unreasonable in the context
of the disease or condition to be treated; and providing the investigational product for the requested use will not interfere with the
initiation, conduct, or completion of clinical investigations that could support marketing approval of the expanded access use or otherwise
compromise the potential development of the expanded access use.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In addition, on May 30,
2018, the Right to Try Act was signed into law. The law, among other things, provides an additional mechanism for patients with a life-threatening
condition who have exhausted approved treatments and are unable to participate in clinical trials to access certain investigational products
that have completed a phase 1 clinical trial, are the subject of an active IND, and are undergoing investigation in a clinical trial that
is intended to form the primary basis of a claim of effectiveness in support of FDA approval. Unlike the expanded access framework described
above, the Right to Try Act does not require FDA to review or approve requests for use of the investigational product, although the law
requires sponsors to report annually to the FDA on use of the pathway and require the FDA to post certain annual summaries. There is no
obligation for a sponsor to make its investigational products available to eligible patients under the Right to Try Act.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Under the 21st Century
Cures Act, the manufacturer or distributor of one or more investigational products for the diagnosis, monitoring and treatment of a serious
disease or condition must make publicly available their policy for evaluating and responding to requests for expanded access for individual
patients. The manufacturer or distributor is required to make such policies publicly available upon the earlier of initiation of a phase
2 or phase 3 study, or as applicable, 15 days after the investigational drug receives designation as a breakthrough therapy, fast track
product, or regenerative medicine advanced therapy. The posting of the expanded access policies by manufacturers and distributors does
not serve as a guarantee of access to any specific investigational drug by any individual patient, but the sponsor must develop a policy
and respond to patient requests according to that policy.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>U.S. Marketing
Approval for Drugs</i></b></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Assuming successful completion
of the required clinical testing, the results of the preclinical studies and clinical trials, together with detailed information relating
to the product&#8217;s chemistry, manufacture, controls and proposed labeling, among other things, are submitted to the FDA as part of
an NDA package requesting approval to market the drug product for one or more indications. An NDA is an application to FDA for approval
to market a new drug for one or more specified indications and must contain proof of the drug&#8217;s safety and efficacy for the requested
indication(s). An NDA is required to include both negative and ambiguous results of preclinical studies and clinical trials, as well as
positive findings, together with detailed information relating to the product&#8217;s chemistry, manufacturing, controls, and proposed
labeling, among other things. Data may come from company-sponsored clinical trials intended to test the safety and efficacy of a product&#8217;s
use or from a number of alternative sources, including studies initiated by investigators. To support marketing approval, the data submitted
must be sufficient in quality and quantity to establish the safety and efficacy of the investigational drug, to the satisfaction of the
FDA. The FDA must approve an NDA before a drug may be marketed in the United States.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The FDA reviews all submitted
NDAs to ensure they are sufficiently complete to permit substantive review before it accepts them for filing and may request additional
information rather than accepting the NDA for filing. The FDA must make a decision on accepting an NDA for filing within 60 days of receipt,
and such decision could include a &#8220;refuse-to-file&#8221; decision by the FDA. Once the submission is accepted for filing, the FDA
begins an in-depth substantive review of the NDA. The FDA reviews an NDA to determine, among other things, whether the product is safe
and effective for the indications sought and whether the facility in which it is manufactured, processed, packaged or held meets standards
designed, including cGMP requirements, designed to assure and preserve the product&#8217;s continued identity, strength, quality and purity.
Under the goals and polices agreed to by the FDA under the Prescription Drug User Fee Act, as amended, or the PDUFA, the FDA targets ten
months, from the filing date, in which to complete its initial review of a new molecular entity NDA and respond to the applicant, and
six months from the filing date of a new molecular entity NDA for priority review. The FDA does not always meet its PDUFA goal dates for
standard or priority NDAs, and the review process is often extended by FDA requests for additional information or clarification.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Further, under PDUFA,
each NDA must be accompanied by a substantial user fee. PDUFA also imposes an annual program fee for each approved prescription drug.
The FDA adjusts the PDUFA user fees on an annual basis. Fee waivers or reductions are available in certain circumstances, including a
waiver of the application fee for the first application filed by a small business. Additionally, no user fees are assessed on applications
for products designated as orphan drugs, unless the product also includes a non-orphan indication.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The FDA also may require
submission of a Risk Evaluation and Mitigation Strategy, or REMS, if it believes that a risk evaluation and mitigation strategy is necessary
to ensure that the benefits of the drug outweigh its risks. A REMS can include use of risk evaluation and mitigation strategies like medication
guides, physician communication plans, assessment plans, and/or elements to assure safe use, or ETASU, such as restricted distribution
methods, patient registries, special monitoring or other risk-minimization tools.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The FDA may refer an
application for a novel drug to an advisory committee. An advisory committee is a panel of independent experts, including clinicians and
other scientific experts, which reviews, evaluates and provides advice and recommendations to FDA as to whether the application should
be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations
carefully when making decisions.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Before approving an NDA,
the FDA typically will inspect the facility or facilities where the product is manufactured. The FDA will not approve an application unless
it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and are adequate to assure consistent
production of the product within required specifications. Additionally, before approving an NDA, the FDA may inspect one or more select
clinical trial sites involved in conducting pivotal studies to assure compliance with GCP and other requirements and the integrity of
the clinical data submitted to the FDA.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">After evaluating the
NDA and all related information, including the advisory committee recommendation, if any, and inspection reports regarding the manufacturing
facilities and clinical trial sites, the FDA may issue an approval letter, or, in some cases, a Complete Response Letter. A Complete Response
Letter indicates that the review cycle of the application is complete and the application is not ready for approval. A Complete Response
Letter generally contains a statement of specific conditions that must be met in order to secure final approval of the NDA, except that
where the FDA determines that the data supporting the application are inadequate to support approval, the FDA may issue the Complete Response
Letter without first conducting required inspections, testing submitted product lots, and/or reviewing proposed labeling. In issuing the
Complete Response Letter, the FDA may require additional clinical or preclinical testing or recommend other actions, such as requests
for additional information or clarification, that the applicant might take in order for the FDA to reconsider the application. Even with
submission of this additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria
for approval. If and when those conditions have been met to the FDA&#8217;s satisfaction, the FDA will typically issue an approval letter.
An approval letter authorizes commercial marketing of the product with specific prescribing information for specific indication(s).</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Even if the FDA approves
a product, depending on the specific risk(s) to be addressed it may limit the approved indications for use of the product, require that
contraindications, warnings or precautions be included in the product labeling, require that post-approval studies, including phase 4
clinical trials, be conducted to further assess a product&#8217;s safety and efficacy after approval, require testing and surveillance
programs to monitor the product after commercialization, or impose other conditions, including distribution and use restrictions or other
risk management mechanisms under a REMS, which can materially affect the potential market and profitability of the product. The FDA may
prevent or limit further marketing of a product based on the results of post-marketing studies or surveillance programs. After approval,
some types of changes to the approved product, such as adding new indications, manufacturing changes, and additional labeling claims,
are subject to further testing requirements and FDA review and approval.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Orphan Drug Designation
and Exclusivity</i></b></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">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 a disease or condition
with either a patient population of fewer than 200,000 individuals in the United States, or a patient population greater than 200,000
individuals in the United States when there is no reasonable expectation that the cost of developing and making the product available
in the United States for the disease or condition will be recovered from sales of the product. Orphan drug designation must be requested
before submitting a marketing application. After the FDA grants orphan drug designation, the generic identity of the therapeutic agent
and its designated orphan use are disclosed by the FDA on its website. Orphan drug designation does not convey any advantage in or shorten
the duration of the regulatory review and approval process, though companies developing orphan products are eligible for certain incentives,
including tax credits for qualified clinical testing and waiver of application fees.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">If a product that has
orphan designation subsequently receives the first FDA approval for the use for which it has such designation, the product is entitled
to a seven-year period of marketing exclusivity from the date of FDA approval during which the FDA may not approve any other applications
to market the &#8220;same drug&#8221; for the same use, except in limited circumstances, such as a subsequent product&#8217;s showing
of &#8220;clinical superiority&#8221; over the product with orphan exclusivity or where the original applicant cannot produce sufficient
quantities of product. The FDA defines &#8220;same drug&#8221; with respect to small molecule drugs as a drug that contains the same active
moiety as a previously approved drug and is intended for the same use as the previously approved drug. To demonstrate a drug is &#8220;clinically
superior&#8221; to the previously approved orphan drug, a sponsor must show that the drug provides a significant therapeutic advantage
over and above the previously already approved drug in terms of greater efficacy, greater safety, or by providing a major contribution
to patient care. Since the enactment of the FDA Reauthorization Act of 2017, the FDA publishes clinical superiority findings on its website
for those drugs approved on or after August 18, 2017. Competitors, however, may receive approval of different therapeutic agents for the
indication for which the orphan product has exclusivity or obtain approval for the same therapeutic agent for a different indication than
that for which the orphan product has exclusivity. If an orphan designated product receives marketing approval for an indication broader
than what is designated, it may not be entitled to orphan exclusivity. Further, orphan drug exclusive marketing rights in the United States
may be lost if the FDA later determines that the request for designation was materially defective or the manufacturer of the approved
product is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition, or
if the manufacturer chooses to provide consent to approval of other applications.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Expedited Development
and Review Programs for Drugs</i></b></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The FDA maintains several
programs intended to facilitate and expedite development and review of new drugs to address unmet medical needs in the treatment of serious
or life-threatening diseases or conditions. These programs include Fast Track designation, Breakthrough Therapy designation, Priority
Review and Accelerated Approval, and the purpose of these programs is to either expedite the development or review of important new drugs
and biologics to get them to patients more quickly than standard FDA review timelines typically permit. We intend to apply for these programs
for product candidates, as applicable.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">A new drug is eligible
for Fast Track designation if it is intended to treat a serious or life-threatening disease or condition and demonstrates the potential
to address unmet medical needs for such disease or condition. Fast Track designation applies to the product candidate and the specific
indication for which it is being studied. The sponsor of a new drug product may request the FDA to designate the drug as a Fast Track
product at any time during the clinical development of the product, but ideally no later than the pre-NDA meeting because many of the
features of Fast Track designation will not apply after that time. Fast Track designation provides increased opportunities for sponsor
interactions with the FDA during preclinical and clinical development, in addition to the potential for rolling review once a marketing
application is filed. Rolling review means that the FDA may review portions of the marketing application before the sponsor submits the
complete application.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In addition, a new drug
may be eligible for Breakthrough Therapy designation if it is intended to treat a serious or life-threatening disease or condition and
preliminary clinical evidence indicates that the drug, alone or in combination with one or more other drugs, may demonstrate substantial
improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early
in clinical development. A sponsor may request that a drug product be designated as a Breakthrough Therapy at any time during the clinical
development of the product and ideally before initiation of the pivotal clinical trial intended to serve as the primary basis for demonstration
of efficacy to obtain the full benefits of the designation. Breakthrough Therapy designation provides all the features of Fast Track designation,
in addition to intensive guidance on an efficient product development program beginning as early as phase 1 and FDA organizational commitment
to expedited development, including involvement of senior managers and experienced review staff in a cross-disciplinary review, where
appropriate.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Any product submitted
to the FDA for approval, including a product with Fast Track or Breakthrough Therapy designation, may also be eligible for additional
FDA programs intended to expedite the review and approval process, including Priority Review and Accelerated Approval. A product is eligible
for Priority Review, once an NDA is submitted, if the product that is the subject of the marketing application has the potential to provide
a significant improvement in safety or effectiveness in the treatment, diagnosis or prevention of a serious disease or condition. Significant
improvement may be illustrated by the following examples: evidence of increased effectiveness in treatment, prevention, or diagnosis of
a condition, elimination or substantial reduction of a treatment-limiting adverse reaction, documented enhancement of patient compliance
that is expected to lead to an improvement in serious outcomes, and evidence of safety and effectiveness in a new subpopulation. Under
Priority Review, the FDA&#8217;s goal date to take action on the marketing application is six months compared to ten months for a standard
review.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The FDA may grant Accelerated
Approval to a product for a serious or life-threatening condition that provides meaningful therapeutic advantage to patients over existing
treatments based upon a determination that the product has an effect on a surrogate endpoint that is reasonably likely to predict clinical
benefit. The FDA may also grant Accelerated Approval for such a condition when the product has an effect on an intermediate clinical endpoint
that can be measured earlier than an effect on irreversible morbidity or mortality, or IMM, and that is reasonably likely to predict an
effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity or prevalence of the
condition and the availability or lack of alternative treatments. Products granted accelerated approval must meet the same statutory standards
for safety and effectiveness as those granted traditional approval.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">For the purposes of Accelerated
Approval, a surrogate endpoint is a marker, such as a laboratory measurement, radiographic image, physical sign or other measure that
is thought to predict clinical benefit, but is not itself a measure of clinical benefit. Surrogate endpoints can often be measured more
easily or more rapidly than clinical endpoints. An intermediate clinical endpoint is a measurement of a therapeutic effect that is considered
reasonably likely to predict the clinical benefit of a drug, such as an effect on IMM. The FDA has limited experience with accelerated
approvals based on intermediate clinical endpoints, but has indicated that such endpoints generally may support Accelerated Approval where
the therapeutic effect measured by the endpoint is not itself a clinical benefit and basis for traditional approval, if there is a basis
for concluding that the therapeutic effect is reasonably likely to predict the ultimate clinical benefit of a product.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The Accelerated Approval
pathway is most often used in settings in which the course of a disease is long and an extended period of time is required to measure
the intended clinical benefit of a product, even if the effect on the surrogate or intermediate clinical endpoint occurs rapidly. Thus,
Accelerated Approval has been used extensively in the development and approval of products for treatment of a variety of cancers in which
the goal of therapy is generally to improve survival or decrease morbidity and the duration of the typical disease course requires lengthy
and sometimes large trials to demonstrate a clinical or survival benefit. Thus, the benefit of Accelerated Approval derives from the potential
to receive approval based on surrogate endpoints sooner than possible for trials with clinical or survival endpoints, rather than deriving
from any explicit shortening of the FDA approval timeline, as is the case with priority review.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The Accelerated Approval
pathway is usually contingent on a sponsor&#8217;s agreement to conduct, in a diligent manner, additional post-approval confirmatory studies
to verify and describe the product&#8217;s clinical benefit. As a result, a product candidate approved on this basis is subject to rigorous
post-marketing compliance requirements, including the completion of phase 4 or post-approval clinical trials to confirm the effect on
the clinical endpoint. Failure to conduct required post-approval studies, or confirm a clinical benefit during post-marketing studies,
would allow the FDA to initiate expedited proceedings to withdraw approval of the product. All promotional materials for product candidates
approved under accelerated regulations are subject to prior review by the FDA. In addition, the FDA generally requires, as a condition
for Accelerated Approval, that all advertising and promotional materials intended for dissemination or publication within 120 days of
marketing approval be submitted to the agency for review during the pre-approval review period. After the 120-day period has passed, all
advertising and promotional materials must be submitted at least 30 days prior to the intended time of initial dissemination or publication.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Even if a product qualifies
for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for qualification or the time
period for FDA review or approval may not be shortened. Furthermore, Fast Track designation, Breakthrough Therapy designation, Priority
Review and Accelerated Approval do not change the scientific or medical standards for approval or the quality of evidence necessary to
support approval, though they may expedite the development or review process.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Pediatric Study
Plan and Pediatric Exclusivity</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Under the Pediatric Research
Equity Act, as amended, or the PREA, certain NDAs and certain NDA supplements must contain data that can be used to assess the safety
and efficacy of the product candidate for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration
for each pediatric subpopulation for which the product is safe and effective. For a cancer drug directed at a molecular target, the pediatric
testing requirement extends to pediatric cancers involving the molecular target even if different than the claimed adult cancer in the
NDA. The FDA may grant deferrals for submission of pediatric data or full or partial waivers. The PREA requires that a sponsor who is
planning to submit a marketing application for a product candidate that includes a new active ingredient, new indication, new dosage form,
new dosing regimen or new route of administration submit an initial Pediatric Study Plan, or the PSP, within 60 days of an end-of-phase
2 meeting or, if there is no such meeting, as early as practicable before the initiation of the phase 3 or phase 2/3 study. The initial
PSP must include an outline of the pediatric study or studies that the sponsor plans to conduct, including study objectives and design,
age groups, relevant endpoints and statistical approach, or a justification for not including such detailed information, and any request
for a deferral of pediatric assessments or a full or partial waiver of the requirement to provide data from pediatric studies along with
supporting information. The FDA and the sponsor must reach an agreement on the PSP. A sponsor can submit amendments to an agreed-upon
initial PSP at any time if changes to the pediatric plan need to be considered based on data collected from preclinical studies, early
phase clinical trials and/or other clinical development programs. Unless otherwise required by regulation, the PREA does not apply to
a drug for an indication for which orphan designation has been granted, except that the PREA will apply to an original NDA for a new active
ingredient that is orphan-designated if the drug is a molecularly targeted cancer product intended for the treatment of an adult cancer
and is directed at a molecular target that the FDA determines to be substantially relevant to the growth or progression of a pediatric
cancer.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">A drug can also obtain
pediatric market exclusivity in the United States. Pediatric exclusivity, if granted, adds six months to existing exclusivity periods
and patent terms. This six-month exclusivity, which runs from the end of other exclusivity protection or patent term, may be granted based
on the voluntary completion of a pediatric study in accordance with an FDA-issued &#8220;Written Request&#8221; for such a study.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>U.S. Post-Approval
Requirements for Drugs</i></b></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Drugs approved by FDA
are subject to continuing regulation by the FDA, including, among other things, requirements relating to manufacturing establishment registration
and product listing, recordkeeping, periodic reporting, product sampling and distribution, reporting of adverse experiences with the product,
field alerts regarding issues with distributed product, promotion and advertising compliance, which include restrictions on promoting
products for unapproved uses or patient populations (known as &#8220;off-label use&#8221;) and limitations on industry-sponsored scientific
and educational activities. Although physicians may prescribe approved products for off-label uses, manufacturers may not market or promote
such uses. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, as well as
other advertising and promotion requirements, including not only by company employees but also by agents of the company or those speaking
on the company&#8217;s behalf, and a company that is found to have improperly promoted may be subject to significant liability, including
investigation by federal and state authorities. Failure to comply with these requirements can result in, among other things, adverse publicity,
warning letters, untitled letters, corrective advertising, and potential civil and criminal penalties, including liabilities under the
False Claims Act where products obtain reimbursement under federal health care programs. Promotional materials for approved drugs must
be submitted to the FDA in conjunction with their first use or first publication, and for products approved under accelerated approval
prior to their first use. Further, if there are any modifications to the drug, including changes in indications, labeling or manufacturing
processes or facilities, the applicant may be required to submit and obtain FDA approval of a new NDA or NDA supplement, which may require
the development of additional data or preclinical studies and clinical trials.</p><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The FDA may withdraw
approval of a product if compliance with regulatory requirements and standards is not maintained or if problems occur after the product
reaches the market. Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity
or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved
labeling to add new safety information, requirements for post-market studies or clinical trials to assess new safety risks, or imposition
of distribution or other restrictions under a REMS. Other potential consequences include, among other things:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">restrictions on the marketing
or manufacturing of the product, complete withdrawal of the product from the market or product recalls;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the issuance of safety alerts,
Dear Healthcare Provider letters, press releases or other communications containing warnings or other safety information about the product;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">fines, warning letters or holds
on post-approval clinical trials;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">refusal of the FDA to approve
applications or supplements to approved applications, or suspension or revocation of product approvals;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">product seizure or detention,
or refusal to permit the import or export of products;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">injunctions or the imposition
of civil or criminal penalties;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">consent decrees, corporate
integrity agreements, debarment or exclusion from federal healthcare programs; or</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">mandated modification of promotional
materials and labeling and issuance of corrective information.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Abbreviated New
Drug Applications and 505(b)(2) Applications</i></b></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In seeking approval for
a drug through an NDA, applicants are required to list with the FDA each patent with claims that cover the applicant&#8217;s drug or an
approved method of use of the drug. Upon approval of a drug, each of the patents listed in the application for the drug is then published
in the FDA&#8217;s Approved Drug Products with Therapeutic Equivalence Evaluations, commonly known as the &#8220;Orange Book.&#8221; Drugs
listed in the Orange Book can, in turn, be cited by competitors in support of approval of an Abbreviated New Drug Application, or ANDA,
or a 505(b)(2) application. In this case, the original NDA (the so-called pioneer drug) is known as the &#8220;listed&#8221; drug or &#8220;reference-listed&#8221;
drug. An ANDA provides for marketing of a drug that has the same active ingredient and the same strength, route of administration and
dosage form as the listed drug and has been shown through testing to be bioequivalent to the listed drug or receives a waiver from bioequivalence
testing. ANDA applicants are generally not required to conduct or submit results of preclinical or clinical tests to prove the safety
or effectiveness of their drug, other than the requirement for bioequivalence testing. Drugs approved in this way are considered therapeutically
equivalent, and are commonly referred to as &#8220;generic equivalents&#8221; to the listed drug. These drugs then generally can be substituted
by pharmacists under prescriptions written for the original listed drug.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">A 505(b)(2) application
is a type of NDA that relies, in part, upon data the applicant does not own and to which it does not have a right of reference. Such applications
often are submitted for changes to previously approved drug products, and rely on the FDA&#8217;s prior findings of safety and effectiveness
for a third party&#8217;s NDA to abbreviate the showings the sponsor of the 505(b)(2) application must make to establish that its product
is safe and effective.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The ANDA or 505(b)(2)
applicant is required to certify to FDA concerning any patents listed for the referenced approved drug in FDA&#8217;s Orange Book. Specifically,
for each listed patent, the applicant must certify that: (1) the required patent information has not been filed; (2) the listed patent
has expired; (3) the listed patent has not expired but will expire on a particular date and approval is sought after patent expiration;
or (4) the listed patent is invalid, unenforceable or will not be infringed by the new drug. A certification that the new drug will not
infringe the already approved drug&#8217;s listed patents or that such patents are invalid or unenforceable is called a Paragraph IV certification.
If the ANDA or 505(b)(2) applicant does not include a Paragraph IV certification, the ANDA or 505(b)(2) application will not be approved
until all of the listed patents claiming the referenced drug have expired, except for any listed patents that only apply to uses of the
drug not being sought by the ANDA or 505(b)(2) applicant.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">If the ANDA or 505(b)(2)
applicant has made a Paragraph IV certification, the applicant must also send notice of a Paragraph IV Notice Letter to the NDA and patent
holders once the ANDA or 505(b)(2) application has been accepted for filing by FDA. The NDA and patent holders may then initiate a patent
infringement lawsuit in response to the notice of the Paragraph IV Notice Letter. The filing of a patent infringement lawsuit within 45
days of the receipt of notice of a Paragraph IV Notice Letter automatically prevents FDA from approving the ANDA until the earlier of
30 months, expiration of the patent, settlement of the lawsuit, modification by a court or a decision in the infringement case that is
favorable to the ANDA or 505(b)(2) applicant.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">As discussed in the next
section, the ANDA or 505(b)(2) application also will not be approved until any applicable non-patent exclusivity, such as a new chemical
entity exclusivity, listed in the Orange Book for the reference-listed drug has expired.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>United States Patent
Term Restoration and Marketing Exclusivity</i></b></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Depending upon the timing,
duration and specifics of FDA approval of our future product candidates, some of our United States patents may be eligible for limited
patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, commonly referred to as the Hatch-Waxman
Amendments. The Hatch-Waxman Amendments permit restoration of the patent term of up to five years as compensation for patent term lost
during the FDA regulatory review process for a drug that has not been previously approved for commercial marketing. Patent-term restoration,
however, cannot extend the remaining term of a patent beyond a total of 14 years from the product&#8217;s approval date and only those
claims covering such approved drug product, a method for using it or a method for manufacturing it may be extended. The patent-term restoration
period is generally one-half the time between the effective date of an IND and the submission date of an NDA plus the time between the
submission date of an NDA and the approval of that application, except that the review period is reduced by any time during which the
applicant failed to exercise due diligence. Only one patent applicable to an approved drug is eligible for the extension and the application
for the extension must be submitted prior to the expiration of the patent. The U.S. Patent and Trademark Office, in consultation with
the FDA, reviews and approves the application for any patent term extension or restoration. In the future, we may apply for restoration
of patent term for our currently owned or licensed patents to add patent life beyond its current expiration date, depending on the expected
length of the clinical trials and other factors involved in the filing of the relevant NDA.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Regulatory exclusivity
provisions under the FDCA also can delay the submission or the approval of certain applications. The FDCA provides a five-year period
of non-patent marketing exclusivity within the United States to the first applicant to gain approval of an NDA for a new chemical entity.
A drug is a new chemical entity if the FDA has not previously approved any other new drug containing the same active moiety, which is
the molecule or ion responsible for the action of the drug substance. During the exclusivity period, the FDA may not accept for review
an ANDA, or a 505(b)(2) NDA, submitted by another company for another version of such drug where the applicant does not own or have a
legal right of reference to all the data required for approval. However, an application may be submitted after four years if it contains
a certification of patent invalidity or non-infringement.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The FDCA also provides
three years of exclusivity for an NDA, 505(b)(2) NDA, or supplement to an existing NDA, if new clinical investigations, other than bioavailability
studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application, for
example, new indications, dosages or strengths of an existing drug. This three-year exclusivity covers only the conditions of use associated
with the new clinical investigations, and prevents FDA approval of an ANDA or 505(b)(2) NDA for such conditions of use, but does not prevent
FDA acceptance for filing and review of an ANDA or 505(b)(2) NDA. The three-year exclusivity does not prohibit the FDA from approving
ANDAs or 505(b)(2) NDAs for drugs containing the original active agent for other conditions of use outside those protected by the exclusivity.
Five-year and three-year exclusivity will not delay the submission or approval of a full NDA. However, an applicant submitting a full
NDA would be required to conduct or obtain a right of reference to all of the preclinical studies and adequate and well-controlled clinical
trials necessary to demonstrate safety and effectiveness.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Regulation of Companion
Diagnostics</i></b></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Companion diagnostics
provide information that is essential for the safe and effective use of a corresponding therapeutic product and can identify patients
who are most likely to benefit from a particular therapeutic product; identify patients likely to be at increased risk for serious side
effects as a result of treatment with a particular therapeutic product; or monitor response to treatment with a particular therapeutic
product for the purpose of adjusting treatment to achieve improved safety or effectiveness. Companion diagnostics are regulated as medical
devices by the FDA. In the United States, the FDCA, and its implementing regulations, and other federal and state statutes and regulations
govern, among other things, medical device design and development, preclinical and clinical testing, premarket clearance or approval,
registration and listing, manufacturing, labeling, storage, advertising and promotion, sales and distribution, export and import, and
post-market surveillance. Unless an exemption or FDA exercise of enforcement discretion applies, diagnostic tests generally require marketing
clearance or approval from the FDA prior to commercialization. The two primary types of FDA marketing authorization applicable to a medical
device are clearance of a premarket notification under section 510(k) of the FDCA, or 510(k), and approval of a premarket approval application,
or PMA.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">To obtain 510(k) clearance
for a medical device, or for certain modifications to devices that have received 510(k) clearance, a manufacturer must submit a premarket
notification demonstrating that the proposed device is substantially equivalent to a legally marketed predicate device, which may be a
previously 510(k)-cleared device or a pre-amendment device that was in commercial distribution before May 28, 1976, or a device that was
originally on the market as a class III device and later down-classified to class II or I. A proposed device is substantially equivalent
to a predicate device if the subject device (1) has the same intended use as the predicate device and (2) either (a) has the same technological
characteristics as the predicate device or (b) has different technological characteristics but does not raise different questions of safety
and effectiveness than the predicate device and the submitted information demonstrates that the subject device is as safe and effective
as the predicate device. If the FDA determines that the subject device is substantially equivalent to the predicate device, the subject
device may be cleared for marketing. The 510(k) premarket notification pathway generally takes from three to twelve months from the date
the application is completed, but can take significantly longer.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">A PMA must be supported
by valid scientific evidence, which typically requires extensive data, including technical, preclinical, clinical and manufacturing data,
to demonstrate to the FDA&#8217;s satisfaction the safety and effectiveness of the device. For diagnostic tests, a PMA typically includes
data regarding analytical and clinical validation studies. As part of its review of the PMA, the FDA will conduct a pre-approval inspection
of the manufacturing facility or facilities to ensure compliance with the quality system regulation, or QSR, which requires manufacturers
to follow design, testing, control, documentation and other quality assurance procedures. FDA has committed to performance goals of reviewing
original PMAs that are not referred to an Advisory Committee within 180 days and reviewing PMAs referred to an Advisory Committee within
320 days (excluding days when a request for additional information is pending with the applicant), although the process typically takes
longer, and may require several years to complete. If the FDA evaluations of both the PMA and the manufacturing facilities are favorable,
the FDA will either issue an approval order or an approvable letter, which usually contains a number of conditions that must be met in
order to secure the final approval of the PMA. If the FDA&#8217;s evaluation of the PMA or manufacturing facilities is not favorable,
the FDA will deny the approval of the PMA or issue a not approvable letter. A not approvable letter will outline the deficiencies in the
application and, where practical, will identify what is necessary to make the PMA approvable. Once granted, PMA approval may be withdrawn
by the FDA if compliance with post-approval requirements, conditions of approval or other regulatory standards is not maintained or the
device is determined to be unsafe or ineffective following initial marketing.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">On August 6, 2014, the
FDA issued a final guidance document addressing the development and approval process for &#8220;In Vitro Companion Diagnostic Devices.&#8221;
According to the guidance document, for novel therapeutic products that depend on the use of a diagnostic test and where the diagnostic
device could be essential for the safe and effective use of the corresponding therapeutic product, the companion diagnostic device should
be developed and approved or cleared contemporaneously with the therapeutic, although the FDA recognizes that there may be cases when
contemporaneous development may not be possible. However, in cases where a drug cannot be used safely or effectively without the companion
diagnostic, the FDA&#8217;s guidance indicates it will generally not approve the drug without the approval or clearance of the diagnostic
device. The FDA also issued a draft guidance in July 2016 setting forth the principles for co-development of an in vitro companion diagnostic
device with a therapeutic product. The draft guidance describes principles to guide the development and contemporaneous marketing authorization
for the therapeutic product and its corresponding&#160;<i>in vitro</i>&#160;companion diagnostic.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Once cleared or approved,
the companion diagnostic device must adhere to post-marketing requirements including the requirements of the FDA&#8217;s QSR, establishment
registration and device listing, adverse event reporting, reporting of recalls and corrections, along with product marketing requirements
and limitations. Like drug makers, companion diagnostic makers are subject to unannounced FDA inspections at any time during which the
FDA will conduct an audit of the product(s) and the company&#8217;s facilities for compliance with its authorities.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Other Regulatory
Matters</i></b></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Manufacturing, sales,
promotion and other activities of products following product approval, where applicable, or commercialization are also subject to regulation
by numerous regulatory authorities in the United States in addition to the FDA, which may include the Centers for Medicare &amp; Medicaid
Services, or CMS, other divisions of the U.S. Department of Health and Human Services, or HHS, the Department of Justice, the Drug Enforcement
Administration, the Consumer Product Safety Commission, the Federal Trade Commission, the Occupational Safety &amp; Health Administration,
the Environmental Protection Agency and state and local governments and governmental agencies.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Healthcare Laws</i></b></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Healthcare providers,
physicians, and third-party payors will play a primary role in the recommendation and prescription of any products for which we obtain
marketing approval. Our business operations and any current or future arrangements with third-party payors, healthcare providers, and
physicians may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business
or financial arrangements and relationships through which we develop, market, sell and distribute any drugs for which we obtain marketing
approval. In the United States, these laws include federal and state anti-kickback, false claims, physician transparency, and patient
data privacy and security laws and regulations, including those described below.</p><div>

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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">The federal Anti-Kickback Statute,
which prohibits, among other things, persons from knowingly and willfully soliciting, receiving, offering or paying any remuneration
(including any kickback, bribe, or rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce, or in return
for, either the referral of an individual, or the purchase, lease, order or recommendation of any good, facility, item or service for
which payment may be made, in whole or in part, under a federal healthcare program, such as the Medicare and Medicaid programs. A person
or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.
Violations are subject to civil and criminal fines and penalties for each violation, plus up to three times the remuneration involved,
imprisonment, and exclusion from federal health care programs. In addition, the government may assert that a claim including items or
services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the
False Claims Act, or the FCA. There are a number of statutory exceptions and regulatory safe harbors protecting some common activities
from prosecution, but the exceptions and safe harbors are drawn narrowly and require strict compliance in order to offer protection.</span></td>
</tr></table><div>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">The federal civil and criminal
false claims laws, including the FCA, which can be enforced through civil &#8220;whistleblower&#8221; actions, and civil monetary penalty
laws, impose criminal and civil penalties against individuals or entities for, among other things, knowingly presenting, or causing to
be presented, claims for payment or approval from Medicare, Medicaid, or other federal health care programs that are false or fraudulent;
knowingly making or causing a false statement material to a false or fraudulent claim or an obligation to pay money to the federal government;
or knowingly concealing or knowingly and improperly avoiding or decreasing such an obligation. Manufacturers can be held liable under
the FCA even when they do not submit claims directly to government payors if they are deemed to &#8220;cause&#8221; the submission of
false or fraudulent claims. When an entity is determined to have violated the federal civil FCA, the government may impose civil fines
and penalties for each false claim, plus treble damages, and exclude the entity from participation in Medicare, Medicaid and other federal
healthcare programs.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">The federal civil monetary
penalties laws impose civil fines for, among other things, the offering or transfer or remuneration to a Medicare or state healthcare
program beneficiary, if the person knows or should know it is likely to influence the beneficiary&#8217;s selection of a particular provider,
practitioner, or supplier of services reimbursable by Medicare or a state health care program, unless an exception applies.</span></td>
</tr></table><div>
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<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">The federal Health Insurance
Portability and Accountability Act of 1996, or HIPAA, which created additional federal criminal statutes that prohibit knowingly and
willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent
pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit
program, regardless of the payor (including, public or private) and knowingly and willfully falsifying, concealing or covering up by
any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare
benefits, items or services relating to healthcare matters. Similar to the federal Anti-Kickback Statute, a person or entity can be found
guilty of violating HIPAA without actual knowledge of the statute or specific intent to violate it.</span></td>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">HIPAA, as amended by the Health
Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and their respective implementing regulations, which
impose requirements on certain covered healthcare providers, health plans, and healthcare clearinghouses and their respective business
associates that perform services for them that involve the use, or disclosure of, individually identifiable health information as well
as their covered subcontractors, relating to the privacy, security and transmission of individually identifiable health information without
appropriate authorization. HITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties
directly applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions
in federal courts to enforce the federal HIPAA laws and seek attorneys&#8217; fees and costs associated with pursuing federal civil actions.</span></td>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">The federal Physician Payments
Sunshine Act, enacted as part of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation
Act of 2010, or collectively, the ACA, imposed annual reporting requirements for certain manufacturers of drugs, devices, biologics,
and medical supplies for which payment is available under Medicare, Medicaid, or the Children&#8217;s Health Insurance Program, for certain
payments and &#8220;transfers of value&#8221; provided to physicians (currently defined to include doctors, dentists, optometrists, podiatrists
and chiropractors) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family
members. Effective January 1, 2022, these reporting obligations will extend to include transfers of value made in the previous year to
certain non-physician providers such as physician assistants and nurse practitioners.</span></td>
</tr></table><div>
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<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">Federal consumer protection
and unfair competition laws broadly regulate marketplace activities and activities that potentially harm consumers.</span></td>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">Analogous state and foreign
laws and regulations, such as state and foreign anti-kickback, false claims, consumer protection and unfair competition laws which may
apply to pharmaceutical business practices, including but not limited to, research, distribution, sales and marketing arrangements as
well as submitting claims involving healthcare items or services reimbursed by any third-party payor, including commercial insurers;
state laws that require pharmaceutical companies to comply with the pharmaceutical industry&#8217;s voluntary compliance guidelines and
the relevant compliance guidance promulgated by the federal government that otherwise restricts payments that may be made to healthcare
providers and other potential referral sources; state laws that require drug manufacturers to file reports with states regarding pricing
and marketing information, such as the tracking and reporting of gifts, compensations and other remuneration and items of value provided
to healthcare professionals and entities; state and local laws requiring the registration of pharmaceutical sales representatives; and
state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each
other in significant ways and may not have the same effect, thus complicating compliance efforts.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The scope and enforcement
of each of these laws is uncertain and subject to rapid change in the current regulatory and healthcare environment, especially in light
of the lack of applicable precedent and regulations. Federal and state enforcement bodies have recently increased their scrutiny of interactions
between healthcare companies and healthcare providers, which has led to a number of investigations, prosecutions, convictions and settlements
in the healthcare industry.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Insurance Coverage
and Reimbursement</i></b></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In the United States
and markets in other countries, patients who are prescribed treatments for their conditions and providers performing healthcare services
generally rely on third-party payors to reimburse all or part of the associated healthcare costs. Thus, even if a product candidate is
approved, sales of the product will depend, in part, on the extent to which third-party payors, including government healthcare programs
in the United States such as Medicare and Medicaid, private health insurers, managed care organizations and other third-party payors,
provide coverage, and establish adequate reimbursement levels for, the product. In the United States, principal decisions about Medicare
reimbursement for new products are typically made by CMS and regional contractors responsible for administering the Medicare program.
CMS and these contractors decide whether and to what extent a new product will be covered and reimbursed under Medicare, and private third-party
payors often follow CMS&#8217;s decisions regarding coverage and reimbursement to a substantial degree.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Reimbursement by a third-party
payor may depend upon a number of factors, including, but not limited to, the third-party payor&#8217;s determination that use of a product
is (1) a covered benefit under its health plan; (2) safe, effective and medically necessary; (3) appropriate for the specific patient;
(4) cost-effective; and (5) neither experimental nor investigational. Reimbursement rates may vary according to the use of the drug and
the clinical setting in which it is used, may be based on reimbursement levels already set for lower cost drugs and may be incorporated
into existing payments for other services. However, one third-party payor&#8217;s determination to provide coverage for a product candidate
does not assure that other payors will also provide coverage for the product candidate. No uniform policy of coverage and reimbursement
for products exists among third-party payors, and coverage and reimbursement levels for products can differ significantly from payor to
payor.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Third-party payors are
increasingly challenging the prices charged, examining the medical necessity, reviewing the cost-effectiveness of medical products and
services and imposing controls to manage costs. In order to secure coverage and reimbursement for any product that might be approved for
sale, a company may need to conduct expensive pharmaco-economic studies in order to demonstrate the cost effectiveness of the product,
which will require additional expenditure above and beyond the costs required to obtain FDA or other comparable regulatory approvals.
Third-party payors may limit coverage to specific products on an approved list, also known as a formulary, which might not include all
of the FDA-approved products for a particular indication. Moreover, the containment of healthcare costs has become a priority of federal,
state and foreign governments, and the prices of products have been a focus in this effort. Governments have shown significant interest
in implementing cost-containment programs, including price controls or price increase penalties, restrictions on reimbursement and requirements
for substitution of generic products.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In addition, companion
diagnostic tests require coverage and reimbursement separate and apart from the coverage and reimbursement for their companion pharmaceutical
products. Similar challenges to obtaining coverage and reimbursement, applicable to pharmaceutical products, will apply to companion diagnostics.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Current and Future
Healthcare Reform Legislation</i></b></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In the United States
and certain foreign jurisdictions, there have been, and likely will continue to be, a number of proposed and adopted legislative and regulatory
changes regarding the healthcare system directed at broadening the availability of healthcare, improving the quality of healthcare, and
containing or lowering the cost of healthcare. For example, in March 2010, the United States Congress enacted the ACA, which, among other
things, includes changes to the coverage and payment for products under government health care programs. The ACA includes provisions of
importance to our potential product candidates that:</p><div>

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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">created an annual, nondeductible
fee on any entity that manufactures or imports specified branded prescription drug products, apportioned among these entities according
to their market share in certain government healthcare programs;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">expanded eligibility criteria
for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to certain individuals with income at or below
133% of the federal poverty level, thereby potentially increasing a manufacturer&#8217;s Medicaid rebate liability;</span></td>
</tr></table><div>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">expanded manufacturers&#8217;
rebate liability under the Medicaid Drug Rebate Program by increasing the minimum rebate for both branded and generic drugs and revising
the definition of &#8220;average manufacturer price,&#8221; or AMP, for calculating and reporting Medicaid drug rebates on outpatient
prescription drug prices;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">addressed a new methodology
by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled,
implanted or injected;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">expanded the types of entities
eligible for the 340B drug discount program;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">established the Medicare Part
D coverage gap discount program by requiring manufacturers to provide point-of-sale-discounts off the negotiated price of applicable
brand drugs to eligible beneficiaries during their coverage gap period as a condition for the manufacturers&#8217; outpatient drugs to
be covered under Medicare Part D; and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">created a new Patient-Centered
Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding
for such research.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Since its enactment,
there have been numerous judicial, administrative, executive, and legislative challenges to certain aspects of the ACA, and we expect
there will be additional challenges and amendments to the ACA in the future. For example, various portions of the ACA have faced legal
and constitutional challenges, including in the United States Supreme Court; the Trump administration issued various Executive Orders
which eliminated cost sharing subsidies and various provisions that would impose a fiscal burden on states or a cost, fee, tax, penalty
or regulatory burden on individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or medical devices; and
Congress introduced several pieces of legislation aimed at significantly revising or repealing the ACA. It is unclear whether the ACA
will be overturned, repealed, replaced, or further amended in the future, and we cannot predict what effect further changes to the ACA
would have on our business.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Other legislative changes
have been proposed and adopted in the United States since the ACA was enacted. For example, in August 2011, the Budget Control Act of
2011, among other things, included reductions of Medicare payments to providers of 2%, which went into effect in April 2013 and, due to
subsequent legislative amendments to the statute, will remain in effect through 2030 unless additional Congressional action is taken.
The reductions have been suspended temporarily through December 2021 in response to the COVID-19 pandemic. In January 2013, the American
Taxpayer Relief Act of 2012 was signed into law, which, among other things, further reduced Medicare payments to several providers, including
hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover
overpayments to providers from three to five years.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Moreover, payment methodologies
may be subject to changes in healthcare legislation and regulatory initiatives. For example, CMS may develop new payment and delivery
models, including bundled payment models. In addition, recently there has been heightened governmental scrutiny over the manner in which
manufacturers set prices for their commercial products, which has resulted in numerous Congressional inquiries and proposed and enacted
state and federal legislation designed to, among other things, bring more transparency to product pricing, review the relationship between
pricing and manufacturer patient programs, and reform government program reimbursement methodologies for pharmaceutical products. At the
federal level, former President Trump used several means to propose or implement drug pricing reform, including through federal budget
proposals, executive orders, and policy initiatives. It is unclear whether the Biden administration will work to reverse those measures
or pursue similar or other policy initiatives, for example related to an independent review board or other mechanisms that would impact
drug pricing and reimbursement.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">On November 20, 2020,
CMS and the HHS Office of the Inspector General issued two final rules implementing changes to the Physician Self-Referral Law, or Stark
Law, and the Anti-Kickback Statute. These new rules provide new value-based enterprise exceptions and safe harbors to the Stark Law and
the Anti-Kickback Statute, as well as offer additional clarification in the form of updated definitions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Compliance with
Other Federal and State Laws or Requirements; Changing Legal Requirements</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">If any products that
we may develop are made available to authorized users of the Federal Supply Schedule of the General Services Administration, additional
laws and requirements apply. Products must meet applicable child-resistant packaging requirements under the U.S. Poison Prevention Packaging
Act. Manufacturing, labeling, packaging, distribution, sales, promotion and other activities also are potentially subject to federal and
state consumer protection and unfair competition laws, among other requirements to which we may be subject. The distribution of pharmaceutical
products is subject to additional requirements and regulations, including extensive recordkeeping, licensing, storage and security requirements
intended to prevent the unauthorized sale of pharmaceutical products, and state licensure.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The failure to comply
with any of these laws or regulatory requirements may subject firms to legal or regulatory action. Depending on the circumstances, failure
to meet applicable regulatory requirements can result in criminal prosecution, fines or other penalties, injunctions, exclusion from federal
healthcare programs, requests for recall, seizure of products, total or partial suspension of production, denial or withdrawal of product
approvals, relabeling or repackaging, or refusal to allow a firm to enter into supply contracts, including government contracts. Any claim
or action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal
expenses and divert our management&#8217;s attention from the operation of our business. Prohibitions or restrictions on marketing, sales
or withdrawal of future products marketed by us could materially affect our business in an adverse way.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Changes in regulations,
statutes or the interpretation of existing regulations could impact our business in the future by requiring, for example: (1) changes
to our manufacturing arrangements; (2) additions or modifications to product labeling or packaging; (3) the recall or discontinuation
of our products; or (4) additional recordkeeping requirements. If any such changes were to be imposed, they could adversely affect the
operation of our business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Government Regulation
of Drugs Outside of the United States</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">To market any product
outside of the United States, we would need to comply with numerous and varying regulatory requirements of other countries regarding safety
and efficacy and governing, among other things, clinical trials, marketing authorization, manufacturing, commercial sales and distribution
of our products. These regulatory requirements may be similarly complex and even more stringent in certain regards than those described
above. If we fail to comply with applicable regulatory requirements in the jurisdiction where we conduct clinical trials or seek regulatory
approvals, we may be subject to, among other things, fines, suspension or withdrawal of regulatory approvals, product recalls, seizure
of products, operating restrictions and criminal prosecution.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>Australia</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Conducting clinical trials
for therapeutic drug candidates in Australia is subject to regulation by Australian regulatory bodies. The Therapeutic Goods Administration,
or TGA, and the National Health and Medical Research Council set the codes of Good Clinical Practice, or GCP, for clinical research in
Australia, and compliance with these codes is mandatory. Australia has also adopted international codes, such as those promulgated by
the International Conference on Harmonization of Technical Requirements for Registration of Pharmaceuticals for Human Use, or the ICH.
The ICH guidelines must be complied with across all fields of clinical research, including those related to pharmaceutical quality, nonclinical
and clinical data requirements and trial designs. The basic requirements for preclinical data to support a first-in-human trial under
ICH guidelines are applicable in Australia. Requirements related to adverse event reporting in Australia are similar to those required
in other major jurisdictions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Clinical trials conducted
using &#8220;unapproved therapeutic goods&#8221; in Australia, being those which have not yet been evaluated by the TGA for quality, safety
and efficacy must occur pursuant to either the Clinical Trial Notification Scheme, or CTN Scheme, or the Clinical Trial Exemption Scheme,
or the CTX Scheme. In each case, the trial is supervised by a Human Research Ethics Committee, or an HREC, an independent review committee
set up under guidelines of the Australian National Health and Medical Research Council that ensures the protection of rights, safety and
well-being of human subjects involved in a clinical trial. An HREC does this by reviewing, approving and providing continuing examination
of trial protocols and amendments, and of the methods and material to be used in obtaining and documenting informed consent of the trial
subjects.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The CTN Scheme broadly
involves:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">completion of pre-clinical
laboratory and animal testing;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">submission to a HREC, of all
material relating to the proposed clinical trial, including the trial protocol;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the institution or organization
at which the trial will be conducted, referred to as the &#8220;Approving Authority&#8221;, giving final approval for the conduct of
the trial at the site, having regard to the advice from the HREC;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the investigator submitting
a &#8216;Notification of Intent to Conduct a Clinical Trial&#8217; form, or the CTN Form, to the TGA. The CTN form must be signed by
the sponsor, the principal investigator, the chairman of the HREC and a person responsible from the Approving Authority. The TGA does
not review any data relating to the clinical trial however CTN trials cannot commence until the trial has been notified to the TGA.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Under the CTX Scheme:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">a sponsor submits an application
to conduct a clinical trial to the TGA for evaluation and comment; and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">a sponsor must forward any
comments made by the TGA Delegate to the HREC(s) at the sites where the trial will be conducted.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">A sponsor cannot commence
a trial under the CTX Scheme until written advice has been received from the TGA regarding the application and approval for the conduct
of the trial has been obtained from an ethics committee and the institution at which the trial will be conducted.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Approval for inclusion
in the Australian Register of Therapeutic Goods, or ARTG, is required before a pharmaceutical product may be marketed (or imported, exported
or manufactured) in Australia. In order to obtain registration of the product on the ARTG, it is required that:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">adequate and well-controlled
clinical trials demonstrate the quality, safety and efficacy of the therapeutic product;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">evidence is compiled which
demonstrates that the manufacture of the therapeutic product complies with the principles of cGMP;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">manufacturing and clinical
data is derived to submit to the Advisory Committee on Prescription Medicines, which makes recommendations to the TGA as to whether or
not to grant approval to include the therapeutic product in the ARTG; and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">an ultimate decision is made
by the TGA whether to include the therapeutic product in the ARTG.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>European Economic
Area</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">For instance, in the
European Economic Area, or the EEA (comprising the 27 EU member states plus Iceland, Liechtenstein and Norway), medicinal products must
be authorized for marketing by using either the centralized authorization procedure or national authorization procedures.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">Centralized procedure&#8212;The
centralized procedure provides for the grant of a single marketing authorization by the European Commission that is valid throughout
the EEA. Pursuant to Regulation (EC) No. 726/2004, the centralized procedure is compulsory for specific products, including for medicines
produced by certain biotechnological processes, products designated as orphan medicinal products, advanced therapy products (gene therapy,
somatic cell therapy and tissue engineered products) and products with a new active substance indicated for the treatment of certain
diseases, which includes products for the treatment of cancer. For medicines that do not fall within one of the mandatory categories,
an applicant still has the option of submitting an application for a centralized marketing authorization to the European Medicines Agency,
or the EMA, as long as the medicine concerned contains a new active substance not authorized in the EEA prior to May 20, 2004, is a significant
therapeutic, scientific or technical innovation, or if its authorization would be in the interest of public health in the EEA. If pursuing
marketing authorization of a product candidate for a therapeutic indication under the centralized procedure, the EMA&#8217;s Committee
for Medicinal Products for Human Use, or the CHMP, is responsible for conducting an initial assessment of whether a product meets the
required quality, safety and efficacy requirements, and whether a product has a positive benefit/risk ratio. Under the centralized procedure
the maximum timeframe for the evaluation of a marketing authorization application, or the MAA, by the EMA is 210 days, excluding clock
stops, when additional written or oral information is to be provided by the applicant in response to questions asked by the CHMP. Clock
stops may extend the timeframe of evaluation of a MAA considerably beyond 210 days. Where the CHMP gives a positive opinion, it provides
the opinion together with supporting documentation to the European Commission, who make the final decision to grant a marketing authorization,
which is issued within 67 days of receipt of the EMA&#8217;s recommendation. Accelerated assessment might be granted by the CHMP in exceptional
cases, when a medicinal product is expected to be of major public health interest, particularly from the point of view of therapeutic
innovation. The timeframe for the evaluation of a MAA under the accelerated assessment procedure is 150 days, excluding clock stops,
but it is possible that the CHMP may revert to the standard time limit for the centralized procedure if it determines that the application
is no longer appropriate to conduct an accelerated assessment.</span></td>
</tr></table><div>
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<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">National authorization procedures&#8212;There
are also two other possible routes to authorize products for therapeutic indications in several countries, which are available for products
that fall outside the scope of the centralized procedure:</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left">o</td><td style="text-align: justify"><span style="font-size: 10pt">Decentralized procedure&#8212;Using
the decentralized procedure, an applicant may apply for simultaneous authorization in more than one EEA Member State for a medicinal
product that has not yet been authorized in any EEA Member State and that does not fall within the mandatory scope of the centralized
procedure.</span></td>
</tr></table><div>
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<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left">o</td><td style="text-align: justify"><span style="font-size: 10pt">Mutual recognition procedure&#8212;In
the mutual recognition procedure, a medicine is first authorized in one EEA Member State, in accordance with the national procedures
of that country. Following this, additional marketing authorizations can be sought from other EEA Member States in a procedure whereby
the countries concerned recognize the validity of the original, national marketing authorization.</span></td>
</tr></table><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In both cases, as with
the centralized procedure, the competent authorities of the EEA Member States assess the risk-benefit balance of the product on the basis
of scientific criteria concerning its quality, safety and efficacy before granting the marketing authorization.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In the EEA, new products
for therapeutic indications that are authorized for marketing (so called &#8220;references products&#8221;) qualify for eight years of
data exclusivity and an additional two years of market exclusivity upon marketing authorization. The data exclusivity period prevents
generic or biosimilar applicants from referencing the preclinical and clinical trial data contained in the dossier of the reference product
when applying for a generic or biosimilar marketing authorization in the EEA during a period of eight years from the date on which the
reference product was first authorized in the EEA. The additional two-year period of market exclusivity period prevents a successful generic
or biosimilar applicant from commercializing its product in the EEA until ten years have elapsed from the initial authorization of the
reference product in the EU. The overall ten-year period can be extended to a maximum of eleven years if, during the first eight years
of those ten years, the marketing authorization holder obtains an authorization for one or more new therapeutic indications which, during
the scientific evaluation prior to their authorization, are held to bring a significant clinical benefit in comparison with existing therapies.
Even if a compound is considered to be a new active substance so that the innovator gains the prescribed period of data exclusivity, another
company may market another version of the product if such company obtained marketing authorization based on a MAA with a complete independent
data package of pharmaceutical tests, preclinical tests and clinical trials.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The criteria for designating
an &#8220;orphan medicinal product&#8221; in the EEA are similar in principle to those in the United States. Under Article 3 of Regulation
(EC) 141/2000, in the EEA a medicinal product may be designated as orphan if it meets the following criteria (1) it is intended for the
diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition; and (2) either (a) such condition affects
no more than five in 10,000 persons in the EEA when the application is made, or (b) it is unlikely that the product, without the benefits
derived from orphan status, would generate sufficient return in the EEA to justify the investment needed for its development; and (3)
there exists no satisfactory method of diagnosis, prevention or treatment of such condition, or if such a method exists, the product will
be of significant benefit to those affected by the condition. Orphan medicinal products are eligible for financial incentives such as
reduction of fees or fee waivers and are, upon grant of a marketing authorization, entitled to ten years of market exclusivity for the
approved therapeutic indication. During this ten-year orphan market exclusivity period, no marketing authorization application shall be
accepted, and no marketing authorization shall be granted for a similar medicinal product for the same indication, although similar, is
safer, more effective or otherwise clinically superior than the authorized product; (ii) the marketing authorization holder of the authorized
product consents to a second orphan medicinal product application; or (iii) the marketing authorization holder of the authorized product
cannot supply enough orphan medicinal product. An orphan product can also obtain an additional two years of market exclusivity in the
EEA for pediatric studies. The ten-year market exclusivity may be reduced to six years if, at the end of the fifth year, it is established
that the product no longer meets the criteria for orphan designation, for example, if the product is sufficiently profitable not to justify
maintenance of market exclusivity. The application for orphan drug designation must be submitted before the application for marketing
authorization. The applicant will receive a fee reduction for the MAA if the orphan drug designation has been granted, but not if the
designation is still pending at the time the marketing authorization is submitted. Orphan drug designation does not convey any advantage
in, or shorten the duration of, the regulatory review and approval process.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Similar to the United
States, the various phases of non-clinical and clinical research in the European Union are subject to significant regulatory controls.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The Clinical Trials Directive
2001/20/EC, the Directive 2005/28/EC on GCP and the related national implementing provisions of the individual EU member states govern
the system for the approval of clinical trials in the European Union. Under this system, an applicant must obtain prior approval from
the national competent authority, or the NCA, of the EU member states in which the clinical trial is to be conducted. Furthermore, the
applicant may only start a clinical trial at a specific study site after the competent ethics committee, or the EC, has issued a favorable
opinion. The clinical trial application must be accompanied by, among other documents, an investigational medicinal product dossier (the
Common Technical Document) with supporting information prescribed by Directive 2001/20/EC, Directive 2005/28/EC, and the provisions of
the individual EU member states&#8217; legislation implementing the Clinical Trials Directive. Under the current regime (the EU Clinical
Trials Directive 2001/20/EC and corresponding national laws) all suspected unexpected serious adverse reactions to the investigated drug
that occur during the clinical trial have to be reported to the NCA and ECs of the Member State where they occurred.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In April 2014, the new
Clinical Trials Regulation, (EU) No 536/2014, or the Clinical Trials Regulation, was adopted, which is expected to apply following confirmation
of full functionality of the Clinical Trials Information System, the centralized European Union portal and database for clinical trials
foreseen by the regulation, through an independent audit. The regulation becomes applicable six months after the European Commission publishes
notice of this confirmation, which it has not yet done. The Clinical Trials Regulation will be directly applicable in all the EU member
states, repealing the current Clinical Trials Directive 2001/20/EC. Conduct of all clinical trials performed in the European Union will
continue to be bound by the Clinical Trials Directive and the Member States&#8217; national implementing legislation until the new Clinical
Trials Regulation becomes applicable. The extent to which ongoing clinical trials will be governed by the Clinical Trials Regulation will
depend on when the Clinical Trials Regulation becomes applicable and on the duration of the individual clinical trial. If a clinical trial
continues for more than three years from the day on which the Clinical Trials Regulation becomes applicable the Clinical Trials Regulation
will at that time begin to apply to the clinical trial. The new Clinical Trials Regulation aims to simplify and streamline the approval
of clinical trials in the European Union. The main characteristics of the regulation include: a streamlined application procedure via
a single-entry point, the &#8220;EU portal&#8221;; a single set of documents to be prepared and submitted for the application as well
as simplified reporting procedures for clinical trial sponsors; and a harmonized procedure for the assessment of applications for clinical
trials, which is divided in two parts. Part I is assessed by the competent authorities of all EU member states in which an application
for authorization of a clinical trial has been submitted (Member States concerned). Part II is assessed separately by each Member State
concerned. Strict deadlines have been established for the assessment of clinical trial applications. The role of the relevant ethics committees
in the assessment procedure will continue to be governed by the national law of the concerned EU member state. However, overall related
timelines will be defined by the Clinical Trials Regulation.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Outside the United States,
ensuring coverage and adequate payment for a product also involves challenges. Pricing of prescription pharmaceuticals is subject to government
control in many countries. Pricing negotiations with government authorities can extend well beyond the receipt of regulatory approval
for a product and may require a clinical trial that compares the cost-effectiveness of a product to other available therapies. The conduct
of such a clinical trial could be expensive and result in delays in commercialization. For example, in the European Union, pricing and
reimbursement schemes vary widely from country to country. Some countries provide that products may be marketed only after a reimbursement
price has been agreed upon. Some countries may require the completion of additional studies that compare the cost-effectiveness of a particular
product candidate to currently available therapies or so-called health technology assessments, in order to obtain reimbursement or pricing
approval. For example, the European Union provides options for its member states to restrict the range of products for which their national
health insurance systems provide reimbursement and to control the prices of medicinal products for human use. European Union member states
may approve a specific price for a product or may instead adopt a system of direct or indirect controls on the profitability of the company
placing the product on the market. Other member states allow companies to fix their own prices for products, but monitor and control prescription
volumes and issue guidance to physicians to limit prescriptions. Recently, many countries in the European Union have increased the amount
of discounts required on pharmaceuticals and these efforts could continue as countries attempt to manage healthcare expenditures, especially
in light of the severe fiscal and debt crises experienced by many countries in the European Union. The downward pressure on healthcare
costs in general, particularly prescription products, has become intense. As a result, increasingly high barriers are being erected to
the entry of new products. Political, economic and regulatory developments may further complicate pricing negotiations, and pricing negotiations
may continue after reimbursement has been obtained. Reference pricing used by various European Union member states, and parallel trade,
in other words, arbitrage between low-priced and high-priced member states, can further reduce prices. 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 products, if approved in those countries.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Government Regulation
of Data Collection outside of the United States</i></b></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In the event we conduct
clinical trials in the European Union, we will be subject to additional privacy restrictions. The collection and use of personal health
data in the EEA is governed by the General Data Protection Regulation, or the GDPR, which became effective on May 25, 2018. The GDPR applies
to the processing of personal data by any company established in the EEA and to companies established outside the EEA to the extent they
process personal data in connection with the offering of goods or services to data subjects in the EEA or the monitoring of the behavior
of data subjects in the EEA. The GDPR enhances data protection obligations for data controllers of personal data, including stringent
requirements relating to the consent of data subjects, expanded disclosures about how personal data is used, enhanced requirements for
securing personal data, requirements to conduct privacy impact assessments for &#8220;high risk&#8221; processing, limitations on retention
of personal data, mandatory data breach notification and &#8220;privacy by design&#8221; requirements, and creates direct obligations
on service providers acting as processors. The GDPR also imposes strict rules on the transfer of personal data outside of the EEA to countries
that do not ensure an adequate level of protection, like the United States. Failure to comply with the requirements of the GDPR and the
related national data protection laws of the EEA Member States, which may deviate slightly from the GDPR, may result in fines of up to
4% of a company&#8217;s global revenue for the preceding financial year, or &#8364;20 million, whichever is greater. Moreover, the GDPR
grants data subjects the right to claim material and non-material damages resulting from infringement of the GDPR. Given the breadth and
depth of changes in data protection obligations, maintaining compliance with the GDPR will require significant time, resources and expense,
and we may be required to put in place additional controls and processes ensuring compliance with the new data protection rules. There
has been limited enforcement of the GDPR to date, particularly in biopharmaceutical development, so we face uncertainty as to the exact
interpretation of the new requirements on any future trials and we may be unsuccessful in implementing all measures required by data protection
authorities or courts in interpretation of the new law. Further, the United Kingdom&#8217;s decision to leave the European Union, means
that it has in force its own legislation which is aligned with the GDPR, known as the Data Protection Act 2018. The requirements are similar
except that the United Kingdom is now regarded as a &#8220;third country&#8221; for the purposes of transfers of personal data from the
EEA. Transfers continue to flow freely from the UK to the EEA following an adequacy decision from the European Commission adopted on June
28, 2021 and valid for four years.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Data protection authority
activity differs across the EU, with certain authorities applying their own agenda which shows there is uncertainty in the manner in which
data protection authorities will seek to enforce compliance with GDPR. For example, it is not clear if the authorities will conduct random
audits of companies doing business in the EU, or if the authorities will wait for complaints to be filed by individuals who claim their
rights have been violated. Enforcement uncertainty and the costs associated with ensuring GDPR compliance are onerous and may adversely
affect our business, financial condition, results of operations and prospects.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Should we utilize third-party
distributors, compliance with such foreign governmental regulations would generally be the responsibility of such distributors, who may
be independent contractors over whom we have limited control.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Properties</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We neither own nor lease
any real property.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Human Capital</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In general, Lomond did
not have any full-time employees prior to the Merger. Instead, Lomond relied on its administrative services agreement with Eil. In connection
with the Merger, we replaced this administrative services agreement with an administrative services &amp; co-employment agreement, or
services agreement, with Abet Solutions Inc., or Abet Solutions. Following the Merger, we will not have any employees. Effective as of
November 1, 2024, we entered into consulting agreements with Dr. Dukes as our Chief Executive Officer and Chairman and with Dr. Savchuk
as our Chief Operating Officer and President.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our human capital resources
objectives include, as applicable, identifying, recruiting, retaining, motivating and integrating our existing and future employees. The
principal purposes of our equity incentive plans are to attract, retain and motivate selected employees, consultants and directors through
grants of stock-based compensation awards and payments of cash-based performance bonus awards, in order to increase stockholder value
and the success of our company by motivating our employees to perform to the best of their abilities and achieve our objectives.&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b>Litigation</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">From time to time, we
may become involved in various lawsuits and legal proceedings that arise in the ordinary course of business. However, litigation is subject
to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We are currently not
aware of any pending legal proceedings to which we are a party or of which any of our property is the subject, nor are we aware of any
such proceedings that are contemplated by any governmental authority.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b>Available Information</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our website is www.lomondther.com,
and we can be contacted at info@lomondther.com. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form
8-K and any amendments to such reports are filed with the SEC. We are subject to the informational requirements of the Exchange Act and
file or furnish reports, proxy statements, and other information with the SEC. Such reports and other information filed by us with the
SEC will be available free of charge on our website at www.lomondther.com when such reports are available on the SEC&#8217;s website.
The SEC maintains a website that contains reports, proxy and information statements, and other information that issuers file electronically
with the SEC at www.sec.gov.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The contents of the websites
referred to above are not incorporated into this filing. Further, our references to the URLs for these websites are intended to be inactive
textual references only.&#160;</p><div>

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</div><div><a id="a_009"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>MANAGEMENT&#8217;S
DISCUSSION AND ANALYSIS OF FINANCIAL<br/>
CONDITION AND RESULTS OF OPERATIONS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>You should read the
following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements
and the related notes and other financial information included in this prospectus. Some of the information contained in this discussion
and analysis or set forth elsewhere in this prospectus, including information with respect to our plans and strategy for our business,
includes forward-looking statements that involve risks and uncertainties as described under the heading &#8220;Special Note Regarding
Forward-Looking Statements&#8221; elsewhere in this prospectus. Accordingly, you should review the disclosure under the heading &#8220;Risk
Factors&#8221; in this prospectus for a discussion of important factors that could cause actual results to differ materially from the
results described in or implied by the forward-looking statements contained in the following discussion and analysis.</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>Unless otherwise indicated
or the context otherwise requires, references in this &#8220;Management&#8217;s Discussion and Analysis of Financial Condition and Results
of Operations&#8221; section to &#8220;we,&#8221; &#8220;us,&#8221;&#8220;our,&#8221; and &#8220;Lomond&#8221; refer to Lomond Therapeutics
Holdings, Inc., and references to &#8220;Legacy Lomond&#8221; refer to Lomond Therapeutics, Inc.</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Overview</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We are a biopharmaceutical
company focused on the discovery and development of multiple product candidates to address hematological malignancies. We are utilizing
a platform offered by Expert Systems, which is powered by AI/ML, to choose molecular mechanisms of pathology and to rationally design,
accelerate discovery and optimize development of potential therapies. Our goal is to utilize this AI/ML platform to become a leader in
developing novel breakthrough medicines to maximize clinical benefit when treating hematologic malignancies.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our initial focus is
on developing a next-generation inhibitor of FMS-like tyrosine kinase 3, or FLT3, and interleukin-1 receptor-associated kinase 4, or IRAK4,
for the treatment of acute myeloid leukemia, or AML.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We have incurred significant
operating losses since our inception in 2020. <span style="background-color: white">Our net losses were $5.4 million and $1.9 million
for the three months ended September 30, 2024 and 2023, respectively. Our net losses were $8.7 million and $5.8 million for the nine months
ended September 30, 2024 and 2023, respectively. As of September 30, 2024, we had an accumulated deficit of $30.4 million. </span>We do
not have any product candidates approved for sale and have not generated any revenue from product sales. To date, we have funded our operations
primarily with proceeds from sales of convertible preferred stock, promissory notes and &#8220;simple agreements for future equity&#8221;,
which we call SAFEs. We will incur significant expenses and increasing operating losses for the foreseeable future. Our expenses and capital
expenditures will increase substantially in connection with our ongoing activities, particularly if, and as we:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><tr style="vertical-align: top">
<td style="width: 0.25in"/><td style="width: 0.25in">&#9679;</td><td style="text-align: justify">Continue <span style="background-color: white">our research and development efforts to develop lomonitinib,
lonitoclax, and the product candidates licensed from related parties Eil Therapeutics, Inc., or Eil, and Bala Therapeutics, Inc., or Bala,
to identify and develop other product candidates and to submit investigational new drug applications, or INDs, for such product candidates;</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white" width="100%"><tr style="vertical-align: top">
<td style="width: 0.25in"/><td style="width: 0.25in">&#9679;</td><td style="text-align: justify"><span style="background-color: white">Pay in full the promissory notes issued by us in connection with
the Eil license agreement and the Bala license agreement;</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white" width="100%"><tr style="vertical-align: top">
<td style="width: 0.25in"/><td style="width: 0.25in">&#9679;</td><td style="text-align: justify"><span style="background-color: white">Conduct preclinical studies and commence clinical trials for our
investigational product candidates and future product candidates;</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white" width="100%"><tr style="vertical-align: top">
<td style="width: 0.25in"/><td style="width: 0.25in">&#9679;</td><td style="text-align: justify"><span style="background-color: white">Develop processes suitable for manufacturing and clinical development;</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white" width="100%"><tr style="vertical-align: top">
<td style="width: 0.25in"/><td style="width: 0.25in">&#9679;</td><td style="text-align: justify"><span style="background-color: white">Continue to develop and expand our manufacturing capabilities;</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white" width="100%"><tr style="vertical-align: top">
<td style="width: 0.25in"/><td style="width: 0.25in">&#9679;</td><td style="text-align: justify"><span style="background-color: white">Seek marketing approvals for any product candidates that successfully
complete clinical trials;</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white" width="100%"><tr style="vertical-align: top">
<td style="width: 0.25in"/><td style="width: 0.25in">&#9679;</td><td style="text-align: justify"><span style="background-color: white">Build commercial infrastructure to support sales and marketing for
our product candidates;</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white" width="100%"><tr style="vertical-align: top">
<td style="width: 0.25in"/><td style="width: 0.25in">&#9679;</td><td style="text-align: justify"><span style="background-color: white">Expand, maintain and protect our intellectual property portfolio;</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white" width="100%"><tr style="vertical-align: top">
<td style="width: 0.25in"/><td style="width: 0.25in">&#9679;</td><td style="text-align: justify"><span style="background-color: white">Hire additional clinical, regulatory and other business personnel;
and</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white" width="100%"><tr style="vertical-align: top">
<td style="width: 0.25in"/><td style="width: 0.25in">&#9679;</td><td style="text-align: justify"><span style="background-color: white">Operate as a public company.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We will not generate
revenue from sales of any of our product candidates unless and until we successfully complete development and clinical trials and obtain
regulatory approvals for one or more of our product candidates. If we obtain regulatory approval for any of our product candidates, we
expect to incur significant expenses related to developing our commercialization capability to support the sales, marketing and distribution
of our product candidates. Further, we expect to incur additional costs associated with operating as a public company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">As a result, we will
need substantial additional funding to support our continuing operations, research and development activities and generally pursue our
growth strategy. Until such time as we can generate significant revenue from sales of approved product candidates, if ever, we expect
to finance our operations through a combination of equity offerings, debt financings, or other dilutive and non-dilutive capital sources,
including collaborations with other companies, and other strategic transactions. We may be unable to raise additional funds or enter into
such other agreements or arrangements when needed on favorable terms, or at all. If we fail to raise capital or enter into such agreements
as, and when, needed, we may have to significantly delay, scale back, or discontinue the development and commercialization of one or more
of our product candidates.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Because of the numerous
risks and uncertainties associated with the development of pharmaceutical products, including lomonitinib and lonitoclax, we are unable
to accurately predict the timing or amount of increased expenses or when, or if, we will be able to achieve or maintain profitability.
Even if we are able to generate sales of our product candidates, we may not become profitable. If we fail to become profitable or are
unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced
to reduce or terminate our operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The Company&#8217;s financial
statements have been prepared on the basis of the Company continuing as a going concern, which assumes the continuity of operations, the
realization of assets and the settlement of liabilities and commitments as they come due in the normal course of business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>The Merger</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">On November 1, 2024,
Venetian 1 Acquisition Corp., Acquisition Sub and Legacy Lomond entered into the Merger Agreement. Pursuant to the terms of the Merger
Agreement, on the Closing Date, Acquisition Sub merged with and into Legacy Lomond, with Legacy Lomond continuing as the surviving corporation
and our wholly-owned subsidiary.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We expect to account
for the Merger as a reverse recapitalization. Legacy Lomond will be the deemed acquiror for accounting purposes and Lomond Therapeutics
Holdings, Inc. will be the successor SEC registrant, meaning that Legacy Lomond&#8217;s financial statements for previous periods will
be disclosed in our future periodic reports filed with the SEC. Under this method of accounting, Venetian 1 Acquisition Corp. will be
treated as the acquired company for financial statement reporting purposes. The Merger was intended to qualify as a tax-free reorganization
under the U.S. Internal Revenue Code.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">As a result of the Merger,
we have become the successor to a public reporting company, which will require the hiring of additional personnel and implementation of
procedures and processes to comply with public company regulatory requirements, including the Exchange Act, and customary practices. We
expect to incur additional expenses as a public company related to, among other things, directors&#8217; and officers&#8217; liability
insurance, director fees and additional internal and external accounting, legal and administrative resources, including increased audit
and legal fees.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Private Placement
Offering</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Immediately following
the Effective Time of the Merger, we issued an aggregate of $43.9 million of our shares of common stock pursuant to a private placement
offering and pursuant to the conversion of certain SAFEs issued by Legacy Lomond, which included (i) 8,241,375 shares of our common stock
issued and sold at a purchase price of $4.00 per share in cash (the &#8220;Offering Price&#8221;) pursuant to the Subscription Agreement;
(ii) 1,078,124 shares of our common stock at a price of $3.20 pursuant to the conversion of certain simple agreements for future equity,
or SAFEs, issued by Legacy Lomond in October 2024, and (iii) 2,083,332 shares of our common stock at a price of $3.60 pursuant to the
conversion of certain SAFEs issued by Legacy Lomond in August 2024. The aggregate gross proceeds from the Offering, including the aggregate
amount previously received from the issuance of the SAFEs, were $43.9&#160;million (before deducting placement agent fees and expenses
of the Offering).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Pursuant to the Subscription
Agreement, we may hold one or more subsequent closings prior to November 30, 2024, to sell up to an additional 4,021,125 shares at the
Offering Price.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font-family: Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b>Agreements
with Eil and Bala</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">On
October 17, 2024, we entered into the Eil license agreement and the Bala license agreements, respectively, which are described above
under the section titled &#8220;<i>Business&#8212;License Agreements</i>". The Eil license agreement and the Bala license agreement
became effective in October 2024 when we issued promissory notes to Eil and Bala, as the case may be. The principal amount of the promissory
notes with Eil and Bala are $1.7 million and $1.2 million, respectively. Each such promissory note bears interest at a rate of 7% per
annum, compounded annually and the principal and accrued interest under each note are due and payable on demand at any time after October
17, 2026. Each such promissory note may be repaid without penalty.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">Upon
the payment in full of the applicable promissory note, Eil and Bala have each agreed to assign to us all of the intellectual property
rights covered by the Eil license agreement and the Bala license agreement, as applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b>SAFEs</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">In
August 2024, we issued &#8220;simple agreements for future equity&#8221;, or the August SAFEs, for an aggregate purchase price of $7.5
million in a private financing round. Upon consummation of the Offering, the August SAFEs automatically converted into 2,083,332 shares
of common stock.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">In
October 2024, we issued &#8220;simple agreements for future equity,&#8221; or the Contribution SAFEs, after converting a $3.5 million
capital contribution made in May 2024 by Eilean Therapeutics, LLC, or Eilean, our former parent company. The Contribution SAFEs converted
into 1,078,124 shares of common stock upon consummation of the Offering. Such shares are held by TPAV, LLC and entities affiliated with
OrbiMed, each of which is a member of Eilean and received an equity distribution from Eilean.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b>Components
of Our Results of Operations</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b><i>Operating
Expenses</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><i>Research
and Development Expenses</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">Research
and development expenses consist primarily of costs incurred for our research activities and the development of our proprietary product
candidates, including lomonitinib and the product candidates licensed from related parties Eil and Bala, and include:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
<td style="font-family: Times New Roman, Times, Serif; width: 0.25in"/><td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Expenses
                                            i<span style="background-color: white">ncurred in connection with the preclinical and clinical
                                            development of our product candidates, including development and studies with contract research
                                            organizations, or CROs, and consultants;</span></span></td></tr></table><div>

</div><p style="font-family: Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
<td style="font-family: Times New Roman, Times, Serif; width: 0.25in"/><td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; background-color: white">The
                                            cost of contract manufacturing organizations, or CMOs, that manufacture drug product for
                                            use in our preclinical studies and clinical trials and perform analytical testing, scale-up
                                            and other services in connection with our development activities;</span></td></tr></table><div>

</div><p style="font-family: Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
<td style="font-family: Times New Roman, Times, Serif; width: 0.25in"/><td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; background-color: white">Costs
                                            related to other expenses, which include direct and allocated expenses for insurance and
                                            supplies;</span></td></tr></table><div>

</div><p style="font-family: Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
<td style="font-family: Times New Roman, Times, Serif; width: 0.25in"/><td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; background-color: white">Costs
                                            related to compliance with regulatory and quality requirements; and</span></td></tr></table><div>

</div><p style="font-family: Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
<td style="font-family: Times New Roman, Times, Serif; width: 0.25in"/><td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; background-color: white">Payments
                                            made under third-party licensing agreements</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">We
recognize external development costs based on an evaluation of the progress to completion of specific tasks using information provided
to us by our service providers. This process involves reviewing ongoing contracts, communicating with our personnel to identify services
that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service
when we have not yet been invoiced or otherwise notified of actual costs. Any nonrefundable advance payments that we make for goods or
services to be received in the future for use in research and development activities are recorded as prepaid expenses. Such amounts are
expensed as the related goods are delivered or the related services are performed, or until it is no longer expected that the goods will
be delivered or the services rendered.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">Research
and development activities are central to our business model. Product candidates in later stages of clinical development generally have
higher development costs than those in earlier stages of clinical development or those in preclinical development. As a result, we expect
that our research and development expenses will continue to increase substantially over the next several years as we advance into clinical
development toward potential regulatory approval, as well as conduct translational research efforts and other preclinical development,
including submitting regulatory filings for product candidates we may acquire or develop. In addition to the expected increase in third-party
costs, we expect that our personnel costs, including costs associated with stock-based compensation, will also increase substantially
in the future. In addition, as we advance into clinical trials and, subject to positive data and regulatory approvals, potentially commercialization,
we expect to incur additional expenses.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

</div><!-- Field: Page; Sequence: 126 --><div>
    </div><div style="margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: normal 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->119<!-- Field: /Sequence --></p><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">We
do not believe that it is possible at this time to accurately project total program-specific expenses through commercialization or any
product candidates we may acquire or develop. This is due to numerous factors, some of which are beyond our control, that are associated
with the successful development and commercialization of product candidates we may acquire or develop, including the following:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
<td style="font-family: Times New Roman, Times, Serif; width: 0.25in"/><td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
                                            scope, <span style="background-color: white">progress, outcome and costs of our preclinical
                                            studies and clinical trials for any product candidates we may develop;</span></span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
<td style="font-family: Times New Roman, Times, Serif; width: 0.25in"/><td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; background-color: white">Making
                                            arrangements with third-party manufacturers for preclinical, clinical and commercial supplies
                                            of any product candidates;</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
<td style="font-family: Times New Roman, Times, Serif; width: 0.25in"/><td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Successful
                                            patient <span style="background-color: white">enrollment in, and the initiation and completion
                                            of clinical trials;</span></span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
<td style="font-family: Times New Roman, Times, Serif; width: 0.25in"/><td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; background-color: white">Raising
                                            additional funds necessary to complete clinical development and the potential commercialization
                                            of any other product candidates;</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
<td style="font-family: Times New Roman, Times, Serif; width: 0.25in"/><td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; background-color: white">Receipt,
                                            timing and related terms of marketing approvals from applicable regulatory authorities;</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
<td style="font-family: Times New Roman, Times, Serif; width: 0.25in"/><td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; background-color: white">The
                                            extent of any required post-marketing approval commitments to applicable regulatory authorities;</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
<td style="font-family: Times New Roman, Times, Serif; width: 0.25in"/><td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; background-color: white">Developing
                                            and implementing marketing and reimbursement strategies;</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
<td style="font-family: Times New Roman, Times, Serif; width: 0.25in"/><td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; background-color: white">establishing
                                            sales, marketing and distribution capabilities and launching commercial sales of any products,
                                            if approved, whether alone or in collaboration with others;</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
<td style="font-family: Times New Roman, Times, Serif; width: 0.25in"/><td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; background-color: white">acceptance
                                            of any other products, if approved, by patients, the medical community and third-party payors;</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
<td style="font-family: Times New Roman, Times, Serif; width: 0.25in"/><td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; background-color: white">effectively
                                            competing with other therapies and/or changes in the standard of care;</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
<td style="font-family: Times New Roman, Times, Serif; width: 0.25in"/><td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; background-color: white">obtaining
                                            and maintaining third-party coverage and adequate reimbursement;</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
<td style="font-family: Times New Roman, Times, Serif; width: 0.25in"/><td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; background-color: white">obtaining
                                            and maintaining patent, trade secret and other intellectual property protection and regulatory
                                            exclusivity for our product candidates;</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
<td style="font-family: Times New Roman, Times, Serif; width: 0.25in"/><td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; background-color: white">protecting
                                            and enforcing our rights in our intellectual property portfolio;</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
<td style="font-family: Times New Roman, Times, Serif; width: 0.25in"/><td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; background-color: white">significant
                                            and changing government regulations; and</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
<td style="font-family: Times New Roman, Times, Serif; width: 0.25in"/><td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; background-color: white">maintaining
                                            an acceptable tolerability profile of the products following approval, if any.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">A
change in the outcome of any of these factors with respect to the development of any future product candidates could significantly change
the costs and timing associated with the development of that product candidate. We may never succeed in obtaining regulatory approval
for any product candidate.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><i>General
and Administrative Expenses</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">General
and administrative expenses consist primarily of professional fees and stock-based compensation.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">We
anticipate that our general and administrative expenses will continue to increase in the future as we increase our headcount to support
the continued advancement toward potential commercialization and the future development of any product candidates that we may pursue.
We also anticipate that we will continue to experience an increase in accounting, audit, legal, regulatory, compliance and director and
officer insurance costs as well as investor and public relations expenses associated with operating as a public company. Additionally,
if we believe a regulatory approval of any product candidate appears likely, we anticipate an increase in payroll and other employee-related
expenses as a result of our preparation for commercial operations to market and sell that product candidate.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b><i>Interest
Expense</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">Interest
expense primarily consists of interest on related-party promissory notes. The notes were assumed by Eilean in December 2023 and are no
longer outstanding.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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    </div><div style="margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: normal 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->120<!-- Field: /Sequence --></p><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b><i>Income
Taxes</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">There
were no provisions for income taxes for the years ended December 31, 2022 and 2023 because we have historically incurred operating losses
and we maintain a full valuation allowance against our net deferred tax assets.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b>Results
of Operations</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">The
following table sets forth our historical operating results for the periods indicated:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Year Ended<br/> December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="text-align: center">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="text-align: center">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><i>Comparison
of Years Ended December 31, 2023 and 2022</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b><i>Operating
Expenses</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><i>Research
and Development Expenses</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">Research
and development expenses increased by $5.6 million, or 134%, in the year ended December 31, 2023 compared to the year ended December
31, 2022. The increase of $5.6 million was primarily attributable to the start of clinical development of lomonitinib in the second half
of 2023.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><i>General
and Administrative Expenses</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">General
and administrative expenses decreased by $55,000, or 73%, in the year ended December 31, 2023 compared to the year ended December 31,
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b><i>Interest
Expense</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">Interest
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><i>Comparison
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><i>&#160;</i></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"></p><div>

</div><!-- Field: Page; Sequence: 128 --><div>
    </div><div style="margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: normal 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->121<!-- Field: /Sequence --></p><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b><i>Operating
Expenses</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><i>Research
and Development Expenses</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">Research
and development expenses increased by $2.1 million, or 115%, in the three months ended September 30, 2024 compared to the three months
ended September 30, 2023. The increase of $2.1 million was primarily attributable to the increase of clinical development of lomonitinib
in 2024 as compared to 2023.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><i>General
and Administrative Expenses</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">General
and administrative expenses increased by $0.5 million, or 20704%, in the three months ended September 30, 2024 compared to the three
months ended September 30, 2023. The increase of $0.5 million was primarily attributable to an increase in accounting expenses of $0.2
million and administrative service expenses of $0.2 million.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b><i>Loss
on change in fair value of SAFE liability</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">Loss
on change in fair value of SAFE liability increased by $0.9 million, or 100%, in the three months ended September 30, 2024 compared to
the three months ended September 30, 2023. The increase of $0.9 million was attributable to the Company&#8217;s issuance of SAFE instruments
to investors in the third quarter of 2024.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b><i>Interest
Expense</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">Interest
expense decrease by $51,760, or 100%, in the three months ended September 30, 2024 compared to the three months ended September 30, 2023.
Interest expense consists of interest on related-party promissory notes. The notes were assumed by Eilean in December 2023 and are no
longer outstanding as of September 30, 2024.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><i>Comparison
of the nine months ended September 30, 2024 and 2023</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Nine months ended<br/> September 30,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td colspan="2">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td></tr>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
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  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(5,654,336</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(2,182,327</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">39</td><td style="text-align: left">%</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(924,479</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(924,479</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">100</td><td style="text-align: left">%</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt; padding-left: 9pt">Interest expense - related party </td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 4pt">Net loss</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(8,761,142</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#160;</td>
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  </table><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b><i>Operating
Expenses</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><i>Research
and Development Expenses</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">Research
and development expenses increased by $1.4 million, or 24%, in the nine months ended September 30, 2024 compared to the nine months ended
September 30, 2023. The increase of $1.4 million was primarily attributable to the increase of clinical development of lomonitinib in
2024 as compared to 2023.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

</div><!-- Field: Page; Sequence: 129 --><div>
    </div><div style="margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: normal 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->122<!-- Field: /Sequence --></p><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><i>General
and Administrative Expenses</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">General
and administrative expenses increased by $0.7 million, or 4871%, in the nine months ended September 30, 2024 compared to the nine months
ended September 30, 2023. The increase of $0.7 million was primarily attributable to an increase in legal expenses of $0.2 million, accounting
expenses of $0.3 million, and administrative service expenses of $0.2 million.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b><i>Loss
on change in fair value of SAFE liability</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">Loss
on change in fair value of SAFE liability increased by $0.9 million, or 100%, in the nine months ended September 30, 2024 compared to
the nine months ended September 30, 2023. The increase of $0.9 million was attributable to the Company&#8217;s issuance of SAFE instruments
to investors in the third quarter of 2024.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b><i>Interest
Expense</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">Interest
expense decreased by $0.2 million, or 100%, in the nine months ended September 30, 2024 compared to the nine months ended September 30,
2023. Interest expense consists of interest on related-party promissory notes. The notes were assumed by Eilean in December 2023 and
are no longer outstanding as of September 30, 2024.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b>Liquidity
and Capital</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b>Resources</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b><i>Sources
of Liquidity</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">Since
our inception, we have incurred significant losses in each period and on an aggregate basis. We have not yet commercialized any product
candidates. We have not generated cash from our operations, and we do not expect to generate revenue from sales of any product candidates
or from other sources for several years, if at all. We have funded our operations primarily from sales of our preferred stock, issuance
of promissory notes, and issuance of SAFEs through September 30, 2024. As of September 30, 2024 and December 31, 2023, we had cash and
cash equivalents of $3.6 million and $0.8 million, respectively.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b><i>Cash
Flows</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">The
following table shows a summary of our cash flows for the periods indicated:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Nine months ended<br/> September 30,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Year ended<br/> December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2024</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2023</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2023</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 52%; text-align: left">Net cash used in operating activities</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">(8,133,064</td><td style="width: 1%; text-align: left">)</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">(2,151,952</td><td style="width: 1%; text-align: left">)</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">(8,412,873</td><td style="width: 1%; text-align: left">)</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">(1,516,853</td><td style="width: 1%; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 1.5pt">Net cash provided by financing activities</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">10,950,000</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">1,740,000</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">8,706,164</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">1,981,447</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 4pt">Net (decrease) increase in cash and cash equivalents</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">2,816,936</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(411,952</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">293,291</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">464,594</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  </table><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><i>Operating
Activities</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">During
the nine months ended September 30, 2024, we used $8.1 million of cash in operating activities. Cash used in operating activities reflects
our net loss of $8.7 million and changes in operating assets and liabilities relating to accrued expenses and other current liabilities
of $0.2 million, partially offset by non-cash adjustments of $0.9 million. Non-cash adjustments primarily consisted of changes in the
fair value of the Company&#8217;s SAFE liability of $0.9 million.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">During
the nine months ended September 30, 2023, we used $2.2 million of cash in operating activities. Cash used in operating activities reflects
our net loss of $5.8 million, partially offset by changes in operating assets and liabilities of $3.7 million relating to accrued expenses
and other current liabilities.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">Net
cash used in operating activities in 2023 was $8.4 million, which consisted of net loss of $9.9 million, primarily adjusted by changes
in accrued expenses and other current liabilities of $1.5 million.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">Net
cash used in operating activities in 2022 was $1.5 million, which consisted of net loss of $4.3 million, primarily adjusted by net cash
changes in accrued expenses and other liabilities of $2.8 million.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><i>Financing
Activities</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">During
the nine months ended September 30, 2024, financing activities provided $11.0 million of net cash, which was attributable to $7.5 million
in capital contributions by Eilean and $7.5 million in proceeds from the issuance of SAFEs to investors, partially offset by $4.0 million
in cash provided to Eilean in exchange for promissory notes.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">During
the nine months ended September 30, 2024, financing activities provided $1.7 million of net cash, attributable to capital contributions
by Eilean.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">Net
cash provided by financing activities was $8.7 million in 2023 and was due to capital contributions by Eilean.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">Net
cash provided by financing activities was $2.0 million in 2022 and was due to capital contributions by Eilean.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b><i>Funding
Requirements</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">As
of September, 2024, we had $3.6 million in cash and cash equivalents and an accumulated deficit of $30.4 million. We expect our expenses
to increase substantially in connection with our ongoing research and development activities, particularly as we continue research and
development, pursue clinical development of lomonitinib, lonitoclax and a menin inhibitor and repay our promissory notes with Eil and
Bala. In addition, we expect to incur additional costs associated with operating as a public company. As a result, we expect to incur
substantial operating losses and negative operating cash flows for the foreseeable future.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">We
believe that our cash and cash equivalents, after the consummation of the Merger and the Offering, will enable us to fund our planned
operations for at least twelve months following the date of this prospectus. However, we have based this estimate on assumptions that
may prove to be wrong, and we could exhaust our capital resources sooner than we expect.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">Because
of the numerous risks and uncertainties associated with research, development and commercialization of product candidates, we are unable
to estimate the exact amount of our working capital requirements. Our future funding requirements will depend on, and could increase
significantly as a result of, many factors, including:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
<td style="font-family: Times New Roman, Times, Serif; width: 0.25in"/><td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">the
                                            scope, <span style="background-color: white">timing, progress, results and costs of preclinical
                                            and clinical development activities;</span></span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
<td style="font-family: Times New Roman, Times, Serif; width: 0.25in"/><td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; background-color: white">the
                                            costs, timing and outcome of regulatory review of product candidates;</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
<td style="font-family: Times New Roman, Times, Serif; width: 0.25in"/><td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; background-color: white">the
                                            costs of future activities, including product sales, medical affairs, marketing, manufacturing
                                            and distribution, for any product candidates for which we receive marketing approval;</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
<td style="font-family: Times New Roman, Times, Serif; width: 0.25in"/><td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; background-color: white">the
                                            costs of establishing and maintaining arrangements with third party manufacturers for preclinical
                                            and clinical development activities and commercial supply of products that receive marketing
                                            approval, if any;</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
<td style="font-family: Times New Roman, Times, Serif; width: 0.25in"/><td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; background-color: white">the
                                            revenue, if any, received from commercial sale of our approved products, should any product
                                            candidates receive marketing approval;</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
<td style="font-family: Times New Roman, Times, Serif; width: 0.25in"/><td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; background-color: white">the
                                            cash requirements of any future acquisitions or discovery of product candidates;</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
<td style="font-family: Times New Roman, Times, Serif; width: 0.25in"/><td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; background-color: white">the
                                            cost and timing of attracting, hiring and retaining skilled personnel to support our operations
                                            and continued growth;</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
<td style="font-family: Times New Roman, Times, Serif; width: 0.25in"/><td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; background-color: white">the
                                            cost of implementing operational, financial and management systems;</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
<td style="font-family: Times New Roman, Times, Serif; width: 0.25in"/><td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; background-color: white">the
                                            costs of preparing, filing and prosecuting patent applications, maintaining and enforcing
                                            our intellectual property rights and defending intellectual property-related claims;</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><p style="margin-top: 0; margin-bottom: 0"></p><div>

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</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
<td style="font-family: Times New Roman, Times, Serif; width: 0.25in"/><td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; background-color: white">our
                                            &#160;ability to establish and maintain collaborations, strategic partnerships or marketing,
                                            distribution, licensing or other strategic arrangements with third parties on favorable terms,
                                            if at all; and</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
<td style="font-family: Times New Roman, Times, Serif; width: 0.25in"/><td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; background-color: white">the
                                            costs associated with operating as a public company.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; background-color: white">A
change in the outcome of any of these or other variables with respect to the development of lomonitinib, lonitoclax, a menin inhibitor
or any of the other product candidates we may develop, license or acquire in the future could significantly change the costs and timing
associated with our development plans. Further, our operating plans may change in the future, and we may need additional funds to meet
operational needs and capital requirements associated with such operating plans. Until such time, if ever, as we can generate substantial
product revenues, we expect to finance our cash needs through a combination of equity offerings, debt financings or other dilutive or
non-dilutive capital sources, which could include collaborations, strategic alliances or licensing arrangements. We currently have no
credit facility or committed sources of capital. Adequate additional funds may not be available to us on acceptable terms, or at all.
To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interests of
our existing stockholders may be diluted, and the terms of these securities may include liquidation or other preferences that could adversely
affect the rights of such stockholders. Debt financing, if available, may involve agreements that include restrictive covenants that
limit our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends, that
could adversely impact our ability to conduct our business.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">If
we raise additional funds through collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish
valuable rights to our technologies, future revenue streams, research program or product candidates, or grant licenses on terms that
may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required
to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market
product candidates that we would otherwise prefer to develop and market ourselves.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b><i>Contractual
Obligations and Commitments</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">We
do not currently have any material contractual obligations or other commitments except with respect to our promissory notes with Eil
and Bala. We entered into the promissory notes with Eil and Bala in October 2024. Such promissory notes each bear interest at a rate
of 7% per year, mature on October 17, 2026 and permit early repayment without penalty. The promissory notes have an aggregate principal
amount of $2.9 million.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b>Critical
Accounting Policies and Estimates</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">Our
financial statements are prepared in accordance with generally accepted accounting principles in the United States, or GAAP. The preparation
of our financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets,
liabilities, costs and expenses, and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates
on historical experience, known trends and events, and various other factors that we believe are reasonable under the circumstances,
the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent
from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates
under different assumptions or conditions. While our significant accounting policies are described in more detail in Note 2 to our audited
financial statements contained in this prospectus, we believe that the following accounting policies are those most critical to the judgments
and estimates used in the preparation of our financial statements.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><i>Research
and development costs</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">Research
and development costs consist primarily of cost of subcontractors and materials used for research and development activities, including
preclinical studies, clinical trials, materials and supplies, and professional services. The costs of services performed by others in
connection with the research and development activities of the Company, including research and development conducted by others, including
by our vendors, related parties and third-party service providers on behalf of the Company, is included in research and development costs
and expensed as the contracted work is performed. The Company accrues for costs incurred as the services are being provided by monitoring
the status of the project and the invoices received from its external service providers. Where contingent milestone payments are due
to third parties under research and development arrangements, the milestone payment obligations are expensed when the milestone results
are probable to be achieved.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><i>&#160;</i></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><i>Stock-Based
Compensation Expenses</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">The
Company measures its share-based awards, including grants issued by the Company or Eilean to the Company&#8217;s employees and non-employees,
based on their grant date fair value. The Company&#8217;s share-based awards as of September 30, 2024 include common units in its parent,
Eilean. The Company records compensation expense for these service-based awards beginning on the grant date over the requisite service
period in which the awards are expected to vest on a straight-line basis, subject to a minimum expense amount based on the awards that
have vested to date. The common units issued to option holders upon the exercise of option awards are authorized and previously unissued
common units of Eilean. Forfeitures are recognized as they occur.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">The
grant date fair value of employee and non-employee awards are determined using the Black-Scholes option pricing model, which includes
inputs such as the fair value of the Company&#8217;s common stock, expected term, risk-free rate, expected stock price volatility over
the expected term, and expected dividend yield. For all options granted, the Company calculated the expected term based on the simplified
method. The Company has no publicly available stock information and therefore, the Company used the historical volatility of the stock
price of similar publicly traded peer companies. The risk-free rate for periods within the contractual life of the option is based on
the U.S. Treasury yield curve in effect at the time of the grant. The Company does not anticipate that dividends will be distributed
in the near future.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b>Recent
Accounting Pronouncements</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">Recently
issued and adopted/unadopted accounting pronouncements are described in Note&#160;2 to our audited financial statements contained in
this prospectus.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b>Emerging
Growth Company Status</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">In
April 2012, the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, was enacted. Section 107 of the JOBS Act provides that
an &#8220;emerging growth company&#8221; may take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities
Act for complying with new or revised accounting standards. Therefore, an emerging growth company can delay the adoption of certain accounting
standards until those standards would otherwise apply to private companies. We have irrevocably elected to avail ourselves of this extended
transition period and, as a result, we will not be required to adopt new or revised accounting standards on the relevant dates on which
adoption of such standards is required for other public companies.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; background-color: white">In
addition, as an emerging growth company, we may take advantage of specified reduced disclosure and other requirements that are otherwise
applicable generally to public companies. These provisions include:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
<td style="font-family: Times New Roman, Times, Serif; width: 0.25in"/><td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">reduced
                                            disclosure about the compensation paid to our executive officers;</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
<td style="font-family: Times New Roman, Times, Serif; width: 0.25in"/><td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">not
                                            being required to submit to our stockholder&#8217;s advisory votes on executive compensation
                                            or golden parachute arrangements;</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
<td style="font-family: Times New Roman, Times, Serif; width: 0.25in"/><td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">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; and</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
<td style="font-family: Times New Roman, Times, Serif; width: 0.25in"/><td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="font-family: Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">an
                                            exemption from compliance with any new requirements adopted by the Public Company Accounting
                                            Oversight Board requiring mandatory audit firm rotation.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">We
may take advantage of these exemptions until such time that we are no longer an emerging growth company. We would cease to be an emerging
growth company on the date that is the earliest of (1) the last day of the fiscal year in which we have total annual gross revenues of
$1.235 billion or more; (2) the last day of our fiscal year following the fifth anniversary of the date of the completion of this offering;
(3) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or (4) the date on
which we are deemed to be a large accelerated filer under the rules of the Securities and Exchange Commission. We may choose to take
advantage of some but not all of these exemptions.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b>Internal
Control Over Financial Reporting</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">In
the preparation of our financial statements to meet the requirements of this prospectus, we determined that material weaknesses in our
internal control over financial reporting existed during 2023 and remained unremedied as of December 31, 2023. Such material weaknesses
related to having inadequate accounting personnel and controls over the recording of transactions, including those with related parties,
to achieve complete, accurate and timely financial accounting, reporting and disclosures, resulting in adjustments to several accounts
and disclosures. As defined in the standards established by the U.S. Public Company Accounting Oversight Board, a &#8220;material weakness&#8221;
is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility
that a material misstatement of our company&#8217;s annual or interim consolidated financial statements will not be prevented or detected
on a timely basis.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">We
are working to remediate the material weaknesses and are taking steps to strengthen our internal control over financial reporting. The
actions that we are taking are subject to ongoing executive management review and will also be subject to audit committee oversight (once
constituted). To date, we have hired external financial consultants and plan to add additional resources, technology and headcount as
warranted by the growth of the Company. We are still implementing formal policies, processes, and documentation procedures related to
our financial reporting process. We will not be able to fully remediate these material weaknesses until these steps have been completed
and have been operating effectively for a sufficient period of time. If we are unable to successfully remediate the material weaknesses,
or if in the future, we identify further material weaknesses in our internal control over financial reporting, we may not detect errors
on a timely basis and our consolidated financial statements may be materially misstated.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif"><b>Quantitative
and Qualitative Disclosures and Market Risk</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">We
are exposed to market risks in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial
position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily the result of fluctuations
in interest rates.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">As
of September 30, 2024, we had cash and cash equivalents of $3.6 million, which were primarily invested in money market funds, federal
agency notes, corporate debt securities, commercial paper and U.S. treasury bills. The securities in our investment portfolio are not
leveraged and are classified as available-for-sale due to their short-term nature. We currently do not engage in hedging activities.
Interest income is sensitive to changes in the general level of interest rates; however, due to the nature of these investments, an immediate
10% change in interest rates would not have a material effect on the fair market value of our investment portfolio.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif">Inflation
generally affects us by increasing our cost of labor and research and development contracts. We do not believe that inflation has had
a material effect on our financial results during the periods presented.</span></p><div>

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</span></p><div>

</div><div><a id="a_010"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>MANAGEMENT</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b>Executive Officers and Directors</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The following table provides
information regarding our executive officers and directors, including their ages as of November 21, 2024:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; background-color: white; border-collapse: collapse">
  <tr style="vertical-align: bottom">
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    <td style="border-bottom: Black 1.5pt solid; width: 8%; font-size: 10pt; text-align: center"><span style="font-size: 10pt"><b>AGE</b></span></td>
    <td style="width: 1%; padding-bottom: 1.5pt; font-size: 10pt; text-align: justify">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; width: 56%; font-size: 10pt; text-align: center"><span style="font-size: 10pt"><b>POSITION(S)</b></span></td></tr>
  <tr>
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    <td style="vertical-align: bottom; font-size: 10pt; text-align: justify">&#160;</td>
    <td style="vertical-align: bottom; font-size: 10pt; text-align: center">&#160;</td>
    <td style="vertical-align: bottom; font-size: 10pt; text-align: justify">&#160;</td>
    <td style="vertical-align: bottom; font-size: 10pt; text-align: justify">&#160;</td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="vertical-align: top; padding-left: 9pt; font-size: 10pt; text-align: justify"><span style="font-size: 10pt">Iain Dukes, MA, D.Phil.</span></td>
    <td style="vertical-align: bottom; font-size: 10pt; text-align: justify">&#160;</td>
    <td style="vertical-align: bottom; font-size: 10pt; text-align: center"><span style="font-size: 10pt">66</span></td>
    <td style="vertical-align: bottom; font-size: 10pt; text-align: justify">&#160;</td>
    <td style="vertical-align: bottom; font-size: 10pt; text-align: justify"><span style="font-size: 10pt">Chief Executive Officer, Chairman and Director</span></td></tr>
  <tr style="background-color: White">
    <td style="vertical-align: top; padding-left: 9pt; font-size: 10pt; text-align: justify"><span style="font-size: 10pt">Nikolay Savchuk, Ph.D.</span></td>
    <td style="vertical-align: bottom; font-size: 10pt; text-align: justify">&#160;</td>
    <td style="vertical-align: bottom; font-size: 10pt; text-align: center"><span style="font-size: 10pt">55</span></td>
    <td style="vertical-align: bottom; font-size: 10pt; text-align: justify">&#160;</td>
    <td style="vertical-align: bottom; font-size: 10pt; text-align: justify"><span style="font-size: 10pt">President, Chief Operating Officer and Director</span></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="vertical-align: top; font-size: 10pt; text-align: justify"><span style="font-size: 10pt"><b><i>Non-Employee&#160;Directors:</i></b></span></td>
    <td style="vertical-align: bottom; font-size: 10pt; text-align: justify">&#160;</td>
    <td style="vertical-align: bottom; font-size: 10pt; text-align: center">&#160;</td>
    <td style="vertical-align: bottom; font-size: 10pt; text-align: justify">&#160;</td>
    <td style="vertical-align: bottom; font-size: 10pt; text-align: justify">&#160;</td></tr>
  <tr style="background-color: White">
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    <td style="vertical-align: bottom; font-size: 10pt; text-align: center"><span style="font-size: 10pt">59</span></td>
    <td style="vertical-align: bottom; font-size: 10pt; text-align: justify">&#160;</td>
    <td style="vertical-align: bottom; font-size: 10pt; text-align: justify"><span style="font-size: 10pt">Director</span></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="vertical-align: top; padding-left: 9pt; font-size: 10pt; text-align: justify"><span style="font-size: 10pt">Eddie Wang Rodriguez</span></td>
    <td style="vertical-align: bottom; font-size: 10pt; text-align: justify">&#160;</td>
    <td style="vertical-align: bottom; font-size: 10pt; text-align: center"><span style="font-size: 10pt">57</span></td>
    <td style="vertical-align: bottom; font-size: 10pt; text-align: justify">&#160;</td>
    <td style="vertical-align: bottom; font-size: 10pt; text-align: justify"><span style="font-size: 10pt">Director</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Executive Officers</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>Iain Dukes, MA, D.Phil</i>,
has served as our Chief Executive Officer, Chairman and director since the consummation of the Merger and served as Chairman and director
of Lomond from January 2020 to the consummation of the Merger. Dr. Dukes is a Venture Partner at OrbiMed Advisors LLC, or OrbiMed, a global
investment firm, which he joined in August 2016. Dr. Dukes has served as the Chief Executive Officer of Viriom Inc. since February 2019
and has also served as the Executive Chair of Angiex Inc. since February 2020, the Chief Executive Officer and Chairman of Eilean Therapeutics
LLC since July 2022 and President of Dinas Therapeutics, Inc. since March 2022. In June 2018, Dr. Dukes co-founded Theseus Pharmaceuticals,
Inc. where he served as chairman and director until its acquisition by Concentra Biosciences, LLC in April 2024. In September 2017, Dr,
Dukes co-founded Kartos Therapeutics, Inc. and currently serves as President and as a member of its board of directors. Dr. Dukes previously
served as Senior Vice President and Head of Business Development and Licensing for Merck Research Laboratories from August 2013 through
May 2016. Prior to joining Merck, Dr. Dukes was Vice President of External Research &amp; Development at Amgen, Inc. from August 2010
to August 2013. He has also served as President and Chief Executive Officer, as well as a member of the Board of Directors of Essentialis
Therapeutics, a clinical stage biotechnology company focused on the treatment of rare metabolic diseases. Previously, Dr. Dukes was Vice
President of Scientific and Technology Licensing at GlaxoSmithKline, and he held various positions at Glaxo Wellcome, including Head of
Exploratory Development for Metabolic and Urogenital Diseases and Head of Ion Channel Drug Discovery Group. From October 2017 to July
2020, Dr. Dukes was a board member and Chairman of KaNDy Therapeutics, which was acquired by Bayer AG in September 2020. From January
2020 to June 2020, Dr. Dukes served as supervisory board member of Themis BioScience GmbH, until it was acquired by Merck &amp; Co. Dr.
Dukes also co-founded Telios Pharmaceuticals, Inc., where he serves as President. Dr. Dukes currently serves on the boards of directors
of NeRRe Therapeutics, Rathlin Therapeutics Limited and ENYO Therapeutics. Since August 2016, Dr. Dukes has also served as chairman of
the board of directors of Iovance Biotherapeutics Inc. In addition, he has served on the board of directors of Ikena Oncology, Inc. since
November 2016 and as executive chairman of Traws Pharma, Inc. since April 2024. He previously served on the board of directors of ReViral
Limited until its acquisition by Pfizer Inc. in June 2022. Dr. Dukes holds Master of Jurisprudence and Doctor of Philosophy degrees from
the University of Oxford, a Master of Science degree in Cardiovascular Studies from the University of Leeds and a Bachelor of Science
degree in Pharmacology from the University of Bath. We believe that Dr. Dukes is qualified to serve as a member of our board of directors
because of his extensive experience in the pharmaceutical industry, including his service in senior management roles.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;<i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>Nikolay Savchuk, Ph.D.</i>&#160;has
served as our President and Chief Operating Officer and as a director since the consummation of the Merger and served as Chief Executive
Officer and President of Lomond from March 2020 to the consummation of the Merger and director of Lomond from January 2020 to the consummation
of the Merger. Dr. Savchuk has been a Managing Director and Founder at Torrey Pines Investment LLC, an investment firm, since November
2002. Since March 2019, he has been a Member at i2020 Accelerator, which is an accelerator program backed by Torrey Pines Investment.
He has served on the board of directors of Traws Pharma, Inc. since April 2024. Dr. Savchuk has served as Chief Operating Officer and
President of Eilean Therapeutics, LLC since September 2022, as President and Chief Executive Officer of Eil Therapeutics, Inc. since February
2020, as President and Chief Executive Officer of Bala Therapeutics, Inc. since June 2018 and as Chief Executive Officer of Dinas Therapeutics,
Inc. since March 2022. In addition, since October 2018, he has been a Founder and Managing General Partner at Teal Ventures, a venture
capital fund. Since November 2015, he has been the Chairman of the board of directors of Viriom Inc., a private biotechnology company.
he has been the Chairman of the board of directors at ChemDiv, Inc. since November 2013, and he served as Chief Executive Officer at such
company from April 2008 to January 2022. Dr. Savchuk holds a Masters of Science degree in Physics and a Ph.D. in Applied Mathematics,
each from the Moscow Institute of Physics and Technology. We believe that Dr. Savchuk is qualified to serve as a member of our board of
directors because of his deep knowledge of our business and industry and his experience managing life sciences companies.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="background-color: white"><b><i>Non-Employee&#160;Directors</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>Carl Gordon, CFA,
Ph.D.</i>, has served as a member of our board of directors since the consummation of the Merger and was a director of Lomond from January
2020 to the consummation of the Merger. Dr. Gordon is a founding member and Managing Partner and Co-Head of Global Private Equity at OrbiMed,
an investment firm, and has served in such roles since 1998 and 2018, respectively. Dr. Gordon currently serves on the boards of directors
of Adicet Bio, Inc., ArriVent Biopharma Inc., Compass Therapeutics Inc., Keros Therapeutics Inc. and Terns Pharmaceuticals, Inc., as well
as several private companies. Dr. Gordon previously served on the boards of directors of several companies, including Alector Inc., Arsanis,
Inc. (which merged with X4 Pharmaceuticals, Inc.), Intellia Therapeutics, Inc., ARMO Biosciences, Inc., Gemini Therapeutics Inc. (merged
with Disc Medicine, Inc.), Kinnate Biopharma, Inc., ORIC Pharmaceuticals, Inc., Passage Bio Inc., Prevail Therapeutics Inc. (which was
acquired by Eli Lilly), Selecta Biosciences, Inc., SpringWorks Therapeutics Inc., Theseus Pharmaceuticals, Inc. (which was acquired by
Concentra Biosciences LLC) and Turning Point Therapeutics, Inc. (which was acquired by Bristol Myers Squibb Co.). Dr. Gordon received
a B.A. in Chemistry from Harvard College, a Ph.D. in Molecular Biology from the Massachusetts Institute of Technology, and was a Fellow
at The Rockefeller University. We believe that Dr. Gordon is qualified to serve on our Board of Directors due to his scientific expertise,
extensive business experience, and experience in venture capital and the life sciences industry.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>Eddie Wang Rodriguez</i>&#160;has
served as a member of our board of directors since the consummation of the Merger and was a director of Lomond from July 2022 to the consummation
of the merger. Since November 2018, Mr. Rodriguez has served as a co-founder and general partner of Teal Ventures, a venture capital fund.
Since November 2019, he has served as the General Counsel at Viriom, Inc., a private biotechnology company. M. Rodriguez has served as
general counsel at Aracari Biosciences, Inc. since February 2023, ScaleCapacity, Inc. since February 2024, Cognitive Medical Systems,
Inc. since January 2019, and Kurin, Inc. since July 2016. Prior to launching Teal Ventures, Mr. Rodriguez was a partner at several national
law firms and a nationally recognized corporate attorney in the venture capital and M&amp;A fields. Mr. Rodriguez made partner at Brobeck,
Phelger &amp; Harrison after just six years and in 2006, Mr. Rodriguez opened the San Diego office of Mintz Levin, where he served as
the managing partner of the Mintz Levin San Diego office and also served on the firmwide management committee. In 25 years of practice
in law firms, Mr. Rodriguez has represented many startup and emerging growth companies throughout their life cycles, numerous private
and public companies in connection with financing and M&amp;A transactions and counseled many companies in corporate governance matters,
in industries including life science, medical devices, technology, ecommerce and telecommunications. In addition to his legal practice,
Mr. Rodriguez has co-founded several companies in the medical device areas. Mr. Rodriguez has also served and continues to serve on numerous
boards of directors in various industries, including life science and medical devices. Mr. Rodriguez received a B.S. in Political Science
from the University of California, Los Angeles, and a J.D. from Stanford Law School. We believe that Mr. Rodriguez is qualified to serve
on our Board of Directors due to his extensive business experience, understanding of corporate governance and experience in venture capital
and the life sciences industry.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Board Composition</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our board of directors
currently consists of four members. In accordance with the terms of our amended and restated certificate of incorporation and amended
and restated bylaws, our board of directors is divided into three classes with staggered three-year terms. At each annual meeting of stockholders,
the successors to directors whose terms then expire will be elected to serve from the time of election and qualification until the third
annual meeting following election. Our directors will be divided among the three classes as follows:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the Class&#160;I director is
Eddie Wang Rodriguez, and his term will expire at the first annual meeting of stockholders to be held after the closing of the Merger;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the Class&#160;II director
is Carl Gordon, and his term will expire at the second annual meeting of stockholders to be held after the closing of the Merger; and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the Class&#160;III directors
are Iain Dukes and Nikolay Savchuk, and their terms will expire at the third annual meeting of stockholders to be held after the closing
of the Merger.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Directors in a particular
class are elected for three-year terms at the annual meeting of stockholders in the year in which their terms expire. As a result, only
one class of directors is elected at each annual meeting of our stockholders, with the other classes continuing for the remainder of their
respective three-year terms. Each director&#8217;s term continues until the election and qualification of his or her successor, or the
earlier of his or her death, resignation or removal.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our amended and restated
certificate of incorporation and amended and restated bylaws provide that only our board of directors can fill vacant directorships, including
newly-created seats. Any additional directorships resulting from an increase in the authorized number of directors would be distributed
pro rata among the three classes so that, as nearly as possible, each class would consist&#160;of&#160;one-third&#160;of&#160;the authorized
number of directors.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The classification of
our board of directors may have the effect of delaying or preventing changes in our control or management. See the section titled &#8220;<i>Description
of Capital Stock&#8212;Amended and Restated Certificate of Incorporation and Amended and Restated Bylaw Provisions</i>&#8221; elsewhere
in this prospectus.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Director Independence</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Currently, our securities
are not listed on a national securities exchange or on any inter-dealer quotation system that has a requirement that a majority of directors
be independent. Nevertheless, our board of directors has undertaken a review of the independence of each director using the standards
for director independence set forth in the rules of the Nasdaq Stock Market, or Nasdaq,&#160;<span style="background-color: white">and
considered whether any director has a material relationship with us that could compromise his or her ability to exercise independent judgment
in carrying out his or her responsibilities</span>.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Under the rules of Nasdaq,
a director will only qualify as an &#8220;independent director&#8221; if, in the opinion of that company&#8217;s board of directors, that
person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities
of a director.&#160;<span style="background-color: white">Based upon information requested from and provided by each director concerning
his background, employment and affiliations, including family relationships, our board of directors has determined that each of Dr. Gordon
and Mr. Rodriguez does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities
of a director and that he is &#8220;independent&#8221; as that term is defined under the rules of Nasdaq.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In making these determinations,
our board of directors considered the current and prior relationships that each&#160;non-employee&#160;director has with our company and
all other facts and circumstances our board of directors deemed relevant in determining independence, including the beneficial ownership
of our capital stock by each&#160;non-employee&#160;director, and the transactions involving them described in the section titled &#8220;<i>Certain
Relationships, Related Party Transactions</i>&#8221; elsewhere in this prospectus.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We anticipate that our
common stock will be quoted on the OTCQB Venture Market of the OTC Markets Group Inc., or the OTCQB. For companies subject to reporting
obligations under Section 13 or 15(d) of the Exchange Act, the rules of OTCQB do not provide for any requirements relating to director
independence or board committees.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In the future, we intend
to apply to have our common stock listed on a national securities exchange, such as Nasdaq, where our common stock is currently ineligible
to be listed. Under the rules of Nasdaq, independent directors must comprise a majority of a listed company&#8217;s board of directors
within 12 months from the date of listing.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In addition, the rules
of Nasdaq require that, subject to specified exceptions, (i) a majority of the members of a listed company&#8217;s audit, compensation
and nominating and corporate governance committees be independent within 90 days from the date of listing and (ii) each member of such
committees must be independent within 12 months from the date of listing. Audit committee members of companies listed on Nasdaq must also
satisfy the independence criteria set forth in Rule 10A-3 under the Securities Exchange Act of 1934, as amended, or the Exchange Act.
Our board of directors has determined that none of our current directors satisfy Nasdaq&#8217;s requirements for independence that apply
to audit committees. Our board of directors has also determined that each of its members can read and understand fundamental financial
statements and that Dr. Gordon qualifies as an audit committee financial expert within the meaning of SEC regulations and would meets
the financial sophistication requirements of Nasdaq.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In addition, to be considered
independent for purposes of Rule 10C-1 and under the rules of Nasdaq, the board of directors must affirmatively determine that each member
of the compensation committee is independent, including a consideration of all factors specifically relevant to determining whether the
director has a relationship to the company which is material to that director&#8217;s ability to be independent from management in connection
with the duties of a compensation committee member, including, but not limited to: (i) the source of compensation of such director, including
any consulting, advisory or other compensatory fee paid by the company to such director and (ii) whether such director is affiliated with
the company, a subsidiary of the company or an affiliate of a subsidiary of the company. Our board of directors has determined that Dr.
Gordon satisfies Nasdaq&#8217;s requirements for independence that apply to compensation committees.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">As of the date of this
prospectus, we would be a &#8220;controlled company&#8221; within the meaning of the Nasdaq rules because Eilean Therapeutics, LLC holds
more than 50% of the voting power for the election of our directors. As a result, we would be eligible to take advantage of exemptions
from certain corporate governance requirements, including the requirement to have a majority independent board, certain heightened independence
standards for compensation committee members and rules regarding the selection and recommendation of director nominees.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Family Relationships</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">There are no family relationships
among any of our directors or executive officers.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Role of the Board
in Risk Oversight</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">One of the key functions
of our board of directors is informed oversight of our risk management process. In particular, our board of directors is responsible for
monitoring and assessing strategic risk exposure. Our executive officers are responsible for the&#160;day-to-day&#160;management of the
material risks we face. Our board of directors administers its oversight function directly as a whole, including with respect to cybersecurity,
our financial reporting, accounting and auditing matters.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Committees of the
Board of Directors</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our board of directors
has not established any committees of the board of directors. Currently, our entire board of directors performs all functions that would
otherwise be performed by committees. Our board of directors does not have a policy with regard to the consideration of any director candidates
recommended by security holders. If we later apply to be listed on Nasdaq or another national securities exchange, we intend to expand
the size of our board and establish audit, compensation and nominating and corporate governance committees.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Compensation Committee
Interlocks and Insider Participation</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">During the year ended
December 31, 2023, neither Venetian-1 nor Lomond had a compensation committee or a separate committee performing equivalent functions.
During the year ended December 31, 2023, Venetian-1 did not compensate any of its directors or executive officers. In addition, during
the year ended December 31, 2023, all members of Lomond&#8217;s board of directors, including Dr. Dukes and Dr. Savchuk, participated
in deliberations of Lomond&#8217;s board of directors concerning executive officer compensation. None of our executive officers serves,
or served during the year ended December 31, 2023, as a member of the board of directors or compensation committee of any other entity
that has or has had one or more executive officers serving as a member of our board of directors.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Code of Conduct</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our board of directors
intends to adopt a Code of Conduct, or the Conduct Code. The Conduct Code will apply to all of our employees, officers and directors,
as well as all of our contractors, consultants, suppliers and agents in connection with their work for us. The Code will be available
on our website at&#160;www.lomondther.com. Information contained on or accessible through this website is not a part of this prospectus,
and the inclusion of such website address in this prospectus is an inactive textual reference only. Any amendments to the Conduct Code,
once adopted, or any waivers of its requirements, are expected to be disclosed on its website to the extent required by applicable rules
and exchange requirements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>&#160;</b></span></p><div>

</div><div><a id="a_011"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>EXECUTIVE
COMPENSATION</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">From the inception of
Venetian-1 Acquisition Corp. to the date when the Merger was consummated, no compensation was earned by or paid to its executive officers.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Upon the consummation
of the Merger, Lomond became the wholly-owned subsidiary of Venetian-1 Acquisition Corp., and Lomond&#8217;s senior management became
the senior management of Venetian-1 Acquisition Corp. The following table summarizes the compensation of Lomond&#8217;s principal executive
officer and its most highly compensated executive officer (other than its chief executive officer) who were serving as executive officers
as of December 31, 2023, whom we refer to herein as our &#8220;named executive officers.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Summary Compensation
Table</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The following table shows
information regarding the compensation awarded to, earned by or paid to each of Lomond&#8217;s named executive officers for the year ended
December&#160;31, 2023. Lomond had only two named executive officers during 2023.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Narrative Disclosure
to Summary Compensation Table</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">During 2023, Lomond&#8217;s
executive officers did not receive any compensation.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Currently, Dr. Dukes
and Dr. Savchuk are our consultants. We generally do not provide our named executive officers with perquisites or other personal benefits.
However, we do reimburse our named executive officers for their necessary and reasonable business and travel expenses incurred in connection
with their services to us.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Consulting Arrangements
with our Named Executive Officers</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">On November 1, 2024,
Lomond entered into a consulting agreement with each of Dr. Dukes and Dr. Savchuk and, as described below, granted our named executive
officers certain compensatory stock options. Prior to taking such actions, compensation paid to Lomond&#8217;s named executive officers
consisted of grants of common limited liability units by Eilean Therapeutics, LLC, or Eilean, prior to the Merger, under Eilean&#8217;s
2022 Equity Incentive Plan and, in the case of Dr. Dukes, vesting under a stock purchase agreement.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The grants of Eilean&#8217;s
limited liability units were paid in respect of services provided to Eilean and its subsidiaries, including Lomond, and were subject to
time-based service requirements. In October 2022, Dr. Dukes was granted (1) 1,243,416 common units in Eilean of which 50% were vested
as of July 7, 2022, with the remaining units vesting in equal monthly installments over the following 24 months and (2) 520,354 common
units, or the Second 2022 Tranche, in Eilean with a vesting commencement date of July 7, 2022 that vested or will vest in 48 equal monthly
installments. The units in the Second 2022 Tranche shall also vest if Eilean is subject to a change in control before Dr. Dukes&#8217;s
service as Eilean&#8217;s Chief Executive Officer terminates and Dr. Dukes is terminated by Eilean without cause or he resigns for good
reason within 12 months of such change in control. In October 2022, Dr. Savchuk was granted 1,121,836 common units in Eilean of which
50% were vested as of July 7, 2022, with the remaining units vesting in equal monthly installments over the following 24 months.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In February 2020, Dr.
Dukes purchased 120,000 shares of Lomond&#8217;s common stock pursuant to a stock purchase agreement. Such shares were subject to Lomond&#8217;s
right of repurchase and vested according to a time-based service requirement. In particular, the shares subject to such agreement vested
in equal installments over a 36-month period and became fully vested in February 2023. Pursuant to the exchange agreement described in
the section entitled &#8220;<i>Reorganization,</i>&#8221; each share of common stock issued by Lomond held by stockholders were exchanged
for limited liability units of Eilean, including such shares purchased by Dr. Dukes in February 2020.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>Consulting Agreement
with Dr. Dukes</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Lomond entered into a
consulting agreement with Dr. Dukes, our Chief Executive Officer and Chairman, on November 1, 2024. Pursuant to the terms of Dr. Dukes&#8217;
consulting agreement, Dr. Dukes serves as our Chief Executive Officer and Chairman, is eligible to receive consulting fees at an annual
rate of $400,000 and is eligible to receive an annual incentive payment equal to up to 50% of such annual consulting fees, subject to
the achievement of applicable performance metrics as determined by our board of directors. Dr. Dukes&#8217; consulting agreement contains
customary invention assignment and confidentiality provisions.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In connection with Dr.
Dukes&#8217; services to the Company, Dr. Dukes was granted an option to purchase 2,096,667 shares of Lomond&#8217;s common stock on September
19, 2024, or the Dukes option. The Dukes option vests as follows: commencing with the date on which Lomond completed a merger, consolidation
or share exchange with a special purpose acquisition company or other similar entity in which the common stock (or similar securities)
of the surviving or parent entity was registered under Section 12 of the Exchange Act on or prior to December 31, 2024, or the vesting
milestone, 1/48th&#160;of the shares underlying the Dukes option shall vest on each month thereafter, subject to Dr. Dukes continued services
to us through the relevant vesting dates. Pursuant to the Dukes option, the achievement of the vesting milestone is determined by our
board of directors in its discretion, and the vesting milestone was achieved when the Merger closed. In October 2024, the Board approved
an amendment to the vesting of the Dukes option, such that all remaining unvested shares subject to the Dukes option vest if (a)&#160;Lomond
is subject to a Change in Control before his service with the Company terminates and (b)&#160;he is subject to an Involuntary Termination
within 12 months after that Change in Control.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><i>Consulting Agreement with Dr. Savchuk</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Lomond entered into a
consulting agreement with Dr. Savchuk, our Chief Operating Officer and President, on November 1, 2024. Pursuant to the terms of Dr. Savchuk&#8217;s
consulting agreement, Dr. Savchuk serves as our Chief Operating Officer and President, is eligible to receive consulting fees at an annual
rate of $400,000 and is eligible to receive an annual incentive payment equal to up to 50% of such annual consulting fees, subject to
the achievement of applicable performance metrics as determined by our board of directors. Dr. Savchuk&#8217;s consulting agreement contains
customary invention assignment and confidentiality provisions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In connection with Dr.
Savchuk&#8217;s services to the Company, Dr. Savchuk was granted an option to purchase 1,258,000 shares of Lomond&#8217;s common stock
on September 19, 2024, or the Savchuk option. The Savchuk option vests as follows: commencing with the date on which Lomond completed
a merger, consolidation or share exchange with a special purpose acquisition company or other similar entity in which the common stock
(or similar securities) of the surviving or parent entity was registered under Section 12 of the Exchange Act on or prior to December
31, 2024, or the vesting milestone, 1/48th&#160;of the shares underlying the Savchuk option shall vest on each month thereafter, subject
to Dr. Savchuk continued services to us through the relevant vesting dates. Pursuant to the Savchuk option, the achievement of the vesting
milestone is determined by our board of directors in its discretion, and the vesting milestone was achieved when the Merger closed. In
October 2024, the Board approved an amendment to the vesting of the Savchuk option, such that all remaining unvested shares subject to
the Savchuk option vest if (a)&#160;Lomond is subject to a Change in Control before his service with the Company terminates and (b)&#160;he
is subject to an Involuntary Termination within 12 months after that Change in Control.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>Applicable Definitions
Relating to Involuntary Termination</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#8220;Cause&#8221; generally
means unauthorized disclosure of confidential information that causes material harm to us; the executive&#8217;s material breach of an
agreement with us; the executive&#8217;s material failure to comply with our written policies or rules; the executive&#8217;s conviction
of, or plea of &#8220;guilty&#8221; or &#8220;no contest&#8221; to, a felony under the laws of the United States or any state; the executive&#8217;s
gross negligence or willful misconduct in connection with the performance of his or her duties to us; the executive&#8217;s continuing
failure to perform assigned duties after receiving written notification of the failure from our board of directors; or the executive&#8217;s
failure to cooperate in good faith with a governmental or internal investigation of the company or its directors, officers or employees,
if we have requested such executive&#8217;s cooperation.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#8220;Change in Control&#8221;
generally means a dissolution, liquidation or winding up of the company, a sale of all or substantially all of our assets, or the consummation
of a merger or consolidation of the company into another entity following which holders of our capital stock do not hold a majority of
the voting power of the surviving or acquiring entity in substantially the same proportions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#8220;Resignation for
Good Reason&#8221; generally means a resignation by the executive within 12 months following a material diminution of base salary, a material
diminution of authorities, duties or responsibilities or our material breach of any agreement by us with such executive.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#8220;Involuntary Termination&#8221;
shall mean the executive&#8217;s involuntary discharge by us for reasons other than Cause, or the executive&#8217;s Resignation for Good
Reason.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Outstanding Equity
Awards as of December 31, 2023</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">As of December 31, 2023,
our named executive officers did not hold any outstanding equity awards in Lomond.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Equity Plans</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Lomond Stock Plan</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>General.&#160;</i>Lomond&#8217;s
board of directors adopted, and its stockholder approved, the Lomond Stock Plan in September 2024, or the Lomond Plan. The Lomond Plan
was terminated in connection with the closing of the Merger.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>Share Reserve</i>.
As of September 19, 2024, Lomond reserved 4,329,617 shares of its common stock for issuance under the Lomond Plan. Immediately prior to
the consummation of the Merger, 4,329,617 options were outstanding under the Lomond Plan at an exercise price of $1.30 per share. Unissued
shares subject to awards that expire, are forfeited, or are cancelled, shares reacquired by us and shares withheld in payment of the purchase
price or exercise price of an award or in satisfaction of withholding taxes will again become available for issuance under the 2024 Plan
(as defined below).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>2024 Equity Incentive
Plan</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our board of directors
adopted our 2024 Equity Incentive Plan, or the 2024 Plan, and the 2024 Plan was approved by our stockholders, in November 2024. The 2024
Plan became effective upon closing of the Merger. The 2024 Plan is intended to replace the Lomond Plan. However, awards outstanding under
the Lomond Plan will continue to be governed by their existing terms.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>Types of Awards.&#160;</i>The
2024 Plan provides for the grant of stock options, which may be ISOs or nonstatutory stock options, or NSOs, stock appreciation rights,
or SARs, restricted shares and restricted stock units, or RSUs, or collectively, awards.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>Administration.&#160;</i>The
2024 Plan is administered by our board of directors and/or by one or more committees to which our board of directors delegates such administration,
or the 2024 Plan Administrator, as applicable. Subject to the terms of the 2024 Plan, the 2024 Plan Administrator will have the complete
discretion to determine the eligible individuals who are to receive awards under the plan, to determine the terms and conditions of awards
granted under the 2024 Plan and to make all decisions related to the 2024 Plan and awards granted thereunder.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>Share Reserve.</i>&#160;The
number of shares of our common stock that may be issued under the 2024 Plan is equal to the sum of (x) 1,759,608 shares, plus (y)&#160;up
to 4,329,617 shares subject to awards granted under the Lomond Plan that were outstanding on the date of the Merger and that are subsequently
forfeited, expire or lapse unexercised or unsettled or are reacquired by us, plus (z)&#160;the annual increase in shares described below.
While a maximum of 4,329,617 shares may be added to the 2024 Plan from the Lomond Plan, since this assumes that all awards outstanding
under the Lomond Plan on the date of this merger will be forfeited, we expect the actual number of shares added to the 2024 Plan to be
less.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">On the first day of each
of our fiscal years during the term of the 2024 Plan, beginning on January 1, 2026 and ending on (and including) January 1, 2034, the
number of shares of our common stock that may be issued under the 2024 Plan will increase by a number of shares equal to the lesser of
(a) 5% of the outstanding shares on the last day of the immediately preceding fiscal year or (b)&#160;a number of shares (including zero)
that the 2024 Plan Administrator determines for purposes of the annual increase for that fiscal year.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">If options, stock appreciation
rights, restricted stock units or any other awards are forfeited, cancelled or expire, the shares subject to such awards will again be
available for issuance under the 2024 Plan. If stock appreciation rights are exercised or restricted stock units are settled, only the
number of shares actually issued upon exercise or settlement of such awards will reduce the number of shares available under the 2024
Plan. If restricted shares or shares issued upon exercise of an option are reacquired by us pursuant to a forfeiture provision, repurchase
right or for any other reason, then such shares will again be available for issuance under the 2024 Plan. Shares applied to pay the exercise
price of an option or satisfy withholding taxes related to any award will again become available for issuance under the 2024 Plan. To
the extent an award is settled in cash, the cash settlement will not reduce the number of shares available for issuance under the 2024
Plan.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Shares issued under the
2024 Plan may be authorized but unissued shares or treasury shares. As of the date hereof, no awards have been granted under the 2024
Plan.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>Incentive Stock Option
Limit.</i>&#160;No more than 22,003,540 shares of our common stock may be issued under the 2024 Plan upon the exercise of ISOs.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>Eligibility.</i>&#160;Employees
(including officers),&#160;non-employee&#160;directors and consultants who render services to us or a parent, subsidiary or affiliate
of us (whether now existing or subsequently established) are eligible to receive awards under the 2024 Plan. ISOs may only be granted
to employees of us or a parent or subsidiary of us (whether now existing or subsequently established). As of the date of this prospectus,
approximately seven persons (including 2 executive officers and one&#160;non-employee&#160;director) would be eligible to participate
in the 2024 Plan.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>International Participation.</i>&#160;The
2024 Plan Administrator has the authority to implement&#160;sub-plans&#160;(or otherwise modify applicable grant terms) for purposes of
satisfying applicable foreign laws, conforming to applicable market practices or for qualifying for favorable tax treatment under applicable
foreign laws, and the terms and conditions applicable to awards granted under any such&#160;sub-plan&#160;or modified award may differ
from the terms of the 2024 Plan. Any shares issued in satisfaction of awards granted under a&#160;sub-plan&#160;will come from the 2024
Plan share reserve.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>Repricing.</i>&#160;The
2024 Plan Administrator has full authority, without specific stockholder approval, to reprice (reduce the exercise price of) options and
stock appreciation rights or to approve programs in which options and stock appreciation rights are exchanged for cash or other equity
awards on terms the 2024 Plan Administrator determines.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>Stock Options.</i>&#160;A
stock option is the right to purchase a certain number of shares of stock at a fixed exercise price which, pursuant to the 2024 Plan,
may not be less than 100% of the fair market value of our common stock on the date of grant. Subject to limited exceptions, an option
may have a term of up to 10&#160;years and will generally expire sooner if the optionee&#8217;s service terminates. Options will vest
at the rate determined by the 2024 Plan Administrator. An optionee may pay the exercise price of an option in cash, or, with the administrator&#8217;s
consent, with shares of common stock the optionee already owns, with proceeds from an immediate sale of the option shares through a broker
approved by us, through a net exercise procedure or by any other method permitted by applicable law.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>Stock Appreciation
Rights</i>. A stock appreciation right provides the recipient with the right to the appreciation in a specified number of shares of stock.
The 2024 Plan Administrator determines the exercise price of stock appreciation rights granted under the 2024 Plan, which may not be less
than 100% of the fair market value of our common stock on the date of grant. Subject to limited exceptions, a stock appreciation right
may have a term of up to 10&#160;years and will generally expire sooner if the recipient&#8217;s service terminates. SARs will vest at
the rate determined by the 2024 Plan Administrator. Upon exercise of a SAR, the recipient will receive an amount in cash, stock, or a
combination of stock and cash determined by the 2024 Plan Administrator, equal to the excess of the fair market value of the shares being
exercised over their exercise price.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>Tax Limitations on
Incentive Stock Options.</i>&#160;The aggregate fair market value, determined at the time of grant, of our common stock with respect to
ISOs that are exercisable for the first time by an optionholder during any calendar year under all of our stock plans may not exceed $100,000.
Options or portions thereof that exceed such limit will generally be treated as NSOs. No ISO may be granted to any person who, at the
time of the grant, owns or is deemed to own stock possessing more than 10% of our total combined voting power or that of any of our affiliates
unless the option exercise price is at least 110% of the fair market value of the stock subject to the option on the date of grant and
the term of the ISO does not exceed five years from the date of grant.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>Restricted Stock Awards.</i>&#160;Shares
of restricted stock may be issued under the 2024 Plan for such consideration as the 2024 Plan Administrator may determine, including cash,
services rendered or to be rendered to us, promissory notes or such other forms of consideration permitted under applicable law. Restricted
shares may be subject to vesting, as determined by the 2024 Plan Administrator. Recipients of restricted shares generally have all of
the rights of a stockholder with respect to those shares, including voting rights, however any dividends and other distributions on restricted
shares will generally be subject to the same restrictions and conditions as the underlying shares.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>Restricted Stock Units.</i>&#160;A
restricted stock unit is a right to receive a share, at no cost to the recipient, upon satisfaction of certain conditions, including vesting
conditions, established by the 2024 Plan Administrator. RSUs vest at the rate determined by the 2024 Plan Administrator and any unvested
RSUs will generally be forfeited upon termination of the recipient&#8217;s service. Settlement of restricted stock units may be made in
the form of cash, common stock or a combination of cash and common stock, as determined by the 2024 Plan Administrator. Recipients of
restricted stock units generally will have no voting or dividend rights prior to the time the vesting conditions are satisfied and the
award is settled. At the 2024 Plan Administrator&#8217;s discretion and as set forth in the applicable restricted stock unit agreement,
restricted stock units may provide for the right to dividend equivalents which will generally be subject to the same conditions and restrictions
as the restricted stock units to which they pertain.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>Other Awards.</i>&#160;The
2024 Plan Administrator may grant other awards based in whole or in part by reference to our common stock and may grant awards under other
plans and programs that will be settled with shares issued under the 2024 Plan. The 2024 Plan Administrator will determine the terms and
conditions of any such awards.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>Changes to Capital
Structure.</i>&#160;In the event of certain changes in capitalization, including a stock split, reverse stock split or stock dividend,
proportionate adjustments will be made in the number and kind of shares available for issuance under the 2024 Plan, the number of shares
that may be added to the 2024 Plan from Lomond&#8217;s 2024 Plan, the limit on the number of shares that may be issued under the 2024
Plan as ISOs, the number and kind of shares subject to each outstanding award and/or the exercise or repurchase price applicable to each
outstanding award.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>Corporate Transactions.</i>&#160;If
we are party to a merger, consolidation or certain change in control transactions, each outstanding award will be treated as described
in the definitive transaction agreement or as the 2024 Plan Administrator determines, which may include the continuation, assumption or
substitution of an outstanding award, the cancellation of an outstanding award after an opportunity to exercise or the cancellation of
an outstanding award in exchange for a payment equal to the value of the shares subject to such award less any applicable exercise price.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>Change of Control.&#160;</i>The
2024 Plan Administrator may provide, in an individual award agreement or in any other written agreement with a participant, that the award
will be subject to acceleration of vesting and exercisability in the event of a change of control or in connection with a termination
of employment in connection with or following a change in control.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>Transferability of
Awards.</i>&#160;Unless the 2024 Plan Administrator determines otherwise, an award generally will not be transferable other than by beneficiary
designation, a will or the laws of descent and distribution. The 2024 Plan Administrator may permit transfer of an award in a manner consistent
with applicable law.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>Amendment and Termination.</i>&#160;The
2024 Plan Administrator may amend or terminate the 2024 Plan at any time. Any such amendment or termination will not affect outstanding
awards. If not sooner terminated, the 2024 Plan will terminate automatically in 2034, 10&#160;years after its adoption by our board of
directors. Shareholder approval is not required for any amendment of the 2024 Plan, unless required by applicable law or exchange listing
standards</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Director Compensation</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Venetian-1 did not provide
compensation to&#160;any members of its board of directors during the year ended December 31, 2023. In addition, Lomond did not provide
compensation to any non-employee&#160;members of its board of directors in their capacity as such during the year ended December&#160;31,
2023. Lomond historically reimbursed its&#160;non-employee&#160;directors for reasonable travel and&#160;out-of-pocket&#160;expenses incurred
in connection with attending board of director and committee meetings.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Non-Employee&#160;Director
Compensation Program</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our board of directors
intends to adopt a compensation program for our non-employee directors that will consist of annual retainer fees and long-term equity
awards, the material terms of which have not yet been determined.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Disclosure of Action
to Recover Erroneously Awarded Compensation</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">To date, our securities
have not been listed on a national securities exchange. As a result, we have not been required to adopt, nor have we adopted, a compensation
recovery policy required by listing standards adopted pursuant to&#160;Rule 10D-1 under the Exchange Act.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="margin: 0">&#160;</p><div>

</div><div><a id="a_012"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>CERTAIN
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="background-color: white">We
describe below all the transactions to which we, since the consummation of the Merger, or Lomond, since January 1, 2021, have been a party
in which the amount involved exceeded the lesser of (i)&#160;$120,000 or (ii)&#160;one percent of the average of its total assets at year
end for the last two completed fiscal years; and in which any of our or Lomond&#8217;s executive officers, directors or beneficial holders
of more than 5% of our or Lomond&#8217;s capital stock (or any immediate family member of, or person sharing the household with, any of
these individuals or entities), which are collectively referred to as a related person, had or will have a direct or indirect material
interest, other than compensation arrangements which are described in the section titled &#8220;<i>Executive Compensation</i>&#8221; and
the Registration Rights Agreement describe in the section titled &#8220;</span><i>Description of the Merger, the Offering, and Related
Transactions&#8212;Registration Rights Agreement</i>.&#8221; The following description is historical and has not been adjusted to give
effect to the Merger.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Series Seed Preferred
Stock Financing</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Between March 2020 and
August 2021, Lomond issued and sold an aggregate of 13,661,416 shares of Series Seed preferred stock, par value $0.0001 per share, or
Series Seed Preferred Stock, at a purchase price of&#160;approximately $0.402594 per share for an aggregate purchase price of approximately
$5.5&#160;million.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The following table summarizes
purchases of shares of Series Seed Preferred Stock by Lomond&#8217;s executive officers, directors and holders of more than 5% of its
capital stock:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="font-weight: bold; border-bottom: Black 1.5pt solid"><span style="font-size: 10pt"><b>Purchaser&#160;<sup>(1)</sup></b></span></td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Shares of<br/>
 Series&#160;Seed<br/>
Preferred<br/> Stock</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Total<br/> Purchase<br/> Price</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 76%; text-align: left; padding-bottom: 1.5pt; text-indent: -17.65pt; padding-left: 17.65pt"><span style="font-size: 10pt">Entities affiliated with OrbiMed&#160;<sup>(2)</sup></span></td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 9%; text-align: right">6,830,708</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">2,750,000.41</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="padding-bottom: 1.5pt; text-indent: -17.65pt; padding-left: 17.65pt"><span style="font-size: 10pt">TPAV, LLC<sup>(3)</sup></span></td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">6,830,708</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">2,750,000.41</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; padding-bottom: 4pt; text-indent: -17.65pt; padding-left: 17.65pt">Total</td><td style="font-weight: bold; padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right">13,661,416</td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right">5,500,000.82</td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left">&#160;</td></tr>
  </table><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(1)</span></td><td style="text-align: justify"><span style="font-size: 10pt">See &#8220;<i>Security Ownership
of Certain Beneficial Owners and Management</i>&#8221; for additional information about shares held by these entities.</span></td>
</tr></table><div>

</div><p style="margin: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(2)</span></td><td style="text-align: justify"><span style="font-size: 10pt">OrbiMed Private Investments
VII, LP, an entity affiliated with OrbiMed, held more than 5% of our capital stock at the time of the transaction. Dr. Gordon, one of
our directors is a member of OrbiMed.</span></td>
</tr></table><div>

</div><p style="margin: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(3)</span></td><td style="text-align: justify"><span style="font-size: 10pt">Nikolay Savchuk is our President
and Chief Operating Officer, one of our directors and an affiliate of TPAV, LLC. In addition, at the time of the transaction, there was
an additional member of Lomond&#8217;s board who was an affiliate of Torrey Pines.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Pursuant to the exchange
agreement described further in the section below titled &#8220;<i>Reorganization</i>,&#8221; each share of Seed Preferred Stock held by
the stockholders was exchanged for limited liability units of Eilean, and Lomond became a direct, wholly-owned subsidiary of Eilean. Dr.
Dukes is the Chief Executive Officer and Chairman of Eilean and Dr. Savchuk is the Chief Operating Officer and President of Eilean.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Services Agreements</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In March 2020, we entered
into an administrative services agreement with Eil, an entity in which our 5% or greater stockholders at the time, which were entities
affiliated with OrbiMed and Torrey Pines, and Eilean, since the reorganization described above, had or have an indirect material interest.
Further, Dr. Savchuk, our President and Chief Operating Officer is President and Chief Executive Officer of Eil. Pursuant to such administrative
services agreement, Eil agreed to provide Lomond, directly or indirectly through its contractors, administrative support services and
access to Eil&#8217;s staff&#8217;s management experience and knowledge. Such services included general management and operations, including
financial and accounting services, and various tax-related services, among other services. Pursuant to the administrative services agreement,
we paid Eil $4.0 million, $0.3 million, and $1.0 million during the years ended December 31, 2021, 2022 and 2023, respectively. The administrative
services agreement with Eil was terminated in October 2024.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"></p><div>

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    </div><div style="margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: normal 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->138<!-- Field: /Sequence --></p><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In connection with such
termination, in October 2024, we entered into an administrative services &amp; co-employment agreement, or services agreement, with Abet
Solutions. Pursuant to such use of services agreement, Abet Solutions agreed to provide Lomond, directly or indirectly through its contractors,
administrative support services and access to staff&#8217;s management experience and knowledge. Such services included general management
and operations, including financial and accounting services, insurance program marketing and administration and various tax-related services.
In exchange, Lomond agreed to, among other items, pay cash compensation and indemnify Abet Solutions in certain instances. We and Eil
share certain employment-related expenses in connection with the Abet services agreement. Dr. Savchuk, our President and Chief Operating
Officer, has a material direct interest in Abet Solutions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>AI/ML Platform</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Since July 2024, Lomond
has used an AI/ML platform offered by Expert Systems pursuant to a master research and development agreement. A family member of Dr. Savchuk,
our President and Chief Operating Officer, has a direct interest in Expert Systems. The Company expects to pay Expert Systems approximately
$670,000 during the year ending December 31, 2024.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Research and Development
Agreement</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Since March 2020, Lomond
purchased research and development services from ChemDiv, Inc., an entity in which Dr. Savchuk, our President and Chief Operating Officer,
was Chief Executive Officer from November 2013 to January 2022. Lomond did not enter into any agreements with ChemDiv, Inc. other than
agreeing to such company&#8217;s standard terms and conditions. During the fiscal years ended December 31, 2021, 2022 and 2023, Lomond
paid ChemDiv, Inc. $5.3 million, $4.0 million and $6.2 million, respectively.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Master Services Agreement</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In January 2023, Lomond and Eilean Therapeutics AU Pty Ltd., or Eilean
AU, a CRO, entered into a master services agreement pursuant to which Eilean AU provides Lomond with clinical trial-related services and
data and research services. Lomond agreed to pay fees under the agreement as well as a 1% royalty on the gross revenue on commercialized
products produced under the agreement. Eilean AU is a wholly owned subsidiary of Eilean Therapeutics, LLC, or Eilean, Lomond&#8217;s former
parent company and currently greater than 5% holder of our common stock. Dr. Dukes is the Chief Executive Officer and Chairman of Eilean
and Dr. Savchuk is the Chief Operating Officer and President of Eilean. During the fiscal years ended December 31, 2021, 2022 and 2023,
Lomond paid Eilean AU $0, $0 and $3.0 million, respectively.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;<b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Promissory Notes</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Between May 2022 and
January 2023, Lomond issued to Eil and Dinas Therapeutics, Inc., each wholly-owned subsidiaries of Eilean, an aggregate of approximately
$5.1 million of promissory notes with interest rates between 2.5% and 5%, or the Eilean promissory notes. In December 2023, Eilean assumed
the Eilean promissory notes and forgave all of such outstanding indebtedness. Lomond agreed to treat such debt as a capital contribution
to Lomond. As a result, as of December 7, 2023, Lomond had no outstanding indebtedness pursuant to any of the Eilean promissory notes.
While the Eilean promissory notes were outstanding, Lomond did not make any payments in respect of principal or interest. Eilean is a
greater than 5% holder of our common stock. Dr. Dukes is the Chief Executive Officer and Chairman of Eilean and President of Dinas. Dr.
Savchuk is the Chief Operating Officer and President of Eilean, President and Chief Executive Officer of Eil, and Chief Executive Officer
of Dinas.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"></p><div>

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    </div><div style="margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: normal 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->139<!-- Field: /Sequence --></p><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b>Reorganization</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In July 2022, Lomond
was reorganized pursuant to a share contribution and exchange agreement dated as of July 5, 2022, by and between Eilean, Lomond and the
other parties thereto, or the exchange agreement. Pursuant to the exchange agreement, stockholders of Lomond contributed all of the capital
stock in Lomond to Eilean in exchange for limited liability units of Eilean and Lomond became a direct, wholly-owned subsidiary of Eilean.
Pursuant to the exchange agreement, Lomond agreed to terminate its then-existing stockholders agreement dated March 5, 2020, by and between
Lomond and certain holders of its preferred stock, or the stockholders agreement, and agreed to the termination of the Series Seed Preferred
Stock Purchase Agreement dated March 5, 2020, as amended, by and between Lomond and certain investors, or the purchase agreement. Pursuant
to this agreement, Lomond waived its right of first refusal under the stockholders agreement and terminated the stockholders agreement
and the purchase agreement. In addition, all outstanding compensatory stock options to purchase shares of Lomond&#8217;s common stock
were cancelled in connection with this reorganization. Dr. Dukes, our Chief Executive Officer and Chairman, is the Chief Executive Officer
and Chairman of Eilean. Further, Dr. Savchuk, our Chief Operating Officer and President, is the Chief Operating Officer and President
of Eilean.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>SAFEs Issued Based
on Capital Contribution in May 2024</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In May 2024, Eilean,
Lomond&#8217;s former parent company, made a capital contribution to Lomond in an aggregate amount of $3.5 million. In October 2024, Eilean
requested that such capital contribution be converted to &#8220;simple agreements for future equity,&#8221; or the Contribution SAFEs,
and immediately distributed to Eilean&#8217;s members, TPAV, LLC and entities affiliated with OrbiMed. Upon consummation of the Offering,
the Contribution SAFEs automatically converted into 1,078,124 shares of common stock.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The following table summarizes
the Contribution SAFEs held by Lomond&#8217;s executive officers, directors and holders of more than 5% of its capital stock immediately
prior to the closing of the merger:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="font-weight: bold; border-bottom: Black 1.5pt solid"><span style="font-size: 10pt"><b>Purchaser&#160;<sup>(1)</sup></b></span></td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Number of<br/> Shares of<br/> Common Stock<br/> Issued Upon&#160;the<br/> Conversion&#160;of<br/> the&#160;Contribution<br/> SAFEs</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Total<br/> Purchase<br/> Price</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 76%; text-align: left; padding-bottom: 1.5pt"><span style="font-size: 10pt">Entities affiliated with OrbiMed<sup>(2)</sup></span></td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 9%; text-align: right">539,062</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,725,000.00</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="padding-bottom: 1.5pt"><span style="font-size: 10pt">TPAV, LLC<sup>(3)</sup></span></td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">539,062</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">1,725,000.00</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; padding-bottom: 4pt">Total</td><td style="font-weight: bold; padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right">1,078,124</td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right">3,450,000.00</td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left">&#160;</td></tr>
  </table><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(1)</span></td><td style="text-align: justify"><span style="font-size: 10pt">See &#8220;<i>Security Ownership
of Certain Beneficial Owners and Management</i>&#8221; for additional information about shares held by these entities.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(2)</span></td><td style="text-align: justify"><span style="font-size: 10pt">Consists of (i) 323,916 shares
held by OrbiMed Private Investments VII, LP and (ii) 215,146 shares held by OrbiMed Private Investments VIII, LP, each of which are affiliates
of OrbiMed. Dr. Gordon is one of our directors and is a member of OrbiMed.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(3)</span></td><td style="text-align: justify"><span style="font-size: 10pt">Nikolay Savchuk is our President
and Chief Operating Officer, one of our directors and an affiliate of TPAV, LLC.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"></p><div>

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    </div><div style="margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: normal 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->140<!-- Field: /Sequence --></p><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b>August 2024 SAFEs</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In August 2024, Lomond
issued &#8220;simple agreements for future equity&#8221;, or the August SAFEs, for an aggregate purchase price of $7.5 million in a private
financing round. Immediately prior to the consummation of the Offering, the August SAFEs automatically converted into 2,083,332 shares
of common stock.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The following table summarizes
purchases of the August SAFEs by Lomond&#8217;s executive officers, directors and holders of more than 5% of its capital stock:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="font-weight: bold; border-bottom: Black 1.5pt solid"><span style="font-size: 10pt"><b>Purchaser&#160;<sup>(1)</sup></b></span></td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Number of<br/> Shares of<br/> Common&#160;Stock<br/> Issued&#160;Upon&#160;the<br/> Conversion&#160;of<br/> the August<br/> SAFEs</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Total<br/> Purchase<br/> Price</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 76%; text-align: left; padding-bottom: 1.5pt"><span style="font-size: 10pt">Entities affiliated with OrbiMed<sup>(2)</sup></span></td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 9%; text-align: right">694,444</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">2,500,000.00</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="padding-bottom: 1.5pt"><span style="font-size: 10pt">TPAV, LLC<sup>(3)</sup></span></td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">694,444</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">2,500,000.00</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt"><span style="font-size: 10pt">American Financial Group<sup>(4)</sup></span></td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">472,222</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">1,700,000.00</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="font-weight: bold; padding-bottom: 4pt">Total</td><td style="font-weight: bold; padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right">1,861,110</td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right">6,700,000.00</td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left">&#160;</td></tr>
  </table><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(1)</span></td><td style="text-align: justify"><span style="font-size: 10pt">See &#8220;<i>Security Ownership
of Certain Beneficial Owners and Management</i>&#8221; for additional information about shares held by these entities.</span></td>
</tr></table><div>

</div><p style="margin: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(2)</span></td><td style="text-align: justify"><span style="font-size: 10pt">Consists of (i) 389,078 shares
held by OrbiMed Private Investments VII, LP, (ii) 230,753 shares held by OrbiMed Private Investments VIII, LP, and (iii) 74,613 shares
held by OrbiMed Private Investments IX, LP, each of which are affiliates of OrbiMed. Dr. Gordon is one of our directors and is a member
of OrbiMed.</span></td>
</tr></table><div>

</div><p style="margin: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(3)</span></td><td style="text-align: justify"><span style="font-size: 10pt">Dr. Savchuk is our President
and Chief Operating Officer, one of our directors and an affiliate of TPAV, LLC.</span></td>
</tr></table><div>

</div><p style="margin: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(4)</span></td><td style="text-align: justify"><span style="font-size: 10pt">Consists of shares of common
stock held directly by Great American Insurance Company, or Great American. Great American is a wholly-owned subsidiary of American Financial
Group, Inc., or AFG, which may be deemed to have beneficial ownership over the shares held by Great American.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Agreements with Eil
and Bala</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">On October 17, 2024,
we entered into a license agreement with Eil, or the Eil license agreement, and a license agreement with Bala, or the Bala license agreement.
Pursuant to the Eil license agreement and the Bala license agreement, we obtained exclusive, worldwide, royalty-bearing licensing rights
for the development and future ownership of (i) lonitoclax, a BCL-2 inhibitor for the treatment of AML and CLL from Eil, and (ii) an early-stage
menin inhibitor for the treatment of AML from Bala.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The Eil license agreement
and the Bala license agreement became effective on October 17, 2024 when we issued promissory notes to Eil and Bala, respectively. The
principal amount of the promissory notes with Eil and Bala are $1.7 million and $1.2 million, respectively. Each such promissory note
bears interest at a rate of 7% per annum, compounded annually and the principal and accrued interest under each note are due and payable
on demand at any time after October 17, 2026. Each such promissory note may be repaid without penalty. In addition, the two promissory
notes each provide for customary events of default. Upon the payment in full of the applicable promissory note, Eil and Bala have each
agreed to transfer to us all of the intellectual property rights covered by the Eil license agreement and the Bala license agreement,
as the case may be.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The license rights are
sublicensable at our option through multiple tiers, in whole or in part. Under such license agreements, we, but not Eil or Bala, as the
case may be, have the right to terminate the applicable license agreement for convenience upon 30 days&#8217; written notice. If we or
Eil or Bala, as the case may be, materially breaches the applicable license agreement, and such breach is not cured within 90 days after
the receipt of notice of such breach, then the non-defaulting party may terminate such license agreement. In addition, upon the occurrence
of an event of default under the applicable promissory note, the Eil license agreement or the Bala license agreement shall be terminated.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Eil and Bala are each
wholly-owned by Eilean, Lomond&#8217;s former parent company, which beneficially owned 53.0% of our common stock upon the closing of the
Merger and the Offering. Dr. Dukes is the Chief Executive Officer and Chairman of Eilean and Dr. Savchuk is the Chief Operating Officer
and President of Eilean and Chief Executive Officer and President of each of Bala and Eil.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"></p><div>

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    </div><div style="margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: normal 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->141<!-- Field: /Sequence --></p><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b>Participation in the Offering</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">OrbiMed, Torrey Pines,
Deerfield Partners, L.P., or Deerfield, and American Financial Group purchased 1,443,750, 1,443,750, 2,692,625 and 1,250,000 shares of
our common stock in the Offering, respectively, for aggregate gross purchase prices of $5.9 million, $5.9 million, $10.8 million and $5.0
million, in each case, pursuant to the Subscription Agreement. Upon the consummation of such sales and the Merger, OrbiMed, Torrey Pines,
and Deerfield beneficially owned 9.8%, 9.8%, 9.9%, and 6.3% of our common stock, respectively. Such purchases were made on the same terms
as the shares that were sold to other investors in the Offering and not pursuant to any pre-existing contractual rights or obligations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Pre-Merger Indemnity
Agreements</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">As a condition to the
Merger, we entered into the Pre-Merger Indemnity Agreements with each former officer and director of Venetian-1 Acquisition Corp., pursuant
to which we agreed to indemnify such former officers and directors for actions taken by them such individual in their official capacities
relating to the consideration, approval and consummation of the Merger and certain related transactions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Indemnification Agreements</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Lomond entered into separate
indemnification agreements with each of its executive officers and directors. Their indemnification agreements provided that Lomond would
indemnify each of the directors and executive officers against any and all expenses incurred by that director or executive officer because
of their status as one of the directors or executive officers to the fullest extent permitted by Delaware law.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our amended and restated
certificate of incorporation contains provisions limiting the liability of directors, and our amended and restated bylaws provide that
we will indemnify each of the directors to the fullest extent permitted under Delaware law. Our amended and restated certificate of incorporation
and amended and restated bylaws also provide our board of directors with discretion to indemnify our officers and employees when determined
appropriate by our board of directors.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We have entered, and
intend to continue to enter, into separate indemnification agreements with each of our directors and executive officers. The indemnification
agreements will provide that we will indemnify each of our directors and executive officers against any and all expenses incurred by that
director or executive officer because of their status as one of our directors or executive officers to the fullest extent permitted by
Delaware law, our amended and restated certificate of incorporation and our amended and restated bylaws. In addition, the indemnification
agreements provide that, to the fullest extent permitted by Delaware law, we will advance all expenses incurred by our directors and executive
officers in connection with a legal proceeding involving their status as a director or executive officer.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b>Policies and Procedures for Related Party
Transactions</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We intend to adopt a
formal written policy providing that we are not permitted to enter into any transaction that exceeds the lesser of (i) $120,000 or (ii)
one percent of the average of our total assets at year end for the last two completed fiscal years, and in which any related person has
a direct or indirect material interest without the consent of our audit committee. Our board of directors will have the primary responsibility
for reviewing and approving or disapproving such &#8220;related party transactions.&#8221; In approving or rejecting any such transaction,
our board of directors is to consider the relevant facts and circumstances available and deemed relevant to it, including whether the
transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances
and the extent of the related person&#8217;s interest in the transaction.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">All of the transactions
described in this section were entered into prior to the adoption of this policy. Although we have not had a written policy for the review
and approval of transactions with related persons, our board of directors has historically reviewed and approved any transaction where
a director or officer had a financial interest, including the transactions described above. Prior to approving such a transaction, the
material facts as to the relationship or interest of the relevant related person in the agreement or transaction were disclosed to our
board of directors. Our board of directors took this information into account when evaluating the transaction and in determining whether
such transaction was fair to us and in the best interest of all our stockholders.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><div><a id="a_013"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>USE
OF PROCEEDS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We are filing the registration
statement of which this prospectus forms a part to permit holders of the shares of common stock described in the section entitled &#8220;<i>Selling
Stockholders</i>&#8221; to resell such shares. We will not receive any proceeds from the resale of any shares offered by this prospectus
by the selling stockholders.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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    </div><div style="margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: normal 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->143<!-- Field: /Sequence --></p><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><div><a id="a_014"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>DIVIDEND
POLICY</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We have never paid any
cash dividends on our capital stock and do not anticipate paying any cash dividends on our common stock in the foreseeable future. We
intend to retain future earnings to fund ongoing operations and future capital requirements. Any future determination to pay cash dividends
will be at the discretion of our board of directors and will be dependent upon financial condition, results of operations, capital requirements
and such other factors as the board of directors deems relevant.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

</div><!-- Field: Page; Sequence: 151 --><div>
    </div><div style="margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: normal 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->144<!-- Field: /Sequence --></p><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"></p></div><div>
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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><div><a id="a_015"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>DETERMINATION
OF OFFERING PRICE</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The selling stockholders
may only sell their shares of common stock pursuant to this prospectus at a fixed price of $4.00 per share (as may be adjusted for stock
splits, stock dividends, combinations, recapitalizations or similar events) until such time as our common stock is quoted on the OTCQB
or another public trading market for our common stock otherwise develops. At and after such time, the selling stockholders may sell all
or a portion of their shares through public or private transactions at prevailing market prices or at privately negotiated prices. The
fixed price of $4.00 (as may be adjusted for stock splits, stock dividends, combinations, recapitalizations or similar events) at which
the selling stockholders may sell their shares pursuant to this prospectus was determined based upon the purchase price per share of common
stock in the initial closing of the Offering.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We have included a fixed
price at which selling stockholders may sell their shares pursuant to this prospectus prior to the time there is a public market for
our stock in order to comply with the rules of the SEC that require that, if there is no market for the shares being registered, this
registration statement must include a price at which the shares may be sold. Except to the extent that we are involved in an underwritten
secondary offering of common stock, if any, by the selling stockholders, all shares being offered pursuant to this prospectus will be
sold by the selling stockholders without our involvement.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><div><a id="a_016"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>MARKET
INFORMATION FOR OUR COMMON STOCK</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our common stock is not
listed on a national securities exchange, an over-the-counter market or any other exchange. Therefore, there is no trading market, active
or otherwise, for our common stock and our common stock may never be included for trading on any stock exchange, automated quotation system
or any over-the-counter market. In connection with this offering, we intend to arrange for a registered broker-dealer to apply to have
the common stock quoted on the OTCQB or another over-the-counter system; however, we cannot assure you that the common stock will become
eligible for trading on the OTCQB or any other over-the-counter system.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">As of November 21, 2024,
we have 27,198,214 shares of common stock outstanding held by approximately 28 stockholders of record.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><div><a id="a_017"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>SECURITY
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The following table sets
forth certain information with respect to the beneficial ownership of our common stock as of November 21, 2024, immediately following
the closing of the Merger and the Offering, by:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">each of our named executive
officers;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">each of our directors</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">all of our current directors
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</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">each person, or group of affiliated
persons, who beneficially owned more than 5% of our common stock.</span></td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We have determined beneficial
ownership in accordance with the rules of the SEC, and the information is not necessarily indicative of beneficial ownership for any other
purpose. Except as indicated by the footnotes below, we believe, based on information furnished to us, that the persons and entities named
in the table below have sole voting and sole investment power with respect to all shares of common stock that they beneficially owned,
subject to applicable community property laws.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The percentage of shares beneficially owned is computed on the basis
of 27,198,214 shares of common stock outstanding as of November 21, 2024, after giving effect to the Merger and the Offering. Shares of
common stock that a person has the right to acquire within 60&#160;days of November 21, 2024 are deemed outstanding for purposes of computing
the percentage ownership of the person holding such rights, but are not deemed outstanding for purposes of computing the percentage ownership
of any other person, except with respect to the percentage ownership of all directors and executive officers as a group. Unless otherwise
indicated, the address of each beneficial owner in the table below is c/o 8 The Green Ste 8490, Dover, Delaware, 19901.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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  </table><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">*</span></td><td style="text-align: justify"><span style="font-size: 10pt">Less than one percent.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(1)</span></td><td style="text-align: justify"><span style="font-size: 10pt">The board of managers of this
stockholder exercises voting and investment power, and such board consists of four individuals, including Dr. Dukes, Dr. Savchuk, Dr.
Gordon and Mr. Rodriguez. As a result, none of these four individuals has sole or shared voting or investment power over the shares of
our common stock held by this stockholder. Each of OrbiMed, TPAV, LLC, Dr. Dukes and Dr. Savchuk hold membership interests in Eilean
and may be deemed to have an economic interest in the shares of common stock held by Eilean. Each of OrbiMed, TPAV, Dr. Dukes and Dr.
Savchuk disclaims beneficial ownership of these securities and this prospectus shall not be deemed an admission that any one of OrbiMed,
TPAV, Dr. Dukes or Dr. Savchuk is the beneficial owner of such securities for purposes of Section 16 or for any other purpose, except
to the extent of their respective pecuniary interests therein. The principal address for this stockholder is 8 The Green Suite 8183 Dover,
DE 19901.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; background-color: white">&#160;</p><div>

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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(2)</span></td><td style="text-align: justify"><span style="font-size: 10pt">The general partner of Deerfield
Partners, L.P. is Deerfield Mgmt, L.P. Deerfield Management Company, L.P. is the investment manager of Deerfield Partners, L.P. James
E. Flynn is the sole member of the general partner of each of Deerfield Mgmt, L.P. and Deerfield Management Company, L.P. Each of Mr.
Flynn and the entities listed in this footnote may be deemed to share voting and investment power over the shares held or beneficially
owned by Deerfield Partners, L.P. The address of this stockholder is 345 Park Avenue South, Floor 12, New York, NY 10010.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(3)</span></td><td style="text-align: justify"><span style="font-size: 10pt">Consists of (i) 1,521,888 shares
of our common stock held directly by OrbiMed Private Investments VII, LP, or OPI VII, (ii) 925,635 shares of our common stock held directly
by OrbiMed Private Investments VIII, LP, or OPI VIII, and (iii) 114,733 shares of our common stock held directly by OrbiMed Private Investments
IX, LP, or OPI IX. OrbiMed Capital GP VII LLC, or GP VII, is the general partner of OPI VII. OrbiMed Capital GP VIII LLC, or GP VIII,
is the general partner of OPI VIII. OrbiMed Capital GP IX LLC, or GP IX, is the general partner of OPI IX. OrbiMed Advisors LLC, or OrbiMed
Advisors, is the managing member of GP VII, GP VIII, and GP IX. By virtue of such relationships, (i) OrbiMed Advisors and GP VII may
be deemed to have voting power and investment power over the securities held by OPI VII; (ii) OrbiMed Advisors and GP VIII may be deemed
to have voting power and investment power over the securities held by OPI VIII; and (iii) OrbiMed Advisors and GP IX may be deemed to
have voting power and investment power over the securities held by OPI IX. OrbiMed Advisors exercises voting and investment power through
a management committee comprising Dr. Gordon, Sven H. Borho, and W. Carter Neild, each of whom disclaims beneficial ownership of the
shares held by OPI VII, OPI VIII and OPI IX. Dr. Gordon is a member of our board of directors. The address for each of the entities and
individuals identified in this footnote is c/o OrbiMed Advisors LLC, 601 Lexington Avenue 54th Floor, New York, NY 10022.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(4)</span></td><td style="text-align: justify"><span style="font-size: 10pt">Nikolay Savchuk is the sole
manager on the Board of Managers of TPAV, LLC and a member of our board of directors and our Chief Operating Officer and President. Dr.
Savchuk disclaims beneficial ownership of the securities held by TPAV, LLC except to the extent of his pecuniary interest therein. The
address for TPAV, LLC is 12730 High Bluff Drive, Suite 100, San Diego, CA 92130.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(5)</span></td><td style="text-align: justify"><span style="font-size: 10pt">Consists of shares of common
stock held directly by Great American. Great American is a wholly-owned subsidiary of American Financial Group, Inc., or AFG, which may
be deemed to have beneficial ownership over the shares held by Great American. The principal business address for each of the entities
identified in this footnote is 301 East Fourth Street, Cincinnati, Ohio 45202. Not included in this total are 436,111 shares of common
stock beneficially owned by S. Craig Lindner, who serves as Co-CFO and a director of AFG, and 411,111 shares of common stock beneficially
owned by John B. Berding, who serves as President and a director of AFG.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(6)</span></td><td style="text-align: justify"><span style="font-size: 10pt">Consists of 43,630 shares of
our common stock issuable upon exercise of outstanding stock options held by Dr. Dukes, which are exercisable within 60 days of November
21, 2024.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(7)</span></td><td style="text-align: justify"><span style="font-size: 10pt">Consists of 26,208 shares of
our common stock issuable upon exercise of outstanding stock options held by Dr. Savchuk, which are exercisable within 60 days of November
21, 2024. Does not include 2,677,256 shares held by TPAV, LLC.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><span style="font-size: 10pt"><span style="clear: both; display: block;"><br/></span>
</span></p><div>

</div><div><a id="a_018"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>SELLING
STOCKHOLDERS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">This prospectus covers
the resale by the selling stockholders identified below of 27,473,624 shares of common stock. The selling stockholders acquired our securities
in connection with the Merger and the Offering, or were pre-Merger stockholders of our predecessor, Venetian-1 Acquisition Corp. The registration
of the common stock of the selling stockholders through this prospectus constitutes a secondary offering and is not an offering by or
on behalf of the Company. We will not receive any proceeds from the resale of the common stock by the selling stockholders.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Except as disclosed in
the footnotes below, none of the selling stockholders has been an officer or director of ours or any of our predecessors or affiliates
within the past three years. Except as disclosed in the footnotes below, no selling stockholder had a material relationship with the company
or any of its affiliates within the last three years.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The following table and
the accompanying footnotes are based in part on information supplied to us by the selling stockholders. The table and footnotes assume
that the selling stockholders will sell all of the shares listed. However, because the selling stockholders may sell all or some of their
shares under this prospectus from time to time, or in another permitted manner, we cannot assure you as to the actual number of shares
that will be sold by the selling stockholders or that will be held by the selling stockholders after completion of any sales. We do not
know how long the selling stockholders will hold the shares before selling them.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The inclusion of any
shares in this table does not constitute an admission of beneficial ownership by the persons named below. Unless otherwise indicated,
based on the information supplied to us by or on behalf of the selling stockholders, no selling stockholder is a broker-dealer or an affiliate
of a broker-dealer.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="font: bold 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Name
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    <td colspan="2" style="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Shares
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Corinne E. Linder Trust</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White">
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Denman Street, LLC</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Eilean Therapeutics LLC</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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                                            </span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><sup>(5)</sup>&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Frances and Craig Linder Foundation</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Frances R. Linder Living Trust</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Gerald J. Berding</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">6,250</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Ian Jacobs</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">175,000</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">175,000
                                            </span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><sup>(6)</sup>&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">John and Susan Berding Family
    Foundation</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">75,000</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">75,000</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><sup>&#160;</sup></span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">John B. Berding Irrevocable
    Children&#8217;s Trust</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">111,111</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">111,111</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><sup>&#160;</sup></span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Joseph Berding</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">10,000</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">10,000</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><sup>&#160;</sup></span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Mark Tompkins</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1,187,500</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1,187,500
                                            </span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><sup>(7)</sup>&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">OrbiMed Private Investments
    IX, LP</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">229,733</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">229,733
                                            </span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><sup>(8)</sup>&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">OrbiMed Private Investments
    VII, LP</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1,521,888</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1,521,888
                                            </span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><sup>(8)</sup>&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">OrbiMed Private Investments
    VIII, LP</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">925,635</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">925,635
                                            </span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><sup>(8)</sup>&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Paul J. Bambach</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">12,500</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">12,500</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><sup>&#160;</sup></span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Raymond James &amp; Associates,
    Inc.</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">--</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">137,705
                                            </span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><sup>(9)</sup>&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">S. Craig Linder Exempt Trust</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">25,000</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">25,000</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><sup>&#160;</sup></span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">S. Craig Linder Qualified
    Annuity Trust</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">62,500</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">62,500</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><sup>&#160;</sup></span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">SCL Dynasty Trust</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">25,000</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">25,000</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><sup>&#160;</sup></span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Sichenzia Ross Ference Carmel
    LLP</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">9,375</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">9,375
                                            </span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><sup>(10)</sup>&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Susan M. Berding</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">150,000</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">150,000</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><sup>&#160;</sup></span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Thomas Berding</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">7,500</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">7,500</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><sup>&#160;</sup></span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">TPAV, LLC</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2,677,256</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2,677,256
                                            </span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><sup>(11)</sup>&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Wedbush &amp; Co., LLC</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">--</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">137,705
                                            </span></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><sup>(12)</sup>&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">TOTAL</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">27,198,214</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">27,473,624</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><sup>&#160;</sup></span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 4pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">*</span></td><td style="text-align: justify"><span style="font-size: 10pt">Less than 1%</span></td>
</tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>
</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(1)</span></td><td style="text-align: justify"><span style="font-size: 10pt">See &#8220;<i>Security Ownership
of Certain Beneficial Owners and Management</i>&#8221; for additional information about shares held by these entities.</span></td>
</tr></table><div>

</div><p style="margin: 0">&#160;</p><div>

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    </div><div style="break-before: page; margin-top: 6pt"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

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<td style="width: 0.28in; text-align: left"><span style="font-size: 10pt">(2)</span></td><td style="text-align: justify"><span style="font-size: 10pt">Applicable percentage ownership
is based on 27,198,214 shares of our common stock outstanding as of November 21, 2024.</span></td>
</tr></table><div>

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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.28in; text-align: left"><span style="font-size: 10pt">(3)</span></td><td style="text-align: justify"><span style="font-size: 10pt">Assumes the sale of all shares
offered in this prospectus.</span></td>
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<td style="width: 0.28in; text-align: left">(4)</td><td style="text-align: justify">Barrett DiPaolo is a Partner at Sichenzia Ross Ference Carmel
LLP and served as counsel to Venetian-1 Acquisition Corp., our predecessor.</td>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.28in; text-align: left"><span style="font-size: 10pt">(5)</span></td><td style="text-align: justify"><span style="font-size: 10pt">Eilean Therapeutics, LLC is
Lomond&#8217;s former parent company. The board of managers of Eilean Therapeutics, LLC consists of four individuals, including Dr. Dukes,
Dr. Savchuk, Dr. Gordon and Mr. Rodriguez. Each of OrbiMed, TPAV, LLC, Dr. Dukes and Dr. Savchuk hold membership interests in Eilean
and may be deemed to have an economic interest in the shares of common stock held by Eilean. Eil and Bala, each the licensor under the
Eli license agreement and the Bala license agreement, respectively, are each wholly-owned by Eilean Therapeutics, LLC.</span></td>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.28in; text-align: left"><span style="font-size: 10pt">(6)</span></td><td style="text-align: justify"><span style="font-size: 10pt">Ian Jacobs is a former President,
Chief Executive Officer, Chief Financial Officer, Secretary and director of Venetian-1 Acquisition Corp., our predecessor.</span></td>
</tr></table><div>

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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.28in; text-align: left"><span style="font-size: 10pt">(7)</span></td><td style="text-align: justify"><span style="font-size: 10pt">Mark Tompkins is a former director
of Venetian-1 Acquisition Corp., our predecessor.</span></td>
</tr></table><div>

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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.28in; text-align: left"><span style="font-size: 10pt">(8)</span></td><td style="text-align: justify"><span style="font-size: 10pt">OrbiMed Private Investments
VII, LP, OrbiMed Private Investments VIII, LP, OrbiMed Private Investments IX, LP, each of which are affiliates of OrbiMed. Dr. Gordon
is one of our directors and is a member of OrbiMed.</span></td>
</tr></table><div>

</div><p style="margin: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.28in; text-align: left"><span style="font-size: 10pt">(9)</span></td><td style="text-align: justify"><span style="font-size: 10pt">Includes 137,705 shares of
common stock issuable upon exercise of warrants held by selling stockholder.</span></td>
</tr></table><div>

</div><p style="margin: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.28in; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(10)</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif">Sichenzia Ross Ference Carmel LLP <span style="font-size: 10pt">served as counsel to Venetian-1 Acquisition Corp., our predecessor.</span></span></td></tr>
  </table><div>

</div><p style="margin: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.28in; text-align: left"><span style="font-size: 10pt">(11)</span></td><td style="text-align: justify"><span style="font-size: 10pt">Dr. Savchuk is the sole manager
on the Board of Managers of TPAV, LLC, a member of our board of directors and our Chief Operating Officer and President.</span></td>
</tr></table><div>

</div><p style="margin: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.28in; text-align: left"><span style="font-size: 10pt">(12)</span></td><td style="text-align: justify"><span style="font-size: 10pt">Includes 137,705 shares of
common stock issuable upon exercise of warrants held by selling stockholder.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="text-transform: uppercase"><b>&#160;</b></span></p><div>

</div><div><a id="a_019"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>PLAN
OF DISTRIBUTION</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The selling stockholders,
which as used herein includes donees, pledgees, transferees or other successors-in-interest selling shares of common stock or interests
in shares of common stock received after the date of this prospectus from a selling stockholder as a gift, pledge, partnership distribution
or other transfer, may, from time to time, sell, transfer or otherwise dispose of any or all of their shares of common stock or interests
in shares of common stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions.
At and after such time, the selling stockholders may sell all or a portion of their shares through public or private transactions at fixed
prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying prices determined
at the time of sale, or at negotiated prices.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The selling stockholders
may use any one or more of the following methods when disposing of shares or interests therein:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">purchases by a broker-dealer
as principal and resale by such broker-dealer for its own account pursuant to this prospectus;</span></td>
</tr></table><div>

</div><p style="margin: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">ordinary brokerage transactions
and transactions in which the broker-dealer solicits purchasers;</span></td>
</tr></table><div>

</div><p style="margin: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">block trades in which the broker-dealer
so engaged will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the
transaction;</span></td>
</tr></table><div>

</div><p style="margin: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">an over-the-counter distribution
in accordance with the rules of the applicable exchange;</span></td>
</tr></table><div>

</div><p style="margin: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">through trading plans entered
into by a selling stockholder pursuant to Rule 10b5-1 under the Exchange Act that are in place at the time of an offering pursuant to
this prospectus and any applicable prospectus supplement hereto that provide for periodic sales of their securities on the basis of parameters
described in such trading plans;</span></td>
</tr></table><div>

</div><p style="margin: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">short sales;</span></td>
</tr></table><div>

</div><p style="margin: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">distribution to employees,
members, limited partners or stockholders of the selling stockholders;</span></td>
</tr></table><div>

</div><p style="margin: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">through the writing or settlement
of options or other hedging transactions, whether through an options exchange or otherwise;</span></td>
</tr></table><div>

</div><p style="margin: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">by pledge to secured debts
and other obligations;</span></td>
</tr></table><div>

</div><p style="margin: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">delayed delivery arrangements;</span></td>
</tr></table><div>

</div><p style="margin: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">to or through underwriters
or agents;</span></td>
</tr></table><div>

</div><p style="margin: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">in &#8220;at the market&#8221;
offerings, as defined in Rule 415 under the Securities Act, at negotiated prices, at prices prevailing at the time of sale or at prices
related to such prevailing market prices, including sales made directly on a national securities exchange or sales made through a market
maker other than on an exchange or other similar offerings through sales agents;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">in privately negotiated transactions;</span></td>
</tr></table><div>

</div><p style="margin: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">in options transactions; and</span></td>
</tr></table><div>

</div><p style="margin: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">through a combination of any
of the above methods of sale, as described below, or any other method permitted pursuant to applicable law.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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    </div><div style="margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: normal 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->151<!-- Field: /Sequence --></p><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The selling stockholders
may, from time to time, pledge or grant a security interest in some or all of the shares of common stock owned by them and, if they default
in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common stock, from time
to time, under this prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities
Act amending the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders
under this prospectus. The selling stockholders also may transfer the shares of common stock in other circumstances, in which case the
transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">There can be no assurance that the selling stockholders
will sell all or any of the securities offered by this prospectus. In addition, the selling stockholders may also sell securities under
Rule 144 under the Securities Act, if available, or in other transactions exempt from registration, rather than under this prospectus.
The selling stockholders have the sole and absolute discretion not to accept any purchase offer or make any sale of securities if they
deem the purchase price to be unsatisfactory at any particular time.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In connection with the
sale of our common stock or interests therein, the selling stockholders may enter into hedging transactions with broker-dealers or other
financial institutions, which may in turn engage in short sales of the common stock in the course of hedging the positions they assume.
The selling stockholders may also sell shares of our common stock short and deliver these securities to close out their short positions,
or loan or pledge the common stock to broker-dealers that in turn may sell these securities. The selling stockholders may also enter into
options or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities
which require the delivery to such broker-dealer or other financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The aggregate proceeds
to the selling stockholders from the sale of the common stock offered by them will be the purchase price of the common stock less discounts
or commissions, if any. Each of the selling stockholders reserves the right to accept and, together with their agents from time to time,
to reject, in whole or in part, any proposed purchase of common stock to be made directly or through agents. We will not receive any of
the proceeds from any sales of common stock by the selling stockholders.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The selling stockholders
and any underwriters, broker-dealers or agents that are involved in selling the common stock or interests therein may be deemed to be
&#8220;underwriters&#8221; within the meaning of Section 2(a)(11) of the Securities Act. In such event, any commissions received by such
broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act. Each selling stockholder in the Offering has informed us that it does not have any agreement or understanding,
directly or indirectly, with any person to distribute the common stock. If a selling stockholder is deemed to be an &#8220;underwriter&#8221;
within the meaning of the Securities Act, it will be subject to the prospectus delivery requirements of the Securities Act.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">To the extent required,
the shares of our common stock to be sold, the names of the selling stockholders, the respective purchase prices and public offering prices,
the names of any agents, dealer or underwriter, any applicable commissions or discounts with respect to a particular offer will be set
forth in an accompanying prospectus supplement or, if appropriate, a post-effective amendment to this registration statement that includes
this prospectus.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In order to comply with
the securities laws of some states, if applicable, the common stock may be sold in these jurisdictions only through registered or licensed
brokers or dealers. In addition, in some states the common stock may not be sold unless it has been registered or qualified for sale or
an exemption from registration or qualification requirements is available and is complied with.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We have advised the selling
stockholders that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of shares in the market and to
the activities of the selling stockholders and their affiliates. In addition, we will make copies of this prospectus (as it may be supplemented
or amended from time to time) available to the selling stockholders for the purpose of satisfying the prospectus delivery requirements
of the Securities Act. The selling stockholders may indemnify any broker-dealer that participates in transactions involving the sale of
the shares against certain liabilities, including liabilities arising under the Securities Act.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We have agreed to indemnify
the selling stockholders against certain liabilities, including liabilities under the Securities Act and state securities laws, relating
to the registration of the shares offered by this prospectus.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Agents, broker-dealers
and underwriters may be entitled to indemnification by us and the selling stockholders against certain civil liabilities, including liabilities
under the Securities Act, or to contribution with respect to payments which the agents, broker-dealers or underwriters may be required
to make in respect thereof.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We have agreed with the
selling stockholders to keep this registration statement of which this prospectus constitutes a part effective until the earlier of five
years from the date it is declared effective by the SEC and the date on which all of the shares of common stock required to be registered
by us have been sold or otherwise transferred other than to assignees pursuant to the Registration Rights Agreement. See the section of
this prospectus captioned &#8220;<i>Shares Eligible for Future Sale &#8212; Registration Rights</i>.&#8221;</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">Certain of our stockholders have entered
into lock-up agreements. See the section of this prospectus captioned &#8220;<i>Shares Eligible for Future Sale&#8201;&#8212;Lock-Up
Agreements</i>.&#8221;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&#160;</p><div>

</div><div><a id="a_020"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>DESCRIPTION
OF CAPITAL STOCK</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The following description
summarizes the material terms of our capital stock. Because it is only a summary, it does not contain all the information that may be
important to you. For a complete description, you should refer to our amended and restated certificate of incorporation and our amended
and restated bylaws, which are included as exhibits hereto, and to the applicable provisions of Delaware law.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We have authorized capital
stock consisting of 300,000,000 shares of common stock and 10,000,000 shares of preferred stock. Except as otherwise provided in the certificate
of designation of any series of preferred stock we may issue, the number of authorized shares of common stock or preferred stock may from
time to time be increased or decreased (but not below the number of shares of such class outstanding) by the affirmative vote of the holders
of a majority in voting power of the outstanding shares of our capital stock.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">As of the date of this
prospectus, we had 27,198,214 shares of common stock issued and outstanding, and no shares of preferred stock issued and outstanding.
Unless stated otherwise, the following discussion summarizes the terms and provisions of our amended and restated certificate of incorporation
and our restated bylaws.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Common Stock</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>Dividend Rights</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Subject to preferences
that may apply to any shares of preferred stock outstanding at the time, the holders of our common stock are entitled to receive dividends
out of funds legally available if our board of directors, in its discretion, determines to issue dividends and then only at the times
and in the amounts that our board of directors may determine.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>Voting Rights</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Holders of our common
stock are entitled to one vote for each share of common stock held on all matters submitted to a vote of stockholders. We have not provided
for cumulative voting for the election of directors in our amended and restated certificate of incorporation. Accordingly, holders of
a majority of the shares of our common stock will be able to elect all of our directors. Our amended and restated certificate of incorporation
establishes a classified board of directors, to be divided into three classes with staggered three-year terms. Only one class of directors
will be elected at each annual meeting of our stockholders, with the other classes continuing for the remainder of their respective three-year
terms.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>No Preemptive or Similar
Rights</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our common stock is not
entitled to preemptive rights, and is not subject to redemption or sinking fund provisions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>Right to Receive Liquidation
Distributions</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Upon our liquidation,
dissolution, or winding-up, the assets legally available for distribution to our stockholders would be distributable ratably among the
holders of our common stock and any preferred stock outstanding at that time, subject to prior satisfaction of all outstanding debt and
liabilities and the preferential rights of and the payment of liquidation preferences, if any, on any outstanding shares of redeemable
convertible preferred stock.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b>&#160;&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b>Preferred Stock</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We are authorized, subject
to limitations prescribed by Delaware law, to issue preferred stock in one or more series, to establish from time to time the number of
shares to be included in each series, and to fix the designation, powers, preferences, and rights of the shares of each series and any
of its qualifications, limitations, or restrictions, in each case without further vote or action by our stockholders. Our board of directors
can also increase or decrease the number of shares of any series of preferred stock, but not below the number of shares of that series
then outstanding, without any further vote or action by our stockholders. Our board of directors may authorize the issuance of preferred
stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of our common stock.
The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could,
among other things, have the effect of delaying, deferring, or preventing a change in our control and might adversely affect the market
price of our common stock and the voting and other rights of the holders of our common stock. We have no current plan to issue any shares
of preferred stock.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Stock Options</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">As of the date of this
prospectus, we had outstanding stock options to purchase an aggregate of 4,329,617 shares of our common stock, with an exercise price
of $1.30 per share, which were issued under the Lomond Plan that was assumed in connection with the Merger.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b>&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Warrants</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">As of the date hereof,
the Placement Agent Warrants consist of two warrants and entitle their holders to purchase an aggregate of 275,410 shares of common stock,
with a term of four years and an exercise price of $4.00 per share (as may be adjusted for stock splits, stock dividends, combinations,
recapitalizations or similar events).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The Placement Agent Warrants
contain customary provisions for adjustment in the event of stock splits, subdivision or combination, mergers and similar events.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">See the section titled
&#8220;<i>Description of the Merger, the Offering, and Related Transactions&#8212;Registration Rights Agreement</i>&#8221; for a description
of the registration rights granted to (among others) the holders of the Placement Agent Warrants, which description is incorporated herein
by reference.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">This summary descriptions
of the warrants described above is qualified in their entirety by reference to the form of such warrants filed as an exhibit to this prospectus.<b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Anti-Takeover Provisions</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The provisions of the
DGCL, our amended and restated certificate of incorporation, and our amended and restated bylaws could have the effect of delaying, deferring,
or discouraging another person from acquiring control of our Company. These provisions, which are summarized below, are expected to discourage
certain types of coercive takeover practices and inadequate takeover bids and encourage persons seeking to acquire control of our Company
to first negotiate with our board of directors. We believe that the benefits of increased protection of our potential ability to negotiate
with an unfriendly or unsolicited acquirer outweigh the disadvantages of discouraging a proposal to acquire us because negotiation of
these proposals could result in an improvement of their terms.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Section 203 of the
DGCL</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We are governed by the
provisions of Section 203 of the Delaware General Corporation Law regulating corporate takeovers. This section prevents some Delaware
corporations from engaging, under some circumstances, in a business combination, which includes a merger or sale of at least 10% of the
corporation&#8217;s assets with any interested stockholder, meaning a stockholder who, together with affiliates and associates, owns or,
within three years prior to the determination of interested stockholder status, did own 15% or more of the corporation&#8217;s outstanding
voting stock, unless:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the transaction is approved
by the board of directors prior to the time that the interested stockholder became an interested stockholder;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">upon closing of the transaction
that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock
of the corporation outstanding at the time the transaction began, excluding for purposes of determining the voting stock outstanding
those shares owned (i)&#160;by persons who are directors and also officers and (ii)&#160;employee stock plans in which employee participants
do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer;
or</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">subsequent to such time that
the stockholder became an interested stockholder the business combination is approved by the board of directors and authorized at an
annual or special meeting of stockholders by at least&#160;two-thirds&#160;of the outstanding voting stock which is not owned by the
interested stockholder.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">A Delaware corporation
may &#8220;opt out&#8221; of these provisions with an express provision in its original certificate of incorporation or an express provision
in its certificate of incorporation or amended and restated bylaws resulting from a stockholders&#8217; amendment approved by at least
a majority of the outstanding voting shares. We have not opted out of these provisions. As a result, mergers or other takeover or change
in control attempts of us may be discouraged or prevented.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b>Amended and Restated Certificate of Incorporation
and Amended and Restated Bylaw Provisions</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our amended and restated
certificate of incorporation and our amended and restated bylaws include a number of provisions that may have the effect of deterring
hostile takeovers or delaying or preventing changes in control of our management team, including the following:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt"><b><i>Board Vacancies</i></b>.
Our amended and restated certificate of incorporation and amended and restated bylaws authorize our board of directors to fill vacant
directorships, including newly-created seats. In addition, the number of directors constituting our board of directors is set only by
resolution adopted by a majority vote of our entire board of directors. These provisions prevent a stockholder from increasing the size
of our board of directors and gaining control of our board of directors by filling the resulting vacancies with its own nominees.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt"><b><i>Classified Board</i></b>.
Our amended and restated certificate of incorporation and amended and restated bylaws provide that our board of directors will be classified
into three classes of directors, each of which will hold office for a three-year term. In addition, directors may only be removed from
the board of directors for cause and only by the approval of 66 2/3% of our then-outstanding shares of our common stock. A third party
may be discouraged from making a tender offer or otherwise attempting to obtain control of us as it is more difficult and time consuming
for stockholders to replace a majority of the directors on a classified board of directors.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;&#160;&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt"><b><i>Stockholder Action; Special
Meetings of Stockholders</i></b>. Our amended and restated certificate of incorporation provides that stockholders are not able to take
action by written consent, and are only able to take action at annual or special meetings of our stockholders. Stockholders are not permitted
to cumulate their votes for the election of directors. Our amended and restated bylaws further provides that special meetings of our
stockholders may be called only by a majority vote of our entire board of directors, the chairman of our board of directors or our chief
executive officer.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt"><b><i>Advance Notice Requirements
for Stockholder Proposals and Director Nominations</i></b>. Our amended and restated bylaws provide advance notice procedures for stockholders
seeking to bring business before our annual meeting of stockholders, or to nominate candidates for election as directors at any meeting
of stockholders. Our amended and restated bylaws also specify certain requirements regarding the form and content of a stockholder&#8217;s
notice. These provisions may preclude our stockholders from bringing matters before our annual meeting of stockholders or from making
nominations for directors at our meetings of stockholders.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt"><b><i>Issuance of Undesignated
Preferred Stock</i></b>. Our board of directors has, the authority, without further action by the holders of common stock, to issue up
to 10,000,000 shares of undesignated preferred stock with rights and preferences, including voting rights, designated from time to time
by the board of directors. The existence of authorized but unissued shares of preferred stock will enable our board of directors to render
more difficult or discourage an attempt to obtain control of us by means of a merger, tender offer, proxy contest or otherwise.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: -0.25in; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Choice of Forum</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our amended and restated
certificate of incorporation provides that unless we consent in writing to the selection of an alternative forum, the Court of Chancery
of the State of Delaware (or, in the event the Chancery Court does not have jurisdiction, the federal district court for the District
of Delaware or other state courts of the State of Delaware) is the sole and exclusive forum for any derivative action or proceeding brought
on our behalf; any action asserting a breach of fiduciary duty owed by any of our directors, officers or other employee to us or our stockholders;
any action asserting a claim against us arising pursuant to the Delaware General Corporation Law, our amended and restated certificate
of incorporation or our amended and restated bylaws; any action asserting a claim against us that is governed by the internal affairs
doctrine; or &#160;any action as to which the DGCL confers jurisdiction on the Court of Chancery, except for any action asserted to enforce
any liability or duty created by the Securities Exchange Act of 1934, as amended, or, in each case, rules and regulations promulgated
thereunder, for which there is exclusive federal jurisdiction. Our amended and restated certificate of incorporation also provides that
the U.S. federal district courts is the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities
Act. Some companies that adopted a similar federal district court forum selection provision were subject to a suit in the Chancery Court
of Delaware by stockholders who asserted that the provision is not enforceable. While the Delaware Supreme Court held that such federal
district court forum selection provision was in fact valid, there can be no assurance that federal courts or other state courts will follow
the holding of the Delaware Supreme Court or determine that our federal district court forum selection provision should be enforced in
a particular case. These choice of forum provisions do not apply to actions brought to enforce a duty or liability created by the Exchange
Act. We intend for the choice of forum provision regarding claims arising under the Securities Act to apply despite the fact that Section
22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all actions brought to enforce any duty or
liability created by the Securities Act or the rules and regulations thereunder. There is uncertainty as to whether a court would enforce
such provision with respect to claims under the Securities Act. Our exclusive forum provision does not relieve us of our duties to comply
with the federal securities laws and the rules and regulations thereunder, and our stockholders will not be deemed to have waived our
compliance with these laws, rules and regulations.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">These exclusive forum
provisions may limit the ability of our stockholders to bring a claim in a judicial forum that such stockholders find favorable for disputes
with us or our directors, officers or employees, which may discourage such lawsuits against us and our directors, officers and employees.
Alternatively, if a court were to find such provisions contained in our certificate of incorporation to be inapplicable or unenforceable
in an action, we may incur additional costs associated with resolving such action in other jurisdictions, we may incur additional costs
associated with resolving such action in other jurisdictions, which could materially adversely affect our business, financial condition
and operating results.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Transfer Agent and
Registrar</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The transfer agent and
registrar for our common stock is VStock Transfer, LLC. The transfer agent&#8217;s address is 18 Lafayette Place, Woodmere, New York 11598,
and its telephone number is 212-828-8436.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Stock Quotation</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">OUR COMMON STOCK IS CURRENTLY
NOT LISTED ON A NATIONAL SECURITIES EXCHANGE OR ANY OTHER EXCHANGE, OR QUOTED ON AN OVER-THE-COUNTER MARKET. WE INTEND TO CAUSE OUR COMMON
STOCK TO BE QUOTED ON THE OTC MARKETS QB TIER AS SOON AS PRACTICABLE FOLLOWING THE EFFECTIVENESS OF THE REGISTRATION STATEMENT. HOWEVER,
WE CANNOT ASSURE YOU THAT WE WILL BE ABLE TO DO SO AND, EVEN IF WE DO SO, THERE CAN BE NO ASSURANCE THAT OUR COMMON STOCK WILL CONTINUE
TO BE QUOTED ON THE OTC MARKETS OR QUOTED OR LISTED ON ANY OTHER MARKET OR EXCHANGE, OR THAT AN ACTIVE TRADING MARKET FOR OUR COMMON STOCK
WILL DEVELOP OR CONTINUE.<span style="text-transform: uppercase"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><div><a id="a_021"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>SHARES
ELIGIBLE FOR FUTURE SALE</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Prior to the Merger,
there was no public market for our common stock. Future sales of our common stock, including shares issued upon the exercise of options
or warrants that we may issue, in the public market after the Merger, or the perception that those sales may occur, could cause the prevailing
price for our common stock to fall or impair our ability to raise equity capital in the future. As described below, only a limited number
of shares of our common stock will be available for sale in the public market for a period of several months after consummation of the
Merger due to contractual and legal restrictions on resale described below. Future sales of our common stock in the public market either
before (to the extent permitted) or after restrictions lapse, or the perception that those sales may occur, could adversely affect the
prevailing price of our common stock at such time and our ability to raise equity capital at a time and price we deem appropriate.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Upon the closing of
the Offering, we had 27,198,214 shares of common stock outstanding, of which our directors and executive officers beneficially own an
aggregate of 5,424,400 shares. Of those outstanding shares, no shares of common stock are freely tradable, without restriction, as of
the date of this prospectus. No shares issued in connection with the Merger or the Offering can be publicly sold under Rule 144 under
the Securities Act until 12 months after the date of filing of our closing 8-K on the Merger.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In addition, we are subject
to a market stand-off provision described, and our directors and officers are subject to lock-up agreements, which are respectively described
in further detail in the sections of this prospectus &#8220;<i>Description of the Merger, the Offering, and Related Transactions &#8212;The
Subscription Agreement&#8212;Restrictions on Certain Equity Sales and Certain Governance Changes</i>&#8221; and &#8220;<i>Description
of the Merger, the Offering, and Related Transactions&#8212;Lock-Up Agreements</i>&#8221;.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Sale of Restricted
Shares</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">All of the 27,198,214
shares of common stock outstanding upon completion of the Offering and the Merger are &#8220;restricted securities&#8221; as such term
is defined in Rule 144. These restricted securities were issued and sold by us, or will be issued and sold by us, in private transactions
and are eligible for public sale only if registered under the Securities Act or if they qualify for an exemption from registration under
the Securities Act, including the exemptions provided by Rule 144 or Rule 701, which rules are summarized below.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Rule&#160;144</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">A person who has beneficially
owned restricted shares of our common stock for at least six months would be entitled to sell their securities provided that (i) such
person is not deemed to have been one of our affiliates at the time of, or at any time during the three months preceding, a sale and (ii)
we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale and have filed all required
reports under Section 13 or 15(d) of the Exchange Act during the 12 months (or such shorter period as we were required to file reports)
preceding the sale. Persons who have beneficially owned restricted shares of our common stock for at least six months but who are our
affiliates at the time of, or any time during the three months preceding, a sale, would be subject to additional restrictions, by which
such person would be entitled to sell within any three-month period a number of securities that does not exceed 1% of the then outstanding
shares of the same class which, immediately after the Merger and the Offering, equaled approximately 271,982 shares of our common stock.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Sales by our affiliates
under Rule 144 are also subject to certain requirements relating to manner of sale, notice and the availability of current public information
about us.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In addition, Rule 144
is not available for the resale of securities initially issued by shell companies (other than business combination related shell companies)
or issuers that have been at any time previously a shell company. However, Rule 144 also includes an important exception to this prohibition
if the following conditions are met:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the issuer of the securities
that was formerly a shell company has ceased to be a shell company;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the issuer of the securities
is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">the issuer of the securities
has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter
period that the issuer was required to file such reports and materials), other than Form 8-K reports; and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">at least one year has elapsed
from the time that the issuer filed current Form 10 type information with the SEC.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Prior to the Merger,
we were a shell company, and the closing 8-K on the Merger included Form 10 type information. As a result, Rule 144 will remain unavailable
for our securityholders for at least twelve months following the filing of the closing 8-K on the Merger.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Rule&#160;701</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In general, under Rule&#160;701
as currently in effect, any of our employees, directors, officers, consultants or advisors who acquired options to purchase common stock
from Lomond in connection with a written compensatory stock or option plan or other written agreement, in compliance with Rule&#160;701
under the Securities Act, before the effective date of the Merger (to the extent such common stock is not subject to a lock-up agreement)
is entitled to rely on Rule&#160;701 to resell shares underlying such options beginning 90&#160;days after the Merger if they comply with
Rule&#160;144, including Rule 144(i), but without complying with the holding period requirements contained in Rule&#160;144. Accordingly,
subject to Rule 144(i) and any applicable lock-up agreements, beginning 90&#160;days after the Merger, under Rule&#160;701 persons who
are not our &#8220;affiliates,&#8221; as defined in Rule&#160;144, may resell those shares without complying with the minimum holding
period or public information requirements of Rule&#160;144, and persons who are our &#8220;affiliates&#8221; may resell those shares without
compliance with Rule&#160;144&#8217;s minimum holding period requirements, subject to any applicable lock-up agreements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Registration Rights</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In connection with the
Merger and the Offering, we entered into the Registration Rights Agreement pursuant to which we agreed to file the Registration Statement
covering the reoffer and resale of up to 27,198,214 shares of our common stock. For a description of the Registration Rights Agreement
that we entered into in connection with the Merger and the Offering, see &#8220;<i>Description of the Merger, the Offering, and Related
Transactions&#8212;Registration Rights Agreement</i>&#8221; above. All descriptions of the Registration Rights Agreement herein are qualified
in their entirety by reference to the text thereof filed as Exhibit 10.6 hereto and incorporated herein by reference.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Lock-Up Agreements</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">As a condition to the
closing of the Offering pursuant to the Subscription Agreement, our directors and officers entered into the Lock-Up Agreements. Pursuant
to such Lock-Up Agreements, our directors and officers each agreed that, subject to certain exceptions, they will not, for a period commencing
on the closing date of the Merger and ending on the earlier of: (i) 60 days after the common stock is listed on a National Securities
Exchange (as defined in the Registration Rights Agreement) and (ii) the later of (A) 18 months after the final closing of the Offering
and (B) 60 days after the first day on which both the common stock is traded on an Approved OTC Market (as defined in the Registration
Rights Agreement) and a registration statement with respect to the resale of all of the Shares and Other Shares (as defined in the Subscription
Agreement) has been declared effective by the SEC, exchange, dispose of, or enter into any swap, hedge or similar arrangement regarding,
any shares of common stock or securities convertible into or exercisable or exchangeable for shares of common stock in each case held
immediately following the closing of the private placement offering or thereafter acquired by any means (including, for the avoidance
of doubt, through the receipt of equity incentive awards from us), and whether held beneficially or of record, but excluding (i) any shares
of common stock purchased such persons or their affiliates in the private placement offering, and (ii) any shares of common stock received
by such persons or their affiliates upon the conversion of the SAFEs. The Lock-Up Agreements contain customary transfer exceptions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b>Equity Plans</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We intend to file with
the SEC a registration statement on Form S-8 under the Securities Act covering the shares of common stock that are outstanding or reserved
for issuance under the Lomond Plan and the 2024 Plan. Such registration statement is expected to be filed and become effective as soon
as practicable after the consummation of the Merger (but no less than 60 days thereafter pursuant to SEC rules that apply to former shell
companies). Accordingly, shares registered under such registration statement will be available for sale in the open market following
its effective date, subject to vesting restrictions, Rule&#160;144 volume limitations and lock-up agreements, if applicable. For a more
complete discussion of our stock plans, see the section titled &#8220;<i>Executive Compensation&#8212;Equity Plans</i>.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><div><a id="a_022"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>LEGAL
MATTERS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The validity of the shares
of our common stock being offered by this prospectus will be passed upon for us by Snell &amp; Wilmer L.L.P., San Diego, California.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>&#160;</b></span></p><div>

</div><div><a id="a_023"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>EXPERTS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The balance sheets of
Lomond Therapeutics, Inc. as of December 31, 2023 and 2022, and the related statements of operations, redeemable convertible preferred
stock and stockholders&#8217; deficit, and cash flows for each of the years then ended, have been audited by EisnerAmper LLP, independent
registered public accounting firm, as stated in their report which is included in this registration statement. Such financial statements
have been included in this registration statement in reliance on the report of such firm given upon their authority as experts in accounting
and auditing.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The financial statements of Venetian-1 Acquisition Corp. as of December 31, 2023 and 2022 and for the years ended December 31, 2023 and
2022 included in this prospectus of Lomond Therapeutics Holdings, Inc., which is referred to and made a part of this Prospectus and Registration
Statement, have been audited by Grassi &amp; Co., CPAs, P.C., independent registered public accounting firm, as set forth in their report
appearing elsewhere herein (which contains an explanatory paragraph relating to substantial doubt about the ability of Venetian-1 Acquisition
Corp. to continue as a going concern as described in Note 6 to the financial statements), and are included in reliance upon such report
given on the authority of such firm as experts in accounting and auditing.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><div><a id="a_024"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>WHERE
YOU CAN FIND MORE INFORMATION</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We have filed with the
SEC this registration statement on Form S-1 under the Securities Act with respect to the shares of common stock being offered by this
prospectus. This prospectus, which constitutes a part of this registration statement, does not contain all of the information in this
registration statement and its exhibits. For further information with respect to us and the common stock offered by this prospectus, you
should refer to this registration statement and the exhibits filed as part of this document. Statements contained in this prospectus as
to the contents of any contract or any other document referred to are not necessarily complete, and in each instance, we refer you to
the copy of the contract or other document filed as an exhibit to this registration statement. Each of these statements is qualified in
all respects by this reference.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We are subject to the
informational requirements of the Exchange Act and file annual, quarterly and current reports, proxy statements and other information
with the SEC. You can read our SEC filings, including this registration statement, over the Internet on the SEC&#8217;s website at&#160;<i>http://www.sec.gov</i>.
You may also request a copy of these filings, at no cost, by writing or telephoning us at: Lomond Therapeutics Holdings, Inc., 8 The Green
Suite 8183, Dover, Delaware 19901, (212) 739-6400.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="margin: 0"></p><div>

</div><!-- Field: Page; Sequence: 167 --><div>
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</div><p style="margin: 0">&#160;</p><div>

</div><div><a id="a_025"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><b>INDEX TO FINANCIAL
STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><b>Lomond Therapeutics,
Inc.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">Audited Financial Statements for the Years
Ended December 31, 2023 and 2022</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; background-color: white; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-indent: -0.125in; padding-left: 0.125in; padding-bottom: 1.5pt; width: 90%">&#160;</td>
    <td style="padding-bottom: 1.5pt; width: 1%">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; width: 9%; text-align: center"><span style="font-size: 10pt"><b>Page</b></span></td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
    <td style="text-indent: -0.125in; padding-left: 0.125in"><a href="#f_001"><span style="font-size: 10pt">Report of Independent Registered Public Accounting Firm</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">F-3</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-indent: -0.125in; padding-left: 0.125in"><a href="#f_002"><span style="font-size: 10pt">Financial Statements Balance Sheets as of December 31, 2023 and 2022</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">F-4</span></td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
    <td style="text-indent: -0.125in; padding-left: 0.125in"><a href="#f_003"><span style="font-size: 10pt">Statements of Operations for the years ended December 31, 2023 and 2022</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">F-5</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-indent: -0.125in; padding-left: 0.125in"><a href="#f_004"><span style="font-size: 10pt">Statements of Redeemable Convertible Preferred Stock and Stockholders&#8217; Deficit for the years ended December 31, 2023 and 2022</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">F-6</span></td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
    <td style="text-indent: -0.125in; padding-left: 0.125in"><a href="#f_005"><span style="font-size: 10pt">Statements of Cash Flows for the years ended December 31, 2023 and 2022</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">F-7</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-indent: -0.125in; padding-left: 0.125in"><a href="#f_006"><span style="font-size: 10pt">Notes to Financial Statements</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">F-8</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.8pt; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">Unaudited Condensed Financial Statements for
the Nine Months Ended September 30, 2024 and 2023</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Page</b></span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <td style="font-family: Times New Roman, Times, Serif; width: 90%"><span style="font-family: Times New Roman, Times, Serif">Financial
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    <td style="font-family: Times New Roman, Times, Serif; padding-bottom: 1.5pt; width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: center; width: 9%"/></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
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    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif">F-27</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: White">
    <td style="font-family: Times New Roman, Times, Serif; padding-left: 0.125in; text-indent: -0.125in"><span style="font-family: Times New Roman, Times, Serif"><a href="#C_002">Condensed
    Statements of Operations for the three and nine months ended September 30, 2024 and 2023 (unaudited)</a></span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif">F-28</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font-family: Times New Roman, Times, Serif; padding-left: 0.125in; text-indent: -0.125in"><span style="font-family: Times New Roman, Times, Serif"><a href="#C_003">Condensed
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    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif">F-29</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: White">
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif"><a href="#C_004">Condensed
    Statements of Cash Flows for the nine months ended September 30, 2024 and 2023 (unaudited)</a></span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif">F-30</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
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    to Financial Statements (unaudited)</a></span></td>
    <td style="font-family: Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif">F-31</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><b>Lomond Therapeutics,
Inc. and Venetian-1 Acquisition Corp.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Unaudited Combined Pro
Forma Financial Statements for the Year Ended December 31, 2023 and the Nine Months Ended September 30, 2024</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; background-color: white; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="padding-bottom: 1.5pt; width: 90%">&#160;</td>
    <td style="padding-bottom: 1.5pt; width: 1%">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; width: 9%; text-align: center"><span style="font-size: 10pt"><b>Page</b></span></td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
    <td><a href="#C_006"><span style="font-size: 10pt">Unaudited Pro Forma Combined Financial Information</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center">F-45</td></tr>
  <tr style="vertical-align: top">
    <td><a href="#C_007"><span style="font-size: 10pt">Balance Sheet as of September 30, 2024</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center">F-47</td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
    <td><a href="#C_008"><span style="font-size: 10pt">Statement of Operations for the Nine Months Ended September 30, 2024</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center">F-48</td></tr>
  <tr style="vertical-align: top">
    <td><a href="#C_009"><span style="font-size: 10pt">Statement of Operations for the Year Ended December 31, 2023</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center">F-49</td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
    <td><a href="#C_010"><span style="font-size: 10pt">Notes to Unaudited Pro Forma Financial Statements</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center">F-50</td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><b>Venetian-1 Acquisition
Corp.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">Audited Financial Statements for the Years
Ended December 31, 2023 and 2022</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; background-color: white; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="padding-bottom: 1.5pt; width: 90%">&#160;</td>
    <td style="padding-bottom: 1.5pt; width: 1%">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; width: 9%; text-align: center"><span style="font-size: 10pt"><b>Page</b></span></td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
    <td><a href="#f_007"><span style="font-size: 10pt">Report of Independent Registered Public Accounting Firm</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">F-53</span></td></tr>
  <tr style="vertical-align: top">
    <td><a href="#f_008"><span style="font-size: 10pt">Balance Sheets as of December 31, 2023 and 2022</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">F-54</span></td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
    <td><a href="#f_009"><span style="font-size: 10pt">Statements of Operations for the Years Ended December 31, 2023 and 2022</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">F-55</span></td></tr>
  <tr style="vertical-align: top">
    <td><a href="#f_010"><span style="font-size: 10pt">Statements of Changes in Stockholders&#8217; Deficit for the Years Ended December 31, 2023 and
    2022</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">F-56</span></td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
    <td><a href="#f_011"><span style="font-size: 10pt">Statements of Cash Flows for the Years Ended December 31, 2023 and 2022</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">F-57</span></td></tr>
  <tr style="vertical-align: top">
    <td><a href="#f_012"><span style="font-size: 10pt">Notes to Financial Statements</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">F-58</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.8pt; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Unaudited Condensed Financial
Statements for the Three and Nine Months Ended September 2024 and 2023</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; background-color: white; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="padding-bottom: 1.5pt; width: 90%">&#160;</td>
    <td style="padding-bottom: 1.5pt; width: 1%">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; width: 9%; text-align: center"><span style="font-size: 10pt"><b>Page</b></span></td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
    <td><a href="#f_013"><span style="font-size: 10pt">Condensed Balance Sheets</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">F-61</span></td></tr>
  <tr style="vertical-align: top">
    <td><a href="#f_014"><span style="font-size: 10pt">Condensed Statements of Operations</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">F-62</span></td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
    <td><a href="#f_015"><span style="font-size: 10pt">Condensed Statement of Changes in Stockholders&#8217; Deficit</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">F-63</span></td></tr>
  <tr style="vertical-align: top">
    <td><a href="#f_016"><span style="font-size: 10pt">Condensed Statement of Cash Flows</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">F-64</span></td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
    <td><a href="#f_017"><span style="font-size: 10pt">Notes to Condensed Financial Statements</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">F-65</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 168; Options: NewSection; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->1<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Lomond Therapeutics, Inc.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Financial Statements</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">As of and for the years ended December 31, 2023
and 2022</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 169; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->2<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><div><a id="f_001"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">To the Board of Directors and Stockholders of</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Lomond Therapeutics, Inc.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Opinion on the Financial Statements</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have audited the accompanying balance sheets
of Lomond Therapeutics, Inc. (the &#8220;Company&#8221;) as of December 31, 2023 and 2022, and the related statements of operations, redeemable
convertible preferred stock and stockholders&#8217; deficit, and cash flows for each of the years then ended, and the related notes (collectively
referred to as the &#8220;financial statements&#8221;). In our opinion, the financial statements present fairly, in all material respects,
the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each
of the years then ended, in conformity with accounting principles generally accepted in the United States of America.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Basis for Opinion</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">These financial statements are the responsibility
of the Company&#8217;s management. Our responsibility is to express an opinion on the Company&#8217;s financial statements based on our
audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (&#8220;PCAOB&#8221;)
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We conducted our audits in accordance with the
standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement,
whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining,
on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">/s/ EisnerAmper LLP</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have served as the Company&#8217;s auditor
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">EISNERAMPER LLP</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Philadelphia, Pennsylvania</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">November 7, 2024</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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</div><div><a id="f_002"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Lomond Therapeutics, Inc.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><span style="font-size: 10pt">Balance Sheets</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">The accompanying notes are an integral part of
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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</div><div><a id="f_003"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><b>Lomond Therapeutics, Inc.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><span style="font-size: 10pt">Statements of Operations</span></p><div>

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    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(4,355,299</td><td style="padding-bottom: 2.5pt; text-align: left">)</td></tr>
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  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">The accompanying notes are an integral part of
these financial statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><div><a id="f_004"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><b>Lomond Therapeutics, Inc.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><span style="font-size: 10pt">Statements of Redeemable Convertible Preferred Stock and Stockholders&#8217; Deficit</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><span style="font-size: 10pt"><b>For the years ended December 31, 2023 and 2022</b></span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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    <td style="text-indent: -0.125in; padding-left: 0.125in; padding-bottom: 1.5pt; text-align: center">&#160;</td><td style="padding-bottom: 1.5pt; text-align: center">&#160;</td>
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Convertible<br/>
 Preferred</b></span></td>
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 Paid-In</td><td style="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&#160;</td><td style="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&#160;</td>
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 Stockholders&#8217;</td><td style="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&#160;</td></tr>
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    <td style="text-indent: -0.125in; padding-left: 0.125in; padding-bottom: 1.5pt; text-align: center">&#160;</td><td style="padding-bottom: 1.5pt; text-align: center">&#160;</td>
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    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Cash contribution from parent</td><td>&#160;</td>
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    <td style="border-right: Black 1.5pt solid">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">1,996,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">1,996,000</td><td style="text-align: left">&#160;</td></tr>
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    <td style="border-right: Black 1.5pt solid">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">29,165</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">29,165</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(14,553</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(14,553</td><td style="text-align: left">)</td></tr>
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    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Cash contribution from parent</td><td>&#160;</td>
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    <td style="border-right: Black 1.5pt solid">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">8,711,966</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">8,711,966</td><td style="text-align: left">&#160;</td></tr>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td>
    <td style="border-right: Black 1.5pt solid">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">5,426,120</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">5,426,120</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td>
    <td style="border-right: Black 1.5pt solid">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">5,428</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">5,428</td><td style="text-align: left">&#160;</td></tr>
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</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">The accompanying notes are an integral part of
these financial statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><div><a id="f_005"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><b>Lomond Therapeutics, Inc.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><span style="font-size: 10pt">Statements of Cash Flows</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><span style="font-size: 10pt"><b>For the years ended December 31, 2023 and 2022</b></span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: 9pt; padding-left: 9pt">Net cash provided by financing activities</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left">Supplemental non-cash financing activities:</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">$</td><td style="text-align: right">1,280,036</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">The accompanying notes are an integral part of
these financial statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><div><a id="f_006"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Lomond Therapeutics, Inc.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Notes to the Financial Statements</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>As of and for the years ended December 31, 2023 and 2022</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.3in; text-align: left"><span style="font-size: 10pt"><b>1</b></span></td><td style="text-align: justify"><span style="font-size: 10pt"><b>Organization and Description
of Business</b></span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">Lomond Therapeutics, Inc. (the &#8220;Company&#8221;)
is a biopharmaceutical company involved in the discovery and development of small molecule inhibitors that target escape mutations in
hematologic cancers. The Company was incorporated on January 22, 2020, pursuant to the laws of the State of Delaware. On July 1, 2022,
shareholders of the Company contributed and transferred all outstanding common stock, stock options, and redeemable convertible preferred
stock of the Company to Eilean Therapeutics, LLC (&#8220;Eilean&#8221;, or the &#8220;Parent&#8221;) in exchange for common unit ownership
in Eilean (the &#8220;Eilean transaction&#8221;). After the Eilean transaction, Eilean became the sole shareholder of the Company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"><b>Liquidity</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">Since inception, the Company has been
primarily performing research and development activities, establishing and maintaining its intellectual property, and raising capital
to support and expand its operations. The Company has funded its operations primarily through the sale of its series seed redeemable convertible
preferred stock and contributions from it&#8217;s Parent. The Company does not yet have a product that has been approved by the FDA, has
not generated any product sales revenues and has not yet achieved profitable operations, nor has it ever generated positive cash flows
from operations. There is no assurance that profitable operations, if achieved, could be sustained on a continuing basis. Further, the
Company&#8217;s future operations are dependent on the success of the Company&#8217;s efforts to raise additional capital, its research
and commercialization efforts, regulatory approval, and, ultimately, the market acceptance of the Company&#8217;s products.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">In accordance with Accounting Standards
Codification (&#8220;ASC&#8221;) 205-40, Going Concern, the Company has evaluated whether there are conditions and events, considered
in the aggregate, that raise substantial doubt about the Company&#8217;s ability to continue as a going concern within one year after
the date that the condensed consolidated financial statements are issued. As of December 31, 2023, the Company had cash of $0.8 million.
In August and October 2024, the Company issued Simple Agreement for Future Equity (&#8220;SAFE instruments&#8221;) resulting in net proceeds
of $11.0 million. In November 2024, the Company completed a merger with Venetian-1 Acquisition Corp (&#8220;Venetian&#8221;) (the &#8220;Merger&#8221;).
Upon closing, the Company completed a private placement offering (the &#8220;Offering&#8221;) resulting in net proceeds of approximately
$29.0 million, net of placement agent fees and estimated offering expenses payable by the Company. See Note 10 for further discussion.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">Additionally, the Company had an accumulated
deficit of $21.7 million at December 31, 2023, and during the year ended December 31, 2023, the Company incurred a net loss of $9.9 million.
The Company expects to continue to generate operating losses for the foreseeable future. The Company believes that its cash and cash equivalents
of $0.8 million as of December 31, 2023, together with the aggregate net proceeds of approximately $40.0 million from the Offering and
issuance of SAFE instruments, will be sufficient to fund its operating expenses for at least the next 12 months from issuance of these
financial statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Lomond Therapeutics, Inc.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Notes to the Financial Statements</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>As of and for the years ended December 31, 2023 and 2022</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">In addition, to finance its future
operations, the Company will likely seek additional funding through public financings or government programs and will seek funding or
development program cost-sharing through collaboration agreements or licenses with larger pharmaceutical or biotechnology companies. If
the Company does not obtain additional funding or development program cost-sharing, or exceeds its current spending forecasts, the Company
has the ability and would be forced to delay, reduce or eliminate certain clinical trials or research and development programs, reduce
or eliminate discretionary operating expenses, and delay company and pipeline expansion, any of which could adversely affect its business
prospects. The inability to obtain funding, as and when needed, could have a material adverse effect on the Company&#8217;s financial
condition and ability to pursue its business strategies.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">The Company&#8217;s financial statements
have been prepared on the basis of the Company continuing as a going concern, which assumes the continuity of operations, the realization
of assets and the settlement of liabilities and commitments as they come due in the normal course of business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0%"/><td style="width: 0.3in; text-align: left"><span style="font-size: 10pt"><b>2</b></span></td><td style="text-align: justify"><span style="font-size: 10pt"><b>Significant accounting policies
and basis of presentation</b></span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"><span style="background-color: white"><b>Basis
of presentation</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">The financial statements have been
prepared in accordance with United States generally accepted accounting principles (&#8220;U.S. GAAP&#8221;) and include the Company&#8217;s
accounts.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"><b>Use of estimates</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">The preparation of the financial statements
in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expense
during the reporting periods. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and
other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could differ from those
estimates. The most significant estimates relate to the accrual of research and development expenses, and valuation of stock option awards
for share-based compensation.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"><b>Cash</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">Cash is comprised of cash deposits
held with financial institutions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"><b>Concentrations and risks and uncertainties</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"><i>Concentration of credit risk</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">Financial instruments that potentially
subject the Company to significant concentrations of credit risk consist primarily of cash. Substantially all of the Company&#8217;s cash
deposits are maintained at one financial institution domiciled in the United States. Amounts on deposit with this financial institution
may, from time to time, exceed the federally insured limit. The Company is exposed to credit risk in the event of default by the financial
institution holding its cash to the extent recorded in the balance sheet. The Company has not experienced any losses on its deposits.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Lomond Therapeutics, Inc.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Notes to the Financial Statements</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>As of and for the years ended December 31, 2023 and 2022</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"><i>Business risks</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">The Company&#8217;s future results
of operations involve a number of other risks and uncertainties. Factors that could affect the Company&#8217;s future operating results
and cause actual results to vary materially from expectations include, but are not limited to, uncertainty of results of clinical trials
and reaching milestones, uncertainty of regulatory approval of the Company&#8217;s current and potential future product candidates, uncertainty
of market acceptance of the Company&#8217;s product candidates, competition from substitute products and larger companies, securing and
protecting proprietary technology, strategic relationships and dependence on key individuals or sole-source suppliers.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">The Company&#8217;s product candidates
require approvals from the U.S. Food and Drug Administration and comparable foreign regulatory agencies prior to commercial sales in their
respective jurisdictions. There can be no assurance that any product candidates will receive the necessary approvals. If the Company was
denied approval, approval was delayed, or the Company was unable to maintain approval for any product candidate, it could have a materially
adverse impact on the Company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"><b>Research and development costs</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">Research and development costs consist
primarily of cost of subcontractors and materials used for research and development activities, including preclinical studies, clinical
trials, materials and supplies, and professional services. The costs of services performed by others in connection with the research and
development activities of the Company, including research and development conducted by others on behalf of the Company, is included in
research and development costs and expensed as the contracted work is performed. The Company accrues for costs incurred as the services
are being provided by monitoring the status of the project and the invoices received from its external service providers. Where contingent
milestone payments are due to third parties under research and development arrangements, the milestone payment obligations are expensed
when the milestone results are probable to be achieved.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"><b>Income taxes</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">The Company accounts for income taxes
under the asset and liability method. Under this method, deferred tax assets and liabilities are determined based on differences between
financial reporting and tax bases of assets and liabilities and are measured using enacted tax rates and laws that are expected to be
in effect when the differences are expected to be recovered or settled. Realization of deferred tax assets is dependent upon future taxable
income. A valuation allowance is recognized if it is more likely than not that some portion or all of a deferred tax asset will not be
realized based on the weight of available evidence, including expected future earnings. As of December 31, 2023 and 2022, management believes
it is more likely than not that no benefits will be derived from the Company&#8217;s deferred tax assets.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">The Company recognizes an uncertain
tax position in its financial statements when it concludes that a tax position is more likely than not to be sustained upon examination
based solely on its technical merits. Only after a tax position passes the first step of recognition will measurement be required. Under
the measurement step, the tax benefit is measured as the largest amount of benefit that is more likely than not to be realized upon effective
settlement. This is determined on a cumulative probability basis. The full impact of any change in recognition or measurement is reflected
in the period in which such change occurs. As of December 31, 2023 and 2022, the Company has not recorded any uncertain tax positions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Lomond Therapeutics, Inc.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Notes to the Financial Statements</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>As of and for the years ended December 31, 2023 and 2022</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">The tax years from 2021 and forward
are subject to examination by federal tax and state tax authorities. In addition, tax years with net operating loss carryforwards are
subject to examination, three years following the year they are utilized. The Company has not been informed by any tax authorities for
any jurisdiction that any of its tax years is under examination.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">The Company elected to record any interest
or penalties related to income taxes as part of its income tax expense. There were no interest or penalties related to income taxes for
the years ended December 31, 2023 or 2022.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in"><b>Redeemable convertible preferred stock</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">The Company records shares of its redeemable
convertible preferred stock at their respective fair values on the dates of issuance, net of issuance costs. The Company classifies its
preferred stock outside of total stockholders&#8217; deficit because, in the event of certain &#8220;liquidation events&#8221; (including
a merger, acquisition or sale of all or substantially all of the Company&#8217;s assets) that are not solely within the control of the
Company, the shares would become redeemable at the option of the holders. The Company did not adjust the carrying values of the preferred
stock to the deemed liquidation values of the shares since a liquidation event was not probable at any of the reporting dates. Subsequent
adjustments to increase or decrease the carrying values to the liquidation values will be made only if and when it becomes probable that
such liquidation event will occur.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"><b>Share-based compensation</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">The Company measures its share-based
awards, including grants issued by the Company or Eilean to the Company&#8217;s employees and non-employees, based on their grantdate
fair value. The Company&#8217;s share-based awards currently include common units in its parent, Eilean. The Company records compensation
expense for these service-based awards beginning on the grant date over the requisite service period in which the awards are expected
to vest on a straight-line basis, subject to a minimum expense amount based on the awards that have vested to date. The common stock issued
to option holders upon the exercise of option awards are authorized and previously unissued common stock of Eilean. Forfeitures are recognized
as they occur.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">The grant date fair value of employee
and non-employee awards are determined using the Black-Scholes option pricing model, which includes inputs such as the fair value of the
Company&#8217;s common stock, expected term, risk-free rate, expected stock price volatility over the expected term, and expected dividend
yield. For all options granted, the Company calculated the expected term based on the simplified method. The Company has no publicly available
stock information and therefore, the Company used the historical volatility of the stock price of similar publicly traded peer companies.
The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time
of the grant. The Company does not anticipate that dividends will be distributed in the near future.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">The absence of an active market for
the Company&#8217;s common stock requires the Company&#8217;s Board of Directors to determine the fair value of its common stock for purposes
of granting options. The Company obtains third-party valuations to assist the Board of Directors in determining the fair value of the
Company&#8217;s common stock.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Lomond Therapeutics, Inc.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Notes to the Financial Statements</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>As of and for the years ended December 31, 2023 and 2022</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"><b>Net loss per share attributable
to common stockholders</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">Net loss per share attributable to
common stockholders is computed using the two-class method required for participating securities based upon their respective rights to
receive dividends as if all income for the period has been distributed.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">The Company&#8217;s participating securities
include the Company&#8217;s redeemable convertible preferred stock. The holders of redeemable convertible preferred stock do not have
a contractual obligation to share in losses of the Company, and, therefore, during periods of loss there is no allocation required under
the two-class method.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">Basic net loss per share attributable
to common stockholders is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding during
the period.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">Diluted net loss per share is computed
by giving effect to all potentially dilutive securities outstanding for the period using the treasury stock method or the if-converted
method based on the nature of such securities. For periods in which the Company reports net losses, diluted net loss per share attributable
to common stockholders is the same as basic net loss per share attributable to common stockholders, because potentially dilutive shares
of common stock are not assumed to have been issued if their effect is anti-dilutive.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">As of December 31, 2023 and 2022, 13,661,416
potential shares of common stock from the Company&#8217;s redeemable convertible preferred stock were excluded from the computation of
diluted net loss per share attributable to common stockholders, because including them would have had an anti-dilutive effect.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"><b>Segments</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">Operating segments are defined as components
of an entity for which separate financial information is available and regularly reviewed by the Chief Operating Decision Maker (&#8220;CODM&#8221;)
in deciding how to allocate resources to such individual segment and in assessing performance. The Company&#8217;s CODM is its President.
To date, the Company operates and manages its business as one operating and reportable segment. All the Company&#8217;s assets are located
in the United States.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"><b>Forward stock split</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">On September 20, 2024, the Company
filed a Certificate of Amendment to its Certificate of Incorporation, as amended, with the Secretary of State of the State of Delaware,
which effected a 3.794838-for-1 forward stock split (the &#8220;stock split&#8221;) of the Company&#8217;s issued and outstanding shares
of common stock and series seed redeemable convertible preferred stock. As a result of the stock split, (i) every share of common stock
issued and outstanding was converted into 3.794838 shares of common stock, and (ii) every share of redeemable convertible preferred stock
issued and outstanding was converted into 3.794838 shares of redeemable convertible preferred stock. The stock split affected all stockholders
uniformly and did not alter any stockholder&#8217;s percentage interest in the Company&#8217;s equity. No fractional shares were issued
in connection with the stock split. Stockholders who would otherwise be entitled to a fractional share of common stock were instead entitled
to receive a proportional cash payment. The Restated Certificate of Incorporation authorizes the Company to issue 32,661,416 shares of
capital stock on a post-stock split adjusted basis, inclusive of 19,000,000 shares of common stock, and 13,661,416 shares of series seed
redeemable convertible preferred stock. All common share and per share amounts presented in the financial statements and accompanying
notes have been retroactively adjusted to reflect the stock split.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Lomond Therapeutics, Inc.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Notes to the Financial Statements</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>As of and for the years ended December 31, 2023 and 2022</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"><b>Recently adopted accounting pronouncements</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">In August 2020, the Financial Accounting
Standards Board (&#8220;FASB&#8221;) issued Accounting Standard Update (&#8220;ASU&#8221;) No. 2020-06, Debt&#8212;Debt with Conversion
and Other Options (Subtopic 470-20) and Derivatives and Hedging&#8212;Contracts in Entity&#8217;s Own Equity (Subtopic 815-40). This standard
simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20
that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host
convertible debt or preferred stock. The Company adopted this standard as of January 1, 2022, which did not have material impact on its
financial statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"><b>Recently issued accounting pronouncements</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">In December 2023, the FASB issued ASU
2023-09, Income Taxes: Improvements to Income Tax Disclosures, which requires enhanced annual disclosures regarding the rate reconciliation
and income taxes paid information. This standard is effective for fiscal years beginning after December 15, 2024, and may be adopted on
a prospective or retrospective basis, with early adoption permitted. The Company is currently evaluating the impact of this standard on
its financial statements and related disclosures.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"/><td style="width: 0.3in; text-align: left"><span style="font-size: 10pt"><b>3</b></span></td><td style="text-align: justify"><span style="font-size: 10pt"><b>Other financial statement information</b></span></td>
</tr></table><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"><b>Accrued expenses and other current
liabilities &#8211; related party</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">Accrued expenses and other current
liabilities &#8211; related party consisted of the following:&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: bottom">
    <td>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p></td>
    <td style="text-align: center">&#160;</td>
    <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center"><span style="font-size: 10pt"><b>As of December 31,</b></span></td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td>
    <td style="text-align: center">&#160;</td>
    <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><span style="font-size: 10pt"><b>2023</b></span></td>
    <td style="text-align: center">&#160;</td>
    <td style="text-align: center">&#160;</td>
    <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><span style="font-size: 10pt"><b>2022</b></span></td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td style="width: 76%"><span style="font-size: 10pt">Accrued research and development</span></td>
    <td style="width: 1%">&#160;</td>
    <td style="width: 1%"><span style="font-size: 10pt">$</span></td>
    <td style="width: 9%; text-align: right"><span style="font-size: 10pt">856,144</span></td>
    <td style="width: 1%">&#160;</td>
    <td style="width: 1%">&#160;</td>
    <td style="width: 1%"><span style="font-size: 10pt">$</span></td>
    <td style="width: 9%; text-align: right"><span style="font-size: 10pt">748,438</span></td>
    <td style="width: 1%">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: white">
    <td><span style="font-size: 10pt">Accrued interest on promissory notes</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: right"><span style="font-size: 10pt">-</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: right"><span style="font-size: 10pt">114,879</span></td>
    <td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td style="padding-bottom: 1.5pt"><span style="font-size: 10pt">Other accrued liabilities</span></td>
    <td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: black 1.5pt solid">&#160;</td>
    <td style="border-bottom: black 1.5pt solid; text-align: right"><span style="font-size: 10pt">-</span></td>
    <td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: black 1.5pt solid">&#160;</td>
    <td style="border-bottom: black 1.5pt solid; text-align: right"><span style="font-size: 10pt">55,964</span></td>
    <td style="padding-bottom: 1.5pt">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: white">
    <td style="padding-bottom: 2.5pt; text-indent: 9pt"><span style="font-size: 10pt">Total accrued expenses and other current liabilities</span></td>
    <td style="padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: black 4.5pt double"><span style="font-size: 10pt">$</span></td>
    <td style="border-bottom: black 4.5pt double; text-align: right"><span style="font-size: 10pt">856,144</span></td>
    <td style="padding-bottom: 2.5pt">&#160;</td>
    <td style="padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: black 4.5pt double"><span style="font-size: 10pt">$</span></td>
    <td style="border-bottom: black 4.5pt double; text-align: right"><span style="font-size: 10pt">919,281</span></td>
    <td style="padding-bottom: 2.5pt">&#160;</td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->13<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Lomond Therapeutics, Inc.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Notes to the Financial Statements</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>As of and for the years ended December 31, 2023 and 2022</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.3in"><span style="font-size: 10pt"><b>4</b></span></td>
    <td style="text-align: justify"><span style="font-size: 10pt"><b>Commitment and contingencies</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"><b>Guarantees and Indemnification</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">In the normal course of business, the
Company enters into agreements that contain a variety of representations and provide for general indemnification. The Company&#8217;s
exposure under these agreements is unknown because it involves claims that may be made against the Company in the future. The Company
has entered into indemnification agreements with certain directors and officers that require the Company, among other things, to indemnify
them against certain liabilities that may arise by reason of the status or service as directors or officers. To date, the Company has
not paid any claims or been required to defend any action related to its indemnification obligations. As of December 31, 2023, the Company
does not have any material indemnification claims that were probable or reasonably possible and consequently has not recorded related
liabilities.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"><b>Contingencies</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">From time to time, the Company may
become involved in legal proceedings arising in the ordinary course of business. The Company is not currently a party to any material
legal proceedings.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.3in"><span style="font-size: 10pt"><b>5</b></span></td>
    <td style="text-align: justify"><span style="font-size: 10pt"><b>Redeemable convertible preferred stock</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">In March 2020, the Company issued an
aggregate of 5,216,179 shares of its series seed redeemable convertible preferred stock (&#8220;preferred stock&#8221;) at a purchase
price of $0.402594 per share in exchange for cash proceeds of $2.1 million.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">Pursuant to the terms of the original
and amended Series Seed Preferred Stock Purchase Agreement (the &#8220;Agreement&#8221;), the Company was obligated to sell additional
shares of its preferred stock to the same investors at a cash purchase price of $0.402594 per share. In 2021, the Company issued an aggregate
of 8,445,237 shares of its preferred stock at a purchase price of $0.402594 per share in exchange for cash proceeds $3.4 million.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">Redeemable convertible preferred stock
consisted of the following:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td colspan="17" style="text-align: center; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>As
of December 31, 2023 and 2022</b></p></td></tr>
  <tr style="vertical-align: bottom">
    <td style="font-weight: bold; border-bottom: Black 1.5pt solid">Series</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Shares authorized</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 52%; text-align: left; padding-bottom: 1.5pt">Series Seed</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
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    <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">5,466,925</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: center; padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">&#160;</td><td style="border-bottom: Black 4pt double; text-align: right">13,661,416</td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">&#160;</td><td style="border-bottom: Black 4pt double; text-align: right">13,661,416</td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">5,500,001</td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">5,466,925</td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr>
  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 181; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->14<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Lomond Therapeutics, Inc.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Notes to the Financial Statements</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>As of and for the years ended December 31, 2023 and 2022</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">The following are the key terms of
the preferred stock:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"><b>Dividends</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">The holders of shares of preferred
stock are entitled to receive dividends, out of any assets legally available, prior and in preference to any declaration or payment of
any dividend on the common stock, payable only if and when declared. Such dividends are non-cumulative.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">After payment of any such dividends
on the preferred stock, any additional dividends or distributions shall be distributed among all holders of common stock and preferred
stock in proportion to the number of shares of common stock that would be held by each such holder if all shares of preferred stock were
converted to common stock at the then effective conversion rate. No dividends have been declared to date.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"><b>Optional Conversion</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">Each share of preferred stock is convertible
at the option of the holder at any time after the issuance date of such share into such number of shares of common stock as is determined
by dividing the applicable original issue price by the applicable conversion price for such series. The initial conversion price per share
for each series of preferred stock shall be the original issue price of $0.402594 per share. Adjustments to the conversion price, if any,
occur if additional shares of common stock have been issued at a price less than the respective preferred stock.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"><b>Automatic Conversion</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">Each share of preferred stock will
automatically convert into shares of common stock at the conversion rate at the time in effect for such series of preferred stock immediately
upon either of (1) the closing of the Company&#8217;s sale of its common stock in an initial public offering pursuant to a registration
statement on Form S-1 that results in at least $30.0 million of gross proceeds; or (2) the date, or the occurrence of an event, specified
by vote or written consent or agreement of the holders of a majority of the then outstanding shares of preferred stock (voting together
as a single class and not as separate series, and on an as-converted basis).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"><b>Liquidation Preference</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">In the event of any voluntary or involuntary
liquidation, dissolution, or winding up of the Company, the holders of the preferred stock are entitled to receive out of the proceeds
or assets of the Company available for distribution to its stockholders, prior and in preference to any distribution of the proceeds to
the holders of common stock, a liquidation preference in the amount per share equal to the sum of the original issue price of $0.402594
per share, plus any declared but unpaid dividends on such share.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">If the assets of the Company are insufficient
to pay the holders of the preferred stock the full amount, the holders of the preferred stock will share ratably in any distribution of
the assets available for distribution.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">If preferential amounts are paid in
full, the remaining assets of the Company are distributed among the holders of the preferred stock and common stock pro rata based on
the number of shares held by each shareholder.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Lomond Therapeutics, Inc.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Notes to the Financial Statements</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>As of and for the years ended December 31, 2023 and 2022</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"><b>Voting rights</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">Each share of preferred stock has a
number of votes equal to the number of shares of common stock into which it is convertible. Except as provided in the Company&#8217;s
amended or restated articles of incorporation, the holders of preferred stock and the holders of common stock vote together as one single
class.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">The holders of preferred stock are
entitled to elect two directors of the Company. The holders of preferred stock and common stock (voting together as a single class and
on an as converted basis) are entitled to elect the two remaining directors.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"><b>Redemption</b></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">The preferred stock is not currently
redeemable; however, it is redeemable at the option of the holders in the event of certain &#8220;liquidation events&#8221; (including
a merger, acquisition or sale of all or substantially all of the Company&#8217;s assets) that are not solely within the control of the
Company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%">
  <tr style="vertical-align: top">
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">The voting, dividend, and liquidation
rights of the holders of the Company&#8217;s common stock are subject to and qualified by the rights, powers, and preferences of the holders
of the preferred stock set forth above. Each share of common stock entitles the holder to one vote, together with the holders of the preferred
stock, on all matters submitted to the stockholders for a vote. The holders of common stock are entitled to receive dividends, if any,
as declared by the Company&#8217;s board of directors, subject to the preferential dividend rights of redeemable convertible preferred
stock. As of December 31, 2023 and 2022, the Company&#8217;s certificate of incorporation, as amended and restated, authorized the Company
to issue 19,000,000 shares of common stock with a par value of $0.0001 per share. There are 758,967 shares of common stock issued and
outstanding. The Company currently has 13,661,416 shares of common stock reserved for issuance upon the conversion of its outstanding
redeemable convertible preferred stock.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"><b>Capital Contributions</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">During the year ended December 31,
2023, the Company received capital contributions of $14.1 million from Eilean. Capital contributions received consisted of cash contributions
of $8.7 million to support working capital requirements and the assumption by Eilean of the Company&#8217;s outstanding principal and
accrued interest of related party promissory notes of $5.4 million (see Note 8).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">During the year ended December 31,
2022, the Company received capital contributions of $2.0 million from Eilean to support the Company&#8217;s working capital requirements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Lomond Therapeutics, Inc.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Notes to the Financial Statements</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>As of and for the years ended December 31, 2023 and 2022</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.3in"><span style="font-size: 10pt"><b>7</b></span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">There is no provision for income taxes
for the years ended December 31, 2023 or 2022 because the Company has historically incurred operating losses and maintains a full valuation
allowance against its deferred tax assets. The tax effects of temporary differences that gave rise to significant portions of the deferred
tax assets and liabilities were as follows:&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">3,253,225</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">Based upon the historical and anticipated
future losses, management has determined that the deferred tax assets do not meet the more likely than not threshold for realizability.
Accordingly, a full valuation allowance has been recorded against the Company&#8217;s net deferred tax assets as of December 31, 2023
and December 31, 2022. The valuation allowance increased by $3.4 million and $3.3 million during the years ended December 31, 2023, and
2022, respectively. The valuation allowance balance for the year ended December 31, 2023 is $6.7 million.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in">A reconciliation of the federal income tax rate to the Company&#8217;s
effective tax rate is as follows:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">At December 31, 2023, the Company has
federal and state net operating loss (&#8220;NOL&#8221;) carryforwards of approximately $9.6 million and $2.6 million, respectively,
which may be available to offset future taxable income. At December 31, 2023, the Company has research and development tax credits of
approximately $1.3 million. The federal and state net operating loss carryforwards have no expiration. The research and development tax
credit will begin to expire in 2040.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->17<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Lomond Therapeutics, Inc.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Notes to the Financial Statements</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>As of and for the years ended December 31, 2023 and 2022</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">Net operating loss and tax credit carryforwards
are subject to review and possible adjustment by the Internal Revenue Service (the &#8220;IRS&#8221;) and may become subject to an annual
limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three-year period in
excess of 50% as defined under Sections 382 and 383 in the Internal Revenue Code, which could limit the amount of tax attributes that
can be utilized annually to offset future taxable income or tax liabilities. The amount of the annual limitation is determined based on
the Company&#8217;s value immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in
future years. The Company has not yet conducted a study to determine if any such limitation exists.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">The Tax Cuts and Jobs Act (&#8220;TCJA&#8221;)
resulted in significant changes to the treatment of R&amp;D expenditures under Section 174. For tax years beginning after December 31,
2021, taxpayers are required to capitalize and amortize all R&amp;D expenditures that are paid or incurred in connection with their trade
or business. Specifically, costs for U.S.-based R&amp;D activities must be amortized over five years and costs for foreign R&amp;D activities
must be amortized over 15 years, both using a midyear convention. During the year ended December 31, 2023, the Company capitalized $9.7
million of R&amp;D expenses.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.3in"><span style="font-size: 10pt"><b>8</b></span></td>
    <td style="text-align: justify"><span style="font-size: 10pt"><b>Related Party Transactions</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"><b>Research and development arrangements
with related parties</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">In March 2020, the Company entered
into a Master Research and Development Agreement with ChemDiv, Inc. (&#8220;ChemDiv&#8221;), pursuant to which ChemDiv provides services
related to preclinical drug discovery to the Company. Dr. Nikolay Savchuk, President and Chief Executive Officer of the Company, is a
stockholder of ChemDiv and a member of its board of directors. During the years ended December 31, 2023 and 2022, $5.8 million and $3.9
million, respectively, was expensed as research and development cost in the statements of operations related to ChemDiv services. As of
December 31, 2023 and 2022, the Company recorded $0.9 million and $0.5 million, respectively, as accrued expense relating to ChemDiv services
in the balance sheets.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">In January 2023, the Company entered
into an agreement with Eilean Therapeutics AU Pty Ltd (&#8220;Eilean AU&#8221;), a subsidiary of Eilean, which provided the Company rights
to intellectual property under development by Eilean AU. During the year ended December 31, 2023, the Company paid Eilean AU $3.0 million
for the intellectual property rights. Because the intellectual property rights from Eilean AU have no alternative future use, the payment
was recorded immediately through research and development expenses in the Company&#8217;s statements of operations for the year ended
December 31, 2023.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"><b>Administrative arrangements with
related parties</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">In March 2020, the Company entered
into an Administrative Services Agreement with Eil Therapeutics, Inc. (&#8220;Eil&#8221;), a subsidiary of Eilean. Pursuant to such administrative
services agreement, Eil agreed to provide the Company, directly or indirectly through its contractors, administrative support services
and access to staff&#8217;s management experience and knowledge. Such services included general management and operations, including financial
and accounting services, insurance program marketing and administration and various tax-related services. Dr. Nikolay Savchuk, President
and Chief Executive Officer of the Company, is also President and Chief Executive Officer of Eil. During the years ended December 31,
2023 and 2022, $1.0 million and $0.2 million, respectively was expensed as research and development cost. Amounts expensed as general
and administrative cost during the years ended December 31, 2023 and 2022 were de minimis. As of December 31, 2022, the Company recorded
$0.3 million as accrued expense relating to Eil services in the balance sheet.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Lomond Therapeutics, Inc.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Notes to the Financial Statements</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>As of and for the years ended December 31, 2023 and 2022</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"><b>Related party notes payable</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">In May and June 2022, the Company borrowed
an aggregate principal amount of $3.9 million under two promissory note agreements with Dinas Therapeutics, Inc. (&#8220;Dinas&#8221;)
for research and development invoices paid by Dinas on behalf of the Company. Dr. Nikolay Savchuk, President and Chief Executive Officer
of the Company, is the Chief Executive Officer of Dinas. The notes were due on the earlier of (i) written demand by Dinas, (ii) the second
anniversary of the note issuances. The notes accrued interest per annum at a rate equal to 5.00%, to be paid at maturity.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">In January and December 2023, the Company
borrowed an aggregate principal amount of $1.3 million under two promissory note agreements with Eil, for payment of services performed
on behalf of the Company. The notes were due no later than the second anniversary of the note issuances. The notes accrued interest per
annum at a rate of 2.5%, to be paid at maturity.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">In December 2023, Eilean assumed the
promissory notes outstanding with Dinas and Eil and related accrued interest, which was accounted for as a contribution from parent of
$5.4 million, as further described in Note 6.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.3in"><span style="font-size: 10pt"><b>9</b></span></td>
    <td style="text-align: justify"><span style="font-size: 10pt"><b>Share-based compensation</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">During the year ended December 31,
2020, the Company issued 539,796 option awards to non-employee consultants for services to be performed for the Company. Option awards
granted generally vest based on a specific vesting schedule as agreed upon by the optionee and the Company and generally expire 10 years
after the grant date.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">In connection with the Eilean transaction,
the existing option awards granted by the Company were cancelled and replaced with common units (the &#8220;units&#8221;) in Eilean. The
units granted generally vest (i) on the date of grant, or (ii) 50% on the date of grant, with the remaining 50% vesting over 24 months
in equal monthly installments as services are provided.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">The replacement of the option awards
with units was evaluated as a modification. The fair value of the option awards was in excess of the grant date fair value of the units.
As such, there was no incremental compensation costs related to the units to be recorded. The Company recognized $25,000 at the grant
date of the units related to the portion of the units that became fully vested at such time.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">Total share-based compensation of $5,428
and $29,165 is included in the Company&#8217;s statements of operations as general and administrative expenses for the years ended December
31, 2023 and 2022, respectively. As of December 31, 2023, there was $3,510 of total unrecognized share-based compensation costs related
to the Company&#8217;s common unit interest awards which is expected to be recognized over a weighted-average period of approximately
0.58 years. There were no awards granted during the year ended December 31, 2023.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Lomond Therapeutics, Inc.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Notes to the Financial Statements</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>As of and for the years ended December 31, 2023 and 2022</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">The estimated fair value of option
awards were estimated as of July 1, 2022 immediately prior to the replacement with units in Eilean using a Black-Scholes option pricing
model, based on the following assumptions:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td>Assumptions used to estimate fair value of option grants:</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; text-indent: 11pt">Expected dividend yield</td><td>&#160;</td>
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  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">The estimated grant date fair value
of the units in Eilean was estimated as of July 1, 2022 using a Black-Scholes option pricing model, based on the following assumptions:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="width: 1%; text-align: center">&#160;</td><td style="width: 9%; text-align: center">2.85%</td><td style="width: 1%; text-align: left"/></tr>
  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: center">&#160;</td><td style="text-align: center">79.80%</td><td style="text-align: left"/></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; text-indent: 11pt">Expected dividend yield</td><td>&#160;</td>
    <td style="text-align: center">&#160;</td><td style="text-align: center">0%</td><td style="text-align: left"/></tr>
  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in">A summary of unit award activity in Eilean is presented
below:</p><div>

</div><p style="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
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 average<br/>
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 fair value</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
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    <td style="border-bottom: Black 4pt double; text-align: left">&#160;</td><td style="border-bottom: Black 4pt double; text-align: right">223,800</td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">&#160;</td><td style="border-bottom: Black 4pt double; text-align: right">0.17</td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 4pt">Exercisable at December 31, 2023</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">&#160;</td><td style="border-bottom: Black 4pt double; text-align: right">202,042</td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">0.17</td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr>
  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0%">&#160;</td>
    <td style="width: 0.3in"><span style="font-size: 10pt"><b>10</b></span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">The Company evaluated the potential
impact of subsequent events on the financial statements through November 7, 2024, the date the financial statements were available to
be issued.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"><b>Issuance of SAFE Instruments</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">In August and October 2024, the Company
issued SAFE instruments to TPAV, LLC (&#8220;TPAV&#8221;), a party related through Nikolay Savchuk, the President and Chief Executive
Officer of the Company, and entities affiliated with OrbiMed, a party related through Carl Gordon, a Director of the Company, and third-party
investors resulting in net proceeds of $11.0 million. The SAFE instruments provide investors the right to certain shares of the Company&#8217;s
capital stock.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">If there is a qualified equity financing
before the termination of the SAFE instruments, the SAFEs will automatically convert into the number of shares of capital stock equal
to the purchase amount divided by the conversion price.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Lomond Therapeutics, Inc.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Notes to the Financial Statements</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>As of and for the years ended December 31, 2023 and 2022</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">If there is a non-qualified equity
financing before the termination of the SAFE instruments, the majority-in-interest investors may elect to convert the purchase amounts
of all then-outstanding SAFE instruments with the same post-money valuation cap into the number of shares of capital stock equal to the
purchase amount divided by the conversion price.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">If there is a merger, reverse merger,
acquisition and/or other business combination involving the Company and a publicly traded company or other similar entity that is a &#8220;blank
check&#8221; company under applicable U.S. securities laws before the termination of the SAFE instruments, the SAFE instruments will automatically
convert into the number of shares of common stock of the issuer entity in the same manner as a qualified equity financing, and as though
the SAFE instrument was issued to the investor by the issuer.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">If there is a liquidity event before
the termination of the SAFE instruments, the investor will be automatically entitled to receive a portion of the proceeds due and payable
to the investor equal to the greater of (i) a cash payment equal to the purchase amount, or (ii) the amount payable on the number of shares
of common stock equal to the conversion amount, or actual shares of common stock equal to the purchase amount divided by the liquidity
price, subject to adjustment in certain events. A liquidity event means a change in control, direct, listing, or an initial public offering
of the Company&#8217;s common stock.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">In the event of a voluntary or involuntary
dissolution event of the Company before the expiration or termination of the SAFE instruments, the investors will receive a cash payment
equal to their purchase amount.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"><b>Agreements with Eil and Bala</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">In October 2024, the Company entered
into license agreements with both of Eil (the &#8220;Eil License Agreement&#8221;) and Bala Therapeutics, Inc. (&#8220;Bala&#8221;, the
&#8220;Bala License Agreement&#8221;). Pursuant to the Eil License Agreement and Bala License Agreement, the Company obtained exclusive,
perpetual, worldwide licensing rights for the development and future ownership of (i) a BCL-2, inhibitor for the treatment of AML and
CLL from Eil, and (ii) an early-stage menin inhibitor for the treatment of AML from Bala.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">The Eil License Agreement and Bala
License Agreement became effective in October 2024 when the Company issued promissory notes to Eil and Bala, respectively. The principal
amount of the promissory notes with Eil and Bala are $1.7 million and $1.2 million, respectively. Each such promissory note bears interest
at a rate of 7% per annum, compounded annually, and matures on October 17, 2026. Each such promissory note may be prepaid without penalty.
In addition, the two promissory notes each provide for customary events of default.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Lomond Therapeutics, Inc.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Notes to the Financial Statements</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>As of and for the years ended December 31, 2023 and 2022</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">Upon the payment in full of the applicable
promissory note, Eil and Bala have each agreed to transfer to the Company all of the intellectual property rights covered by the license
agreements, as the case may be.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">The license rights are sublicensable
at the option of the Company. Under such license agreements, Lomond, but not Eil or Bala, as the case may be, have the right to terminate
the applicable license agreement for convenience upon 30 days&#8217; written notice. If Lomond, or Eil or Bala, as the case may be, materially
breaches the applicable license agreement, and such breach is not cured within 90 days after the receipt of notice of such breach, then
the non-defaulting party may terminate such license agreement. In addition, upon the occurrence of an event of default under the applicable
promissory note, the license agreement shall be terminated.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">Eil and Bala are each wholly-owned
by Eilean, Lomond&#8217;s parent company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"><b>Adoption of 2024 Stock Plan and
Grant of Options</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">On September 20, 2024, the Board of
Directors of Lomond (the &#8220;Board&#8221;) approved the adoption of the Lomond Therapeutics, Inc. 2024 Stock Plan (the &#8220;2024
Plan&#8221;). The purpose of the 2024 Plan is to attract, incentivize and retain employees, outside directors and consultants through
the grant of awards. The 2024 Plan provides for the direct award or sale of shares, the grant of options to purchase shares and the grant
of restricted stock units to acquire shares. The maximum number of shares which may be issued under the 2024 Plan were 4,329,617. Options
granted under the 2024 Plan may be ISOs intended to qualify under Code Section 422 or NSOs which are not intended to so qualify.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">Immediately following the adoption
of the 2024 Plan, the Board approved the grant of 4,329,617 options to purchase Lomond common stock to employees, outside directors and
consultants, at an exercise price of $1.30 per share. The option shares will become eligible to vest based on, and subject to, the Company&#8217;s
completion of a merger, consolidation or share exchange with a special purpose acquisition company or other similar entity in which the
common stock (or similar securities) of the surviving parent entity is listed on a nation securities exchange on or prior to December
31, 2024 (the &#8220;Milestone&#8221;) and the optionee&#8217;s continuous service through the achievement of the Milestone. Any option
shares that become eligible to vest based on achievement of the milestone (the &#8220;Eligible Shares&#8221;) shall vest and become exercisable
in a series of 48 successive equal monthly installments.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"><b>Entry into a Material Definitive
Agreement</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">On November 1, 2024, the Company, Venetian,
and its wholly-owned subsidiary, Lomond Acquisition Corp. (&#8220;Acquisition Corp.&#8221;), entered into an Agreement and Plan of Merger
and Reorganization (the &#8220;Merger Agreement&#8221;). Pursuant to the terms of the Merger Agreement, on November 1, 2024 (the &#8220;Closing
Date&#8221;), Acquisition Corp. merged with and into Lomond, with Lomond continuing as the surviving corporation and a wholly-owned subsidiary
of Venetian (the &#8220;Merger&#8221;). In connection with the Merger, Venetian intends to change its corporate name from &#8220;Venetian-1
Acquisition Corp&#8221; to &#8220;Lomond Therapeutics Holdings, Inc.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">Pursuant to the terms of the Merger
Agreement, at the time the certificate of merger reflecting the Merger was filed with the Secretary of State of Delaware (the &#8220;Effective
Time&#8221;), each share of Legacy Lomond&#8217;s capital stock issued and outstanding immediately prior to the closing of the Merger
was cancelled and converted into the right to receive one share of Venetian common stock (the &#8220;Exchange Ratio&#8221;), with the
maximum number of shares of Venetian common stock issuable to the former holder of Lomond&#8217;s capital stock equal to 14,420,383. In
addition, pursuant to the Merger Agreement, immediately prior to the Effective Time, an aggregate of 3,625,000 shares of the 5,000,000
then-outstanding shares of Venetian common stock owned by Venetian stockholders prior to the Merger were forfeited and cancelled (the
&#8220;Stock Forfeiture&#8221;).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Lomond Therapeutics, Inc.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Notes to the Financial Statements</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>As of and for the years ended December 31, 2023 and 2022</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">In addition, pursuant to the Merger
Agreement, at the Effective Time, options to purchase an aggregate of 4,329,617 shares of Lomond common stock at an exercise price of
$1.30 per share issued and outstanding immediately prior to the closing of the Merger under Lomond&#8217;s 2024 Equity Incentive Plan
(the &#8220;Legacy Lomond Plan&#8221;) were assumed and converted into options to purchase 4,329,617 shares of Lomond Therapeutics Holdings,
Inc. common stock at an exercise price of $1.30 per share.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">The Merger Agreement contained customary
representations and warranties and pre- and post-closing covenants of each party and customary closing conditions. The Merger will be
treated as a recapitalization and reverse acquisition for Venetian for financial reporting purposes. Lomond will be considered the acquirer
for accounting purposes, and Venetian&#8217;s historical financial statements before the Merger will be replaced with the historical financial
statements of Lomond before the Merger in future filings with the United States Securities and Exchange Commission (the &#8220;SEC&#8221;).
The Merger is intended to be treated as a tax-free reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">Immediately following the Effective
Time of the Merger, Lomond Therapeutics Holdings, Inc. held a closing for a private placement offering (the &#8220;Offering&#8221;) pursuant
to which 8,241,375 shares of common stock were issued and sold at a purchase price of $4.00 per share for aggregate gross proceeds of
approximately $32.9 million before deducting placement agent fees and expenses of the Offering.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">In connection with the Offering and
subject to the closing of the Offering, Lomond Therapeutics Holdings, Inc. agreed to pay the placement agents, Raymond James &amp; Associates,
Inc. (&#8220;Raymond James&#8221;), and Wedbush &amp; Co., LLC (&#8220;Wedbush&#8221; and with Raymond James, the &#8220;Lead Placement
Agents&#8221;) and Aegis Capital Corp. (&#8220;Aegis&#8221; and together with Raymond James and Wedbush, the &#8220;Placement Agents&#8221;),
each a U.S. registered broker-dealer, a cash placement fee and issue Placement Agent Warrants to the Placement Agent as follows. The Lead
Placement Agents will be paid a cash placement fee equal to the sum of (x) 4% of the gross proceeds raised from OrbiMed Advisors LLC (&#8220;OrbiMed&#8221;)
and Torrey Pines Investment LLC and/or their respective affiliates and/or certain other investors (collectively &#8220;Insider Investors&#8221;),
(y) 6% of the gross proceeds raised from certain other investors introduced by Legacy Lomond or its affiliates (&#8220;Lomond Investors&#8221;)
and (z) 8% of the gross proceeds raised from all other Purchasers resulting from the efforts of the Lead Placement Agents (other than
Co-Agent Investors (as defined below), the &#8220;Lead Placement Agent Investors&#8221;). Aegis will be paid a cash placement fee equal
to 8% of the gross proceeds raised from Purchasers resulting from the efforts of Aegis (the &#8220;Co-Agent Investors&#8221;). Further,
Lomond Therapeutics Holdings, Inc. agreed to issue Placement Agent Warrants to the Placement Agents covering a number of shares of its
common stock equal to 8% of the number of shares of Common Stock sold in the Offering to the Lead Placement Agent Investors and Co-Agent
Investors, as applicable, with a term of four years and an exercise price of $4.00 per share.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Lomond Therapeutics, Inc.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Notes to the Financial Statements</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>As of and for the years ended December 31, 2023 and 2022</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">As a result of the foregoing, in connection
with the closing of the Offering, Lomond Therapeutics Holdings, Inc. paid the Placement Agents an aggregate cash commission of $2.5 million
and issued Placement Agent Warrants to purchase an aggregate of 275,410 shares of Lomond Therapeutics Holdings, Inc. Common Stock. Lomond
Therapeutics Holdings, Inc. has also reimbursed or will reimburse the Placement Agents for approximately $0.1 million of expenses incurred
in connection with the Offering.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"><b>Consulting Agreement with Dr. Dukes</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">In November 2024, the Company entered
into a consulting agreement with Dr. Iain Dukes, to commence upon closing of the Merger. Pursuant to the terms of Dr. Dukes&#8217; consulting
agreement, Dr. Dukes will serve as Chief Executive Officer and Chairman of Lomond Therapeutics Holdings, Inc., is eligible to receive
consulting fees at an annual rate of $400,000, and is eligible to receive an annual incentive payment equal to up to 50% of such annual
consulting fees, subject to the achievement of applicable performance metrics as determined by the Company&#8217;s board of directors.
Dr. Dukes&#8217; consulting agreement contains customary invention assignment and confidentiality provisions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"><b>Consulting Agreement with Dr. Savchuk</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">In November 2024, the Company entered
into a consulting agreement with Dr. Nikolay Savchuk, to commence upon closing of the Merger. Pursuant to the terms of Dr. Savchuk&#8217;s
consulting agreement, Dr. Savchuk will serve as Chief Operating Officer and President of Lomond Therapeutics Holdings, Inc., is eligible
to receive consulting fees at an annual rate of $400,000, and is eligible to receive an annual incentive payment equal to up to 50% of
such annual consulting fees, subject to the achievement of applicable performance metrics as determined by the Company&#8217;s board of
directors. Dr. Savchuk&#8217;s consulting agreement contains customary invention assignment and confidentiality provisions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="margin-top: 0; margin-bottom: 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Lomond Operating Co.</b></p><div>

</div><p style="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Formerly Known as Lomond Therapeutics,
Inc.)</b></p><div>

</div><p style="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Financial Statements</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">For the nine months ended September 30, 2024 and
2023</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
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  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
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    <td>&#160;</td>
    <td style="text-align: center">F-27</td></tr>
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    <td style="padding-left: 0.125in; text-indent: -0.125in"><a href="#C_003">Condensed Statements of Redeemable Convertible Preferred Stock and Stockholders&#8217; Deficit for the three and nine months ended September 30, 2024 and 2023 (unaudited)</a></td>
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</div><div><a id="C_001"></a></div><p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Lomond Operating Co. <b>(Formerly Known as
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</div><p style="padding-bottom: 3pt; font: bold 10pt Times New Roman, Times, Serif; margin: 0pt; border-bottom: Black 0.5pt solid">As of September 30, 2024 and
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The accompanying notes are an integral part of these (unaudited) financial
statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>


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</div><div><a id="C_002"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Lomond Operating Co. (Formerly Known as Lomond Therapeutics,
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Condensed Statements of Operations</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>For the three and nine months ended September 30, 2024 and 2023</b></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: White">
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  </table><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The accompanying notes are an integral part of these (unaudited) financial
statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>


</div><!-- Field: Page; Sequence: 195; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->28<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><div><a id="C_003"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Lomond Operating Co. (Formerly Known as Lomond Therapeutics,
Inc.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Condensed Statements of Redeemable Convertible Preferred Stock
and Stockholders&#8217; Deficit</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>For the three and nine months ended September 30, 2024 and 2023</b></p><div>

</div><p style="padding-bottom: 3pt; font: 10pt Times New Roman, Times, Serif; margin: 0pt">(unaudited)</p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="font-size: 1pt; border-top: Black 1pt solid">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="border-left: Black 1.5pt solid; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-indent: -0.125in; padding-left: 0.125in">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">13,661,416</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">5,466,925</td><td style="text-align: left">&#160;</td><td style="border-left: Black 1.5pt solid">&#160;</td>
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    <td style="text-align: left">$</td><td style="text-align: right">(15,675,696</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">(11,867,364</td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -0.125in; padding-left: 0.125in">Stock-based compensation</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">1,357</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
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    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(17,591,671</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(13,781,982</td><td style="padding-bottom: 2.5pt; text-align: left">)</td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="padding-left: 0.125in; text-indent: -0.125in">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom">
    <td style="padding-left: 0.125in; text-indent: -0.125in">&#160;</td><td style="font-weight: bold">&#160;</td>
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    <td colspan="2" style="font-weight: bold; text-align: center">&#160;</td><td style="font-weight: bold">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center">Related Party</td><td style="font-weight: bold">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center">Additional</td><td style="font-weight: bold">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center">&#160;</td><td style="font-weight: bold">&#160;</td><td style="font-weight: bold">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td style="padding-left: 0.125in; text-indent: -0.125in">&#160;</td><td style="font-weight: bold">&#160;</td>
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    <td style="width: 1%; text-align: left">$</td><td style="width: 6%; text-align: right">(21,725,671</td><td style="width: 1%; text-align: left">)</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 6%; text-align: right">(5,522,341</td><td style="width: 1%; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td style="border-left: Black 1.5pt solid">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">4,071</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left; padding-bottom: 1.5pt">Net loss</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
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  </table><div>




</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The accompanying notes are an integral part of these (unaudited) financial
statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>


</div><!-- Field: Page; Sequence: 196; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->29<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><div><a id="C_004"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Lomond Operating Co. (Formerly Known as Lomond Therapeutics,
Inc.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Condensed Statements of Cash Flows</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>For the nine months ended September 30, 2024 and 2023</b></p><div>

</div><p style="padding-bottom: 3pt; font: 10pt Times New Roman, Times, Serif; margin: 0pt">(unaudited)</p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="font-size: 1pt; border-top: Black 1pt solid">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-left: 9pt">Interest receivable on promissory note issued to parent</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">4,603</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The accompanying notes are an integral part of these (unaudited) financial
statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><div><a id="C_005"></a></div><p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in">Lomond Operating Co. <b>(Formerly Known as Lomond Therapeutics,
Inc.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt">Notes to the Condensed Financial Statements</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt"><b>For the nine months ended September 30, 2024 and 2023</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt">(unaudited)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"/><td style="width: 0.25in; text-align: left">1</td><td style="text-align: justify">Organization and Description of Business</td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Lomond Operating Co. (the &#8220;Company&#8221;)
is a privately-held biopharmaceutical company involved in the discovery and development of small molecule inhibitors that target escape
mutations in hematologic cancers. The Company was incorporated on January 22, 2020 as Lomond Therapeutics, Inc., pursuant to
the laws of the State of Delaware. On July 1, 2022, shareholders of the Company contributed and transferred all outstanding common stock,
stock options, and redeemable convertible preferred stock of the Company to Eilean Therapeutics, LLC (&#8220;Eilean&#8221;, or the &#8220;Parent&#8221;)
in exchange for common unit ownership in Eilean (the &#8220;Eilean transaction&#8221;). After the Eilean transaction, Eilean became the
sole shareholder of the Company. The Company subsequently changed its name to Lomond Operating Co. on November 1, 2024.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b>Liquidity</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Since inception, the Company has been primarily
performing research and development activities, establishing and maintaining its intellectual property, and raising capital to support
and expand its operations. The Company has funded its operations primarily through the sale of its redeemable convertible
preferred stock and contributions from it&#8217;s Parent. The Company does not yet have a product that has been approved by the FDA, has
not generated any product sales revenues and has not yet achieved profitable operations, nor has it ever generated positive cash flows
from operations. There is no assurance that profitable operations, if achieved, could be sustained on a continuing basis. Further, the
Company&#8217;s future operations are dependent on the success of the Company&#8217;s efforts to raise additional capital, its research
and commercialization efforts, regulatory approval, and, ultimately, the market acceptance of the Company&#8217;s products.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">In accordance with Accounting Standards Codification
(&#8220;ASC&#8221;) 205-40, Going Concern, the Company has evaluated whether there are conditions and events, considered in the aggregate,
that raise substantial doubt about the Company&#8217;s ability to continue as a going concern within one year after the date that the
condensed consolidated financial statements are issued. As of September 30, 2024, the Company had cash of $3.6 million. In November 2024,
the Company completed a merger with Venetian-1 Acquisition Corp (&#8220;Venetian&#8221;) (the &#8220;Merger&#8221;). Upon closing, the
Company completed a private placement offering (the &#8220;Offering&#8221;) resulting in net proceeds of approximately $29.0 million,
net of placement agent fees and estimated offering expenses payable by the Company. See Note 11 for further discussion.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Additionally, the Company had an accumulated deficit
of $30.5 million at September 30, 2024, and during the three and nine months ended September 30, 2024, the Company incurred a net loss
of $5.5 and $8.8 million, respectively. The Company expects to continue to generate operating losses for the foreseeable future. The Company
believes that its cash of $3.6 million as of September 30, 2024, together with the aggregate net proceeds of approximately $29.0 million
from the Offering, will be sufficient to fund its operating expenses for at least the next 12 months from issuance of these financial
statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">In addition, to finance its future operations,
the Company will likely seek additional funding through public financings or government programs and will seek funding or development
program cost-sharing through collaboration agreements or licenses with larger pharmaceutical or biotechnology companies. If the Company
does not obtain additional funding or development program cost-sharing, or exceeds its current spending forecasts, the Company has the
ability and would be forced to delay, reduce or eliminate certain clinical trials or research and development programs, reduce or eliminate
discretionary operating expenses, and delay company and pipeline expansion, any of which could adversely affect its business prospects.
The inability to obtain funding, as and when needed, could have a material adverse effect on the Company&#8217;s financial condition and
ability to pursue its business strategies.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt"><b>Lomond Operating Co. (Formerly Known as Lomond Therapeutics,
Inc.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt">Notes to the Condensed Financial Statements</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt"><b>For the nine months ended September 30, 2024 and 2023</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt">(unaudited)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"/><td style="width: 0.25in; text-align: left">2</td><td style="text-align: justify">Significant accounting policies and basis of presentation</td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><span style="background-color: white"><b>Basis
of presentation</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The accompanying interim condensed financial statements
have been prepared in accordance with accounting principles generally accepted in the United States of America (&#8220;U.S. GAAP&#8221;)
for interim financial statements and pursuant to the rules of the Securities and Exchange Commission (&#8220;SEC&#8221;). Accordingly,
certain information and footnotes required by U.S. GAAP for complete financial statements have been omitted. It is the opinion of management
that all adjustments considered necessary for a fair presentation have been included, and that all such adjustments are of a normal recurring
nature. The results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of the results
to be expected for the full year or any other period. The unaudited condensed financial statements should be read in conjunction with
the financial statements and related notes for the year ended December 31, 2023.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b>Use of estimates</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The preparation of the financial statements in
conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expense
during the reporting periods. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and
other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could differ from those
estimates. The most significant estimates relate to the accrual of research and development expenses, valuation of stock option awards
for share-based compensation and valuation of the simple agreement for future equity liability.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b>Cash </b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.3in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Cash is comprised of cash deposits held with financial
institutions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b>Concentrations and risks and uncertainties</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><i>Concentration of credit risk</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Financial instruments that potentially subject
the Company to significant concentrations of credit risk consist primarily of cash. Substantially all of the Company&#8217;s cash deposits
are maintained at one financial institution domiciled in the United States. Amounts on deposit with this financial institution may, from
time to time, exceed the federally insured limit. The Company is exposed to credit risk in the event of default by the financial institution
holding its cash to the extent recorded in the balance sheet. The Company has not experienced any losses on its deposits.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><i>Business risks</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The Company&#8217;s future results of operations
involve a number of other risks and uncertainties. Factors that could affect the Company&#8217;s future operating results and cause actual
results to vary materially from expectations include, but are not limited to, uncertainty of results of clinical trials and reaching milestones,
uncertainty of regulatory approval of the Company&#8217;s current and potential future product candidates, uncertainty of market acceptance
of the Company&#8217;s product candidates, competition from substitute products and larger companies, securing and protecting proprietary
technology, strategic relationships and dependence on key individuals or sole-source suppliers.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The Company&#8217;s product candidates require
approvals from the U.S. Food and Drug Administration and comparable foreign regulatory agencies prior to commercial sales in their respective
jurisdictions. There can be no assurance that any product candidates will receive the necessary approvals. If the Company was denied approval,
approval was delayed, or the Company was unable to maintain approval for any product candidate, it could have a materially adverse impact
on the Company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b>Fair Value Measurements</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Fair value is defined as the exchange price to
sell an asset or transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly
transaction between market participants at the measurement date. Fair value should be based on the assumptions market participants would
use when pricing the asset or liability. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset
or liability as of the measurement date.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in">Lomond Operating Co. (Formerly Known as Lomond Therapeutics,
Inc.)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in">Notes to the Condensed Financial Statements</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in"><b>For the nine months ended September 30, 2024 and 2023</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in">(unaudited)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Fair value measurements are classified and disclosed
in one of the following three categories:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Level 1: Quoted unadjusted
prices for identical instruments in active markets.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Level 2: Quoted prices for similar
instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations
in which all observable inputs and significant value drivers are observable in active markets</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Level&#160;3: Model derived valuations in
which one of more significant inputs or significant value drivers are unobservable, including assumptions developed by the Company</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">There were no transfers between
Levels 1, 2, or 3, of such instruments during the three and nine months ended September 30, 2024. The carrying amounts of the
Company&#8217;s accrued expenses and other current liabilities approximate their fair values due to their short-term nature. See
Note 4 for further information.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b>Deferred financing costs</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The Company capitalized costs during the third
quarter of 2024 that were directly associated with the Merger and Offering in November 2024. These costs were recorded against the gross
proceeds upon closing of the Merger and Offering in November 2024. See Note 11 for further information. Ongoing costs that are not directly
associated with the Merger or the Offering are expensed as incurred.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b>Research and development costs</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Research and development costs consist primarily
of cost of related-party subcontractors and materials used for research and development activities, including preclinical studies, clinical
trials, materials and supplies, and professional services. The costs of services performed by related-parties in connection with the research
and development activities of the Company, including research and development conducted by related-parties on behalf of the Company, is
included in research and development costs and expensed as the contracted work is performed. The Company accrues for costs incurred as
the services are being provided by monitoring the status of the project and the invoices received from its external service providers.
Where contingent milestone payments are due to third parties under research and development arrangements, the milestone payment obligations
are expensed when the milestone results are probable to be achieved.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b>Income taxes</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The Company accounts for income taxes under the
asset and liability method. Under this method, deferred tax assets and liabilities are determined based on differences between financial
reporting and tax bases of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect
when the differences are expected to be recovered or settled. Realization of deferred tax assets is dependent upon future taxable income.
A valuation allowance is recognized if it is more likely than not that some portion or all of a deferred tax asset will not be realized
based on the weight of available evidence, including expected future earnings. As of September 30, 2024 and December 31, 2023, management
believes it is more likely than not that no benefits will be derived from the Company&#8217;s deferred tax assets.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The Company recognizes an uncertain tax position
in its financial statements when it concludes that a tax position is more likely than not to be sustained upon examination based solely
on its technical merits. Only after a tax position passes the first step of recognition will measurement be required. Under the measurement
step, the tax benefit is measured as the largest amount of benefit that is more likely than not to be realized upon effective settlement.
This is determined on a cumulative probability basis. The full impact of any change in recognition or measurement is reflected in the
period in which such change occurs. As of September 30, 2024 and December 31, 2023, the Company has not recorded any uncertain tax positions.
There were no interest or penalties related to income taxes for the three and nine months ended September 30, 2024 or 2023.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in">Lomond Operating Co. (Formerly Known as Lomond Therapeutics,
Inc.)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in">Notes to the Condensed Financial Statements</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in"><b>For the nine months ended September 30, 2024 and 2023</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in">(unaudited)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The tax years from 2021 and forward are open to
examination by federal tax and state tax authorities. In addition, tax years with net operating loss carryforwards are subject to examination,
three years following the year they are utilized. The Company has not been informed by any tax authorities for any jurisdiction that any
of its tax years is under examination.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b>Simple agreement for future equity (&#8220;SAFE&#8221;) liability</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The SAFE instruments issued in August&#160;2024
have the potential for cash settlement upon the occurrence of certain &#8220;liquidity events&#8221; (including a change of control, direct
listing, or initial public offering) and &#8220;dissolution events&#8221; (including voluntary termination of operations, a general assignment
for the benefit of the Company&#8217;s creditors, or any other liquidation, dissolution or winding up of the Company (excluding a liquidity
event), whether voluntary or involuntary). The instrument, at the election of the holder, can also be settled in shares of the Company&#8217;s
Capital Stock, which are contingently redeemable upon a liquidation event that may obligate the Company to transfer assets at some point
in the future. The SAFE instrument was determined to be liability classified on issuance and recorded at estimated fair value. The SAFE
instrument is subject to remeasurement at each reporting date with changes in estimated fair value recognized in other income (expense)
in the statements of operations until settlement or termination in cash or shares.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b>Redeemable convertible preferred stock</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The Company records shares of its redeemable convertible
preferred stock at their respective fair values on the dates of issuance, net of issuance costs. The Company classifies its preferred
stock outside of total stockholders&#8217; deficit because, in the event of certain &#8220;liquidation events&#8221; (including a merger,
acquisition or sale of all or substantially all of the Company&#8217;s assets) that are not solely within the control of the Company,
the shares would become redeemable at the option of the holders. The Company did not adjust the carrying values of the preferred stock
to the deemed liquidation values of the shares since a liquidation event was not probable at any of the reporting dates. Subsequent adjustments
to increase or decrease the carrying values to the liquidation values will be made only if and when it becomes probable that such liquidation
event will occur.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b>Share-based compensation</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The Company measures its share-based awards, including
grants issued by the Company or Eilean to the Company&#8217;s employees and non-employees, based on their grant date fair value. The Company&#8217;s
share-based awards currently include common units in its parent, Eilean. The Company records compensation expense for these service-based
awards beginning on the grant date over the requisite service period in which the awards are expected to vest on a straight-line basis,
subject to a minimum expense amount based on the awards that have vested to date. The common stock issued to option holders upon the exercise
of option awards are authorized and previously unissued common stock of Eilean. Forfeitures are recognized as they occur.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The grant date fair value of employee and non-employee
awards are determined using the Black-Scholes option pricing model, which includes inputs such as the fair value of the Company&#8217;s
common stock, expected term, risk-free rate, expected stock price volatility over the expected term, and expected dividend yield. For
all options granted, the Company calculated the expected term based on the simplified method. The Company has no publicly available stock
information and therefore, the Company used the historical volatility of the stock price of similar publicly traded peer companies. The
risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of
the grant. The Company does not anticipate that dividends will be distributed in the near future.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The absence of an active market for the Company&#8217;s
common stock requires the Company&#8217;s Board of Directors to determine the fair value of its common stock for purposes of granting
options. The Company obtains third-party valuations to assist the Board of Directors in determining the fair value of the Company&#8217;s
common stock.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b>Net loss per share attributable to common stockholders</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Net loss per share attributable to common stockholders
is computed using the two-class method required for participating securities based upon their respective rights to receive dividends as
if all income for the period has been distributed.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in">Lomond Operating Co. (Formerly Known as Lomond Therapeutics,
Inc.)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in">Notes to the Condensed Financial Statements</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in"><b>For the nine months ended September 30, 2024 and 2023</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in">(unaudited)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The Company&#8217;s participating securities include
the Company&#8217;s redeemable convertible preferred stock. The holders of redeemable convertible preferred stock do not have a contractual
obligation to share in losses of the Company, and, therefore, during periods of loss there is no allocation required under the two-class
method.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Basic net loss per share attributable to common
stockholders is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Diluted net loss per share is computed by giving
effect to all potentially dilutive securities outstanding for the period using the treasury stock method or the if-converted method based
on the nature of such securities. For periods in which the Company reports net losses, diluted net loss per share attributable to common
stockholders is the same as basic net loss per share attributable to common stockholders, because potentially dilutive shares of common
stock are not assumed to have been issued if their effect is anti-dilutive.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">As of September 30, 2024 13,661,416 potential
shares of common stock from the Company&#8217;s redeemable convertible preferred stock, 4,329,617 potential shares of Common stock from
the Company&#8217;s option awards, and potential shares from SAFE instruments issuable to investors were excluded from the computation
of diluted net loss per share attributable to common stockholders, because including them would have had an anti-dilutive effect. As of
September 30, 2023, 13,661,416 potential shares of common stock from the Company&#8217;s redeemable convertible preferred stock were excluded
from the computation of diluted net loss per share attributable to common stockholders, because including them would have had an anti-dilutive
effect.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b>Segments</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Operating segments are defined as components of
an entity for which separate financial information is available and regularly reviewed by the Chief Operating Decision Maker (&#8220;CODM&#8221;)
in deciding how to allocate resources to such individual segment and in assessing performance. The Company&#8217;s CODM is its President
and Chief Executive Officer. To date, the Company operates and manages its business as one operating and reportable segment. All of the
Company&#8217;s assets are located in the United States.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b>Forward stock split</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">On September 20, 2024, the Company filed a Certificate
of Amendment to its Certificate of Incorporation, as amended, with the Secretary of State of the State of Delaware, which effected a 3.8-for-1
forward stock split (the &#8220;stock split&#8221;) of the Company&#8217;s issued and outstanding shares of common stock and redeemable convertible preferred stock. As a result of the stock split, (i) every share of common stock issued and outstanding was converted
into 3.8 shares of common stock, and (ii) every share of redeemable convertible preferred stock issued and outstanding was converted into
3.8 shares of redeemable convertible preferred stock. The stock split affected all stockholders uniformly and did not alter any stockholder&#8217;s
percentage interest in the Company&#8217;s equity. No fractional shares were issued in connection with the stock split. Stockholders who
would otherwise be entitled to a fractional share of common stock were instead entitled to receive a proportional cash payment. The Restated
Certificate of Incorporation authorizes the Company to issue 32,661,416 shares of capital stock on a post-stock split adjusted basis,
inclusive of 19,000,000 shares of common stock, and 13,661,416 shares of series seed redeemable convertible preferred stock. All common
share and per share amounts presented in the financial statements and accompanying notes have been retroactively adjusted to reflect the
stock split.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in">Lomond Operating Co. (Formerly Known as Lomond Therapeutics,
Inc.)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in">Notes to the Condensed Financial Statements</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in"><b>For the nine months ended September 30, 2024 and 2023</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in">(unaudited)</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b>Recently issued accounting pronouncements	</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">In November 2023, the Financing Accounting Standards
Board (&#8220;FASB&#8221;) issued Accounting Standards Update (&#8220;ASU&#8221;) 2023-07, Segment Reporting (Topic 280): Improvements
to Reportable Segment Disclosures. ASU 2023-07 will improve reportable segment disclosure requirements, primarily through enhanced disclosures
about significant segment expenses on an interim and annual basis. The ASU is effective for fiscal years beginning after December 15,
2023, and interim periods after December 15, 2024, with early adoption permitted. The adoption of this standard is not expected to have
a material impact on the Company&#8217;s condensed financial statements at adoption date.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">In November 2024, the FASB issued ASU 2024-03,
Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement
Expenses, which is intended to provide more detailed information about specified categories of expenses (purchases of inventory, employee
compensation, depreciation and amortization) included in certain expense captions presented on the consolidated statement of operations.
This new standard is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after
December 15, 2027. Early adoption is permitted. The amendments may be applied either (1) prospectively to financial statements issued
for periods after the effective date of this ASU or (2) retrospectively to all prior periods presented in the consolidated financial statements.
The Company is currently assessing the impact this standard will have on the condensed financial statements and footnote disclosures.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">In December 2023, the FASB issued ASU 2023-09,
Income Taxes: Improvements to Income Tax Disclosures, which requires enhanced annual disclosures regarding the rate reconciliation and
income taxes paid information. This standard is effective for fiscal years beginning after December 15, 2024, and may be adopted on a
prospective or retrospective basis, with early adoption permitted. The Company is currently evaluating the impact of this standard on
its financial statements and related disclosures.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"/><td style="width: 0.25in; text-align: left">3</td><td style="text-align: justify">Other financial statement information</td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Accrued expenses and other current liabilities
consisted of the following:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
    of</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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    <td colspan="2" style="font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">December&#160;31,</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2023</span></td><td style="padding-bottom: 1.5pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 76%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accrued research
    and development - related party</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">-</span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">856,144</span></td><td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accrued legal expenses</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">694,352</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accrued accounting and audit
    expenses</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">205,900</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">-</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accrued
    other expenses - related party</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">350,677</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">-</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1,250,929</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 4pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="border-bottom: Black 4pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">856,144</span></td><td style="padding-bottom: 1.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  </table><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"/><td style="width: 0.25in; text-align: left">4</td><td style="text-align: justify">Fair value measurements</td>
</tr></table><div>

</div><p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The SAFE liability is a Level 3 financial instrument measured at fair
value on a recurring basis.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The following table provides a summary of changes in the estimate fair
value of the SAFE liability:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Three months ended<br/>
September&#160;30, <br/>
2024</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Nine Months Ended<br/>
September&#160;30, <br/>
2024</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; width: 76%; text-align: left">Issuance of SAFE instrument</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">7,500,000</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">7,500,000</td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Change in fair value</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">924,479</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">924,479</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 4pt">Balance at September 30, 2024</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">8,424,479</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">8,424,479</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  </table><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->36<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in">Lomond Operating Co. (Formerly Known as Lomond Therapeutics,
Inc.)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in">Notes to the Condensed Financial Statements</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in"><b>For the nine months ended September 30, 2024 and 2023</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in">(unaudited)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
fair value of the SAFE liability was estimated using a Probability-Weighted Expected Return Method (&#8220;PWERM&#8221;) using the following
inputs:</span> </p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">August 27,<br/>
2024<br/>
(issuance date)</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">September&#160;30, <br/>
2024</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>Fair value of underlying equity</td><td>&#160;</td>
    <td style="text-align: center">$1.30 - $3.35</td><td>&#160;</td>
    <td style="text-align: center">$1.37 - $3.45</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>Volatility</td><td>&#160;</td>
    <td style="white-space: nowrap; text-align: center">103.0% - 124.5%</td><td>&#160;</td>
    <td style="white-space: nowrap; text-align: center">96.0% - 119.0%</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 76%; text-align: left">Discount rate</td><td style="width: 1%">&#160;</td>
    <td style="width: 11%; text-align: center">9.4%</td><td style="width: 1%">&#160;</td>
    <td style="width: 11%; text-align: center">8.0%</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Expected term (in years)</td><td>&#160;</td>
    <td style="text-align: center">0.50 - 2.97</td><td>&#160;</td>
    <td style="text-align: center">0.50 - 2.87</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Probability of equity financing</td><td>&#160;</td>
    <td style="text-align: center">20.0%</td><td>&#160;</td>
    <td style="text-align: center">10.0%</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Probability of Alternative Public Offering transaction</td><td>&#160;</td>
    <td style="text-align: center">30.0%</td><td>&#160;</td>
    <td style="text-align: center">66.7%</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Probability of liquidity event</td><td>&#160;</td>
    <td style="text-align: center">49.0%</td><td>&#160;</td>
    <td style="text-align: center">22.3%</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>Probability of dissolution</td><td>&#160;</td>
    <td style="text-align: center">1.0%</td><td>&#160;</td>
    <td style="text-align: center">1.0%</td></tr>
  </table><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"/><td style="width: 0.25in; text-align: left">5</td><td style="text-align: justify">Commitments and contingencies</td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b>Guarantees and Indemnification</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">In the normal course of business, the Company
enters into agreements that contain a variety of representations and provide for general indemnification. The Company&#8217;s exposure
under these agreements is unknown because it involves claims that may be made against the Company in the future. The Company has entered
into indemnification agreements with certain directors and officers that require the Company, among other things, to indemnify them against
certain liabilities that may arise by reason of the status or service as directors or officers. To date, the Company has not paid any
claims or been required to defend any action related to its indemnification obligations. As of September 30, 2024, the Company does not
have any material indemnification claims that were probable or reasonably possible and consequently has not recorded related liabilities.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b>Contingencies </b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">From time to time, the Company may become involved
in legal proceedings arising in the ordinary course of business. The Company is not currently a party to any material legal proceedings.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"/><td style="width: 0.25in; text-align: left">6</td><td style="text-align: justify">SAFE instruments</td>
</tr></table><div>

</div><p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><span style="font-weight: normal">During
the three and nine months ended September 30, 2024, the Company issued SAFE instruments to TPAV, LLC (&#8220;TPAV&#8221;), a party related
through Nikolay Savchuk, the President and Chief Executive Officer of the Company, entities affiliated with OrbiMed, a party related through
Carl Gordon, Director of the Company, and third-party investors resulting in net proceeds of $7.5 million. The terms of the SAFEs required
that they automatically convert into capital stock upon a qualified equity financing prior to the termination of the SAFE. The SAFEs will
automatically convert into the number of shares of capital stock equal to the purchase amount divided by the conversion price, which means
either: (1) the SAFE price or (2) discount price (lowest price per standard share of capital stock sold in the equity financing multiplied
by the discount rate), whichever results in a greater number of shares of capital stock.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><span style="font-weight: normal">If
there is a liquidity event before the termination of the SAFEs, the SAFEs will be automatically entitled (subject to the liquidation priority)
to receive a portion of the proceeds, due and payable to each investor immediately prior to the liquidity event equal to the greater of
(1) the purchase amount or (2) the amount payable on the number of shares of Common Stock equal to the Purchase Amount divided by the
Liquidity price (the price per share equal to the Post-Money Valuation Cap divided by the Liquidity Capitalization). If any of the Company&#8217;s
security holders are given a choice as to the form and amount of proceeds to be received in a liquidity event, each investor will be given
the same choice. The SAFEs were settled subsequent to September 30, 2024. Refer to Note 4 and Note 11 for further information.</span></p><div>

</div><p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&#160;</p><div>

</div><p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"></p><div>

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</div><p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&#160;</p><div>

</div><p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in">Lomond Operating Co. (Formerly Known as Lomond Therapeutics,
Inc.)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in">Notes to the Condensed Financial Statements</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in"><b>For the nine months ended September 30, 2024 and 2023</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in">(unaudited)</p><div>

</div><p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"/><td style="width: 0.25in; text-align: left">7</td><td style="text-align: justify">Redeemable convertible preferred stock</td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">In March 2020, the Company issued an aggregate
of 5,216,179 shares of its redeemable convertible preferred stock (&#8220;preferred stock&#8221;) at a purchase price of $0.402594 per
share in exchange for cash proceeds of $2.1 million.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Pursuant to the terms of the original and amended
Series Seed Preferred Stock Purchase Agreement (the &#8220;Agreement&#8221;), the Company was obligated to sell additional shares of its
preferred stock to the same investors at a cash purchase price of $0.402594 per share. In 2021, the Company issued an aggregate of 8,445,237
shares of its preferred stock at a purchase price of $0.402594 per share in exchange for cash proceeds $3.4 million.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Redeemable convertible preferred stock consisted
of the following:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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authorized</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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issued<br/>
 and&#160;outstanding</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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liquidation<br/>
preferrence</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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value</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
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    <td style="border-bottom: Black 4pt double; text-align: left">&#160;</td><td style="border-bottom: Black 4pt double; text-align: right">13,661,416</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The following are the key terms of the preferred stock:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b>Dividends</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The holders of shares of preferred stock are entitled
to receive dividends, out of any assets legally available, prior and in preference to any declaration or payment of any dividend on the
common stock, payable only if and when declared. Such dividends are non-cumulative.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">After payment of any such dividends on the preferred
stock, any additional dividends or distributions shall be distributed among all holders of common stock and preferred stock in proportion
to the number of shares of common stock that would be held by each such holder if all shares of preferred stock were converted to common
stock at the then effective conversion rate. No dividends have been declared to date.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b>Optional Conversion</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Each share of preferred stock is convertible at
the option of the holder at any time after the issuance date of such share into such number of shares of common stock as is determined
by dividing the applicable original issue price by the applicable conversion price for such series. The initial conversion price per share
for each series of preferred stock shall be the original issue price of $0.402594 per share. Adjustments to the conversion price, if any,
occur if additional shares of common stock have been issued at a price less than the respective preferred stock.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b>Automatic Conversion</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Each share of preferred stock will automatically
convert into shares of common stock at the conversion rate at the time in effect for such series of preferred stock immediately upon either
of (1) the closing of the Company&#8217;s sale of its common stock in an initial public offering pursuant to a registration statement
on Form S-1 that results in at least $30.0 million of gross proceeds; or (2) the date, or the occurrence of an event, specified by vote
or written consent or agreement of the holders of a majority of the then outstanding shares of preferred stock (voting together as a single
class and not as separate series, and on an as-converted basis).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->38<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in">Lomond Operating Co. (Formerly Known as Lomond Therapeutics,
Inc.)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in">Notes to the Condensed Financial Statements</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in"><b>For the nine months ended September 30, 2024 and 2023</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in">(unaudited)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b>Liquidation Preference</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">In the event of any voluntary or involuntary liquidation,
dissolution, or winding up of the Company, the holders of the preferred stock are entitled to receive out of the proceeds or assets of
the Company available for distribution to its stockholders, prior and in preference to any distribution of the proceeds to the holders
of common stock, a liquidation preference in the amount per share equal to the sum of the original issue price of $0.402594 per share,
plus any declared but unpaid dividends on such share.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">If the assets of the Company are insufficient
to pay the holders of the preferred stock the full amount, the holders of the preferred stock will share ratably in any distribution of
the assets available for distribution.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">If preferential amounts are paid in full, the
remaining assets of the Company are distributed among the holders of the preferred stock and common stock pro rata based on the number
of shares held by each shareholder.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b>Voting rights</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Each share of preferred stock has a number of
votes equal to the number of shares of common stock into which it is convertible. Except as provided in the Company&#8217;s amended or
restated articles of incorporation, the holders of preferred stock and the holders of common stock vote together as one single class.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The holders of preferred stock are entitled to
elect two directors of the Company. The holders of preferred stock and common stock (voting together as a single class and on an as converted
basis) are entitled to elect the two remaining directors.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b>Redemption</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The preferred stock is not currently redeemable;
however, it is redeemable at the option of the holders in the event of certain &#8220;liquidation events&#8221; (including a merger, acquisition
or sale of all or substantially all of the Company&#8217;s assets) that are not solely within the control of the Company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"/><td style="width: 0.25in; text-align: left">8</td><td style="text-align: justify">Stockholders&#8217; deficit</td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The voting, dividend, and liquidation rights of
the holders of the Company&#8217;s common stock are subject to and qualified by the rights, powers, and preferences of the holders of
the preferred stock set forth above. Each share of common stock entitles the holder to one vote, together with the holders of the preferred
stock, on all matters submitted to the stockholders for a vote. The holders of common stock are entitled to receive dividends, if any,
as declared by the Company&#8217;s board of directors, subject to the preferential dividend rights of redeemable convertible preferred
stock. As of September 30, 2024 and December 31, 2023, the Company&#8217;s certificate of incorporation, as amended and restated, authorized
the Company to issue 19,000,000 shares of common stock with a par value of $0.0001 per share. There were 758,967 shares of common stock
issued and outstanding during all periods presented. The Company currently has 13,661,416 shares of common stock reserved for issuance
upon the conversion of its outstanding redeemable convertible preferred stock and 4,329,617 shares of common stock reserved for issuance
upon the exercise of stock options outstanding.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b>Capital Contributions</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">During the three and nine months ended September
30, 2024, the Company received cash capital contributions of $4.0 million and $7.5 million, respectively, from Eilean to support working
capital requirements. During the nine months ended September 30, 2023, the Company received cash capital contributions of $1.7 million
from Eilean to support working capital requirements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->39<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in">Lomond Operating Co. (Formerly Known as Lomond Therapeutics,
Inc.)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in">Notes to the Condensed Financial Statements</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in"><b>For the nine months ended September 30, 2024 and 2023</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in">(unaudited)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b>Promissory note receivable from parent </b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">In September 2024, the Company entered into a
promissory note with Eilean, which allows Eilean to borrow an aggregate principal amount of up to $7.5 million from the Company. The note
accrues simple interest on the outstanding principal balance at a rate of 6% per annum. The outstanding principal and related accrued
interest is due in full no later than September 30, 2027. As of September 30, 2024, Eilean has borrowed $4.0 million under the promissory
note. The balance outstanding on this note receivable is included in stockholders&#8217; deficit on the accompanying condensed balance
sheet.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"/><td style="width: 0.25in; text-align: left">9</td><td style="text-align: justify">Related Party Transactions</td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b>Research and development arrangements with
related parties</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">In March 2020, the Company entered into a Master
Research and Development Agreement with ChemDiv, Inc. (&#8220;ChemDiv&#8221;), pursuant to which ChemDiv provides services related to
preclinical drug discovery to the Company. Dr. Nikolay Savchuk, President and Chief Executive Officer of the Company, is a stockholder
of ChemDiv and a member of its board of directors. During the three and nine months ended September 30, 2023, $1.7 million and $4.9 million,
respectively, was expensed as research and development cost in the statement of operations related to ChemDiv services. As of December
31, 2023, the Company recorded $0.9 million as accrued expense relating to ChemDiv services in the balance sheet.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">In January 2023, the Company entered into an agreement
with Eilean Therapeutics AU Pty Ltd (&#8220;Eilean AU&#8221;), a subsidiary of Eilean, which provided the Company rights to intellectual
property under development by Eilean AU. During the three and nine months ended September 30, 2024, the Company paid Eilean AU $4.0 million
and $7.0 million, respectively, for the intellectual property rights. Because the intellectual property rights from Eilean AU have no
alternative future use, the payments were recorded immediately through research and development expense in the Company&#8217;s condensed
statements of operations for the three and nine months ended September 30, 2024.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b>Administrative arrangements with related parties</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">In March 2020, the Company entered into an Administrative
Services Agreement with Eil Therapeutics, Inc (&#8220;Eil&#8221;), a subsidiary of Eilean. Pursuant to such administrative services agreement,
Eil agreed to provide the Company, directly or indirectly through its contractors, administrative support services and access to staff&#8217;s
management experience and knowledge. Such services included general management and operations, including financial and accounting services,
insurance program marketing and administration and various tax-related services. Dr. Nikolay Savchuk, President and Chief Executive Officer
of the Company, is also President and Chief Executive Officer of Eil. During the three and nine months ended September 30, 2023, $0.2
million and $0.7 million, respectively, was expensed as research and development cost. Amounts expensed as general and administrative
cost during the three and nine months ended September 30, 2024 and 2023 were de minimis.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">During 2024, the Company received administrative
support services from Abet Solutions (&#8220;Abet&#8221;), a party related through Dr. Nikolay Savchuk, President and Chief Executive
Officer of the Company. During the three and nine months ended September 30, 2024, $0.2 million was expensed as general and administrative
cost in the statement of operations related to Abet services received by the Company. As of September 30, 2024, the Company recorded $0.2
million as accrued expense relating to Abet services in the balance sheet.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b>Related party notes payable</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">In May and June 2022, the Company borrowed an
aggregate principal amount of $3.9 million under two promissory note agreements with Dinas Therapeutics, Inc. (&#8220;Dinas&#8221;) for
research and development invoices paid by Dinas on behalf of the Company. Dr. Nikolay Savchuk, President and Chief Executive Officer of
the Company, is the Chief Executive Officer of Dinas. The notes were due on the earlier of (i) written demand by Dinas, (ii) the second
anniversary of the note issuances. The notes accrued interest per annum at a rate equal to 5.00%, to be paid at maturity.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in">Lomond Operating Co. (Formerly Known as Lomond Therapeutics,
Inc.)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in">Notes to the Condensed Financial Statements</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in"><b>For the nine months ended September 30, 2024 and 2023</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in">(unaudited)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">In January 2023, the Company borrowed an aggregate
principal amount of $0.3 million under a promissory note agreement with Eil, for payment of services performed on behalf of the Company.
The note was due no later than the second anniversary of the note issuances. The notes accrued interest per annum at a rate of 2.5%, to
be paid at maturity.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">For the three and nine months ended September
30, 2023, $0.1 million and $0.2 million, respectively, was expensed as interest cost related to the promissory notes with Dinas and Eil.
In December 2023, Eilean assumed the promissory notes outstanding with Dinas and Eil and related accrued interest, which was accounted
for as a contribution from parent.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"/><td style="width: 0.25in; text-align: left">10</td><td style="text-align: justify">Share-based compensation</td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">During the year ended December 31, 2020, the Company
issued 539,796 option awards to non-employee consultants for services to be performed for the Company. Option awards granted generally
vest based on a specific vesting schedule as agreed upon by the optionee and the Company and generally expire 10 years after the grant
date.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">In connection with the Eilean transaction, the
existing option awards granted by the Company were cancelled and replaced with common units (the &#8220;units&#8221;) in Eilean. The units
granted generally vest (i) on the date of grant, or (ii) 50% on the date of grant, with the remaining 50% vesting over 24 months in equal
monthly installments as services are provided.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The replacement of the option awards with units
was evaluated as a modification. The fair value of the option awards was in excess of the grant date fair value of the units. As such,
there was no incremental compensation costs related to the units to be recorded. The Company recognized $25,000 at the grant date of the
units related to the portion of the units that became fully vested at such time.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The Company recorded share-based compensation
expense in the following expense categories in its accompanying unaudited interim condensed statements of operations:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><i>Adoption of 2024 Stock Plan and Grant of Options</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">On September 20, 2024, the Board of Directors
of Lomond (the &#8220;Board&#8221;) approved the adoption of the Lomond Operating Co. 2024 Stock Plan (the &#8220;2024 Plan&#8221;). The
purpose of the 2024 Plan is to attract, incentivize and retain employees, outside directors and consultants through the grant of awards.
The 2024 Plan provides for the direct award or sale of shares, the grant of options to purchase shares and the grant of restricted stock
units to acquire shares. The maximum number of shares which may be issued under the 2024 Plan were 4,329,617.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Immediately following the adoption of the 2024
Plan, the Board approved the grant of 4,329,617 options to purchase Lomond common stock to employees, outside directors and consultants,
at an exercise price of $1.30 per share. The option shares will become eligible to vest based on, and subject to, the Company&#8217;s
completion of a merger, consolidation or share exchange with a special purpose acquisition company or other similar entity in which the
common stock (or similar securities) of the surviving parent entity is listed on a national securities exchange on or prior to December
31, 2024 (the &#8220;Milestone&#8221;) and the optionee&#8217;s continuous service through the achievement of the Milestone. Any option
shares that become eligible to vest based on achievement of the milestone (the &#8220;Eligible Shares&#8221;) shall vest and become exercisable
in a series of 48 successive equal monthly installments.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in">Lomond Operating Co. (Formerly Known as Lomond Therapeutics,
Inc.)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in">Notes to the Condensed Financial Statements</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in"><b>For the nine months ended September 30, 2024 and 2023</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in">(unaudited)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">As of September 30, 2024, there was $4.6 million
of total unrecognized share-based compensation costs related to the Company&#8217;s option awards granted under the 2024 Plan. The Milestone
for vesting to commence was not achieved as of September 30, 2024. The Milestone was achieved upon closing of the Merger, and therefore,
vesting commenced on November 1, 2024, the date of closing. Refer to Note 11 for further information.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The fair value of options granted under the 2024
plan was estimated on September 20, 2024, the date of grant, using the Black-Scholes option pricing model, with the following assumptions:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><span style="font-weight: normal">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 88%; text-align: left">Risk-free interest rate</td><td style="width: 1%">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Expected term (in years)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">6.1</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Expected dividend yield</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">0.0</td><td style="text-align: left">%</td></tr>
  </table><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><span style="font-weight: normal">&#160;</span>&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"/><td style="width: 0.25in; text-align: left">11</td><td style="text-align: justify">Subsequent events</td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
Company evaluated the potential impact of subsequent events on the financial statements through November 22, 2024, the date the financial
statements were available to be issued.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b>Issuance of SAFE Instruments</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">In October 2024, the Company issued SAFE instruments
to TPAV, LLC (&#8220;TPAV&#8221;), a party related through Nikolay Savchuk, the President and Chief Executive Officer of the Company,
and entities affiliated with OrbiMed, a party related through Carl Gordon, Director of the Company, after converting a $3.5 million capital
contribution made in May 2024 by Eilean. The SAFE instruments provide investors the right to certain shares of the Company&#8217;s capital
stock. The terms of the SAFEs provided for automatic or discretionary conversion upon the occurrence of certain events.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b>Agreements with Eil and Bala</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">In October 2024, the Company entered into license
agreements with both of Eil (the &#8220;Eil License Agreement&#8221;) and Bala Therapeutics, Inc. (&#8220;Bala&#8221;, the &#8220;Bala
License Agreement&#8221;). Pursuant to the Eil License Agreement and Bala License Agreement, the Company obtained exclusive, perpetual,
worldwide licensing rights for the development and future ownership of (i) a BCL-2, inhibitor for the treatment of AML and CLL from Eil,
and (ii) an early-stage menin inhibitor for the treatment of AML from Bala.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The Eil License Agreement and Bala License Agreement
became effective in October 2024 when the Company issued promissory notes to Eil and Bala, respectively. The principal amount of the promissory
notes with Eil and Bala are $1.7 million and $1.2 million, respectively. Each such promissory note bears interest at a rate of 7% per
annum, compounded annually, and matures on October 17, 2026. Each such promissory note may be repaid without penalty. In addition, the
two promissory notes each provide for customary events of default.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Upon the payment in full of the applicable promissory
note, Eil and Bala have each agreed to transfer to the Company all of the intellectual property rights covered by the license agreements,
as the case may be.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The license rights are sublicensable at the option
of the Company. Under such license agreements, Lomond, but not Eil or Bala, as the case may be, have the right to terminate the applicable
license agreement for convenience upon 30 days&#8217; written notice. If Lomond, or Eil or Bala, as the case may be, materially breaches
the applicable license agreement, and such breach is not cured within 90 days after the receipt of notice of such breach, then the non-defaulting
party may terminate such license agreement. In addition, upon the occurrence of an event of default under the applicable promissory note,
the license agreement shall be terminated.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Eil and Bala are each wholly-owned by Eilean,
Lomond&#8217;s parent company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in">Lomond Operating Co. (Formerly Known as Lomond Therapeutics,
Inc.)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in">Notes to the Condensed Financial Statements</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in"><b>For the nine months ended September 30, 2024 and 2023</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in">(unaudited)</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b>Entry into a Material Definitive Agreement</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">On November 1, 2024, the Company, Venetian, and
its wholly-owned subsidiary, Lomond Acquisition Corp. (&#8220;Acquisition Corp.&#8221;), entered into an Agreement and Plan of Merger
and Reorganization (the &#8220;Merger Agreement&#8221;), and a Subscription Agreement (the &#8220;Subscription Agreement&#8221;). Pursuant
to the terms of the Merger Agreement, on November 1, 2024 (the &#8220;Closing Date&#8221;), Acquisition Corp. merged with and into Lomond,
with Lomond continuing as the surviving corporation and a wholly-owned subsidiary of Venetian (the &#8220;Merger&#8221;). In connection
with the Merger, Venetian intends to change its corporate name from &#8220;Venetian-1 Acquisition Corp&#8221; to &#8220;Lomond Therapeutics
Holdings, Inc.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Pursuant to the terms of the Merger Agreement,
at the time the certificate of merger reflecting the Merger was filed with the Secretary of State of Delaware (the &#8220;Effective Time&#8221;),
each share of Legacy Lomond&#8217;s capital stock issued and outstanding immediately prior to the closing of the Merger was cancelled
and converted into the right to receive one share of Venetian common stock (the &#8220;Exchange Ratio&#8221;), with the maximum number
of shares of Venetian common stock issuable to the former holder of Lomond&#8217;s capital stock equal to 14,420,383. In addition, pursuant
to the Merger Agreement, immediately prior to the Effective Time, an aggregate of 3,625,000 shares of the 5,000,000 then-outstanding shares
of Venetian common stock owned by Venetian stockholders prior to the Merger were forfeited and cancelled (the &#8220;Stock Forfeiture&#8221;).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">In addition, pursuant to the Merger Agreement,
at the Effective Time, options to purchase an aggregate of 4,329,617 shares of Lomond common stock at an exercise price of $1.30 per share
issued and outstanding immediately prior to the closing of the Merger under Lomond&#8217;s 2024 Equity Incentive Plan (the &#8220;Legacy
Lomond Plan&#8221;) were assumed and converted into options to purchase 4,329,617 shares of Lomond Therapeutics Holdings, Inc. common
stock at an exercise price of $1.30 per share.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The Merger Agreement contained customary representations
and warranties and pre- and post-closing covenants of each party and customary closing conditions. The Merger will be treated as a recapitalization
and reverse acquisition for Venetian for financial reporting purposes. Lomond will be considered the acquirer for accounting purposes,
and Venetian&#8217;s historical financial statements before the Merger will be replaced with the historical financial statements of Lomond
before the Merger in future filings with the United States Securities and Exchange Commission (the &#8220;SEC&#8221;). The Merger is intended
to be treated as a tax-free reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Immediately following the Effective Time of the
Merger, Lomond Therapeutics Holdings, Inc. held a closing for a private placement offering (the &#8220;Offering&#8221;) pursuant to which
8,241,375 shares of common stock were issued and sold at a purchase price of $4.00 per share for aggregate gross proceeds of approximately
$32.9 million before deducting placement agent fees and expenses of the Offering. Pursuant to the Subscription Agreement, Lomond Therapeutics
Holdings, Inc., may hold one or more subsequent closings prior to November 30, 2024, to sell up to an additional 4,021,1125 shares at
the Offering Price.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">In connection with the Offering and subject to
the closing of the Offering, Lomond Therapeutics Holdings, Inc. agreed to pay the placement agents a cash placement fee and issue Placement
Agent Warrants to the Placement Agent. As a result of the foregoing, in connection with the closing of the Offering, Lomond Therapeutics
Holdings, Inc. paid the Placement Agents an aggregate cash commission of $2.5 million and issued Placement Agent Warrants to purchase
an aggregate of 275,410 shares of Lomond Therapeutics Holdings, Inc. Common Stock. Lomond Therapeutics Holdings, Inc. has also reimbursed
or will reimburse the Placement Agents for approximately $0.1 million of expenses incurred in connection with the Offering.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in">Lomond Operating Co. (Formerly Known as Lomond Therapeutics,
Inc.)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in">Notes to the Condensed Financial Statements</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in"><b>For the nine months ended September 30, 2024 and 2023</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in">(unaudited)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b>Consulting Agreement with Dr. Dukes</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">In November 2024, the Company entered into a consulting
agreement with Dr. Iain Dukes, to commence upon closing of the Merger. Pursuant to the terms of Dr. Dukes&#8217; consulting agreement,
Dr. Dukes will serve as Chief Executive Officer and Chairman of Lomond Therapeutics Holdings, Inc., is eligible to receive consulting
fees at an annual rate of $400,000, and is eligible to receive an annual incentive payment equal to up to 50% of such annual consulting
fees, subject to the achievement of applicable performance metrics as determined by the Company&#8217;s board of directors. Dr. Dukes&#8217;
consulting agreement contains customary invention assignment and confidentiality provisions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b>Consulting Agreement with Dr. Savchuk</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">In November 2024, the Company entered into a consulting
agreement with Dr. Nikolay Savchuk, to commence upon closing of the Merger. Pursuant to the terms of Dr. Savchuk&#8217;s consulting agreement,
Dr. Savchuk will serve as Chief Operating Officer and President of Lomond Therapeutics Holdings, Inc., is eligible to receive consulting
fees at an annual rate of $400,000, and is eligible to receive an annual incentive payment equal to up to 50% of such annual consulting
fees, subject to the achievement of applicable performance metrics as determined by the Company&#8217;s board of directors. Dr. Savchuk&#8217;s
consulting agreement contains customary invention assignment and confidentiality provisions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b>Services Agreement with Related Party</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">In October 2024, Lomond Therapeutics Holdings,
Inc. entered into an administrative services &amp; co-employment agreement, or services agreement, with Abet Solutions. Pursuant to such
use of services agreement, Abet Solutions agreed to provide to the Company, directly or indirectly through its contractors, administrative
support services and access to staff&#8217;s management experience and knowledge. Such services included general management and operations,
including financial and accounting services, insurance program marketing and administration and various tax-related services. Dr. Savchuk,
President and Chief Operating Officer of Lomond Therapeutics Holdings, Inc., has a material direct interest in Abet Solutions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>



</div><p style="margin: 0">&#160;</p><div>

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</div><p style="margin: 0"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><div><a id="C_006"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b><span style="text-decoration:underline">Unaudited Pro Forma Condensed Combined Financial
Statements</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On November 1, 2024, Venetian-1 Acquisition Corp
(&#8220;Venetian&#8221;), Lomond Acquisition Corp. (&#8220;Acquisition Corp.&#8221;), and Lomond Therapeutics Inc. (&#8220;Legacy Lomond&#8221;)
entered into the Merger Agreement, pursuant to which, among other things, and subject to the satisfaction or waiver of the conditions
set forth therein, Acquisition Corp. will merge with and into Legacy Lomond at the Effective Time (the &#8220;Merger&#8221;), with Legacy
Lomond continuing after the Merger as the surviving corporation and a wholly-owned subsidiary of Venetian. In connection with the Merger,
Venetian changed its corporate name from &#8220;Venetian-1 Acquisition Corp.&#8221; to &#8220;Lomond Therapeutics Holdings, Inc.&#8221;
(&#8220;Lomond&#8221;). Following the consummation of the Merger, Legacy Lomond changed its name to &#8220;Lomond Operating Co.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">At the Effective Time, each outstanding share
of Legacy Lomond common stock will be converted into the right to receive a number of shares of Venetian common stock based upon the Exchange
Ratio calculated as set forth in the Merger Agreement. Each excluded share will automatically be cancelled and will cease to exist, and
no consideration will be delivered in exchange therefor. In addition, (i) each Legacy Lomond option granted under Legacy Lomond&#8217;s
2024 Stock Plan (the &#8220;Legacy Lomond Plan&#8221;), whether vested or unvested, that is outstanding immediately prior to the Effective
Time will be assumed by Venetian and converted into an option to purchase shares of Venetian common stock, on the same terms and conditions
as were applicable to such Legacy Lomond options immediately prior to the Effective Time, with the number of underlying shares and exercise
price adjusted to give effect to the Exchange Ratio.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Immediately following the Effective Time, former
Legacy Lomond stockholders are expected to own approximately 91.29% of the outstanding shares of Venetian common stock, and stockholders
of Venetian as of immediately prior to the Effective Time are expected to own approximately 8.71% of the outstanding shares of Venetian
common stock. Under certain circumstances further described in the Merger Agreement and elsewhere in this report, these ownership percentages
may be adjusted upward or downward.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The merger will be accounted for as a reverse
recapitalization of Venetian by Legacy Lomond under U.S.&#160;GAAP for purposes of these unaudited pro forma condensed combined financial
information, similar to the issuance of equity for the net assets of Venetian, which upon closing of the Merger are assumed to be primarily
cash. Legacy Lomond will be determined to be the accounting acquirer in the Merger for financial reporting purposes based upon several
factors, including: (i)&#160;former Legacy Lomond securityholders are expected to own approximately 91.29% of the Venetian Common Stock
outstanding immediately following the Effective Time (excluding the current private investment in public equity), (ii)&#160;Legacy Lomond
is entitled to designate all of the initial members of the board of directors of the combined company, and (iii)&#160;Legacy Lomond&#8217;s
current senior management will hold all positions in the senior management of the combined company. <span style="background-color: white">As
a result of Lomond being treated as the accounting acquirer for financial reporting purposes, if the Merger is consummated, among other
things, the historical financial statements of Legacy Lomond will become the historical consolidated financial statements of the combined
company.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The unaudited pro forma condensed combined financial
information was prepared in accordance with Article 11 of Regulation S-X.&#160; The unaudited pro forma condensed combined balance sheet
data assumes that the Merger took place on January 1, 2023 and combines the Legacy Lomond and Venetian historical balance sheets at September
30, 2024. The unaudited pro forma condensed combined statements of operations data assumes that the Merger took place as of January 1,
2023 and combines the historical results of Legacy Lomond and Venetian for the nine months ended September 30, 2024 and the year ended
December 31, 2023. The historical financial statements of Legacy Lomond and Venetian, which are incorporated by reference into or included
elsewhere in this report, have been adjusted to give pro forma effect to events that are (i)&#160;directly attributable to the merger,
(ii)&#160;factually supportable, and (iii)&#160;with respect to the statements of operations, expected to have a continuing impact on
the combined results. The unaudited pro forma condensed combined financial information, including the notes thereto, should be read in
conjunction with the <span style="background-color: white">separate historical </span>audited financial statements of Legacy Lomond and
Venetian for the years ended December&#160;31, 2023 and December 31, 2022 and the unaudited interim statements of Legacy Lomond and Venetian
for the nine months ended September 30, 2024, which are incorporated by reference or included elsewhere in this report.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="background-color: white">In the unaudited
pro forma combined condensed financial statements, the Merger has been accounted for as a reverse recapitalization under U.S. GAAP because
the assets of Venetian at the Effective Date are expected to be primarily cash. </span>The unaudited pro forma condensed combined financial
statements are based on the assumptions and adjustments that are described in the accompanying notes. The actual amounts recorded as of
the completion of the merger may differ materially from the information presented in these unaudited pro forma condensed combined financial
statements as a result of the amount of cash used by Venetian&#8217;s operations between the signing of the Merger Agreement and the closing
of the Merger; the timing of the closing of the Merger; and other changes in Venetian&#8217;s assets and liabilities that occur prior
to the completion of the Merger.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In addition, the unaudited pro forma condensed
combined financial statements do not give effect to the potential impact of current financial conditions, regulatory matters, operating
efficiencies or other savings or expenses that may be associated with the Merger. The actual results reported in periods following the
Merger may differ significantly from those reflected in the unaudited pro forma condensed combined financial information presented herein
for a number of reasons, including, but not limited to, differences in the assumptions used to prepare this unaudited pro forma condensed
combined financial information. Furthermore, accounting rules require evaluation of certain assumptions, estimates, or determination of
financial statement classifications. While this unaudited pro forma condensed combined financial information assumes no material differences,
the account policies of Venetian may materially vary from those of Legacy Lomond. Following consummation of the Merger, management will
conduct a final review of Venetian&#8217;s accounting policies in order to determine if differences in accounting policies require adjustment
or reclassification of Venetian&#8217;s results of operations or reclassification of assets or liabilities to conform to Lomond&#8217;s
accounting policies and classifications. As a result of this review, management may identify differences that, when conformed, could have
a material impact on these unaudited pro forma condensed combined financial statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Accordingly, the unaudited pro forma condensed
combined financial statements have been prepared for illustrative purposes only are not necessarily indicative of the combined financial
position or results of operations in future periods or the results that actually would have been realized had Legacy Lomond and Venetian
been a combined company during the specified period and may not be useful in predicting the future consolidated results of operations
or financial position.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><div><a id="C_007"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Unaudited Pro Forma Condensed Combined Balance
Sheet</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>As of September 30, 2024</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Legacy Lomond</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Venetian</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Notes</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Pro Forma Combined</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="padding-left: 0.125in; text-indent: -0.125in; font-weight: bold">Assets</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td style="text-align: right">&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="padding-left: 0.125in; text-indent: -0.125in; font-weight: bold">Current assets:</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td style="text-align: right">&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.5in; text-indent: -0.125in; text-align: left; padding-bottom: 1.5pt">Deferred financing costs</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">694,352</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(694,352</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="font-weight: bold; text-align: center; padding-bottom: 1.5pt; padding-left: 5.4pt">B</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: right; padding-bottom: 4pt; padding-left: 5.4pt">&#160;</td><td style="font-weight: bold; padding-bottom: 4pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: right; padding-left: 5.4pt">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: right; padding-left: 5.4pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">$</td><td style="text-align: right">10,700</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">127,500</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: center; padding-bottom: 1.5pt; padding-left: 5.4pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">127,500</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">1,250,929</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">138,200</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">705,648</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: center; padding-left: 5.4pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">2,094,777</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">3,265,908</td><td style="text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: center; padding-left: 5.4pt">E</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">3,265,908</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">8,424,479</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="font-weight: bold; text-align: center; padding-bottom: 1.5pt; padding-left: 5.4pt">F</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
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    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right"/><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">138,200</td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td style="text-align: center; padding-bottom: 1.5pt; padding-left: 5.4pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">5,360,685</td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">5,466,925</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(5,466,925</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="font-weight: bold; text-align: center; padding-bottom: 1.5pt; padding-left: 5.4pt">G</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: center; padding-left: 5.4pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">76</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">500</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">2,144</td><td style="text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: center; padding-left: 5.4pt">H</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">2,720</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">23,656,420</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">42,707,989</td><td style="text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: center; padding-left: 5.4pt">H</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">66,364,409</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(4,004,603</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: center; padding-left: 5.4pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(4,004,603</td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left; padding-bottom: 1.5pt">Accumulated deficit</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(30,482,210</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(136,431</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="font-weight: bold; text-align: center; padding-bottom: 1.5pt; padding-left: 5.4pt">H</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(35,148,118</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left; padding-bottom: 1.5pt">Total stockholders&#8217; equity (deficit)</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(135,931</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">38,180,657</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: center; padding-bottom: 1.5pt; padding-left: 5.4pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
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  </table><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">See accompanying notes to the unaudited pro forma
condensed combined financial statements</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->47<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><div><a id="C_008"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Unaudited Pro Forma Condensed Combined Statements
of Operations</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>For the Nine Months Ended September&#160;30,
2024</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 215; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->48<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><div><a id="C_009"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Unaudited Pro Forma Condensed Combined Statements
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>For the Year Ended December&#160;31, 2023</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="font-weight: bold; text-align: center; padding-bottom: 1.5pt; padding-left: 5.4pt">J</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(0.01</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt; text-align: right">&#160;</td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="font-weight: bold; text-align: center; padding-bottom: 4pt; padding-left: 5.4pt">K</td><td style="padding-bottom: 4pt">&#160;</td>
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  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">See accompanying notes to the unaudited pro forma
condensed combined financial statements</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 216; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->49<!-- Field: /Sequence --></p></div><div>
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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><div><a id="C_010"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED
FINANCIAL INFORMATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>1. Description of Transactions</b></span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Merger Transaction</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On November 1, 2024, Venetian, Acquisition Corp.,
and Legacy Lomond entered into the Merger Agreement, pursuant to which, among other things, and subject to the satisfaction or waiver
of the conditions set forth therein, Acquisition Corp. will merge with and into Legacy Lomond at the Effective Time, with Legacy Lomond
continuing after the Merger as the surviving corporation and a wholly-owned subsidiary of Venetian. In connection with the Merger, Venetian
intends to change its corporate name from &#8220;Venetian-1 Acquisition Corp&#8221; to &#8220;Lomond Therapeutics Holdings, Inc.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">At the Effective Time, all shares of Legacy Lomond
capital stock outstanding immediately prior to the Effective Time, excluding certain excluded and dissenting shares, will be converted
into the right to receive approximately 14.4 million shares (which is equal to approximately 0.8 million shares of Legacy Lomond common
stock and approximately 13.6 million shares of Legacy Lomond preferred stock) of Venetian common stock in the aggregate, based on an Exchange
Ratio of 1.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In addition, (i) each Legacy Lomond Option granted
under the Legacy Lomond Plan, whether vested or unvested, that is outstanding immediately prior to the Effective Time will be assumed
by Venetian and converted into an option to purchase shares of Venetian common stock, on the same terms and conditions as were applicable
to such Legacy Lomond options immediately prior to the Effective Time with the number of underlying shares and exercise price adjusted
to give effect to the Exchange Ratio.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Immediately following the Effective Time, former
Legacy Lomond stockholders are expected to own approximately 91.29% of the outstanding shares of Venetian common stock, and stockholders
of Venetian as of immediately prior to the Effective Time are expected to own approximately 8.71% of the outstanding shares of Venetian
common stock, in each case, on a fully-diluted basis as calculated in accordance with the Merger Agreement (both percentages exclude the
private placement in public equity investment).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Conversion of Lomond&#8217;s SAFE liability</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Immediately following
the Effective Time, Lomond completed a private placement offering (the &#8220;Offering&#8221;) resulting in net proceeds of approximately
$29.0 million, net of placement agent fees and estimated offering expenses payable by Lomond. At the Effective Time, each of Legacy Lomond&#8217;s
SAFEs will be assumed by Venetian and be converted into 3.2 million shares of Venetian&#8217;s common stock at the closing of the Offering.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>2. Basis of Presentation</b></span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The unaudited pro forma condensed combined financial
statements were prepared in accordance with the regulations of the SEC. The unaudited pro forma condensed combined balance sheet as of
September 30, 2024 is presented as if the Merger had been completed on September 30, 2024. The unaudited pro forma condensed combined
statements of operation for the nine months ended September 30, 2024 and year ended December 31, 2023 assumes that the Merger occurred
on January 1, 2023, and combines the historical results of Legacy Lomond and Venetian.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For accounting purposes, Legacy Lomond will be
considered to be the acquiring company and the Merger will be accounted for as a reverse recapitalization of Venetian by Legacy Lomond
because at the closing of the Merger, the primary pre-combination assets of Venetian will be cash. The exchange ratio at the time of the
execution of the Merger Agreement is 1 share of Venetian common stock for each share of Legacy Lomond capital stock.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Under reverse recapitalization accounting, the
assets and liabilities of Venetian will be recorded at their book values due to their short-term nature. No goodwill or intangible assets
are to be recognized <span style="background-color: white">and any excess consideration transferred over the net assets of Venetian following
determination of the actual purchase consideration for Venetian will be reflected as a reduction to additional&#160;paid-in&#160;capital</span>.
The historical financial statements of Legacy Lomond and Venetian, which are provided elsewhere in this report, have been adjusted to
give pro forma effect to events that are (i)&#160;directly attributable to the Merger, (ii)&#160;factually supportable, and (iii)&#160;with
respect to the statements of operations, expected to have a continuing impact on the combined results.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">To the extent there are significant changes to
the business following completion of the Merger, the assumptions and estimates set forth in the unaudited pro forma condensed combined
financial statements could change significantly. Accordingly, the pro forma adjustments are subject to further adjustments as additional
information becomes available and as additional analyses are conducted following the completion of the Merger. There can be no assurances
that these additional analyses will not result in material changes to the estimates.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>3. Pro Forma Adjustments</b></span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The pro forma adjustments were based on the preliminary
information available at the time of the preparation of the unaudited pro forma condensed combined financial information. The unaudited
pro forma condensed combined financial information, including the notes thereto, are qualified in their entirety by reference to, and
should be read in conjunction with, the <span style="background-color: white">separate historical </span>audited financial statements
of Legacy Lomond and Venetian for the years ended December&#160;31, 2023 and December 31, 2022 and the unaudited interim financial statements
as of September 30, 2024 which are included elsewhere in this report.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Unaudited Pro forma Condensed Combined Balance
Sheet Transaction Adjustments</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Reflects
(i) net proceeds from the Offering, net of offering costs (ii) proceeds from issuance of SAFE instruments, and (iii) payment of total
estimated unpaid transaction costs upon consummation of the Merger.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Lomond</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Venetian</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Total</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 64%; text-align: left; text-indent: -9pt; padding-left: 9pt">Proceeds from issuance of shares of Lomond common stock, net of offering costs</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">30,455,160</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">&#160;&#160;&#160;&#160;&#160;-</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">30,455,160</td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Payment of transaction costs</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,500,000</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,500,000</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt">Pro forma adjustment</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">28,955,160</td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">-</td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">28,955,160</td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr>
  </table><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">B</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Reclassification of deferred offering costs in connection with the completion of the PIPE financing and Merger</span></td></tr>
  <tr style="vertical-align: top">
    <td>&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">C</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Reflects the accrued executive compensation cost arising from entry into consulting agreements with CEO and COO</span></td></tr>
  <tr style="vertical-align: top">
    <td>&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
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    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Represents the elimination of transaction costs and PIPE financing costs in accrued expenses as of September 30, 2024.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0in"/>
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  <tr style="vertical-align: top">
    <td/>
    <td>&#160;</td>
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  <tr style="vertical-align: top">
    <td/>
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    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Conversion of Legacy Lomond&#8217;s SAFE liability into shares of Venetian common stock.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&#160;</p><div>

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  <tr style="vertical-align: top">
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    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Conversion of Legacy Lomond&#8217;s convertible preferred stock into shares of Venetian common stock.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%">
  <tr style="vertical-align: top">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: center">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">824</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">30,455,160</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">1,366</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">5,465,559</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">5,466,925</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">Issuance of Lomond common stock upon settlement of Legacy Lomond&#8217;s SAFE instruments</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">3,161,456</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">3,161</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">8,421,318</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">8,424,479</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">Issuance of note payable in exchange for license agreement</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(3,265,908</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(3,265,908</td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">Elimination of Venetian&#8217;s historical carrying values</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(500</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(135,931</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">136,431</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">Issuance of shares of Lomond common stock of the continuing company to Venetian shareholders</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">1,375,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">138</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(138</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">Payment of transaction costs</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(1,500,000</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(1,500,000</td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left; padding-bottom: 1.5pt">Payment of consulting fees for executive compensation</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="padding-left: 0.125in; text-indent: -0.125in; padding-bottom: 4pt">Pro forma adjustment</td><td style="padding-bottom: 4pt">&#160;</td>
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    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">2,144</td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">42,707,989</td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(4,529,477</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">38,180,657</td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr>
  </table><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Unaudited Pro forma Condensed Combined Statement of Operations Transaction
Adjustments</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0in"/>
    <td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">I</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The removal of change in fair value of SAFE liability for the nine months ended September 30, 2024</span></td></tr>
  <tr style="vertical-align: top">
    <td/>
    <td>&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td/>
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    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The accrued interest on the promissory notes issued in exchange for license agreement for the nine months ended September 30, 2024 and the year ended December 31, 2023.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0in"/>
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    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The pro forma combined basic and diluted loss per share have been adjusted to reflect the pro forma net loss for the nine months ended September 30, 2024 and the year ended December 31, 2023. In addition, the number of shares used in calculating the pro forma combined basic and diluted net loss per share has been adjusted to reflect the estimated total number of shares of common stock of the combined company that would be outstanding as of the closing. The following table sets forth the calculation of the pro forma weighted average number of common shares outstanding&#8212;basic and diluted.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 9%; text-align: right">(5,000,000</td><td style="width: 1%; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">13,661,416</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">8,241,375</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
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    <td style="padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
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    <td style="border-bottom: Black 4pt double; text-align: left">&#160;</td><td style="border-bottom: Black 4pt double; text-align: right">21,439,247</td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr>
  </table><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 219; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->52<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&#160;</p><div>

</div><div><a id="f_007"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif">REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left">To the Board of Directors<br/>
Venetian-1 Acquisition Corp.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left">Boca Raton, Florida</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Opinion on the Financial Statements</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We have audited the accompanying balance sheets of
Venetian-1 Acquisition Corp. (the &#8220;Company&#8221;) as of December 31, 2023 and 2022, and the related statements of operations, changes
in stockholders&#8217; deficit, and cash flows for the year then ended, and the related notes (collectively referred to as the &#8220;financial
statements&#8221;). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company
as of December 31, 2023 and 2022, and the results of its operations and its cash flows for the years then ended, in conformity with accounting
principles generally accepted in the United States of America.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Substantial Doubt About the Company&#8217;s Ability
to Continue as a Going Concern</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying financial statements have been prepared
assuming that the Company will continue as a going concern. As discussed in Note 6 to the financial statements, the Company has incurred
losses from inception, which raises substantial doubt about its ability to continue as a going concern. Management&#8217;s plans in regard
to these matters are also described in Note 6. The financial statements do not include any adjustments that might result from the outcome
of this uncertainty.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Basis for Opinion</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">These financial statements are the responsibility
of the Company&#8217;s management. Our responsibility is to express an opinion on the Company&#8217;s financial statements based on our
audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (&#8220;PCAOB&#8221;)
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We conducted our audit in accordance with the standards
of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform,
an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal
control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company&#8217;s internal
control over financial reporting. Accordingly, we express no such opinion.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Our audit included performing procedures to assess
the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><img alt="" src="image_012.jpg" style="height: 48px; width: 300px"/>&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">/s/ GRASSI &amp; CO., CPAs, P.C.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">PCAOB ID # 606</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif">We
have served as the Company&#8217;s auditors since 2022.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Jericho, New York</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">April 1, 2024</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 220; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->53<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><div><a id="f_008"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>VENETIAN-1 ACQUISITION CORP.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>BALANCE SHEETS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td style="text-indent: -0.125in; padding-left: 0.125in; font-weight: bold; text-align: center">ASSETS</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">See accompanying notes to financial statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><div><a id="f_009"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>VENETIAN-1 ACQUISITION CORP.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>STATEMENTS OF OPERATIONS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">For the Years Ended<br/>
 December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Loss from operations</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="text-indent: -0.125in; padding-left: 0.125in">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left; padding-bottom: 4pt">Weighted average common stock outstanding, basic and diluted</td><td style="padding-bottom: 4pt">&#160;</td>
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    <td style="text-indent: -0.125in; padding-left: 0.125in">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">See accompanying notes to financial statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><div><a id="f_010"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>VENETIAN-1 ACQUISITION CORP.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>STATEMENTS OF CHANGES IN STOCKHOLDERS&#8217;
DEFICIT</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">For the Years Ended December 31, 2023 and 2022</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
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    <td colspan="2" style="text-align: center">&#160;</td><td>&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">See accompanying notes to financial statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->56<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><div><a id="f_011"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>VENETIAN-1 ACQUISITION CORP.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>STATEMENTS OF CASH FLOWS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">For the Years Ended<br/>
 December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2023</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="font-weight: bold">Cash flows from operating activities:</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Adjustments to reconcile net loss to net cash used in operating activities:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Accounts payable and accrued expenses</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInAccountsPayableAndAccruedLiabilities" scale="0" unitRef="usd" id="ixv-27624">1,433</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="padding-left: 0.25in; font-weight: bold; text-align: left; padding-bottom: 1.5pt">Net cash used in operating activities</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="font-weight: bold; text-align: left">Cash flows from financing activities:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Proceeds from stockholder advances</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-29">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-30">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="padding-left: 0.25in; font-weight: bold; text-align: left; padding-bottom: 1.5pt">Net cash provided by financing activities</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="font-weight: bold; text-align: left">Net change in cash</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">See accompanying notes to financial statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 224; Value: 1 --><div>
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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><div><a id="f_012"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>VENETIAN-1 ACQUISITION CORP.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">December 31, 2023</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><ix:nonNumeric contextRef="c4" escape="true" name="us-gaap:NatureOfOperations" id="ixv-25077"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 1.&#160;<span style="text-decoration:underline">Nature of Operations</span></b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Venetian-1 Acquisition Corp. (the &#8220;Company&#8221;)
was incorporated in the State of Delaware on September 24, 2021. The Company&#8217;s management has chosen December 31st&#160;for its
fiscal year end.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company was organized as a vehicle to investigate
and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly traded
corporation. The Company&#8217;s principal business objective is to achieve long-term growth potential through a combination with a business,
rather than immediate short-term earnings. The Company will not restrict its potential target companies to any specific business, industry,
or geographical location. The analysis of business opportunities will be undertaken by, or under the supervision of, the officer and directors
of the Company.</p></ix:nonNumeric><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:nonNumeric contextRef="c4" continuedAt="_BasisOfPresentationAndSignificantAccountingPoliciesTextBlock-c4_cont_1" escape="true" name="us-gaap:BasisOfPresentationAndSignificantAccountingPoliciesTextBlock" id="ixv-25088"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 2.&#160;<span style="text-decoration:underline">Basis of Presentation and Summary
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<ix:nonNumeric contextRef="c4" continuedAt="_BasisOfAccountingPolicyPolicyTextBlock-c4_cont_1" escape="true" name="us-gaap:BasisOfAccountingPolicyPolicyTextBlock" id="ixv-25093"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Basis of Presentation</span></p></ix:nonNumeric>

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<ix:continuation id="_BasisOfAccountingPolicyPolicyTextBlock-c4_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The accompanying financial statements have been
prepared in accordance with accounting principles generally accepted in the United States of America (&#8220;U.S. GAAP&#8221;).</p></ix:continuation>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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<ix:continuation id="_UseOfEstimates-c4_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The preparation of financial statements in conformity
with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those estimates.</p></ix:continuation>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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<ix:continuation continuedAt="_IncomeTaxPolicyTextBlock-c4_cont_2" id="_IncomeTaxPolicyTextBlock-c4_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company adopted ASC 740, <i>&#8220;Income
Taxes&#8221;</i>, at its inception. Under ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets, including tax loss and credit carry-forwards, and liabilities are measured using enacted tax rates expected
to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred
tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred income
tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. The components of the deferred
tax assets and liabilities are individually classified as current and non-current based on their characteristics. Deferred tax assets
are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred
tax assets will not be realized.</p></ix:continuation>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<ix:continuation id="_IncomeTaxPolicyTextBlock-c4_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company recognizes accrued interest and penalties
related to unrecognized tax benefits as income tax expense. There were <span style="-sec-ix-hidden: hidden-fact-33"><span style="-sec-ix-hidden: hidden-fact-34">no</span></span> unrecognized tax benefits and no amounts accrued for interest
and penalties as of December 31, 2023 and 2022. The Company is currently not aware of any issues under review that could result in significant
payments, accruals or material deviation from its position.</p></ix:continuation>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<ix:nonNumeric contextRef="c4" continuedAt="_EarningsPerSharePolicyTextBlock-c4_cont_1" escape="true" name="us-gaap:EarningsPerSharePolicyTextBlock" id="ixv-25120"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="text-decoration:underline">Net Loss per Common Share</span></p></ix:nonNumeric>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

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average number of common shares outstanding for the period. Diluted earnings per share takes into effect any dilutive instruments, except
when doing so would be anti-dilutive. As of December 31, 2023 and 2022, there were <span style="-sec-ix-hidden: hidden-fact-35"><span style="-sec-ix-hidden: hidden-fact-36">no</span></span> dilutive instruments.&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:nonNumeric><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 225; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->58<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:continuation id="_BasisOfPresentationAndSignificantAccountingPoliciesTextBlock-c4_cont_1"><ix:nonNumeric contextRef="c4" continuedAt="ck0001900520_EmergingGrowthCompanyPolicyTextBlock-c4_cont_1" escape="true" name="ck0001900520:EmergingGrowthCompanyPolicyTextBlock" id="ixv-25144"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="text-decoration:underline">Emerging Growth Company</span></p></ix:nonNumeric>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

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as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As
such, the Company is eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other
public companies that are not &#8220;emerging growth companies&#8221; including, but not limited to, not being required to comply with
the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive
compensation in the Company&#8217;s periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding
advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. If some investors
find the securities less attractive as a result, there may be a less active trading market for securities and the prices of securities
may be more volatile.</p></ix:continuation>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<ix:continuation continuedAt="ck0001900520_EmergingGrowthCompanyPolicyTextBlock-c4_cont_3" id="ck0001900520_EmergingGrowthCompanyPolicyTextBlock-c4_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In addition, Section 107 of the JOBS Act also
provides that an &#8220;emerging growth company&#8221; can take advantage of the extended transition period provided in Section 7(a)(2)(B)
of the Securities Act for complying with new or revised accounting standards (that is, an &#8220;emerging growth company&#8221; can delay
the adoption of certain accounting standards until those standards would otherwise apply to private companies). The Company intends to
take advantage of the benefits of this extended transition period.</p></ix:continuation>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<ix:continuation id="ck0001900520_EmergingGrowthCompanyPolicyTextBlock-c4_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Additionally, the Company is a &#8220;smaller
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a smaller reporting company until the last day of the fiscal year in which (1) the market value of the ordinary shares held by non-affiliates
equals or exceeds $250 million as of the prior June 30, and (2) the annual revenues equaled or exceeded $100 million during such completed
fiscal year or the market value of the ordinary shares held by non-affiliates equals or exceeds $700 million as of the prior June 30.</ix:nonNumeric></p></ix:continuation>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<ix:nonNumeric contextRef="c4" continuedAt="_NewAccountingPronouncementsPolicyPolicyTextBlock-c4_cont_1" escape="true" name="us-gaap:NewAccountingPronouncementsPolicyPolicyTextBlock" id="ixv-25157"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="text-decoration:underline">Recently Issued Accounting Pronouncements</span></p></ix:nonNumeric>

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<ix:continuation id="_NewAccountingPronouncementsPolicyPolicyTextBlock-c4_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Management does not believe that any recently
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:nonNumeric contextRef="c4" escape="true" name="us-gaap:StockholdersEquityNoteDisclosureTextBlock" id="ixv-25166"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Note 3.&#160;<span style="text-decoration:underline">Capital Stock</span></b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="text-decoration:underline">Preferred Stock</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of December 31, 2023 and 2022, the Company
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="text-decoration:underline">Common Stock</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of December 31, 2023 and 2022, the Company
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 226; Value: 1 --><div>
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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:nonNumeric contextRef="c4" escape="true" name="us-gaap:IncomeTaxDisclosureTextBlock" id="ixv-25199"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 4.&#160;<span style="text-decoration:underline">Income Taxes</span></b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of December 31, 2023 and 2022, the Company
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respectively, available to offset future taxable income through 2041 subject to the change in ownership provisions under IRC 382. A valuation
allowance has been recorded to fully offset these deferred tax assets because the Company&#8217;s management believes future realization
of the related tax benefits is uncertain.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<ix:continuation id="_ScheduleOfEffectiveIncomeTaxRateReconciliationTableTextBlock-c4_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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Transactions</span></b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="text-decoration:underline">Office Space</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company utilizes the office space and equipment of its management
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="text-decoration:underline">Note Payable - Stockholder</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On September 24, 2021, the Company issued a promissory
note (the &#8220;Note&#8221;) to a stockholder of the Company pursuant to which the Company agreed to repay the sum of any and all amounts
advanced to the Company, on or before the date that the Company consummates a business combination with a private company or reverse takeover
transaction or other transaction after which the Company would cease to be a shell company. Interest shall not accrue on the outstanding
principal amount of the note except if an Event of Default (as defined in the note) has occurred. In the event of an Event of Default,
the entire note shall automatically become due and payable (the &#8220;Default Date&#8221;) and starting from five (5) days after the
Default Date, the interest rate on the note shall accrue at the rate of eighteen percent (<ix:nonFraction contextRef="c1" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:DerivativeVariableInterestRate" scale="-2" unitRef="pure" id="ixv-27664">18</ix:nonFraction>%) per annum. As of December 31, 2023 and
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The accompanying financial statements have been
prepared assuming the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of
liabilities in the normal course of business.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company has accumulated deficit and total
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substantial doubt about the Company&#8217;s ability to continue as a going concern for the twelve months following the date these financial
statements are issued. Management intends to finance operations over the next twelve months through additional borrowings on the existing
Note.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The accompanying financial statements do not include
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></p><div>

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</div><p style="margin: 0">&#160;</p><div>

</div><div><a id="f_013"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>VENETIAN-1
ACQUISITION CORP.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>CONDENSED
BALANCE SHEETS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: center">&#160;</td><td style="font-weight: bold">&#160;</td>
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom">
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    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">See
accompanying notes to condensed financial statements.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>


</div><!-- Field: Page; Sequence: 228; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->61<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><div><a id="f_014"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>VENETIAN-1
ACQUISITION CORP.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>CONDENSED
STATEMENTS OF OPERATIONS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>(Unaudited)</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Three Months Ended <br/> September 30,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Nine Months Ended <br/> September 30,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">$</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-17">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; font-weight: bold; text-align: left; padding-bottom: 2.5pt">Net loss</td><td style="font-weight: bold; padding-bottom: 2.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left; padding-bottom: 2.5pt">Weighted average common stock outstanding, basic and diluted</td><td style="padding-bottom: 2.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; font-weight: bold; text-align: left; padding-bottom: 2.5pt">Net loss per share of common stock, basic and diluted</td><td style="font-weight: bold; padding-bottom: 2.5pt">&#160;</td>
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    <td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right">(<ix:nonFraction contextRef="c0" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:EarningsPerShareDiluted" scale="0" sign="-" unitRef="usdPershares" id="ixv-27727"><ix:nonFraction contextRef="c0" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:EarningsPerShareBasic" scale="0" sign="-" unitRef="usdPershares" id="ixv-27728">0.01</ix:nonFraction></ix:nonFraction></td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">)</td><td style="font-weight: bold; padding-bottom: 2.5pt">&#160;</td>
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  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">See
accompanying notes to condensed financial statements.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>


</div><!-- Field: Page; Sequence: 229; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->62<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><div><a id="f_015"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>VENETIAN-1
ACQUISITION CORP.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>CONDENSED
STATEMENTS OF CHANGES IN STOCKHOLDERS&#8217; DEFICIT</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>(Unaudited)</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>For
the Three and Nine Months Ended September 30, 2023</b></span></p><div>

</div><p style="margin: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: center">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: center">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: center">&#160;</td><td>&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center">Total</td><td style="font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Common Stock</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="padding-bottom: 1.5pt; font-weight: bold; text-align: center">Accumulated</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="padding-bottom: 1.5pt; font-weight: bold; text-align: center">Stockholders&#8217;</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Shares</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Amount</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Deficit</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Deficit</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Net loss</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-23">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c22" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetIncomeLoss" scale="0" sign="-" unitRef="usd" id="ixv-27736">13,126</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; text-align: right">(<ix:nonFraction contextRef="c25" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockholdersEquity" scale="0" sign="-" unitRef="usd" id="ixv-27740">67,406</ix:nonFraction></td><td style="font-weight: bold; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Net loss</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-24">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; font-weight: bold">Balances &#8211; June 30, 2023</td><td style="font-weight: bold">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-25">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; font-weight: bold; padding-bottom: 2.5pt">Balances &#8211; September 30, 2023</td><td style="font-weight: bold; padding-bottom: 2.5pt">&#160;</td>
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</table><div>

</div><p style="margin: 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><b>For
the Three and Nine Months Ended September 30, 2024</b></p><div>

</div><p style="margin: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="text-align: center">&#160;</td>
    <td colspan="2" style="text-align: center">&#160;</td><td style="text-align: center">&#160;</td><td style="text-align: center">&#160;</td>
    <td colspan="2" style="text-align: center">&#160;</td><td style="text-align: center">&#160;</td><td style="text-align: center">&#160;</td>
    <td colspan="2" style="text-align: center">&#160;</td><td style="text-align: center">&#160;</td><td style="text-align: center; font-weight: bold">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center">Total</td><td style="text-align: center; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="text-align: center; font-weight: bold">&#160;</td>
    <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Common Stock</td><td style="text-align: center">&#160;</td><td style="text-align: center; font-weight: bold">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -0.125in; padding-left: 0.125in">Net loss</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-26">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c38" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetIncomeLoss" scale="0" sign="-" unitRef="usd" id="ixv-27757">11,291</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c39" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetIncomeLoss" scale="0" sign="-" unitRef="usd" id="ixv-27758">11,291</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; text-align: right">(<ix:nonFraction contextRef="c41" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockholdersEquity" scale="0" sign="-" unitRef="usd" id="ixv-27761">114,007</ix:nonFraction></td><td style="font-weight: bold; text-align: left">)</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; text-align: right">(<ix:nonFraction contextRef="c42" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockholdersEquity" scale="0" sign="-" unitRef="usd" id="ixv-27762">113,507</ix:nonFraction></td><td style="font-weight: bold; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -0.125in; padding-left: 0.125in">Net loss</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-27">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c45" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetIncomeLoss" scale="0" sign="-" unitRef="usd" id="ixv-27764">11,471</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-indent: -0.125in; padding-left: 0.125in">Balances &#8211; June 30, 2024</td><td style="font-weight: bold">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -0.125in; padding-left: 0.125in">Net loss</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-28">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c50" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetIncomeLoss" scale="0" sign="-" unitRef="usd" id="ixv-27769">10,953</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; padding-bottom: 2.5pt; text-indent: -0.125in; padding-left: 0.125in">Balances &#8211; September 30, 2024</td><td style="font-weight: bold; padding-bottom: 2.5pt">&#160;</td>
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  </table><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">See
accompanying notes to condensed financial statements.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 230; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->63<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="f_016"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>VENETIAN-1
ACQUISITION CORP.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>CONDENSED
STATEMENTS OF CASH FLOWS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>(Unaudited)</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Nine Months Ended </b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>September 30, </b></span></p></td><td style="padding-bottom: 1.5pt">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2024</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2023</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-indent: -0.125in; padding-left: 0.125in; font-weight: bold">Cash flows from operating activities:</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">See
accompanying notes to condensed financial statements.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 296.15pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>


</div><!-- Field: Page; Sequence: 231; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->64<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><div><a id="f_017"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>VENETIAN-1
ACQUISITION CORP.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTES
TO CONDENSED FINANCIAL STATEMENTS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>September
30, 2024</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>(Unaudited)</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:NatureOfOperations" id="ixv-26406"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Note
1.&#160;<span style="text-decoration:underline">Nature of Operations</span></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Venetian-1
Acquisition Corp. (the &#8220;Company&#8221;) was incorporated in the State of Delaware on <ix:nonNumeric contextRef="c0" format="ixt:date-monthname-day-year-en" name="dei:EntityIncorporationDateOfIncorporation" id="ixv-27791">September 24, 2021</ix:nonNumeric>. The Company&#8217;s management
has chosen December 31st&#160;for its fiscal year end.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company was organized as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the
perceived advantages of being a publicly traded corporation. The Company&#8217;s principal business objective is to achieve long-term
growth potential through a combination with a business, rather than immediate short-term earnings. The Company will not restrict its
potential target companies to any specific business, industry, or geographical location. The analysis of business opportunities will
be undertaken by, or under the supervision of, the officer and directors of the Company.</span></p></ix:nonNumeric><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_BasisOfPresentationAndSignificantAccountingPoliciesTextBlock-c0_cont_1" escape="true" name="us-gaap:BasisOfPresentationAndSignificantAccountingPoliciesTextBlock" id="ixv-26423"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Note
2.&#160;<span style="text-decoration:underline">Basis of Presentation and Summary of Significant Accounting Policies</span></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<ix:continuation id="_BasisOfAccountingPolicyPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United
States of America (&#8220;U.S. GAAP&#8221;) for interim financial information and in accordance with the instructions to Form 10-Q and
Article 8 of Regulation S-X of the Securities and Exchange Commission (the &#8220;SEC.&#8221;). Certain information or footnote disclosures
normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted, pursuant to the rules
and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary
for a compete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying
unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a
fair presentation of the financial position, operating results and cash flows for the periods presented. The interim unaudited condensed
financial statements and notes thereto should be read in conjunction with the audited condensed financial statements and notes thereto
contained in our Annual Report on Form 10-K for the year ended December 31, 2023.</span></p></ix:continuation>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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preparation of the condensed financial statements in conformity with U.S.&#160;GAAP requires the Company&#8217;s management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could
differ from those estimates.</span></p></ix:continuation>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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Company accounts for income taxes under ASC 740, &#8220;<i>Income Taxes&#8221;,</i> deferred tax assets and liabilities are recognized
for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities
and their respective tax bases. Deferred tax assets, including tax loss and credit carry-forwards, and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered
or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes
the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities.
The components of the deferred tax assets and liabilities are individually classified as current and non-current based on their characteristics.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

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tax benefits and no amounts accrued for interest and penalties as of September 30, 2024 and December 31, 2023. The Company is currently
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</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><ix:continuation id="_BasisOfPresentationAndSignificantAccountingPoliciesTextBlock-c0_cont_1"><ix:nonNumeric contextRef="c0" continuedAt="_EarningsPerSharePolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:EarningsPerSharePolicyTextBlock" id="ixv-26483"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Net
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loss per share is computed by dividing net loss by the weighted average number of common shares outstanding for the period. Diluted earnings
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there were <span style="-sec-ix-hidden: hidden-fact-44"><span style="-sec-ix-hidden: hidden-fact-45">no</span></span> dilutive instruments.</span></p></ix:continuation>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<ix:nonNumeric contextRef="c0" continuedAt="ck0001900520_EmergingGrowthCompanyPolicyTextBlock-c0_cont_1" escape="true" name="ck0001900520:EmergingGrowthCompanyPolicyTextBlock" id="ixv-26495"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Emerging
Growth Company</span></span></p></ix:nonNumeric>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<ix:continuation continuedAt="ck0001900520_EmergingGrowthCompanyPolicyTextBlock-c0_cont_2" id="ck0001900520_EmergingGrowthCompanyPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company is an &#8220;emerging growth company,&#8221; as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our
Business Startups Act of 2012, or the JOBS Act. As such, the Company is eligible to take advantage of certain exemptions from various
reporting requirements that are applicable to other public companies that are not &#8220;emerging growth companies&#8221; including,
but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of
2002, reduced disclosure obligations regarding executive compensation in the Company&#8217;s periodic reports and proxy statements, and
exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden
parachute payments not previously approved. If some investors find the securities less attractive as a result, there may be a less active
trading market for securities and the prices of securities may be more volatile.</span></p></ix:continuation>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<ix:continuation continuedAt="ck0001900520_EmergingGrowthCompanyPolicyTextBlock-c0_cont_3" id="ck0001900520_EmergingGrowthCompanyPolicyTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, Section 107 of the JOBS Act also provides that an &#8220;emerging growth company&#8221; can take advantage of the extended
transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards (that is,
an &#8220;emerging growth company&#8221; can delay the adoption of certain accounting standards until those standards would otherwise
apply to private companies). The Company intends to take advantage of the benefits of this extended transition period.</span></p></ix:continuation>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<ix:continuation id="ck0001900520_EmergingGrowthCompanyPolicyTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Additionally,
the Company is a &#8220;smaller reporting company&#8221; as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may
take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial
statements. The Company will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of
the ordinary shares held by non-affiliates equals or exceeds $<ix:nonFraction contextRef="c48" decimals="-6" format="ixt:num-dot-decimal" name="us-gaap:MoneyMarketFundsAtCarryingValue" scale="6" unitRef="usd" id="ixv-27792">250</ix:nonFraction> million as of the prior June 30, and (2) the annual revenues equaled
or exceeded $<ix:nonFraction contextRef="c57" decimals="-6" format="ixt:num-dot-decimal" name="us-gaap:DeferredRevenueRevenueRecognized1" scale="6" unitRef="usd" id="ixv-27793">100</ix:nonFraction> million during such completed fiscal year or the market value of the ordinary shares held by non-affiliates equals or
exceeds $<ix:nonFraction contextRef="c57" decimals="-6" format="ixt:num-dot-decimal" name="us-gaap:MarketRiskBenefitChangeInFairValueGainLoss" scale="6" unitRef="usd" id="ixv-27794">700</ix:nonFraction> million as of the prior June 30.</span></p></ix:continuation>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<ix:nonNumeric contextRef="c0" continuedAt="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:NewAccountingPronouncementsPolicyPolicyTextBlock" id="ixv-26515"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Recently
Issued Accounting Pronouncements</span></span></p></ix:nonNumeric>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<ix:continuation id="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Management
does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect
on the accompanying financial statements.</span></p></ix:continuation></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:StockholdersEquityNoteDisclosureTextBlock" id="ixv-26528"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Note
3.&#160;<span style="text-decoration:underline">Capital Stock</span></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Preferred
Stock</span></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of September 30, 2024 and December 31, 2023, the Company has <ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PreferredStockSharesAuthorized" scale="0" unitRef="shares" id="ixv-27795"><ix:nonFraction contextRef="c1" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PreferredStockSharesAuthorized" scale="0" unitRef="shares" id="ixv-27796">10,000,000</ix:nonFraction></ix:nonFraction> shares of preferred stock, par value of $<ix:nonFraction contextRef="c3" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:PreferredStockParOrStatedValuePerShare" scale="0" unitRef="usdPershares" id="ixv-27797"><ix:nonFraction contextRef="c1" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:PreferredStockParOrStatedValuePerShare" scale="0" unitRef="usdPershares" id="ixv-27798">0.0001</ix:nonFraction></ix:nonFraction>, authorized and
<span style="-sec-ix-hidden: hidden-fact-46"><span style="-sec-ix-hidden: hidden-fact-47"><span style="-sec-ix-hidden: hidden-fact-48"><span style="-sec-ix-hidden: hidden-fact-49">none</span></span></span></span> issued or outstanding.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Common
Stock</span></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of September 30, 2024 and December 31, 2023, the Company has <ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesAuthorized" scale="0" unitRef="shares" id="ixv-27799"><ix:nonFraction contextRef="c1" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesAuthorized" scale="0" unitRef="shares" id="ixv-27800">50,000,000</ix:nonFraction></ix:nonFraction> shares of common stock, par value of $<ix:nonFraction contextRef="c3" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:CommonStockParOrStatedValuePerShare" scale="0" unitRef="usdPershares" id="ixv-27801"><ix:nonFraction contextRef="c1" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:CommonStockParOrStatedValuePerShare" scale="0" unitRef="usdPershares" id="ixv-27802">0.0001</ix:nonFraction></ix:nonFraction>, authorized and
<ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares" id="ixv-27803"><ix:nonFraction contextRef="c1" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares" id="ixv-27804"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesOutstanding" scale="0" unitRef="shares" id="ixv-27805"><ix:nonFraction contextRef="c1" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesOutstanding" scale="0" unitRef="shares" id="ixv-27806">5,000,000</ix:nonFraction></ix:nonFraction></ix:nonFraction></ix:nonFraction> shares issued and outstanding.</span></p></ix:nonNumeric><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:IncomeTaxDisclosureTextBlock" id="ixv-26557"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Note
4.&#160;<span style="text-decoration:underline">Income Taxes</span></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of September 30, 2024, and December 31, 2023, the Company has $<ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DeferredTaxAssetsGross" scale="0" unitRef="usd" id="ixv-27807">28,700</ix:nonFraction> and $<ix:nonFraction contextRef="c1" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DeferredTaxAssetsGross" scale="0" unitRef="usd" id="ixv-27808">21,600</ix:nonFraction>, respectively, in gross deferred tax assets resulting
from net operating loss carry-forwards of $<ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OperatingLossCarryforwards" scale="0" unitRef="usd" id="ixv-27809">136,400</ix:nonFraction> and $<ix:nonFraction contextRef="c1" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OperatingLossCarryforwards" scale="0" unitRef="usd" id="ixv-27810">102,700</ix:nonFraction>, respectively, available to offset future taxable income through 2041
subject to the change in ownership provisions under IRC 382. A valuation allowance has been recorded to fully offset these deferred tax
assets because the Company&#8217;s management believes future realization of the related tax benefits is uncertain.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 233; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><ix:continuation id="_IncomeTaxDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><ix:nonNumeric contextRef="c0" continuedAt="_ScheduleOfEffectiveIncomeTaxRateReconciliationTableTextBlock-c0_cont_1" escape="true" name="us-gaap:ScheduleOfEffectiveIncomeTaxRateReconciliationTableTextBlock" id="ixv-26584"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
difference between the tax provision at the statutory federal income tax rate on September 30, 2024 and December 31, 2023, and the tax
provisions attributable to loss before income taxes is as follows:</span></ix:nonNumeric></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<ix:continuation id="_ScheduleOfEffectiveIncomeTaxRateReconciliationTableTextBlock-c0_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, 2023</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 74%; text-align: justify">Statutory federal income taxes</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 10%; text-align: right"><ix:nonFraction contextRef="c0" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:EffectiveIncomeTaxRateReconciliationAtFederalStatutoryIncomeTaxRate" scale="-2" unitRef="pure" id="ixv-27811">21.0</ix:nonFraction></td><td style="width: 1%; text-align: left">%</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 10%; text-align: right"><ix:nonFraction contextRef="c4" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:EffectiveIncomeTaxRateReconciliationAtFederalStatutoryIncomeTaxRate" scale="-2" unitRef="pure" id="ixv-27812">21.0</ix:nonFraction></td><td style="width: 1%; text-align: left">%</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: justify; padding-bottom: 1.5pt">Valuation allowance</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c0" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:EffectiveIncomeTaxRateReconciliationChangeInDeferredTaxAssetsValuationAllowance" scale="-2" sign="-" unitRef="pure" id="ixv-27813">21.0</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)%</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c4" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:EffectiveIncomeTaxRateReconciliationChangeInDeferredTaxAssetsValuationAllowance" scale="-2" sign="-" unitRef="pure" id="ixv-27814">21.0</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)%</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify; padding-bottom: 1.5pt">Effective income tax rate, net</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-50">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">%</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-51">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">%</td></tr>
  </table></ix:continuation></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:CommitmentsDisclosureTextBlock" id="ixv-26640"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Note
5. <span style="text-decoration:underline">Commitments and Related Party Transactions</span></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Office
Space</span></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company utilizes the office space and equipment of its management at no cost.&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Note
Payable - Stockholder</span></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
September 24, 2021, the Company issued a promissory note (the &#8220;Note&#8221;) to a stockholder of the Company pursuant to which the
Company agreed to repay the sum of any and all amounts advanced to the Company, on or before the date that the Company consummates a
business combination with a private company or reverse takeover transaction or other transaction after which the Company would cease
to be a shell company. Interest shall not accrue on the outstanding principal amount of the note except if an Event of Default (as defined
in the note) has occurred. In the event of an Event of Default, the entire note shall automatically become due and payable (the &#8220;Default
Date&#8221;) and starting from five (5) days after the Default Date, the interest rate on the note shall accrue at the rate of eighteen
percent (<ix:nonFraction contextRef="c3" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:DerivativeVariableInterestRate" scale="-2" unitRef="pure" id="ixv-27815">18</ix:nonFraction>%) per annum. As of September 30, 2024 and December 31, 2023, the amount due under the note payable was $<ix:nonFraction contextRef="c58" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NotesPayableCurrent" scale="0" unitRef="usd" id="ixv-27816">127,500</ix:nonFraction> and $<ix:nonFraction contextRef="c59" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NotesPayableCurrent" scale="0" unitRef="usd" id="ixv-27817">92,500</ix:nonFraction>,
respectively.</span></p></ix:nonNumeric><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:SubstantialDoubtAboutGoingConcernTextBlock" id="ixv-26665"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Note
6.&#160;<span style="text-decoration:underline">Going Concern</span></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the recoverability
of assets and the satisfaction of liabilities in the normal course of business.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company has accumulated deficit and total stockholders&#8217; deficit of $<ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:RetainedEarningsAccumulatedDeficit" scale="0" sign="-" unitRef="usd" id="ixv-27818">136,431</ix:nonFraction> and $<ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockholdersEquity" scale="0" sign="-" unitRef="usd" id="ixv-27819">135,931</ix:nonFraction>, respectively as of September 30, 2024.
Management believes these conditions raise substantial doubt about the Company&#8217;s ability to continue as a going concern for the
twelve months following the date these financial statements are issued. Management intends to finance operations over the next twelve
months through additional borrowings from the existing Note.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
accompanying financial statements do not include any adjustments that might be required should the Company be unable to continue as a
going concern.</span></p></ix:nonNumeric><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><ix:nonNumeric contextRef="c0" escape="true" name="ck0001900520:MergerAgreement" id="ixv-26687"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Note
7. <span style="text-decoration:underline">Merger Agreement</span></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
October 2, 2024, the Company filed with the SEC a Schedule 14F-1 Information Statement relating to an anticipated change in the composition
of its board of directors that is expected to occur in connection with a proposed merger to be completed by and among the Company, a
recently formed wholly-owned subsidiary of the Company (&#8220;Merger Sub&#8221;), and Lomond Therapeutics, a privately held Delaware
corporation (&#8220;Lomond&#8221;), pursuant to which Merger Sub would merge with and into Lomond, with Lomond continuing as the surviving
entity (the &#8220;Merger&#8221;) and as the Company&#8217;s wholly-owned subsidiary, after which the Company would continue the business
of Lomond. The Merger has since occurred occur pursuant to an Agreement and Plan of Merger and Reorganization entered into by and among
the Company, Lomond and Merger Sub (the &#8220;Merger Agreement)&#8221;).</span></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Lomond
is a biopharmaceutical company focused on the discovery and development of multiple product candidates to address hematological malignancies,
including a pan-FLT3/IRAK4 inhibitor for the treatment of acute myeloid leukemia (&#8220;AML&#8221;), a BCL-2 inhibitor for the treatment
of AML and chronic lymphocytic leukemia, and an early-stage menin inhibitor for the treatment of AML. Lomond is headquartered in Dover,
DE.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the terms of the Merger Agreement, all outstanding equity interest of Lomond was converted into shares of our Common Stock, such that
the holders of Lomond equity before the Merger now own a majority of the outstanding shares of our Common Stock (before giving effect
to the private placement offering of Common Stock by the Company was consummated simultaneously with the Merger), which resulted in a
change of control of the Company. The private placement financing was completed as a condition to completion of the Merger.</span></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Certain
other information regarding the proposed Merger and proposed changes to the management and share ownership of the Company is set forth
in the Schedule 14F-1.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
foregoing description of the Merger Agreement and Common Stock private placement and related matters does not purport to be complete
and is qualified in its entirety by the terms of the actual Merger Agreement and of terms and documentation for a private placement.
The Merger Agreement is further described in and filed by the Company with the SEC as an exhibit to a Current Report on Form 8-K. The
consummation of the Common Stock private placement was further described in, and material agreements relating thereto were filed by the
Company with the SEC as exhibits to a Current Report on Form 8-K.</span></p></ix:nonNumeric><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->67<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&#160;</p><div>

</div><div><a id="a_026"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="text-transform: uppercase"><b>PART&#160;II</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="text-transform: uppercase"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="font-variant: small-caps"><b>INFORMATION
NOT REQUIRED IN THE PROSPECTUS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Item&#160;13. Other
Expenses of Issuance and Distribution.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The following table sets
forth the estimated fees and expenses payable by us in connection with the offering of the securities being registered.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>


</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 88%; text-align: left">SEC registration fee</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">16,824.845</td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Accounting fees and expenses</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right"/><td style="text-align: left">*</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Legal fees and expenses</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right"/><td style="text-align: left">*</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="padding-bottom: 1.5pt; text-align: left">Printing and miscellaneous expenses</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right"/><td style="padding-bottom: 1.5pt; text-align: left">*</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right"/><td style="padding-bottom: 2.5pt; text-align: left">*</td></tr>
  </table><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; background-color: white; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.25in"><span style="font-size: 10pt">*</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">To be provided in an amendment.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Item&#160;14. Indemnification
of Directors and Officers.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Section&#160;145 of the
Delaware General Corporation Law (DGCL), authorizes a court to award, or a corporation&#8217;s board of directors to grant, indemnity
to directors and officers under certain circumstances and subject to certain limitations. The terms of Section&#160;145 of the DGCL are
sufficiently broad to permit indemnification under certain circumstances for liabilities, including reimbursement of expenses incurred,
arising under the Securities Act.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">As permitted by the DGCL,
the Registrant&#8217;s amended and amended and restated certificate of incorporation contains provisions that eliminate the personal liability
of its directors for monetary damages for any breach of fiduciary duties as a director, except liability for the following:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; background-color: white; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 24px">&#160;</td>
    <td style="width: 24px; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; background-color: white; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 24px">&#160;</td>
    <td style="width: 24px; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; background-color: white; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 24px">&#160;</td>
    <td style="width: 24px; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">under Section 174 of the DGCL (regarding unlawful dividends and stock purchases); or</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; background-color: white; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 24px">&#160;</td>
    <td style="width: 24px; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">any transaction from which the director derived an improper personal benefit.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The Company has entered
into indemnification agreements with each of its current directors and executive officers to provide these directors and executive officers
additional contractual assurances regarding the scope of the indemnification set forth in the Company&#8217;s amended and amended and
restated certificate of incorporation and amended and restated bylaws, and to provide additional procedural protections. There is no pending
litigation or proceeding involving a director or executive officer of the Company for which indemnification is sought. The indemnification
provisions in the Company&#8217;s amended and restated certificate of incorporation, amended and restated bylaws, and the indemnification
agreements entered into between the Company and each of its directors and executive officers may be sufficiently broad to permit indemnification
of the Company&#8217;s directors and executive officers for liabilities arising under the Securities Act.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The Company currently
carries liability insurance for its directors and officers.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Certain of the Company&#8217;s
directors are also indemnified by their employers with regard to service on the Company&#8217;s board of directors.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Item&#160;15. Recent
Sales of Unregistered Securities</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b>The Offering</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">On November 1, 2024,
in connection with the Offering, we issued an aggregate of 8,241,375 shares of common stock at a price of $4.00 per share for aggregate
gross consideration of approximately $32.9 million to 23 accredited investors. In addition, on November 1, 2024 we issued Placement Agent
Warrants to purchase an aggregate of 275,410 shares of our common stock to our Placement Agents. These transactions were exempt from registration
under Section&#160;4(a)(2) of the Securities Act and Rule&#160;506(b) of Regulation&#160;D promulgated by the SEC thereunder. The shares
of common stock sold in the Offering were sold solely to &#8220;accredited investors,&#8221; as defined in Regulation&#160;D under the
Securities Act, and the Offering was conducted on a &#8220;reasonable best efforts&#8221; basis.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b>Securities Issued in Connection with the
Merger</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">On November 1, 2024,
pursuant to the terms of the Merger Agreement, 13,661,416 shares of Lomond&#8217;s Series Seed preferred stock and 758,967 shares of Lomond&#8217;s
common stock were exchanged for an aggregate of 14,420,383 shares of our common stock. These transactions were not registered under the
Securities Act, in reliance upon the exemption from registration provided by Section&#160;4(a)(2) of the Securities Act, which exempts
transactions by an issuer not involving any public offering, and Rule&#160;506(b) of Regulation&#160;D promulgated by the SEC thereunder.
Lomond had one stockholder, and it had adequate access to information about us. The issuance of such shares was made without any general
solicitation or advertising. None of the securities were sold through an underwriter and, accordingly, there were no underwriting discounts
or commissions involved.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Under Rule 145(a) of
the Securities Act, the Merger is deemed to involve an offer and sale of shares of our common stock to our pre-Merger Stockholders. These
transactions were not registered under the Securities Act, in reliance upon the exemption from registration provided by Section&#160;4(a)(2)
of the Securities Act, which exempts transactions by an issuer not involving any public offering, and Rule&#160;506(b) of Regulation&#160;D
promulgated by the SEC thereunder. We had two pre-Merger stockholders, and each had adequate access to information about us. The issuance
of such shares was made without any general solicitation or advertising. None of the securities were sold through an underwriter and,
accordingly, there were no underwriting discounts or commissions involved.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b>Sales of Unregistered Securities of Lomond</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The following paragraphs
set forth information as to all securities Lomond sold from November 1, 2021, through immediately prior to the consummation of the Merger,
which were not registered under the Securities Act. The following description is historical and has not been adjusted to give effect to
the Merger.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In August 2024, Lomond
issued &#8220;simple agreements for future equity&#8221;, or the August SAFEs, for an aggregate purchase price of $7.5 million in a private
financing round. Immediately prior to the consummation of the Offering, the August SAFEs automatically converted into 2,083,332 shares
of common stock.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In October 2024, Lomond
converted a $3.5 million capital contribution made by Eilean Therapeutics, LLC, or Eilean, its former parent company, in May 2024 into
a &#8220;simple agreements for future equity,&#8221; or the Contribution SAFEs, which were immediately distributed to Eilean&#8217;s members.
Immediately prior to the consummation of the Offering, the Contribution SAFEs automatically converted into 1,078,124 shares of common
stock.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Lomond granted to its
directors, officers, consultants and other service providers stock options to purchase an aggregate of 4,329,617 shares of its common
stock at a per share purchase price of $1.30 per share under the Lomond Stock Plan.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">None of the foregoing
transactions involved any underwriters, underwriting discounts or commissions, or any public offering. We believe that the offers, sales,
and issuances of the above securities were exempt from registration under the Securities Act by virtue of Section 4(a)(2) of the Securities
Act or Regulation D promulgated thereunder as transactions by an issuer not involving any public offering, or in reliance on Rule 701
promulgated under Section 3(b) of the Securities Act because the transactions were pursuant to compensatory benefit plans or contracts
relating to compensation as provided under Rule 701. The recipients of the securities in each of these transactions represented their
intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof,
and appropriate legends were placed upon the stock certificates issued in these transactions. All recipients had adequate information
about Lomond or had adequate access, through their relationships with Lomond, to information about Lomond.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Sales of Unregistered
Securities of Venetian-1</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">There were no securities
of Venetian-1 sold from November 1, 2021 through immediately prior to the consummation of the Merger, which were not registered under
the Securities Act.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Item&#160;16. Exhibits
and Financial Statement Schedules</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>&#160;</i></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; background-color: white; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.25in"><span style="font-size: 10pt"><i>(a)</i></span></td>
    <td style="text-align: justify"><span style="font-size: 10pt"><i>Exhibits</i></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The exhibit index attached
hereto is incorporated herein by reference.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>&#160;</i></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; background-color: white; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.25in"><span style="font-size: 10pt"><i>(b)</i></span></td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">All schedules have been
omitted because the information required to be set forth in the schedules is either not applicable or is included in our financial statements
or notes to those financial statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Item&#160;17. Undertakings.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 24pt; text-align: justify; text-indent: -24pt; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; background-color: white; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.25in"><span style="font-size: 10pt">(a)</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">The undersigned registrant hereby undertakes:</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-align: justify; text-indent: -24pt; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; background-color: white; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.25in">&#160;</td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -24pt; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; background-color: white; border-collapse: collapse">
  <tr style="vertical-align: top">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -24pt; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; background-color: white; border-collapse: collapse">
  <tr style="vertical-align: top">
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -24pt; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; background-color: white; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-size: 10pt">(iii)</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-align: justify; text-indent: -24pt; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; background-color: white; border-collapse: collapse">
  <tr style="vertical-align: top">
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-align: justify; text-indent: -24pt; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; background-color: white; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.25in">&#160;</td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-align: justify; text-indent: -24pt; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; background-color: white; border-collapse: collapse">
  <tr style="vertical-align: top">
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    <td style="text-align: justify"><span style="font-size: 10pt">That, for the purpose of determining liability under the Securities Act to any purchaser:</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -24pt; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; background-color: white; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-size: 10pt">(i)</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 24pt; text-align: justify; text-indent: -24pt; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; background-color: white; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.25in"><span style="font-size: 10pt">(b)</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Act and is, therefore unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 24pt; text-align: justify; text-indent: -24pt; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 24pt; text-align: justify; text-indent: -24pt; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 24pt; text-align: justify; text-indent: -24pt; background-color: white">&#160;</p><div>

</div><div><a id="a_027"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><b>EXHIBIT INDEX</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; border-bottom: Black 1.5pt solid; width: 9%"><b>Exhibit No.</b></td>
    <td style="text-align: justify; width: 1%"><b>&#160;</b></td>
    <td style="text-align: justify; border-bottom: Black 1.5pt solid; width: 90%"><b>Description</b></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="text-align: justify">2.1&#167;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1900520/000121390024095442/ea021976201ex2-1_lomond.htm">Agreement and Plan of Merger and Reorganization among Venetian-1 Acquisition Corp, Lomond Acquisition Corp. and Lomond Therapeutics, Inc. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).</a></td></tr>
  <tr style="vertical-align: top; background-color: White">
    <td style="text-align: justify">3.1</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1900520/000121390024095442/ea021976201ex3-1_lomond.htm">Certificate of Merger relating to the merger of Lomond Acquisition Corp. with and into Lomond Therapeutics, Inc., filed with the Secretary of State of the State of Delaware on November 1, 2024 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).</a></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="text-align: justify">3.2</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1900520/000121390024095442/ea021976201ex3-2_lomond.htm">Amended and restated certificate of incorporation, filed with the Secretary of State of the State of Delaware on November 1, 2024 (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).</a></td></tr>
  <tr style="vertical-align: top; background-color: White">
    <td style="text-align: justify">3.3</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1900520/000121390024095442/ea021976201ex3-3_lomond.htm">Amended and restated bylaws (incorporated by reference to Exhibit 3.3 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).</a></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="text-align: justify">4.1</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1900520/000121390024095442/ea021976201ex4-1_lomond.htm">Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).</a></td></tr>
  <tr style="vertical-align: top; background-color: White">
    <td style="text-align: justify">4.2</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1900520/000121390024095442/ea021976201ex4-2_lomond.htm">Form of Simple Agreement for Future Equity, dated August 27, 2024 (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).</a></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="text-align: justify">4.3</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1900520/000121390024095442/ea021976201ex4-3_lomond.htm">Form of Simple Agreement for Future Equity, dated October 17, 2024 (incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).</a></td></tr>
  <tr style="vertical-align: top; background-color: White">
    <td style="text-align: justify">5.1**</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">Opinion of Snell &amp; Wilmer L.L.P.</td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="text-align: justify">10.1&#8224;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1900520/000121390024095442/ea021976201ex10-1_lomond.htm">Administrative Services &amp; Co-Employment Agreement, dated October 18, 2024, by and between Abet Solutions Inc. and Lomond Therapeutics, Inc. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).</a></td></tr>
  <tr style="vertical-align: top; background-color: White">
    <td style="text-align: justify">10.2+&#8224;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1900520/000121390024095442/ea021976201ex10-2_lomond.htm">Consulting Agreement with Iain Dukes, dated as of November 1, 2024 (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).</a></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="text-align: justify">10.3+&#8224;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1900520/000121390024095442/ea021976201ex10-3_lomond.htm">Consulting Agreement with Nikolay Savchuk, dated as of November 1, 2024 (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).</a></td></tr>
  <tr style="vertical-align: top; background-color: White">
    <td style="text-align: justify">10.4</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1900520/000121390024095442/ea021976201ex10-4_lomond.htm">Form of Pre-Merger Indemnification Agreement (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).</a></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="text-align: justify">10.5&#167;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1900520/000121390024095442/ea021976201ex10-5_lomond.htm">Subscription Agreement, dated November 1, 2024, by and between the Company and the parties thereto (incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).</a></td></tr>
  <tr style="vertical-align: top; background-color: White">
    <td style="text-align: justify">10.6&#167;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1900520/000121390024095442/ea021976201ex10-6_lomond.htm">Registration Rights Agreement, dated November 1, 2024, by and between the Company and the parties thereto (incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).</a></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="text-align: justify">10.7+</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1900520/000121390024095442/ea021976201ex10-7_lomond.htm">2022 Equity Incentive Plan of Eilean Therapeutics, LLC and form of award agreements thereunder (incorporated by reference to Exhibit 10.7 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).</a></td></tr>
  <tr style="vertical-align: top; background-color: White">
    <td style="text-align: justify">10.8+</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1900520/000121390024095442/ea021976201ex10-8_lomond.htm">Lomond Therapeutics, Inc. 2024 Stock Plan and form of award agreements thereunder (incorporated by reference to Exhibit 10.8 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).</a></td></tr>
</table><div>

</div><p style="margin: 0">&#160;</p><div>

</div><p style="margin: 0"></p><div>

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</div><p style="margin: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="text-align: justify; width: 9%">10.9+</td>
    <td style="text-align: justify; width: 1%">&#160;</td>
    <td style="text-align: justify; width: 90%"><a href="http://www.sec.gov/Archives/edgar/data/1900520/000121390024095442/ea021976201ex10-9_lomond.htm">Lomond Therapeutics Holdings, Inc. 2024 Equity Incentive Plan and form of award agreements thereunder (incorporated by reference to Exhibit 10.9 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).</a></td></tr>
  <tr style="vertical-align: top; background-color: White">
    <td style="text-align: justify">10.10+</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1900520/000121390024095442/ea021976201ex10-10_lomond.htm">Form of Indemnification Agreement (incorporated by reference to Exhibit 10.10 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).</a></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="text-align: justify">10.11&#167;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1900520/000121390024095442/ea021976201ex10-11_lomond.htm">License Agreement, dated as of October 17, 2024, by and between Lomond Therapeutics, Inc. and Eil Therapeutics, Inc (incorporated by reference to Exhibit 10.11 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).</a></td></tr>
  <tr style="vertical-align: top; background-color: White">
    <td style="text-align: justify">10.12&#167;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1900520/000121390024095442/ea021976201ex10-12_lomond.htm">Promissory Note, dated as of October 17, 2024, by and between Lomond Therapeutics, Inc. and Eil Therapeutics, Inc. (incorporated by reference to Exhibit 10.12 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).</a></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="text-align: justify">10.13&#167;&#8224;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1900520/000121390024095442/ea021976201ex10-13_lomond.htm">License Agreement, dated as of October 17, 2024, by and between Lomond Therapeutics, Inc. and Bala Therapeutics, Inc. (incorporated by reference to Exhibit 10.13 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).</a></td></tr>
  <tr style="vertical-align: top; background-color: White">
    <td style="text-align: justify">10.14&#167;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1900520/000121390024095442/ea021976201ex10-14_lomond.htm">Promissory Note, dated as of October 17, 2024, by and between Lomond Therapeutics, Inc. and Bala Therapeutics, Inc. (incorporated by reference to Exhibit 10.14 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).</a></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
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</div><div><a id="a_028"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><b>SIGNATURES</b></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Pursuant to the requirements
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We, the undersigned directors
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with full power to him to sign for us and in our names in the capacities indicated below, the registration statement on Form S-1 filed
herewith, and any and all pre-effective and post-effective amendments to said registration statement, and any registration statement filed
pursuant to Rule 462(b) under the Securities Act in connection with the registration under the Securities Act of equity securities of
the Company, and to file or cause to be filed the same, with all exhibits thereto and other documents in connection therewith, with the
SEC, granting unto said attorneys, and each of them, full power and authority to do and perform each and every act and thing requisite
and necessary to be done in connection therewith, as fully to all intents and purposes as each of them might or could do in person, and
hereby ratifying and confirming all that said attorneys, and each of them, or their substitute or substitutes, shall do or cause to be
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Pursuant to the requirements
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{"company-data": {"conformed-name": "Lomond Therapeutics Holdings, Inc.", "cik": "0001900520", "assigned-sic": "6770", "organization-name": "05 Real Estate & Construction", "irs-number": "872959575", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-283508", "film-number": "241511057"}, "business-address": {"street1": "C/O LOMOND THERAPEUTICS HOLDINGS, INC.", "street2": "8 THE GREEN STE 8490", "city": "DOVER", "state": "DE", "zip": "19901", "phone": "561 464 2841"}, "mail-address": {"street1": "C/O LOMOND THERAPEUTICS HOLDINGS, INC.", "street2": "8 THE GREEN STE 8490", "city": "DOVER", "state": "DE", "zip": "19901"}, "former-company": {"former-conformed-name": "Venetian-1 Acquisition Corp.", "date-changed": "20211220"}}
As filed with the Securities and Exchange Commission on November 27,
2024
Registration Number
333-
UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Lomond Therapeutics
Holdings, Inc.
(Exact name of registrant
as specified in its charter)
Delaware
2834
87-2959575
(State or other jurisdiction of
incorporation or organization)
(Primary Standard Industrial
Classification Code Number)
(I.R.S. Employer
Identification Number)
8 The Green Ste 8490
Dover, Delaware 19901
(212) 739-6400
(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)
Iain Dukes
Chief Executive Officer and Chairman
8 The Green Ste 8490
Dover, Delaware 19901
(212) 739-6400
(Name, address, including
zip code, and telephone number, including area code, of agent for service)
Copies to
:
Bardia Moayedi
Christopher L. Tinen
Sarah A. Hibbard
Snell & Wilmer L.L.P.
12230 El Camino Real, Suite 300
San Diego, CA 92130
(858) 434-5020
From time to time after
this registration statement is declared effective.
(Approximate date of commencement of proposed sale to the public)
If any of the securities
being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933,
check the following box.
☒
If this Form is filed
to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and
list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
☐
If this Form is a post-effective
amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering.
☐
If this Form is a post-effective
amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering.
☐
Indicate by check mark
whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging
growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting
company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large Accelerated filer
☐
Accelerated filer
☐
Non-accelerated filer
☒
Smaller reporting company
☒
Emerging growth company
☒
If an emerging growth
company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Exchange Act.
☐
The registrant hereby
amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section
8(a) of the Securities Act of 1933, as amended, or until this Registration Statement shall become effective on such date as the Securities
and Exchange Commission, acting pursuant to said Section 8(a), may determine.
The
information in this prospectus is not complete and may be changed. The selling stockholders may not sell these securities pursuant to
this prospectus until the registration statement filed with the Securities and Exchange Commission becomes effective. This preliminary
prospectus is not an offer to sell these securities and is not soliciting offers to buy these securities in any jurisdiction where the
offer or sale is not permitted.
SUBJECT
TO COMPLETION, DATED NOVEMBER 27, 2024
PRELIMINARY
PROSPECTUS
27,473,624 Shares of
Common Stock
This prospectus relates
to the offering and resale by the selling stockholders identified herein of up to 27,473,624 shares of common stock, par value $0.0001
per share, of Lomond Therapeutics Holdings, Inc. (the "Company"), which includes: (i) 11,402,831 shares of our common stock
issued in a private placement offering on November 1, 2024 (the "Offering") (including 3,161,456 shares of our common stock
issued upon conversion of the SAFEs offered and sold by Lomond Operating Co., a privately held Delaware corporation (formerly known as
Lomond Therapeutics Inc.) ("Lomond"), to accredited investors); (ii) an aggregate of 275,410 shares of our common stock issuable
upon exercise of the warrants issued to certain registered broker-dealers in connection with the Offering (the "Placement Agent
Warrants"); (iii) 14,420,383 shares of our common stock privately issued to the selling stockholders on November 1, 2024 in exchange
for the capital stock of Lomond in connection with the closing of the merger between us and Lomond (the "Merger"); and (iv)
1,375,000 shares of our common stock held by the stockholders of Venetian-1 Acquisition Corp., our predecessor, prior to the Merger.
We will not receive any
proceeds from the sale of the shares of common stock by the selling stockholders. The selling stockholders may sell the shares of common
stock offered by this prospectus from time to time through the means described in this prospectus under the caption "
Plan of
Distribution
." For a list of the selling stockholders, see the section entitled "
Selling Stockholders
" on
page 149 of this prospectus. We have borne and will continue to bear the costs relating to the registration of these shares.
There is not currently,
and there has never been, any established public trading market for any of our securities. The common stock is not currently eligible
for trading on any national securities exchange, including The Nasdaq Stock Market, LLC, or any over-the-counter markets, including the
OTC Markets-OTCQB tier (the "OTCQB"). In connection with this offering, we intend to have a registered broker-dealer to apply
to have the common stock quoted on the OTCQB or another OTC system. We cannot assure you that the common stock will become eligible for
trading on any exchange or market. Until such time as the common stock is quoted on the OTCQB or another public trading market otherwise
develops, the selling stockholders identified herein may only sell their shares of common stock pursuant to this prospectus at a fixed
price of $4.00 per share (as may be adjusted for stock splits, stock dividends, combinations, recapitalizations or similar events), the
price per share in the offering discussed above, for a total offering amount of $109,894,496. At and after such time, the selling stockholders
may sell all or a portion of their shares through public or private transactions at prevailing market prices or at privately negotiated
prices.
We may amend or supplement
this prospectus from time to time by filing amendments or supplements as required. You should read the entire prospectus and any amendments
or supplements carefully before you make your investment decision.
We are an "emerging
growth company" and a "smaller reporting company" as defined under the federal securities laws and, as such, are eligible
for reduced public company reporting requirements. See "
Prospectus Summary — Implications of Being an Emerging Growth Company
and a Smaller Reporting Company
."
Investing in our common
stock involves a high degree of risk. Before making an investment decision, please read "Risk Factors" on page 9 of this
prospectus.
Neither the Securities
and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus
is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus
is           , 2024
TABLE
OF CONTENTS
Page
PRELIMINARY PROSPECTUS
ABOUT THIS PROSPECTUS
ii
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
iii
PROSPECTUS SUMMARY
1
THE OFFERING
6
SUMMARY FINANCIAL DATA
7
RISK FACTORS
9
DESCRIPTION OF THE MERGER, THE OFFERING, AND RELATED TRANSACTIONS
75
DESCRIPTION OF OUR BUSINESS
81
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
117
MANAGEMENT
128
EXECUTIVE COMPENSATION
132
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
138
USE OF PROCEEDS
143
DIVIDEND POLICY
144
DETERMINATION OF OFFERING PRICE
145
MARKET INFORMATION FOR OUR COMMON STOCK
146
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
147
SELLING STOCKHOLDERS
149
PLAN OF DISTRIBUTION
151
DESCRIPTION OF CAPITAL STOCK
154
SHARES ELIGIBLE FOR FUTURE SALE
158
LEGAL MATTERS
160
EXPERTS
160
WHERE YOU CAN FIND MORE INFORMATION
160
INDEX TO FINANCIAL STATEMENTS
F-1
PART II
II-1
EXHIBIT INDEX
II-4
SIGNATURES
II-6
i
ABOUT
THIS PROSPECTUS
We have not, and the
selling stockholders have not, authorized anyone to give you any information other than the information contained in this prospectus,
the information incorporated by reference herein, any applicable prospectus supplement or any free writing prospectus filed with the U.S.
Securities and Exchange Commission (the "SEC"). We and the selling stockholders take no responsibility for, and can provide
no assurances as to the reliability of, any other information that others may give you. Neither we nor the selling stockholders have authorized
anyone to provide you with additional information or information different from that contained in this prospectus filed with the SEC.
The selling stockholders are offering to sell, and seeking offers to buy, shares of our common stock only in jurisdictions where offers
and sales are permitted. You should assume that the information appearing in this prospectus, the applicable prospectus supplement and
any related free writing prospectus is accurate only as of the respective dates of those documents. Our business, financial condition,
results of operations and prospects may have changed since those dates.
For Non-U.S. investors
Neither we nor the selling
stockholders have done anything that would permit this offering or possession or distribution of this prospectus, any prospectus supplement
or free writing prospectus filed with the SEC, in any jurisdiction where action for that purpose is required, other than in the United
States. Persons outside the United States who come into possession of this prospectus, any prospectus supplement or free writing prospectus
must inform themselves about, and observe any restrictions relating to, the offering of the shares of common stock and the distribution
of this prospectus, any prospectus supplement or free writing prospectus outside the United States.
ii
Special
Note Regarding Forward-Looking Statements
This prospectus, including
the sections entitled "
Risk Factors
," "
Management's Discussion and Analysis of Financial Condition and
Results of Operations
" and "
Description of our Business
", includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements relate to, among others, our plans, objectives
and expectations for our business, operations and financial performance and condition, and can be identified by terminology such as "may,"
"should," "expect," "intend," "plan," "anticipate," "believe,"
"estimate," "predict," "will," "could," "project," "target," "potential,"
"continue" and similar expressions that do not relate solely to historical matters. Forward-looking statements are based on
management's belief and assumptions and on information currently available to management. Although we believe that the expectations
reflected in forward-looking statements are reasonable, such statements involve known and unknown risks, uncertainties and other factors
that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements
expressed or implied by forward-looking statements.
Forward-looking statements
contained in this prospectus include, but are not limited to, statements about:
●
the ability of our preclinical
studies and future clinical trials to demonstrate safety and efficacy of product candidates that we may develop, license or acquire and
other positive results;
●
any action we may take in the
future with respect to our license agreements with Eil Therapeutics, Inc., or Eil, and Bala Therapeutics, Inc., or Bala, including our
obligations to pay promissory notes issued in connection with such license agreements;
●
the initiation, timing, progress,
results and cost of our research and development programs and our current and future preclinical studies and planned clinical trials
for our current product candidate, any licensed product candidate and any other product candidates we may develop, license or acquire,
including statements regarding the timing of initiation and completion of studies or trials and related preparatory work, the period
during which the results of the studies or trials will become available, and our current or future research and development programs;
●
the timing, scope and likelihood
of regulatory filings and approvals, including timing of INDs, and final FDA approval of our current product candidate, our licensed
product candidates and any future product candidates we may develop, license or acquire;
●
our ability to develop and
advance our current product candidate, our licensed product candidates and development programs into, and successfully complete, clinical
trials;
●
our manufacturing, commercialization,
and marketing capabilities and strategy;
●
our plans relating to commercializing
our product candidate, our licensed product candidates and any other product candidates we may develop, license or acquire, if approved,
including the geographic areas of focus and sales strategy;
●
the need to hire additional
personnel and our ability to attract and retain such personnel;
●
the size of the market opportunity
for our product candidate, our licensed product candidates and any of product candidates that we develop, license or acquire, including
our estimates of the number of patients who suffer from the diseases we are targeting;
●
our competitive position and
the success of competing therapies that are or may become available;
●
the potential beneficial characteristics,
and the potential safety, efficacy and therapeutic effects of our product candidate, our licensed product candidates and any other product
candidates we may develop, license or acquire;
iii
●
our ability to obtain and maintain
regulatory approval of product candidates;
●
our plans relating to the further
development of product candidates, including additional indications we may pursue;
●
existing regulations and regulatory
developments in the United States, Europe and other jurisdictions;
●
our intellectual property position,
including the scope of protection we are able to establish and maintain for intellectual property rights covering our current product
candidate, our licensed product candidates and any other product candidates we may develop, license or acquire, including the extensions
of existing patent terms where available, the validity of intellectual property rights held by third parties, and our ability not to
infringe, misappropriate or otherwise violate any third-party intellectual property rights;
●
our continued reliance on third
parties to conduct additional preclinical studies and planned clinical trials of our current product candidate and any product candidate
we may develop, license or acquire, and for the manufacture of product candidates for preclinical studies and clinical trials;
●
our ability to obtain, and
negotiate favorable terms of, any collaboration, licensing or other arrangements that may be necessary or desirable to develop, manufacture
or commercialize product candidates;
●
the pricing and reimbursement
of our current product candidate, our licensed product candidates and any other product candidates we may develop, license or acquire,
if approved;
●
the rate and degree of market
acceptance and clinical utility of our product candidate, our licensed product candidates and any other product candidates we may develop,
license or acquire;
●
our estimates regarding expenses,
capital requirements and needs for additional financing;
●
our financial performance;
●
the period over which we estimate
our existing cash and cash equivalents will be sufficient to fund our future operating expenses and capital expenditure requirements;
●
our expectations regarding
the period during which we will remain an emerging growth company under the JOBS Act;
●
the development of a market
for our common stock;
●
our intended use of proceeds
from the Offering (as defined below);
●
developments relating to our
competitors and our industry; and
●
other risks and uncertainties,
including those listed under the caption "
Risk Factors
."
We caution you that the foregoing list may
not contain all of the forward-looking statements made in this prospectus.
iv
These forward-looking
statements are subject to a number of risks, uncertainties, and assumptions, including those described in the section titled "
Risk
Factors
." Moreover, we operate in a very competitive and rapidly changing environment, and new risks emerge from time to time.
It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent
to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking
statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this prospectus
may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.
You should not rely upon
forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may
not be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot
guarantee future results, performance or achievements. We undertake no obligation to update any of these forward-looking statements for
any reason after the date of this prospectus or to conform these statements to actual results or to changes in our expectations, except
as required by law.
In addition, statements
that "we believe" and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based
upon information available to us as of the date of this prospectus, and while we believe such information forms a reasonable basis for
such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted
an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and
investors are cautioned not to unduly rely upon these statements.
You should read this
prospectus and the documents we have filed with the SEC as exhibits to this prospectus with the understanding that our actual future results,
performance and events and circumstances may be materially different from what we expect.
This prospectus contains
estimates, projections and other information concerning our industry, our business and the markets for our product candidate and development
programs, including data regarding the estimated size of such markets and the incidence of certain medical conditions. We obtained the
industry, market and similar data set forth in this prospectus from our internal estimates and research and from academic and industry
research, publications, surveys and studies conducted by third parties, including governmental agencies. The content of third-party sources,
except to the extent specifically set forth in this prospectus, does not constitute a portion of this prospectus and is not incorporated
herein. In some cases, we do not expressly refer to the sources from which this data is derived. Information that is based on estimates,
forecasts, projections, market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances
may differ materially from events and circumstances that are assumed in this information. Investors are cautioned not to give undue weight
to any such information, projections and estimates. In particular, projections, assumptions, and estimates of our future performance and
the future performance of the industry in which we operate is necessarily subject to a high degree of uncertainty and risk due to a variety
of factors, including those described in the section titled "
Risk Factors
" and elsewhere in this prospectus.
v
PROSPECTUS
SUMMARY
This summary highlights
certain information about us, this offering and selected information contained elsewhere in this prospectus. This summary is not complete
and does not contain all of the information that you should consider before deciding whether to invest in the securities covered by this
prospectus. For a more complete understanding of the Company and this offering, we encourage you to read and consider carefully the more
detailed information in this prospectus, any related prospectus supplement and any related free writing prospectus, including the information
set forth in the section titled "Risk Factors" in this prospectus, any related prospectus supplement and any related free
writing prospectus in their entirety before making an investment decision.
All references to "Lomond"
refer to Lomond Operating Co. (formerly known as Lomond Therapeutics, Inc.), a privately held Delaware corporation and our direct, wholly-owned
subsidiary. Unless otherwise stated or the context otherwise indicates, references to the "Company", "we", "our",
"us" or similar terms refer to Lomond Therapeutics Holdings, Inc. (formerly named Venetian-1 Acquisition Corp.) together with
its wholly-owned subsidiary, Lomond. Lomond holds all material assets and conducts all business activities and operations of Lomond Therapeutics
Holdings, Inc.
Overview
We are a biopharmaceutical
company focused on the discovery and development of multiple product candidates to address hematological malignancies. We were co-founded
by OrbiMed Advisors LLC, or OrbiMed, Torrey Pines Investment LLC, or Torrey Pines, and Dr. John C. Byrd. We are utilizing a platform
offered by Expert Systems Inc., or Expert Systems, which is powered by artificial intelligence and machine learning, or AI/ML, to choose
molecular mechanisms of pathology and to rationally design, accelerate discovery and optimize development of potential therapies. Our
goal is to utilize this AI/ML platform to become a leader in developing novel breakthrough medicines to maximize clinical benefit when
treating hematologic malignancies.
Our initial focus is
on developing a next-generation inhibitor of FMS-like tyrosine kinase 3, or FLT3, and interleukin-1 receptor-associated kinase 4, or IRAK4,
for the treatment of acute myeloid leukemia, or AML and myelodysplastic syndrome, or MDS.
Our Strategy
We are a biopharmaceutical
company focused on improving the lives of cancer patients through the discovery, development and commercialization of transformative targeted
therapies. Our development programs are designed to address drug resistance mutations in key driver oncogenes, which are mutated genes
that cause cancer. The key elements of our strategy to achieve our mission are:
●
Advance the clinical
development of lomonitinib.
We designed lomonitinib as a differentiated pan-FLT3/IRAK4 inhibitor for the
treatment of patients with AML with FLT3 mutations, or FLT3 AML. We believe that the lomonitinib could become a safe and effective pan-FLT3/IRAK4
inhibitor. We have conducted extensive evaluation of lomonitinib in healthy volunteers in Australia and determined what we believe to
be an effective dose that is not associated with any adverse events. We have advanced lomonitinib into previously treated FLT3 positive
AML patients in Australia. Separately, we submitted an Investigational New Drug, or IND, application to the U.S. Food and Drug Administration,
or the FDA, for lomonitinib in the first quarter of 2024, and this clinical trial, also in patients with previously treated
FLT3-positive AML is ongoing, with initial Phase 1b data expected to be announced in the fourth quarter of 2024. Our initial registration
strategy will focus on relapsed and refractory AML, or R/R AML, where there are currently no effective therapies and therefore a significant
unmet medical need. We also plan to evaluate lomonitinib in first-line FLT3-positive AML in light of this candidate's
potential for inhibiting certain FLT3 mutations. Based on its preclinical profile, we believe lomonitinib has the potential
to deliver meaningful clinical benefits over the currently available standard of care.
1
●
Advance the clinical
development of the drug products that we have licensed from Eil and Bala.
We have exclusive, perpetual, worldwide licensing
rights for the development and future ownership of (i) lonitoclax, a B-cell lymphoma 2, or BCL-2, inhibitor for the treatment of AML,
chronic lymphocytic leukemia, or CLL, which we obtained from Eil Therapeutics, Inc., or Eil, and (ii) an early-stage menin inhibitor
for the treatment of AML, which we obtained from Bala Therapeutics, Inc., or Bala. We believe that these two drug products could be synergistic
with lomonitinib and with each other.
●
Build a leading, fully
integrated precision oncology company to maximize the clinical impact and value of our pipeline
. We believe the targeted nature
of our research and discovery approach, which is guided in part by an AI/ML platform, allows for efficient and focused clinical development.
We are building a lean, experienced team to rapidly advance product candidates in a capital-efficient manner. We intend to retain the
commercialization rights to product candidates; however, we may opportunistically enter into strategic collaborations in certain geographic
or clinical settings to maximize the value of our pipeline.
Risks Related to Our
Business and Strategy
Our ability to implement
our current business strategy is subject to numerous risks, as more fully described in the section titled "
Risk Factors
."
These risks include, among others, the following:
●
We are very early in our development
efforts, have a limited operating history, have not conducted any late-stage clinical trials, have no products approved for commercial
sale and have not generated any revenue, which may make it difficult for investors to evaluate our current business and likelihood of
success and viability.
●
There is no guarantee that
the Eil license agreement or the Bala license agreement will positively affect our business, results of operations or prospects.
●
Our ability to generate revenue
and achieve profitability depends significantly on our ability to achieve in a timely manner our objectives relating to the discovery,
development and commercialization of our product candidates and development programs.
●
We are very early in our development
efforts and are substantially dependent on our FLT3/IRAK4 and BCL-2 inhibitor programs. If we are unable to advance lomonitinib, our
lead product candidate from the FLT3/IRAK4 program, or lonitoclax, our lead product candidate from the BCL-2 inhibitor program licensed
from Eil, or any of the products we have licensed from Bala, through preclinical and clinical development, obtain regulatory approval
and ultimately commercialize such product candidates, or experience significant delays in doing so, our business will be materially harmed.
●
In addition to our lead candidates,
lomonitinib and lonitoclax, our business depends in part upon licensing or acquiring, developing and commercializing product candidates
from other research programs, which may fail in development or suffer delays that adversely affect their commercial viability.
●
We have only conducted preclinical
studies and early clinical trials to date, and the outcome of preclinical testing and early clinical trials may not be predictive of
the success of subsequent clinical trials, including in respect of demonstrating consistent or adequate efficacy and safety.
●
The design or our execution
of our future clinical trials may not support marketing approval.
●
We have limited experience
as a company in conducting clinical trials.
●
We face substantial competition
which may result in others discovering, developing or commercializing products before or more successfully than we do.
●
We have never commercialized
a product candidate as a company before and currently lack the necessary expertise, personnel and resources to successfully commercialize
any products on our own or together with suitable collaborators.
●
We may be unable to obtain
U.S. or foreign regulatory approval and, as a result, may be unable to commercialize product candidates.
●
If we and our licensors and
collaborators, if any, are unable to obtain and maintain sufficient patent and other intellectual property protection for product candidates
and technology, our competitors could develop and commercialize products and technology similar or identical to ours, and we may not
be able to compete effectively in our market or successfully commercialize any of our current or future product candidates.
2
Recent Developments
Merger Agreement
On November 1, 2024,
we, Acquisition Sub and Lomond entered into the Merger Agreement. Pursuant to the terms of the Merger Agreement, on November 1, 2024 (the
"Closing Date"), Acquisition Sub merged with and into Lomond, with Lomond continuing as the surviving corporation and our
wholly-owned subsidiary.
Pursuant to the terms
of the Merger Agreement, at the time the certificate of merger reflecting the Merger was filed with the Secretary of State of Delaware
(the "Effective Time"), each share of Lomond's capital stock (comprising of Lomond common stock and Lomond preferred
stock) issued and outstanding immediately prior to the closing of the Merger was cancelled and converted into the right to receive one
share of our common stock (the "Exchange Ratio"), with the maximum number of shares of our common stock issuable to the former
holder of Lomond's capital stock equal to 14,420,383 (which is equal to 758,967 shares of Lomond common stock and 13,661,416 shares
of Lomond preferred stock issued and outstanding immediately prior to the closing of the Merger). In addition, pursuant to the Merger
Agreement, immediately prior to the Effective Time, an aggregate of 3,625,000 shares of the 5,000,000 then-outstanding shares of our common
stock owned by our stockholders prior to the Merger were forfeited and cancelled (the "Stock Forfeiture").
In addition, pursuant
to the Merger Agreement, at the Effective Time, options to purchase an aggregate of 4,329,617 shares of Lomond common stock at an exercise
price of $1.30 per share issued and outstanding immediately prior to the closing of the Merger under Lomond's 2024 Stock Plan (the
"Lomond Plan") were assumed and converted into options to purchase 4,329,617 shares of our common stock at an exercise
price of $1.30 per share.
The issuance of shares
of our common stock to Lomond's stockholders and the assumption of Lomond's options outstanding immediately prior to the Effective
Time pursuant to the Merger Agreement are collectively referred to as the "Share Conversion."
The Merger Agreement
contained customary representations and warranties and pre- and post-closing covenants of each party and customary closing conditions.
As a condition to the
Merger, we entered into a Pre-Merger Indemnity Agreement with each of our former officers and directors, pursuant to which we agreed to
indemnify such individuals for actions taken by him or her in his or her official capacities relating to the consideration, approval and
consummation of the Merger and certain related transactions.
We expect the Merger
to be treated as a recapitalization and reverse acquisition for us for financial reporting purposes. Lomond is considered the acquirer
for accounting purposes, and our historical financial statements before the Merger will be replaced with the historical financial statements
of Lomond before the Merger in future filings with the United States Securities and Exchange Commission (the "SEC"). The Merger
is intended to be treated as a tax-free reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended.
Private Placement
Offering
Immediately following
the Effective Time of the Merger, we issued an aggregate of $43.9 million of our shares of common stock pursuant to a private placement
offering and the conversion of certain simple agreements for future equity ("SAFEs") issued by Lomond, which included (i)
8,241,375 shares of our common stock issued and sold at a purchase price of $4.00 per share in cash (the "Offering Price")
pursuant to the Subscription Agreement; (ii) 1,078,124 shares of our common stock at a price of $3.20 pursuant to the conversion of certain
SAFEs issued by Lomond in October 2024, and (iii) 2,083,332 shares of our common stock at a price of $3.60 pursuant to the conversion
of certain SAFEs issued by Lomond in August 2024. The private placement offering is referred to herein as the "Offering."
3
The aggregate gross proceeds
from the Offering, including the aggregate amount previously received from the issuance of the SAFEs, were $43.9 million (before
deducting placement agent fees and expenses of the Offering, which are estimated at $2.6 million).
The Offering was exempt
from registration under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated by the SEC thereunder. The common
stock was sold to "accredited investors," as defined in Regulation D, and was conducted on a "reasonable best efforts"
basis.
Implications of Being
an Emerging Growth Company and a Smaller Reporting Company
As a company with less
than $1.235 billion in revenue during our last fiscal year, we qualify as an "emerging growth company" as defined in the Jumpstart
Our Business Startups Act of 2012, or JOBS Act. An emerging growth company may take advantage of reduced reporting requirements that are
otherwise applicable to public companies. These provisions include, but are not limited to:
●
being permitted to present
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 our periodic reports and registration statements, including this prospectus;
●
reduced disclosure about our
executive compensation arrangements;
●
not being required to comply
with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, as amended, on the effectiveness of our internal
controls over financial reporting;
●
reduced disclosure obligations
regarding executive compensation arrangements in our periodic reports, proxy statements and registration statements, including this prospectus;
and
●
exemptions from the requirements
of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously
approved.
We may use these provisions
until the last day of our fiscal year in which the fifth anniversary of the first sale of our common stock pursuant to an effective registration
statement occurs. However, if certain events occur prior to the end of such five-year period, including if we become a "large accelerated
filer," our annual gross revenues exceed $1.235 billion or we issue more than $1.00 billion of non-convertible debt in any three-year
period, we will cease to be an emerging growth company prior to the end of such five-year period.
We have elected to take
advantage of certain of the reduced disclosure obligations in the registration statement of which this prospectus is a part and may elect
to take advantage of other reduced reporting requirements in future filings. As a result, the information that we provide to our stockholders
may be different than you might receive from other public reporting companies in which you hold equity interests.
The JOBS Act provides
that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards,
until those standards apply to private companies. We have elected to take advantage of the benefits of this extended transition period
and, therefore, we will not be subject to the same new or revised accounting standards as other public companies that are not emerging
growth companies. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised
accounting standards. Until the date that we are no longer an emerging growth company or affirmatively and irrevocably opt out of the
exemption provided by Section 7(a)(2)(B) of the Securities Act upon issuance of a new or revised accounting standard that applies to our
financial statements and that has a different effective date for public and private companies, we will disclose the date on which we will
adopt the recently issued accounting standard.
4
We are also a "smaller
reporting company," meaning that the market value of our stock held by non-affiliates plus the proposed aggregate amount of gross
proceeds to us as a result of this offering is less than $700 million and our annual revenue is less than $100 million during the most
recently completed fiscal year. We may continue to be a smaller reporting company after this offering if either (i) the market value of
our stock held by non-affiliates is less than $250 million or (ii) our annual revenue is less than $100 million during the most recently
completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million. If we are a smaller reporting
company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements
that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two
most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies,
smaller reporting companies have reduced disclosure obligations regarding executive compensation.
Corporate Information
We were incorporated as Venetian-1 Acquisition
Corp. in the State of Delaware in September 2021. On November 1, 2024, our wholly-owned subsidiary, Lomond Acquisition Corp., a corporation
formed in the State of Delaware on October 23, 2024 ("Acquisition Sub"), merged with and into Lomond, which is developing
multiple product candidates to address hematological malignancies. Pursuant to the Merger, Lomond was the surviving corporation and became
our wholly-owned subsidiary, and all of the outstanding stock of Lomond held by a single accredited investor was converted into shares
of our common stock. Lomond's 2024 Stock Plan and all of outstanding options granted under such plan were assumed by us. Following
the consummation of the Merger, Lomond changed its name to "Lomond Operating Co." Immediately after completion of the Merger,
we changed our name to "Lomond Therapeutics Holdings, Inc."
Prior to the Merger (as
defined below), Venetian-1 Acquisition Corp. was a "shell company" (as defined in Rule 12b-2 under the Securities Exchange
Act of 1934, as amended (the "Exchange Act")), with no specific business plan or purpose until it began operating the business
of Lomond following the closing of the Merger.
Our principal executive
offices are located at 8 The Green Ste. 8490, Dover, Delaware. Our telephone number is (212) 739-6400. Our website address is
www.lomondther.com.
Information
contained on, or that can be accessed through, our website is not a part of this prospectus.
All trademarks, service
marks and trade names appearing in this prospectus are the property of their respective holders. Use or display by us of other parties'
trademarks, trade dress, or products in this prospectus is not intended to, and does not, imply a relationship with, or endorsements or
sponsorship of, us by the trademark or trade dress owners.
5
THE
OFFERING
Common stock offered by selling stockholders
27,473,624 shares (1)
Common stock outstanding
27,198,214 shares
Use of proceeds
We will not receive any proceeds from the sale of the shares of common stock offered by the selling stockholders.
Offering price
The selling stockholders may only sell their shares of common stock pursuant to this prospectus at a fixed price of $4.00 per share (as may be adjusted for stock splits, stock dividends, combinations, recapitalizations or similar events) until such time as our common stock is quoted on the OTCQB, or another public trading market for the common stock otherwise develops. At and after such time, the selling stockholders may sell all or a portion of their shares through public or private transactions at prevailing market prices or at privately negotiated prices.
Risk factors
You should read the "Risk Factors" section of this prospectus for a discussion of factors to consider carefully before deciding to invest in shares of our common stock.
Market for our shares
There is not now and never has been any market for our securities and an active market may never develop. We have arranged for a broker-dealer to apply to have our common stock quoted on the OTCQB or another over-the-counter system. In the future, we intend to seek to have the common stock listed on a national securities exchange. However, we may not be successful in having our shares quoted on an over-the-counter market or listed on a national securities exchange.
(1)
Includes common stock issuable upon exercise of Placement
Agent Warrants to purchase an aggregate of 275,410 shares of our common stock at an exercise price of $4.00 per share.
The number of shares
of common stock outstanding is based on an aggregate of 27,198,214 shares outstanding as of November 21, 2024 but excludes:
●
4,329,617 shares of common
stock issuable upon the exercise of stock options outstanding that were subject to options originally granted under the Lomond's
2024 Stock Plan, with a weighted-average exercise price of $1.30 per share; and
●
outstanding Placement Agent
Warrants to purchase an aggregate of 275,410 shares of our common stock at an exercise price of $4.00 per share.
6
SUMMARY
FINANCIAL DATA
The following tables
set forth summary financial data as of, and for the nine months ended, September 30, 2024 and 2023, and as of, and for the years ended,
December 31, 2023 and 2022 and should be read together with our consolidated financial statements and the related notes, as well as the
sections of this prospectus entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition
and Results of Operations" appearing elsewhere in this prospectus. The summary financial data in this section is not intended to
replace our financial statements and related notes. The summary consolidated financial data as of, and for the nine months ended, September
30, 2024 and 2023 are derived from our unaudited consolidated financial statements included elsewhere in this prospectus. In our opinion,
these unaudited consolidated financial statements have been prepared on a basis consistent with our audited financial statements and contain
all adjustments, consisting only of normal and recurring adjustments, necessary for a fair presentation of such consolidated financial
data. The summary financial data as of, and for the years ended, December 31, 2023 and 2022 are derived from our audited financial statements
included elsewhere in this prospectus. Our historical results are not necessarily indicative of our future results, and our operating
results for the nine-month period ended September 30, 2024 are not necessarily indicative of the results that may be expected for the
fiscal year ending December 31, 2024 or any other interim periods or any future year or period. See Unaudited Pro Forma Combined Financial
Statements on page F-45.
Nine Months Ended
September 30,
Years Ended
December 31,
2024
2023
2023
2022
Operating expenses:
Research and development - related party
$
7,000,000
$
5,639,607
$
9,729,437
$
4,164,438
General and administrative
836,663
14,729
20,642
75,982
Total operating expenses
7,836,663
5,654,336
9,750,079
4,240,420
Loss from operations
(7,836,663
)
(5,654,336
)
(9,750,079
)
(4,240,420
)
Other income (expense):
Change in fair value of SAFE liability
(924,479
)
-
-
-
Interest expense - related party
-
(152,948
)
(191,205
)
(114,879
)
Total other expense, net
(924,479
)
(152,948
)
(191,205
)
(114,879
)
Net Loss
$
(8,761,142
)
$
(5,807,284
)
$
(9,941,284
)
$
(4,355,299
)
Net loss per share attributable to common stockholders, basic and diluted
$
(11.54
)
$
(7.65
)
$
(13.10
)
$
(5.74
)
Weighted-average shares of common stock outstanding, basic and diluted
758,967
758,967
758,967
758,967
7
September 30,
2024
(unaudited)
December 31,
2023
December 31,
2022
Assets
Current assets:
Cash
$
3,617,664
$
800,728
$
507,437
Total current assets
3,617,664
800,728
507,437
Deferred financing costs
694,352
-
-
Total assets
$
4,312,016
$
800,728
$
507,437
Liabilities, Redeemable Convertible Preferred Stock, and Stockholders' Deficit
Current liabilities:
Accrued expenses and other current liabilities
$
1,250,929
$
856,144
$
919,281
Total current liabilities
1,250,929
856,144
919,281
SAFE liability
8,424,479
-
-
Notes payable – related party
-
-
3,840,000
Total liabilities
9,675,408
856,144
4,759,281
Commitments and contingencies (Note 5)
Redeemable convertible preferred stock: $0.0001 par value; 13,661,416 shares authorized, issued, and outstanding. Aggregate liquidation preference: $5,500,001
5,466,925
5,466,925
5,466,925
Stockholders' Deficit
Common stock: $0.0001 par value; 19,000,000 shares authorized; and 758,967 shares issued and outstanding
76
76
76
Related party notes receivable
(4,004,603
)
-
-
Additional paid-in capital
23,656,420
16,203,254
2,065,542
Accumulated deficit
(30,482,210
)
(21,725,671
)
(11,784,387
)
Total stockholders' deficit
(10,830,317
)
(5,522,341
)
(9,718,769
)
Total liabilities, redeemable convertible preferred stock, and stockholders' deficit
$
4,312,016
$
800,728
$
507,437
8
RISK
FACTORS
Investing in our common
stock is speculative and involves a high degree of risk. Before deciding whether to invest in our common stock, you should consider carefully
the risks described below, together with the other information contained in this prospectus, including our financial statements and the
section below titled "Management's Discussion and Analysis of Financial Condition and Results of Operations." If any
of the following risks occur, our business, financial condition, results of operations and future growth prospects could be materially
and adversely affected. In these circumstances, the market price of our common stock could decline, and you may lose all or part of your
investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business
operations and the market price of our common stock. This prospectus also contains forward-looking statements that involve risks and uncertainties.
Our actual results could differ materially from those anticipated in the forward-looking statements as a result of a number of factors,
including the risks described below. See "Special Note Regarding Forward-Looking Statements."
Summary of Principal
Risks
Investing in our common
stock involves substantial risk. Our ability to execute our business strategy is subject to numerous risks, as more fully described in
the remainder of this section titled "
Risk Factors
" below. These risks include, among others:
●
We are very early in our development
efforts, have a limited operating history, have not conducted any late-stage clinical trials, have no products approved for commercial
sale and have not generated any revenue, which may make it difficult for investors to evaluate our current business and likelihood of
success and viability.
●
There is no guarantee that
the Eil license agreement or the Bala license agreement will positively affect our business, results of operations or prospects.
●
We have incurred significant
net losses in each period since our inception, and we expect to continue to incur significant net losses for the foreseeable future.
●
Our ability to generate revenue
and achieve profitability depends significantly on our ability to achieve in a timely manner our objectives relating to the discovery,
development and commercialization of our product candidates and development programs.
●
In the future, we will need
substantial additional funding to complete the development and, if approved, any commercialization of product candidates. If we are unable
to raise this capital when needed, we may be forced to delay, reduce or eliminate our product development programs or other operations.
●
We are very early in our development
efforts and are substantially dependent on our FLT3/IRAK4 and BCL-2 inhibitor programs. If we are unable to advance lomonitinib, our
lead product candidate from the FLT3/IRAK4 program, or lonitoclax, our lead product candidate from the BCL-2 inhibitor program licensed
from Eil, or any of the products we have licensed from Bala, through preclinical and clinical development, obtain regulatory approval
and ultimately commercialize such product candidates, or experience significant delays in doing so, our business will be materially harmed.
●
In addition to our lead candidates,
lomonitinib and lonitoclax, our business depends in part upon licensing or acquiring, developing and commercializing product candidates
from other research programs, which may fail in development or suffer delays that adversely affect their commercial viability.
●
We have only conducted preclinical
studies and early clinical trials to date, and the outcome of preclinical testing and early clinical trials may not be predictive of
the success of subsequent clinical trials, including in respect of demonstrating consistent or adequate efficacy and safety.
●
The design or our execution
of our future clinical trials may not support marketing approval.
9
●
We have limited experience
as a company in conducting clinical trials.
●
We face substantial competition
which may result in others discovering, developing or commercializing products before or more successfully than we do.
●
We have never commercialized
a product candidate as a company before and currently lack the necessary expertise, personnel and resources to successfully commercialize
any products on our own or together with suitable collaborators.
●
We may be unable to obtain
U.S. or foreign regulatory approval and, as a result, may be unable to commercialize product candidates.
●
If we and our licensors and
collaborators, if any, are unable to obtain and maintain sufficient patent and other intellectual property protection for product candidates
and technology, our competitors could develop and commercialize products and technology similar or identical to ours, and we may not
be able to compete effectively in our market or successfully commercialize any of our current or future product candidates.
●
There is currently no market
for our common stock and there can be no assurance that any market will ever develop. You may therefore be unable to re-sell shares of
our common stock at times and prices that you believe are appropriate.
●
We have identified material
weaknesses in our internal control over financial reporting in the past. If our remediation of the material weaknesses is not effective,
our ability to produce accurate and timely financial statements could be impaired, which could result in sanctions or other penalties
that would harm our business and the trading price of our common stock may decline.
●
Our common stock is not listed
on a securities exchange and is not quoted on an over-the-counter trading system, and it may not ever be eligible for listing or quotation
on any securities exchange or on a given over-the-counter trading system.
Risks Related to Our
Business, Financial Position and Capital Requirements
We are very early
in our development efforts, have a limited operating history, have not conducted any late-stage clinical trials, have no products approved
for commercial sale and have not generated any revenue, which may make it difficult for investors to evaluate our current business and
likelihood of success and viability.
We are a biopharmaceutical
company with a limited operating history upon which investors can evaluate our business and prospects. Since our inception in 2020, our
operations have focused on organizing and staffing our company, business planning, raising capital, establishing our intellectual property
portfolio and performing research and development activities, including with respect to lomonitinib, our pan-FLT3/IRAK4 inhibitor for
the treatment of acute myeoloid leukemia, or AML. To date, we have not conducted any late-stage clinical trials, have no products approved
for commercial sale and have not generated any revenue. Drug development is a highly uncertain undertaking that involves a substantial
degree of risk.
We have not demonstrated
our ability to successfully conduct any late-stage clinical trials, obtain marketing approvals, manufacture the clinical or commercial
supply of drug product or arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful
product commercialization. As a result, it may be more difficult for investors to accurately predict our likelihood of success and viability
than if we had a longer operating history.
In addition, we may encounter
unforeseen expenses, difficulties, complications, delays and other known and unknown factors and risks frequently experienced by preclinical-stage
biopharmaceutical companies in rapidly evolving fields. We also expect that, as we advance our product candidates and development programs,
we will need to transition from a company with a research and development focus to a company capable of supporting commercial activities.
There can be no assurance that we will overcome such risks and difficulties or make such a transition. If we do not adequately address
these risks and difficulties or successfully make such a transition, our business will suffer such that we may never generate revenue
or achieve profitability.
10
There is no guarantee
that the Eil license agreement or the Bala license agreement will positively affect our business, results of operations or prospects.
In October 2024, we entered
into the Eil license agreement and the Bala license agreement. Pursuant to the Eil license agreement and the Bala license agreement, we
obtained exclusive, perpetual, worldwide licensing rights for the development and future ownership of (i) lonitoclax, a BCL-2 inhibitor
for the treatment of AML and CLL from Eil, and (ii) an early-stage menin inhibitor for the treatment of AML from Bala.
The Eil license agreement
and the Bala license agreement became effective in October 2024 when we issued promissory notes to Eil and Bala, respectively. The principal
amount of the promissory notes with Eil and Bala are $1.7 million and $1.2 million, respectively. Each such promissory note bears interest
at a rate of 7% per annum, compounded annually and the principal and accrued interest under each note are due and payable on demand at
any time after October 17, 2026. Each such promissory note may be repaid without penalty. In addition, the two promissory notes each provide
for customary events of default. Upon the payment in full of the applicable promissory note, Eil and Bala have each agreed to transfer
to us all of the intellectual property rights covered by the Eil license agreement and the Bala license agreement, as the case may be.
Eil and Bala have respectively
developed lonitoclax, a BCL-2 inhibitor, and a menin inhibitor, which may in the future be used by themselves or as combinations with
each other or lomonitinib to treat acute myeloid leukemia or other cancers
There can be no assurance
that these license agreements and the transactions contemplated thereby will yield the return we expect or any return on investment at
all. When Lomond entered into the Eil license agreement and the Bala license agreement, it had limited information about the drug candidates
being developed by such companies. Moreover, drug development is a highly uncertain undertaking that involves a substantial degree of
risk. In fact, neither Eil nor Bala has demonstrated the ability to successfully initiate and complete any clinical trials, obtain marketing
approvals, manufacture the clinical or commercial supply of drug product or arrange for a third party to do so on its behalf, or conduct
sales and marketing activities necessary for successful product commercialization. To date, Eil and Bala have only completed certain preclinical
studies of their product candidates.
As a result of the foregoing,
there is no guarantee that any action we take with respect to the Eil license agreement or the Bala license agreement will positively
affect our business, results of operations or prospects. To the extent that we continue developing the products pursuant to such agreements,
we would incur increased operating costs, which could materially adversely affect our business, results of operations and financial condition.
We have incurred
significant net losses in each period since our inception, and we expect to continue to incur significant net losses for the foreseeable
future.
We have incurred significant
net losses in each reporting period since our inception, have not generated any revenue to date and have financed our operations principally
through private placements of our convertible preferred stock, a promissory note from our former parent company and SAFEs. Our net loss
was $4.1 million and $9.7 million for the years ended December 31, 2022 and 2023, respectively, and it was $8.7 million for the nine months
ended September 30, 2024. As of September 30, 2024, we had an accumulated deficit of $30.4 million. We are still in the very early stages
of development of our product candidates and development programs and have not yet initiated or completed any late-stage clinical trials.
As a result, we expect that it will be many years, if ever, before we have a commercialized product and generate revenue from product
sales. Even if we succeed in receiving marketing approval for and commercializing one or more product candidates, we expect that we will
continue to incur substantial research and development and other expenses in order to discover and develop additional potential products.
We expect to continue
to incur significant expenses and increasing operating losses for the foreseeable future. The net losses we incur may fluctuate significantly
from quarter to quarter such that a period-to-period comparison of our results of operations may not be a good indication of our future
performance. The size of our future net losses will depend, in part, on the rate of future growth of our expenses, which we expect to
increase as our development programs advance, and our ability to generate revenue. To the extent we develop the candidates licensed to
us under the Eil license agreement and the Bala license agreement, our operating costs would also be increased. Our prior losses and expected
future losses have had and will continue to have an adverse effect on our working capital, our ability to fund the development of our
product candidate and development programs, our ability to achieve and maintain profitability and the performance of our common stock.
11
Our ability to
generate revenue and achieve profitability depends significantly on our ability to achieve in a timely manner our objectives relating
to the discovery, development and commercialization of our product candidates and development programs.
We have no products approved
for commercial sale and do not anticipate generating any revenue from product sales for many years, if ever. We rely on our team's
expertise and experience in biology, chemistry, drug discovery and translational research to develop our product candidate and development
programs. Identifying potential product candidates and conducting preclinical studies and clinical trials is a time consuming, expensive
and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain marketing
approval. In addition, any product candidates that we develop, if approved, may not achieve product sales or commercial success.
As such, our ability
to generate revenue from sales of approved products and achieve profitability depends significantly on our ability to achieve several
objectives, including:
●
successful and timely completion
of our ongoing and planned preclinical studies of lomonitinib, lonitoclax, our development candidates from our other programs and any
other future programs we may initiate or acquire;
●
timely submission and clearance
of our investigational new drug, or IND, applications for lomonitinib, lonitoclax, or any other product candidate we may develop or license;
●
timely and satisfactory responses
to any concerns or questions raised by the FDA in respect of any submitted INDs, including any concerns that could result in the imposition
of any full or partial clinical holds;
●
establishing and maintaining
relationships with contract research organizations, or CROs, and clinical trial sites for the clinical development of product candidates
from any of our current programs and any other future programs both in the United States and internationally;
●
timely receipt of marketing
approvals from regulatory authorities for product candidates for which we successfully complete clinical development;
●
developing an efficient and
scalable manufacturing process for product candidates, including obtaining finished products that are appropriately packaged for sale,
through manufacturing arrangements as necessary;
●
establishing and maintaining
commercially viable supply and manufacturing relationships with third parties that can provide adequate, in both amount and quality,
products and services to support clinical development and meet the market demand for product candidates, if approved;
●
successful commercial launch
following any marketing approval, including the development of a commercial infrastructure, whether in-house or with one or more collaborators;
●
a continued acceptable safety
profile following any marketing approval of product candidates;
●
acceptance of product candidates,
if approved, by patients, the medical community and third-party payors;
●
satisfying any required post-marketing
studies or other commitments to applicable regulatory authorities;
●
identifying, assessing and
developing new product candidates;
12
●
obtaining, maintaining and
expanding patent protection, trade secret protection and regulatory exclusivity, both in the United States and internationally;
●
defending against third-party
interference or infringement claims, if any;
●
entering into, on favorable
terms, any collaboration, licensing or other arrangements that may be necessary or desirable to develop, manufacture or commercialize
product candidates;
●
obtaining coverage and adequate
reimbursement by third-party payors for product candidates, if approved;
●
addressing any competing therapies
and technological and market developments; and
●
attracting, hiring and retaining
qualified personnel.
See also "—
Risks
Related to the Discovery, Research and Development of Product Candidates
."
We may never be successful
in achieving our objectives and, even if we do, may never generate revenue that is significant or large enough to achieve profitability.
In addition, as a young business, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown
challenges. If we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis, and
we will continue to incur substantial research and development and other expenditures to develop and market additional product candidates.
Our failure to become and remain profitable would significantly decrease the value of our company and could impair our ability to maintain
or further our research and development efforts, raise additional necessary capital, grow our business and continue our operations. A
decline in the value of our company could also cause you to lose all or part of your investment.
In the future,
we will need substantial additional funding to complete the development and, if approved, any commercialization of product candidates.
If we are unable to raise this capital when needed, we may be forced to delay, reduce or eliminate our product development programs or
other operations.
Since our inception,
we have used substantial amounts of cash to fund our operations, and our expenses will increase substantially in the foreseeable future
in connection with our ongoing activities, particularly as we continue the research and development of and initiate preclinical studies
and clinical trials of product candidates. The development of product candidates, including conducting preclinical studies and clinical
trials, is a very time-consuming, capital intensive and uncertain process that takes years to complete. Even if our current product candidate,
lomonitinib, any of the product candidates we have licensed, including lonitoclax, or any additional product candidates that we may develop,
license or acquire enter and advance through preclinical studies and clinical trials, we will need substantial additional funds to expand
our clinical, regulatory, quality and manufacturing capabilities. In addition, if we obtain marketing approval for product candidates,
we expect to incur significant commercialization expenses related to marketing, sales, manufacturing and distribution. Our expenses could
increase beyond expectations if we are required by the U.S. Food and Drug Administration, or FDA, or any comparable foreign regulatory
authorities to perform clinical trials or preclinical studies in addition to those that we currently anticipate. Other unanticipated costs
may also arise. Furthermore, upon the consummation of the Merger, we became a public company and expect to incur additional costs associated
with operating as a public company.
As of September 30, 2024,
we had $3.6 million in cash and cash equivalents. Based on our current operating plan, we believe that the net proceeds from the Offering,
together with our existing cash and cash equivalents, will be sufficient to fund our operations and capital expenses for at least the
next twelve months.
Advancing the development
of lomonitinib, our licensed product candidates, including lonitoclax, and our other development programs will require a significant amount
of capital. Our existing cash and cash equivalents, including the net proceeds from the Offering, will not be sufficient to fund our product
candidates through regulatory approval, and we anticipate needing to raise additional capital to complete the development of and commercialize
our product candidate and development programs. Our estimate as to how long we expect our existing cash and cash equivalents, together
with the net proceeds from the Offering, to fund our operations is based on assumptions that may prove to be incorrect, and we could utilize
our available capital resources sooner than we currently expect, particularly given that the design and outcome of our ongoing preclinical
studies and anticipated preclinical studies and clinical trials are highly uncertain. Our future capital requirements will depend on many
factors, including:
●
the scope, rate of progress,
success and costs of our drug discovery, preclinical development activities, laboratory testing and clinical trials for our product candidate
and our licensed product candidates;
●
the number and scope of clinical
programs we decide to pursue;
13
●
the scope and costs of manufacturing
development and commercial manufacturing activities for product candidates, if approved;
●
the extent to which we acquire
or in-license other product candidates and technologies;
●
the timing and amount of any
payments required to be made under the agreements governing acquired or in-licensed product candidates or technologies;
●
the cost, timing and outcome
of regulatory review of product candidates;
●
the cost and timing of establishing
sales and marketing capabilities, if any product candidate receives marketing approval;
●
the costs of preparing, filing
and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related
claims;
●
our ability to establish and
maintain collaborations on favorable terms, if at all;
●
external disruptions on our
business, results of operations and financial position;
●
our efforts to enhance operational
systems and our ability to attract, hire and retain qualified personnel, including personnel to support the development of product candidates;
●
the costs associated with being
a public company; and
●
the cost associated with commercializing
product candidates, if they receive marketing approval.
In addition, pursuant
to the Subscription Agreement, we agreed that, subject to certain exceptions, we would not, without the prior written consent of a majority
of the shares held by certain outside investors who participated in the Offering, take certain capital-raising actions for a period that
would not end until the latest of (x) 180 days after the closing of the Offering, (y) the date on which a registration statement with
respect to the resale of all of the shares issued in the Offering is declared effective and (z) the date on which the common stock is
listed on a national securities exchange. Pursuant to such agreement, we also agreed that for the year following such period, we would
not raise capital by entering into certain derivative transactions. We are currently ineligible to be listed on any national securities
exchange, and there is no guarantee we ever will be eligible to do so. For more information, see the section titled "
Description
of the Merger, the Offering, and Related Transactions—The Subscription Agreement—Restrictions on Certain Equity Sales and
Certain Governance Changes
". As a result, our ability to raise capital may be limited for the foreseeable future.
Our failure to raise
capital as and when needed or on acceptable terms would have a negative impact on our financial condition and our ability to pursue our
business strategy, and we may have to delay, reduce the scope of, suspend or eliminate one or more of our research or drug development
programs, clinical trials or future commercialization efforts.
14
Raising additional
capital may cause dilution to our stockholders restrict our operations or require us to relinquish rights to our technologies or product
candidates.
We will need to obtain
substantial additional funding to complete the development and any commercialization of our product candidate and any additional product
candidates that we may develop. Until such time, if ever, as we can generate substantial revenue, we will be required to obtain further
funding through public or private equity financings, debt financings, collaborative agreements, licensing arrangements or other sources
of financing, which may dilute our stockholders or restrict our operating activities. In addition, we may seek additional capital due
to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current and future operating
plans.
We do not have any committed
external source of funds, and adequate additional financing may not be available to us on acceptable terms, or at all. If we are unable
to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product
development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer
to develop and market ourselves. In addition, securing financing could require a substantial amount of time and attention from our management
and may divert a disproportionate amount of their attention away from day-to-day activities, which may adversely affect our management's
ability to oversee the development of product candidates.
To the extent that we
raise additional capital through the sale of equity or convertible debt securities, your ownership interests will be diluted, and the
terms may include liquidation or other preferences that adversely affect your rights as a stockholder. Debt financing may result in imposition
of debt covenants, increased fixed payment obligations or other restrictions that may affect our business. If we raise additional funds
through upfront payments or milestone payments pursuant to strategic collaborations with third parties, we may have to relinquish valuable
rights to product candidates or grant licenses on terms that are not favorable to us.
Risks Related to the
Discovery, Research and Development of Product Candidates
We are very early
in our development efforts for and are substantially dependent on our FLT3/IRAK4 and BCL-2 inhibitor programs. If we are unable to advance
lomonitinib, our lead product candidate from the FLT3/IRAK4 program, or lonitoclax, our lead product candidate from the BCL-2 inhibitor
program licensed from Eil, or any of the products we have licensed from Bala, through preclinical and clinical development, obtain regulatory
approval and ultimately commercialize such product candidates, or experience significant delays in doing so, our business will be materially
harmed.
We are very early in
our development efforts. In fact, we have submitted only one IND to the FDA with respect to our product candidate, lomonitinib, and only
one IND has been submitted for lonitoclax, the product candidate we licensed from Eil. We have not yet demonstrated our ability to successfully
initiate or conduct any late-stage clinical trials, including large-scale, pivotal clinical trials, obtain regulatory approvals, manufacture
a commercial scale product, or arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for
successful commercialization.
As such, our ability
to generate revenue from product sales, which we do not expect will occur for many years, if ever, will depend heavily on the successful
preclinical and clinical development and eventual commercialization of one or more product candidates, such as lomonitinib and lonitoclax,
any of the product candidates we have licensed or a development candidate from another program that we develop, license or acquire. The
success of our programs will depend on several factors, including the following:
●
successful and timely completion
of preclinical studies;
●
timely submission and clearance
of INDs for our anticipated clinical trials;
●
successful initiation of clinical
trials;
●
successful and timely study
subject selection and enrollment in and completion of clinical trials;
●
maintaining and establishing
relationships with CROs and clinical trial sites for the clinical development of product candidates both in the United States and internationally;
15
●
the frequency and severity
of adverse events in clinical trials;
●
demonstrating efficacy, safety
and tolerability profiles that are satisfactory to the FDA or any comparable foreign regulatory authorities for marketing approval;
●
the timely receipt of marketing
approvals from FDA and any comparable foreign regulatory authorities;
●
the extent of any required
post-marketing studies or other post-approval commitments to applicable regulatory authorities;
●
the timely identification,
development and approval of companion diagnostic tests, if required;
●
the establishment and maintenance
of supply arrangements with third-party drug product suppliers and manufacturers for clinical development and, if approved, commercialization
of product candidates;
●
obtaining and maintaining patent
protection, trade secret protection and regulatory exclusivity, and the protection of our other intellectual property rights, both in
the United States and internationally;
●
the availability of an approved
product for evaluation as a combination therapy;
●
successful commercialization
following the receipt of any marketing approval;
●
a continued acceptable safety
profile following any marketing approval;
●
acceptance of our products,
if approved, by patients, the medical community and third-party payors; and
●
our ability to compete with
other therapies, including our ability to differentiate any product for which we receive marketing approval against other approved products
within the same class of drugs.
We do not have complete
control over many of these factors, including certain aspects of preclinical and clinical development and the regulatory submission process,
potential threats to our intellectual property rights and the manufacturing, marketing, distribution and sales efforts of any collaborator.
If we are not successful with respect to one or more of these factors in a timely manner or at all, we could experience significant delays
or an inability to successfully commercialize any product candidates from our development programs, which would materially harm our business.
If we do not receive marketing approvals for such product candidates, we may not be able to continue our operations.
In addition to
our lead candidates, lomonitinib and lonitoclax, our business depends in part upon discovering, licensing or acquiring, developing and
commercializing product candidates from other research programs, which may fail in development or suffer delays that adversely affect
their commercial viability.
Our future operating
results are dependent on our ability to successfully discover, license or acquire, develop, obtain regulatory approval for and commercialize
product candidates from research programs other than our FLT3/IRAK4 and BCL-2 inhibitor programs and our lead candidates from each program,
lomonitinib and lonitoclax, respectively. In addition to lomonitinib and lonitoclax, which is licensed by Eil, we currently have licensed
the rights to a series of menin inhibitors from Bala. Research programs to identify new product candidates require substantial technical,
financial and human resources.
While the results of
preclinical studies have suggested that lomonitinib and the programs licensed from Eil and Bala may have the ability to treat AML and
certain other diseases, none of us, Eil and Bala has yet succeeded and we, Eil and Bala may not succeed in demonstrating efficacy and
safety of lomonitinib or any other development programs in clinical trials or in obtaining marketing approval thereafter. If our approach
to the discovery and design of product candidates does not lead to the development of product candidates that prove to be effective and
safe for the targeted indication, we may never generate the necessary data or results required to obtain marketing approval.
16
Even if identified, a
development candidate can unexpectedly fail at any stage of development. The historical failure rate for development candidates is high
due to risks relating to safety, efficacy, clinical execution, changing standards of medical care and other unpredictable variables. The
success of other development candidates we may acquire or develop will depend on many factors, including those described throughout
"—Risks
Related to the Discovery, Research and Development of Product Candidates
".
Even if we successfully
advance any development candidates into preclinical and clinical development, their success will be subject to all of the preclinical,
clinical, regulatory and commercial risks described elsewhere in this "
Risk Factors
" section. Accordingly, there can
be no assurance that we will ever be able to acquire or discover, develop, obtain regulatory approval of, commercialize or generate significant
revenue from product candidates from any research programs.
Our preclinical studies
and any clinical trials that we may commence may fail at any time, and because our only product candidates, including the ones we licensed
from Eil and Bala, are in a very early stage of development, there is a high risk of failure, and we may never succeed in developing marketable
products.
Before obtaining marketing
approval from the FDA or other comparable foreign regulatory authorities for the sale of product candidates, we must demonstrate through
lengthy, complex and expensive preclinical studies and clinical trials that such product candidates are both safe and effective for use
in each target indication. Preclinical and clinical testing is expensive, difficult to design and implement and can take many years to
complete, and its ultimate outcome is uncertain. Failure can occur at any time during the preclinical study and clinical trial processes,
and, because our only product candidate and other programs are in a very early stage of development, there is a high risk of failure and
we may never succeed in developing products that receive marketing approval.
The commencement and
completion of clinical trials can be delayed for a number of reasons, including delays related to:
●
failure of product candidates
in preclinical studies or clinical trials to demonstrate safety and efficacy;
●
delays with IND-enabling studies
or in analyzing the data collected from any completed clinical trials;
●
negative or inconclusive clinical
trial results that may require us to conduct additional clinical trials or abandon certain research and/or drug development programs;
●
the number of study subjects
required for clinical trials being larger than anticipated, enrollment in these clinical trials being slower than anticipated or participants
dropping out of these clinical trials at a higher rate than anticipated;
●
subjects choosing an alternative
treatment or other product candidates, or participating in competing clinical trials;
●
lack of adequate funding to
continue the clinical trial;
●
subjects experiencing severe
or unexpected drug-related adverse effects;
●
any interruptions or delays
in the supply of product candidates for our clinical trials;
●
a facility manufacturing product
candidates or any of their components being ordered by the FDA or comparable foreign regulatory authorities to temporarily or permanently
shut down due to violations of current good manufacturing practice, or cGMP, regulations or other applicable requirements, or infections
or cross-contaminations of product candidates in the manufacturing process;
●
any changes to the manufacturing
process of product candidates that may be necessary or desired;
●
any failure or delay in reaching
an agreement with CROs and clinical trial sites;
17
●
clinical investigators losing
the licenses or permits necessary to perform our clinical trials, not performing our clinical trials on our anticipated schedule or consistent
with the clinical trial protocol, good clinical practices, or GCP, or regulatory requirements or other third parties not performing data
collection or analysis in a timely or accurate manner;
●
third-party contractors becoming
debarred or suspended or otherwise penalized by the FDA or other comparable foreign regulatory authorities for violations of applicable
regulatory requirements, in which case we may need to find a substitute contractor, and we may not be able to use some or all of the
data produced by such contractors in support of our marketing applications;
●
one or more institutional review
boards, or IRBs, refusing to approve, suspending or terminating the trial at a clinical trial site, precluding enrollment of additional
subjects, or withdrawing its approval of the trial; or
●
changes in regulatory requirements
and policies, which may require us to amend clinical trial protocols to comply with these changes and resubmit our clinical trial protocols
to IRBs for reexamination.
If we are required to
conduct additional preclinical studies, clinical trials or other testing of product candidates beyond those that are contemplated, if
we are unable to successfully complete preclinical studies or clinical trials of product candidates or other testing in a timely manner,
if the results of these studies, trials or tests are not positive or are only modestly positive or if there are safety concerns, we may
incur unplanned costs, be delayed in seeking and obtaining marketing approval, if we receive such approval at all, receive more limited
or restrictive marketing approval, be subject to additional post-marketing testing requirements or have the drug removed from the market
after obtaining marketing approval.
The deployment
of artificial intelligence in our efforts to discover and develop product candidates, could adversely affect our business, reputation,
or financial results.
We integrate artificial
intelligence and machine learning, or AI, in our efforts to discover and engineer next-generation antibodies. We are utilizing a platform
offered by Expert Systems, Inc., or Expert Systems, which is powered by AI and machine learning, or AI/ML, to choose molecular mechanisms
of pathology and to rationally design, accelerate discovery and optimize development of potential therapies. AI may be difficult to deploy
successfully due to operational issues inherent in such methods. In particular, AI algorithms utilize machine learning and predictive
analytics which may lead to flawed, biased, and inaccurate results, which could lead to ineffective product or target candidates and exposure
to competitive and reputational harm. In addition, perceived or actual technical, legal, compliance, privacy, security, ethical or other
issues relating to the use of AI may cause regulators' or the public's confidence in AI to be undermined, which could impede
our ability to develop products using AI. In addition, any latency, disruption, or failure in our AI operations or infrastructure could
result in failures, delays or errors in our discovery and development of next-generation antibodies or other investigational products.
Developing, testing, and deploying resource-intensive AI systems may also require additional investment and increase our costs, and there
is no guarantee that our investment in such systems will lead to more effective or efficient discovery or development of antibodies or
other investigational products, or lead to eventual regulatory approval or commercialization of any new products
We have only conducted
preclinical studies and early clinical trials to date, and the outcome of preclinical testing and early clinical trials may not be predictive
of the success of subsequent clinical trials, including in respect of demonstrating consistent or adequate efficacy and safety.
We will be required to
demonstrate with substantial evidence through well-controlled clinical trials that our product candidate and any additional product candidates
that we may develop, license or acquire are safe and effective for use in a defined population before we can seek marketing approvals
for their commercial sale. There is typically an extremely high rate of attrition from the failure of product candidates proceeding through
preclinical studies and clinical trials. We do not know whether any preclinical studies or clinical trials we may conduct will demonstrate
consistent or adequate efficacy and safety sufficient to obtain approval to market any product candidates.
The results of preclinical
studies may not be predictive of the results of clinical trials of product candidates. Although product candidates may demonstrate promising
results in preclinical studies, they may not prove to be safe or effective in subsequent clinical trials. Favorable results from certain
animal studies may not accurately predict the results of other animal studies or of human trials due to the inherent biologic differences
in species, the differences between testing conditions in animal studies and human trials, and the particular goals, purposes and designs
of the relevant studies and trials.
18
Moreover, the results
of preclinical studies and any early clinical trials we complete may not be predictive of the results of later-stage clinical trials.
A number of companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in advanced clinical trials,
notwithstanding promising results in earlier trials. Clinical trial failure, including with respect to achieving the desired safety and
efficacy profile, and the failure to obtain regulatory approval may result from a multitude of factors, including those described under
"—
Risks Related to the Discovery, Research and Development of Product Candidates—The design or our execution of our
future clinical trials may not support marketing approval
." In particular, early, smaller-scale clinical trials may not be predictive
of eventual safety or effectiveness in large-scale pivotal clinical trials. See
"—Risks Related to the Discovery, Research
and Development of Product Candidates—Product candidates may cause significant adverse events, toxicities or other undesirable side
effects when used alone or in combination with other approved products or investigational new drugs.
"
The development and regulatory
approval of product candidates may also be impacted by inferences, whether correct or not, that are drawn between the success or failure
of preclinical studies or clinical trials of our competitors or other companies in the pharmaceutical and biotechnology industries, in
addition to our own preclinical studies and clinical trials.
If the results of our
ongoing or future preclinical studies and any future clinical trials are inconclusive with respect to the safety and efficacy of product
candidates, if we do not meet the clinical endpoints with statistical or clinically meaningful significance, or if there are safety concerns
associated with product candidates or those of our competitors, we may be prevented or delayed in obtaining marketing approval for product
candidates.
The design or our
execution of our future clinical trials may not support marketing approval.
The design or execution
of a clinical trial can determine whether its results will support marketing approval, and flaws in the design or execution of a clinical
trial may not become apparent until the clinical trial is well-advanced and significant resources have been expended.
In some instances, there
can be significant variability in safety and efficacy results between different clinical trials of the same product candidate due to numerous
factors, including changes in trial protocols, differences in size and type of the patient populations, differences in and adherence to
the dose and dosing regimen and other trial protocols and the rate of dropout among clinical trial participants. Assessments of safety
and efficacy can therefore vary widely for a particular patient, and from patient to patient and site to site within a clinical trial.
As a result, we do not know whether any clinical trials we conduct will demonstrate consistent or adequate efficacy and safety to obtain
marketing approval to market our product candidate and any additional product candidates that we may develop. See
"—Risks
Related to the Discovery, Research and Development of Product Candidates—Product candidates may cause significant adverse events,
toxicities or other undesirable side effects when used alone or in combination with other approved products or investigational new drugs.
"
Additionally, even if
the FDA or a comparable foreign regulatory authority agrees with the design and implementation of the clinical trials set forth in an
IND or comparable foreign regulatory submission, there is no guarantee such regulatory authority will not change its requirements in the
future. The FDA and comparable foreign regulatory authorities have substantial discretion in the product approval process and in determining
when or whether to approve product candidates. For example, as more product candidates within a particular class of drugs proceed through
clinical development to regulatory review and approval, the amount and type of clinical data that may be required by regulatory authorities
may increase or change. Moreover, data obtained from clinical trials are susceptible to varying interpretations, and regulators may not
interpret our data as favorably as we do. Regulators may require us to conduct additional clinical trials or preclinical studies due to
negative or inconclusive results. Any changes in requirements for the approval of product candidates made by these regulatory authorities
may occur even after they have reviewed and provided comments or advice on a protocol for a planned clinical trial, including a registrational
trial, and irrespective of whether product candidates achieve their primary endpoints in such trials.
Any of these regulatory
authorities may also approve a product candidate for fewer or more limited indications than we request, or with other limitations, or
may grant approval contingent on the performance of costly post-marketing clinical trials. The FDA or comparable foreign regulatory authorities
may not approve the labeling claims that we believe would be necessary or desirable for the successful commercialization of product candidates,
if approved.
19
We have limited
experience as a company in conducting clinical trials.
Although many of our
personnel have experience in clinical development and manufacturing at other companies, we have limited experience as a company in conducting
clinical trials. Moreover, we do not currently operate our own laboratory facilities, and we rely completely on the services of independent
contractors and consultants to conduct our preclinical studies. In part because of this lack of experience as a company and our limited
infrastructure, we cannot be certain that our ongoing preclinical studies will be completed on time or that our planned or anticipated
preclinical studies and clinical trials will begin or be completed on time, if at all. Human clinical trials require significant additional
financial and management resources and reliance on third-party investigators and collaborators, such as medical institutions, CROs, clinical
trial sites, contract manufacturing organizations, or CMOs, and potentially strategic collaborators. Although we have succeeded in identifying
third-party investigators and collaborators to date, we may in the future be unable to identify and contract with sufficient third parties,
or on terms that are acceptable to us. See "—
Risks Related to Our Reliance on Third Parties
—
We rely on third
parties to conduct our preclinical studies, and rely on third parties to conduct clinical trials, and those third parties may not perform
satisfactorily, including failing to meet deadlines for the completion of such trials, research and studies
."
We may expend our
limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications that
may be more profitable or for which there is a greater likelihood of success.
Because we have limited
financial, managerial and research and development resources, we must prioritize our research programs and will need to focus product
candidates on the potential treatment of certain indications. As a result, we may forego or delay pursuit of opportunities with other
product candidates or for other indications that later prove to have greater commercial potential. Our resource allocation decisions may
cause us to fail to capitalize on viable commercial products or profitable market opportunities. Our spending on current and future research
and development programs and product candidates for specific indications may not yield any commercially viable products. If we do not
accurately evaluate the commercial potential or target market for a particular product candidate, we may also relinquish valuable rights
to that product candidate through collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous
for us to retain sole development and commercialization rights to such product candidate.
We face substantial
competition which may result in others discovering, developing or commercializing products before or more successfully than we do.
The pharmaceutical and
biotechnology industries, particularly the field of oncology, are characterized by rapidly advancing technologies, intense competition
and a strong emphasis on proprietary and novel products and product candidates. We have competitors in the United States and internationally,
including major multinational pharmaceutical companies, established biotechnology companies, specialty pharmaceutical companies, emerging
and start-up companies, universities and other research institutions. For example, several biopharmaceutical companies, including Beigene,
Ltd, Curis, Inc., Aptose Biosciences Inc., Biomea Fusion, Inc. or PharsoBio, Ryvu Therapeutics S.A., Ellipses Pharma Limited, Sunshine
Lake Co., Ltd, AROG Pharmaceuticals, Inc., Nerviana, A.Menarini Industrie Farmaceutiche Riunite S.r.l., Fujifilm Corporation, Maxinovel
Co., Ltd., LaNova Medicines Ltd., Beijing Novruns, Tarapeutics, Haihe Biopharma Co., Ltd., Oscotec Inc., Shanghai Fosun Pharmaceutical
Co., Ltd., and Tyligand Bioscience (Shanghai) Limited, are also developing FLT3 inhibitors for the treatment of AML.
Our competitors have
developed, are developing or may develop products, product candidates and processes competitive with our product candidate. Any product
candidates that we successfully develop and commercialize will compete with existing therapies and new therapies that may become available
in the future. There are several approved therapies for the treatment of conditions for which we are attempting or may attempt to develop
product candidates. In addition, we believe that a significant number of product candidates are currently under development, and may become
commercially available in the future. We also compete to recruit and retain qualified scientific and management personnel, which could
negatively affect our level of expertise and our ability to execute our business plan. As a result, our potential commercial opportunity
could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer or less
severe side effects or are more convenient than any products that we may develop.
20
For example, with respect
to one of our lead product candidates, lomonitinib, there are several large pharmaceutical companies and biotechnology companies marketing
drugs for the treatment of AML, including Astellas Pharma Inc., Novartis AG and Daiichi Sankyo, Inc.
Our potential commercial
opportunity could also be reduced or eliminated if our competitors develop products that obtain marketing approval from the FDA or other
comparable foreign regulatory authorities for their products more rapidly than we do. Likewise, our competitors may commercialize products
that have a broader label, are marketed more effectively, are more widely reimbursed or are less expensive than any products that we may
develop. Any of these could result in our competitors establishing a strong market position before we are able to enter the market or
make our development and commercialization more complicated. For example, we will face competition in establishing clinical trial sites
and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs, which
may delay or prevent the development of product candidates. Further, our competitors may obtain patent protection or other intellectual
property rights that limit our ability to develop or commercialize product candidates. Even if our current product candidate or any other
product candidates we may develop achieves marketing approval, technological advances or products developed by our competitors may render
our technologies or product candidates obsolete, less competitive or not economical. Our product candidate and any other product candidates
we may develop may also be priced at a significant premium over competitive products if any have been approved by then, resulting in reduced
competitiveness. The availability of reimbursement from government and other third-party payors will also significantly affect the pricing
and competitiveness of our products.
Many of our competitors,
either alone or with their collaborators, have significantly greater financial resources, established presence in the market and expertise
in research and development, manufacturing, preclinical and clinical testing, obtaining regulatory approvals and reimbursement and marketing
approved products than we do. Large pharmaceutical and biotechnology companies, in particular, have extensive experience in clinical testing,
obtaining regulatory approvals, recruiting patients and manufacturing biopharmaceutical product candidates. These companies also have
significantly greater research and marketing capabilities than we do and may also have product candidates that have been approved or are
in late stages of development, and collaborative arrangements in our target markets with leading companies and research institutions.
Established pharmaceutical and biotechnology companies may also invest heavily to accelerate discovery and development of novel compounds
or to in-license novel compounds that could make product candidates that we develop obsolete. Smaller or early-stage companies may also
prove to be significant competitors, particularly through collaborative arrangements with large and established companies, as well as
in acquiring technologies complementary to, or necessary for, our programs.
We also face competition
more broadly across the oncology market for cost-effective and reimbursable cancer treatments. There are a variety of available drug therapies
marketed for cancer. In many cases, these drugs are administered in combination to enhance efficacy. While product candidates, if any
are approved, may compete with these existing drugs and other therapies, to the extent they are ultimately used in combination with or
as an adjunct to these therapies, product candidates may not be competitive with them. Some of these drugs are branded and subject to
patent protection, and others are available on a generic basis. Insurers and other third-party payors may also encourage the use of generic
products or other specific branded products. As a result, obtaining market acceptance of, and gaining significant share of the market
for, any product candidates that we successfully introduce to the market may pose challenges. Additionally, product candidates may need
to compete with drugs physicians use off-label to treat the indications for which we seek approval. This may make it difficult for us
to replace existing therapies with our product candidate and any additional product candidates that we may develop. Moreover, many companies
are developing new oncology therapeutics, and we cannot predict what the standard of care will be as product candidates progress through
clinical development.
If we are unable to compete
effectively, our opportunity to generate revenue from the sale of any product candidates we may develop, if approved, could be adversely
affected.
21
Interim, topline
and preliminary data from our preclinical studies and clinical trials that we announce or publish from time to time may change as more
data become available and are subject to audit and verification procedures that could result in material changes in the final data.
From time to time, we
may publicly disclose preliminary, interim or topline data from our preclinical studies and clinical trials. These updates are based on
a preliminary analysis of then-available data. These data should be viewed with caution as they may differ from future results of the
same studies or trials, or different conclusions or considerations may qualify such results, once additional data have been received and
fully evaluated. For example, we may report responses in certain patients that are unconfirmed at the time and which do not ultimately
result in confirmed responses to treatment after follow-up evaluations. We also make assumptions, estimations, calculations and conclusions
as part of our analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate all data. Certain
data may also be subject to audit and verification procedures that may result in the final data being materially different from the preliminary
data we previously published. In addition, we may report interim analyses of only certain endpoints rather than all endpoints. Interim
data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change
as patient enrollment continues and more patient data become available.
Further, regulatory agencies
and others, may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the
importance of data differently, which could adversely impact the potential of the particular program, the likelihood of obtaining regulatory
approval of the particular product candidate, commercialization of any approved product and the business prospects of our company in general.
In addition, the information we choose to publicly disclose regarding a particular study or trial is typically selected from a more extensive
amount of available information. Investors may not agree with what we determine is the material or otherwise appropriate information to
include in our disclosure, and any information we determine not to disclose may ultimately be deemed significant with respect to future
decisions, conclusions, views, activities or otherwise regarding a particular product candidate or our business.
If the preliminary, interim
or topline data that we report differ from late, final or actual results, or if others, including regulatory authorities, disagree with
the conclusions reached, our ability to obtain approval for, and commercialize, any product candidates may be harmed.
Product candidates
may cause significant adverse events, toxicities or other undesirable side effects when used alone or in combination with other approved
products or investigational new drugs.
We, the FDA or other
comparable foreign regulatory authorities or an IRB may suspend or terminate clinical trials of a product candidate at any time for various
reasons, including a belief that subjects in such trials are being exposed to unacceptable safety risks or adverse side effects. For example,
some potential therapeutics that initially showed therapeutic promise in early-stage trials have later been found to cause side effects
that prevented their further development.
While we have not yet
conducted late-stage clinical trials for our product candidates, it is likely that there will be side effects associated with their use
and the use of any additional product candidates that we may develop, as is typically the case with oncology drugs. Results of our studies
or trials could reveal a high and unacceptable severity and prevalence of these or other side effects or adverse events. In addition,
product candidates may be studied in combination with other therapies, which may exacerbate adverse events associated with the therapy.
Patients treated with product candidates may also be undergoing surgical, radiation and chemotherapy treatments, which can cause side
effects or adverse events that are unrelated to product candidates but may still impact the success of our clinical trials. The inclusion
of critically ill patients in our clinical trials may result in deaths or other adverse medical events due to other therapies or medications
that such patients may be using or due to the gravity of such patients' illnesses. For example, it is expected that some of the
patients to be enrolled in our future clinical trials will die or experience major clinical events either during the course of our clinical
trials or after participating in such trials for non-treatment related reasons. Moreover, product candidates may be used in populations
for which safety concerns may be particularly scrutinized by regulatory agencies.
22
If product candidates
are associated with undesirable side effects or have unexpected characteristics in preclinical studies or clinical trials when used alone
or in combination with other approved products or investigational new drugs, we may need to interrupt, delay or abandon their development
or limit development to more narrow uses or subpopulations in which the undesirable side effects or other characteristics are less prevalent,
less severe or more acceptable from a risk-benefit perspective. Drug-related side effects could also result in potential product liability
claims.
Even if the side effects
do not preclude the product candidate from obtaining or maintaining marketing approval, undesirable side effects may inhibit market acceptance
due to its tolerability versus other therapies. Further, if product candidates obtain marketing approval, toxicities associated with such
product candidates previously not seen during clinical testing may also develop after such approval and lead to a requirement to conduct
additional clinical safety trials, additional contraindications, warnings and precautions being added to the drug label, significant restrictions
on the use of the product or the withdrawal of the product from the market. We cannot predict whether our product candidates and any additional
product candidates that we may develop will cause toxicities in humans that would preclude or lead to the revocation of regulatory approval
based on preclinical studies or early-stage clinical trials.
Any of these occurrences
may prevent us from obtaining or maintaining regulatory approvals or achieving or maintaining market acceptance of the affected product
candidate and, accordingly, may harm our business, financial condition and prospects significantly.
If we encounter
difficulties enrolling study subjects in our clinical trials, our clinical development activities could be delayed or otherwise be adversely
affected.
Identifying and qualifying
study subjects to participate in clinical trials of product candidates is critical to our success. The timing of initiation and completion
of our clinical trials depends in part on the speed at which we can recruit study subjects to participate in testing product candidates.
We may not be able to initiate or continue clinical trials for product candidates if we are unable to locate and enroll a sufficient number
of eligible study subjects to participate in these clinical trials to their conclusion as required by the FDA or other comparable foreign
regulatory authorities.
Study subjects enrollment
for clinical trials and the ability to initiate or continue clinical trials for product candidates may be affected by many factors, including:
●
size and nature of the patient
population;
●
severity of the disease under
investigation;
●
availability and efficacy of
approved drugs for the disease under investigation;
●
study subject eligibility criteria
for the trial in question as defined in the clinical trial protocol;
●
clinicians' and patients'
perceptions as to the potential advantages of the product candidate being studied in relation to other available therapies, including
any new products that may be approved or other product candidates being investigated for the indications we are investigating;
●
invasive procedures required
to enroll patients and to obtain evidence of the product candidate's performance during the clinical trial;
●
study subject referral practices
of physicians;
●
ability to monitor patients
adequately during and after treatment, including through any follow-up periods;
●
ability to recruit clinical
trial investigators of appropriate competencies and experience;
●
negative results that we may
report in clinical trials of product candidates, which may make it difficult or impossible to recruit and retain subjects in other clinical
trials of that same product candidate;
●
ability to obtain and maintain
study subject consents; and
●
risk that study subjects enrolled
in clinical trials will drop out of the trials before completion or, because they may be late-stage cancer patients, will not survive
the full terms of the clinical trials.
23
Our clinical trials will
compete with other clinical trials for product candidates that are in the same therapeutic areas as our current and potential future product
candidates. This competition will reduce the number and types of patients available to us because some patients who might have opted to
enroll in our trials may instead opt to enroll in a trial conducted by one of our competitors. Since the number of qualified clinical
investigators is limited, we expect to conduct some of our clinical trials at the same clinical trial sites that some of our competitors
use, which will reduce the number of patients who are available for our clinical trials at such sites.
Our inability to enroll
a sufficient number of patients for our clinical trials would result in significant delays or may require us to abandon one or more clinical
trials altogether. Enrollment delays in our clinical trials may result in increased development costs for product candidates or may affect
the timing or outcome of our clinical trials, which could prevent completion of these trials and adversely affect our ability to advance
the development of product candidates, if at all, thereby jeopardize our ability to obtain regulatory approval and the commercialization
of product candidates.
Changes in methods
of product candidate formulation may result in additional costs or delay.
As product candidates
progress through preclinical and clinical trials to marketing approval and commercialization, it is common that various aspects of the
development program are altered along the way in an effort to optimize yield and manufacturing batch size, minimize costs and achieve
consistent quality and results. For example, we may introduce an alternative formulation of one or more product candidates during the
course of our clinical trials. Such changes carry the risk that they will not achieve these intended objectives. Any of these changes
could cause product candidates to perform differently and affect the results of clinical trials conducted with the altered materials.
This could delay completion of clinical trials, require the conduct of bridging clinical trials or the repetition of one or more clinical
trials, increase clinical trial costs, delay approval of product candidates and jeopardize our ability to commercialize product candidates,
if approved.
Risks Related to the
Manufacturing, Commercialization and Marketing of Product Candidates
We have never commercialized
a product candidate as a company before and currently lack the necessary expertise, personnel and resources to successfully commercialize
any products on our own or together with suitable collaborators.
We have never commercialized
a product candidate as a company. For product candidates for which we retain commercialization rights and marketing approval, we will
have to develop our own sales, marketing and supply organization or outsource these activities to a third party. We may also license certain
rights with respect to product candidates to collaborators, and, if so, we will rely on the assistance and guidance of those collaborators.
Factors that may affect
our ability to commercialize product candidates, if approved, on our own include recruiting and retaining adequate numbers of effective
sales and marketing personnel, developing adequate educational and marketing programs to increase public acceptance of our approved product
candidates, ensuring regulatory compliance of our company, employees and third parties under applicable healthcare laws, and other unforeseen
costs associated with creating an independent sales and marketing organization.
Establishing an internal
sales or marketing team with technical expertise and supporting distribution capabilities to commercialize product candidates will be
expensive and time-consuming and will require significant attention of our executive officers to manage. Any failure or delay in the development
of our internal sales, marketing and distribution capabilities could adversely impact the commercialization of any product candidates
that we obtain approval to market if we do not have arrangements in place with third parties to provide such services on our behalf. Alternatively,
if we choose to collaborate, either globally or on a territory-by-territory basis, with third parties that have direct sales forces and
established distribution systems, either to augment our own sales force and distribution systems or in lieu of our own sales force and
distribution systems, we will be required to negotiate and enter into arrangements with such third parties relating to the proposed collaboration
and such arrangements may prove to be less profitable than commercializing the product on our own. If we are unable to enter into such
arrangements when needed, on acceptable terms or at all, we may not be able to successfully commercialize any product candidates that
receive regulatory approval, or any such commercialization may experience delays or limitations. If we are unable to successfully commercialize
our approved product candidates, either on our own or through collaborations with one or more third parties, our future revenue will suffer,
and we may incur significant additional losses.
24
The manufacture
of drugs is complex, and our third-party manufacturers may encounter difficulties in production, which may delay or prevent our ability
to provide adequate supply of product candidates for clinical trials or our products for patients, if approved.
Manufacturing drugs,
especially in large quantities, is complex and may require the use of innovative technologies. Each lot of an approved drug product must
undergo thorough testing for identity, strength, quality, purity and potency. Manufacturing drugs requires facilities specifically designed
for and validated for this purpose, as well as sophisticated quality assurance and quality control procedures. Slight deviations anywhere
in the manufacturing process, including filling, labeling, packaging, storage and shipping and quality control and testing, may result
in lot failures, product recalls or spoilage. When changes are made to the manufacturing process, we may be required to provide preclinical
and clinical data showing the comparable identity, strength, quality, purity or potency of the products before and after such changes.
If microbial, viral or other contaminations are discovered at the facilities of our manufacturer, such facilities may need to be closed
for an extended period of time to investigate and remedy the contamination, which could delay clinical trials and adversely harm our business.
The use of biologically derived ingredients can also lead to allegations of harm, including infections or allergic reactions, or closure
of product facilities due to possible contamination. If our third-party manufacturers are unable to produce sufficient quantities for
clinical trials or for commercialization as a result of these challenges, or otherwise, our development and commercialization efforts
would be impaired, which would have an adverse effect on our business, financial condition, results of operations and growth prospects.
See "
—Risks Related to Our Reliance on Third Parties—We contract with third parties for the manufacture of our only
product candidate for preclinical studies and expect to continue to do so for additional preclinical studies, anticipated clinical trials
and ultimately for commercialization. This reliance on third parties increases the risk that we will not have sufficient quality and quantities
of product candidates or such quantities at an acceptable cost, which could delay, prevent or impair our development or commercialization
efforts.
"
The market opportunities
for any product candidates we develop, if approved, may be limited to certain smaller patient subsets and may be smaller than we estimate
them to be.
When cancer is detected
early (referred to as localized disease), conventional treatments, which include chemotherapy, hormone therapy, surgery and radiation
therapy and/or selected targeted therapies, may be adequate to cure the patient in many cases. However, if cancer has spread to other
areas (advanced or metastatic disease), initial cancer treatments may not be sufficient and other cancer therapies may be considered.
Cancer therapies are sometimes characterized by line of therapy (for example, first-, second-, third-, fourth- or fifth-line). The FDA
and other comparable foreign regulatory authorities often approve cancer therapies for a particular line of treatment. Typically, drug
approvals are initially granted for use in later lines of treatment. With additional evidence of significant efficacy and safety from
clinical trials, pharmaceutical and biotechnology companies can seek, and sometimes gain, approval for use in earlier lines of treatment.
We plan to initially
seek approval of our product candidates and, in most instances, any additional product candidates that we may develop, license or acquire
where prior therapies have had limited clinical benefit or lost their effectiveness. For those product candidates that prove to be sufficiently
safe and effective, if any, we would expect to seek approval as earlier lines of therapy. For example, our initial registration strategy
with respect to lomonitinib will focus on relapsed and refractory AML, or R/R AML, where there is currently no available therapy
and therefore a significant unmet medical need. There is no guarantee that lomonitinib, our licensed product candidates, including
lonitoclax, or any product candidates we may develop in the future, even if approved in later lines of therapy, would be approved
for an earlier line of therapy, and prior to any such approvals we may have to conduct additional clinical trials that may be costly,
time-consuming and subject to risk.
Our projections of both
the number of people who have AML, MDS, CLL and the cancers we may target in the future, as well as the subset of people with these cancers
in a position to receive a particular line of therapy and who have the potential to benefit from treatment with product candidates, are
based on our beliefs and estimates. These estimates have been derived from a variety of sources, which could include scientific literature,
surveys of clinics or market research, and may prove to be incorrect. Further, new studies may change the estimated incidence or prevalence
of the cancers that we are targeting. The potentially addressable patient population for product candidates may be limited or may not
be amenable to treatment with product candidates, particularly if product candidates are only approved for later lines of treatment.
Consequently, even if product candidates are approved, the number of patients that may be eligible for treatment with product candidates
may turn out to be much lower than expected. In addition, we have not conducted market research to determine how treating physicians
would expect to prescribe a product that is approved for multiple tumor types if there are different lines of approved therapies for
each such tumor type.
25
Product candidates, if approved, may not achieve adequate market acceptance among physicians, patients, healthcare payors and others
in the medical community necessary for commercial success.
Even if product candidates
ultimately receive regulatory approval, they may not gain adequate market acceptance among physicians, patients, third-party payors and
others in the medical community. The degree of market acceptance of any product candidates that may be approved in the future will depend
on a number of factors, including:
●
the efficacy and safety profile
as demonstrated in clinical trials compared to alternative treatments;
●
the timing of market introduction
of the product candidate, if approved, as well as competitive products;
●
the indications for which a
product candidate is approved;
●
restrictions on the use of
product candidates in the labeling approved by regulatory authorities, such as boxed warnings or contraindications in labeling, or a
risk evaluation and mitigation strategy, or REMS, if any, which may not be required of alternative treatments and competitor products;
●
the potential and perceived
advantages of product candidates over alternative treatments;
●
the cost of product candidates,
if approved, in relation to alternative treatments;
●
the availability of coverage
and adequate reimbursement by third-party payors, including government authorities;
●
the availability of an approved
product for evaluation as a combination therapy;
●
relative convenience and ease
of administration;
●
the willingness of the target
patient population to try new therapies and undergo required diagnostic screening to determine treatment eligibility and of physicians
to prescribe these therapies and diagnostic tests;
●
the effectiveness of sales
and marketing efforts;
●
unfavorable publicity relating
to product candidates; and
●
the approval of other new therapies
for the same indications.
If any product candidates
are approved but do not achieve an adequate level of acceptance by physicians, hospitals, healthcare payors and patients, we may not generate
or derive sufficient revenue from that product candidate, and our financial results could be negatively impacted.
26
Lomonitinib, our
licensed product candidates, including lonitoclax, and any product candidates we develop, license or acquire may become subject to unfavorable
third-party coverage and reimbursement practices.
The availability and
extent of coverage and adequate reimbursement by third-party payors, including government health care programs, private health insurers,
managed care organizations and other third-party payors is essential for most patients to be able to afford expensive treatments. Sales
of any product candidates that receive marketing approval will depend substantially, both in the United States and internationally, on
the extent to which the costs of such product candidates will be covered and reimbursed by third-party payors. If coverage is not available,
or is available only in limited circumstances, we may not be able to successfully commercialize product candidates.
There is significant
uncertainty related to third-party payor coverage and reimbursement of newly approved products. Reimbursement by a third-party payor may
depend upon a number of factors, including the third-party payor's determination that use of a product is (1) a covered benefit
under its health plan; (2) safe, effective and medically necessary; (3) appropriate for the specific patient; (4) cost-effective; and
(5) neither experimental nor investigational. For example, in order to obtain reimbursement, physicians may need to show that patients
have superior treatment outcomes with our products compared to standard of care drugs, including lower-priced generic versions of standard
of care drugs. Additionally, eligibility for coverage does not imply that any drug will be paid for in all cases or at a rate that covers
our costs, including research, development, manufacture, sale and distribution. Interim reimbursement levels for new drugs, if applicable,
may also not be sufficient to cover our costs and may not be made permanent. Reimbursement rates may vary according to the use of the
drug and the clinical setting in which it is used, may be based on reimbursement levels already set for lower cost drugs and may be incorporated
into existing payments for other services.
Moreover, in the United
States, principal decisions about Medicare reimbursement for new products are typically made by or on behalf of the Centers for Medicare
& Medicaid Services, or CMS, an agency within the U.S. Department of Health and Human Services, or HHS. CMS and regional contractors
responsible for administering the Medicare program decide whether and to what extent a new product will be covered and reimbursed under
Medicare, and private third-party payors often follow these decisions regarding coverage and reimbursement to a substantial degree. However,
one third-party payor's determination to provide coverage for a product candidate does not ensure that other payors will also provide
coverage for the product candidate. No uniform policy of coverage and reimbursement for products exists among third-party payors, and
coverage and reimbursement levels for products can differ significantly from payor to payor. As a result, the coverage determination process
is often time-consuming and costly. This process may require us to provide scientific and clinical support for the use of our products
to each third-party payor separately, with no assurance that coverage and adequate reimbursement will be available consistently or obtained
in the first instance. Reimbursement agencies in Europe may be more conservative than CMS. For example, a number of cancer drugs have
been approved for reimbursement in the United States and have not been approved for reimbursement in certain European countries.
Third-party payors are
increasingly examining the medical necessity and reviewing the cost effectiveness of medical product candidates. There may be especially
significant delays in obtaining coverage and reimbursement for newly approved drugs. Third-party payors may limit coverage to specific
product candidates on an approved list, known as a formulary, which might not include all FDA-approved drugs for a particular indication.
We may need to conduct expensive pharmaco-economic studies to demonstrate the cost effectiveness of our products. Notwithstanding the
results of these studies, product candidates may not be considered medically necessary or cost effective. We cannot be sure that coverage
and reimbursement will be available for any product that we commercialize and, if reimbursement is available, what the level of reimbursement
will be.
In addition, companion
diagnostic tests require coverage and reimbursement separate and apart from the coverage and reimbursement for their companion pharmaceutical
or biological products. Similar challenges to obtaining coverage and reimbursement, applicable to pharmaceutical or biological products,
will apply to companion diagnostics. Further, if any companion diagnostic provider is unable to obtain reimbursement or is inadequately
reimbursed, that may limit the availability of such companion diagnostic, which would negatively impact prescriptions for product candidates,
if approved
If we are unable to establish
or sustain coverage and adequate reimbursement for any product candidates from third-party payors, the adoption of those products and
sales revenue will be adversely affected, which, in turn, could adversely affect the ability to market or sell those product candidates,
if approved. Coverage policies and third-party payor reimbursement rates may change at any time. Any of these could have a material and
adverse effect on our business, financial condition, results of operations and prospects.
27
Downward pressure
on healthcare costs may negatively affect the coverage and pricing of product candidates.
The downward pressure
on healthcare costs in general, particularly prescription drugs and surgical procedures and other treatments, has become very intense.
Legislative or regulatory requirements related to pricing and reimbursement may limit our ability to recoup our investment in one or more
product candidates and therefore affect such product candidate's commercial viability, if approved. Moreover, third-party payors
are increasingly requiring that drug companies provide them with predetermined discounts from list prices and are challenging the prices
charged for medical products. We expect to experience pricing pressures in connection with the commercialization of any product candidates,
which could have a material and adverse effect on our business, financial condition, results of operations and prospects.
As federal and state
governments implement additional health care cost containment measures, including measures related to prescription drug pricing or reimbursement,
we cannot be sure that product candidates, if approved, will be covered by private or public payors, and if covered, whether the reimbursement
will be adequate or competitive with other marketed products. Moreover, net prices for drugs may be reduced by mandatory discounts or
rebates required by government healthcare programs or private payors or other changes such as relaxation of restrictions on imports of
drugs from countries where they may be sold at lower prices than in the United States. These and other actions by federal and state governments
and health plans may put additional downward pressure on pharmaceutical pricing and health care costs, which could negatively impact coverage
and reimbursement for our products if approved, our revenue, and our ability to compete with other marketed products and to recoup the
costs of our research and development. For further discussion, see "—We may face difficulties from changes to current regulations
and future legislation. Healthcare legislative measures aimed at reducing healthcare costs may have a material adverse effect on our business
and results of operations."
Outside the United States,
the commercialization of therapeutics is generally subject to extensive governmental price controls as part of national health systems
and other market regulations, and we believe the increasing emphasis on cost containment initiatives in Europe, Canada and other countries
has and will continue to put pressure on the pricing and usage of therapeutics, such as our product candidate and any additional product
candidates that we may develop. For example, to obtain reimbursement or pricing approval in some countries, we may be required to conduct
a clinical trial that compares the cost-effectiveness of our product candidate to other available therapies. In general, product prices
under such systems are substantially lower than in the United States. Prescription pharmaceutical pricing may also remain subject to continuing
governmental control even after initial approval is granted. Some countries that allow companies to fix their own prices for products
continue to monitor and control company profits. Additional foreign price controls or other changes in pricing regulation could restrict
the amount that we are able to charge for product candidates. Additionally, pricing negotiations with governmental authorities can take
considerable time after a product receives marketing approval. As a result, we might obtain marketing approval for a product in a particular
country, but then be subject to price regulations that delay our commercial launch of the product, possibly for lengthy time periods.
Accordingly, in markets outside the United States, the pricing and reimbursement for our products may be reduced compared with the United
States and may be insufficient to generate commercially reasonable revenue and profits.
A variety of risks
associated with marketing product candidates internationally could materially adversely affect our business.
We may seek regulatory
approval of product candidates outside of the United States and, accordingly, we expect that we will be subject to additional risks related
to operating in foreign countries if we obtain the necessary approvals, including:
●
differing regulatory requirements
and reimbursement regimes in foreign countries, such as the lack of pathways for accelerated drug approval, may result in foreign regulatory
approvals taking longer and being more costly than obtaining approval in the United States;
●
foreign regulatory authorities
may disagree with the design, implementation or results of our clinical trials or our interpretation of data from nonclinical studies
or clinical trials;
●
approval policies or regulations
of foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval;
28
●
unexpected changes in tariffs,
trade barriers, price and exchange controls and other regulatory requirements;
●
economic weakness, including
inflation, or political instability in particular foreign economies and markets;
●
compliance with legal requirements
applicable to privacy, data protection, information security and other matters;
●
compliance with tax, employment,
immigration and labor laws for any employee living or traveling abroad;
●
foreign taxes, including withholding
of payroll taxes;
●
foreign currency fluctuations,
which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country;
●
difficulties staffing and managing
foreign operations;
●
complexities associated with
managing multiple payor reimbursement regimes and government payors in foreign countries;
●
workforce uncertainty in countries
where labor unrest is more common than in the United States;
●
potential liability under the
Foreign Corrupt Practices Act or comparable foreign regulations;
●
challenges enforcing our contractual
and intellectual property rights, especially in those foreign countries that do not recognize and protect intellectual property rights
to the same extent as the United States;
●
production shortages resulting
from any events affecting raw material supply or manufacturing capabilities abroad; and
●
business interruptions resulting
from geo-political actions, including war, terrorism and the outbreak of other hostilities, trade policies, treaties and tariffs.
These and other risks
associated with international operations may materially adversely affect our ability to attain or maintain profitable operations, our
product development efforts or our potential clinical trials.
Risks Related to Regulatory
Approval Process and Other Healthcare Compliance Matters
We may be unable
to obtain U.S. or foreign regulatory approval and, as a result, may be unable to commercialize product candidates.
We have not submitted
for, or obtained, regulatory approval for any product candidate, and it is possible that none of our product candidates will ever obtain
regulatory approval.
Product candidates are
and will continue to be subject to extensive governmental regulations relating to, among other things, research, testing, development,
manufacturing, safety, efficacy, approval, recordkeeping, reporting, labeling, storage, packaging, advertising and promotion, pricing,
marketing and distribution of drugs. Rigorous preclinical testing and clinical trials and an extensive regulatory approval process must
be successfully completed in the United States and in many foreign jurisdictions before a new drug can be approved for marketing. Satisfaction
of these and other regulatory requirements is costly, time-consuming, uncertain and subject to unanticipated delays.
Moreover, the standards
that the FDA and its foreign counterparts use when evaluating clinical trial data can, and often do, change during drug development, which
makes it difficult to predict with any certainty how they will be applied. We may also encounter unexpected delays or increased costs
due to new government regulations, including future legislation or administrative action, or changes in applicable FDA or any other regulatory
policy during the period of drug development, clinical trials and regulatory review and approval. Accordingly, the time required to obtain
approvals from the FDA or any other regulatory authorities is unpredictable and will take many years, depending upon the type, complexity
and novelty of the product candidate. We cannot provide any assurance that any of our current or future product candidate will progress
through required clinical testing and obtain the regulatory approvals necessary for us to begin selling them.
29
Regulatory authorities
have substantial discretion in the approval process. Applications for product candidates could fail to receive regulatory approval for
many reasons, including the following:
●
the FDA or other comparable
foreign regulatory authorities may disagree with the design, implementation or results of our clinical trials;
●
the FDA or other comparable
foreign regulatory authorities may determine that product candidates are not safe and effective or have undesirable or unintended side
effects, toxicities or other characteristics that preclude our obtaining marketing approval or prevent or limit commercial use;
●
the population studied in the
clinical trial may not be sufficiently broad or representative to assure efficacy and safety in the full population for which we seek
approval;
●
the FDA or other comparable
foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials or may decide
that our data are insufficient for approval and require additional preclinical, clinical or other data;
●
we may be unable to demonstrate
to the FDA or other comparable foreign regulatory authorities that our product candidate's risk-benefit ratio for its proposed
indication is acceptable;
●
the FDA or other comparable
foreign regulatory authorities may fail to approve the manufacturing processes, test procedures and specifications or facilities of third-party
manufacturers with which we contract for clinical and commercial supplies; and
●
the approval policies or regulations
of the FDA or other comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient
for approval.
Any delay or failure
in seeking or obtaining required approvals would have a material and adverse effect on our ability to generate revenue from any particular
product candidates we are developing and for which we are seeking approval. Furthermore, any regulatory approval to market a drug may
be approved for a narrower patient population than we originally requested or subject to significant limitations on the approved uses
or indications for which we may market, promote and advertise the drug or the labeling or other restrictions. In addition, the FDA has
the authority to require a REMS as part of approving an NDA, or after approval, which may impose further requirements or restrictions
on the distribution or use of an approved drug. These requirements or restrictions might include limiting prescribing to certain physicians
or medical centers that have undergone specialized training, limiting treatment to patients who meet certain safe-use criteria and requiring
treated patients to enroll in a registry. These limitations and restrictions may significantly limit the size of the market for the drug
and affect reimbursement by third-party payors.
There are also numerous
foreign regulatory requirements governing, among other things, the conduct of clinical trials, manufacturing and marketing authorization,
pricing and third-party reimbursement. The foreign regulatory approval process varies among countries, and generally includes all of the
risks associated with FDA approval described above as well as risks attributable to the satisfaction of local regulations in foreign jurisdictions.
Moreover, the time required to obtain approval may differ from that required to obtain FDA approval.
We may develop
our current or future product candidates in combination with other therapies, which would expose us to additional risks.
We may develop our current
or future product candidates in combination with one or more currently approved cancer therapies or therapies in development. Even if
any of our current or future product candidates were to receive marketing approval or be commercialized for use in combination with other
existing therapies, we would continue to be subject to the risks that the FDA or other comparable foreign regulatory authorities could
revoke approval of the therapy used in combination with any product candidates, or safety, efficacy, manufacturing or supply issues could
arise with these existing therapies. In addition, it is possible that existing therapies with which product candidates are approved for
use could themselves fall out of favor or be relegated to later lines of treatment. This could result in the need to identify other combination
therapies for product candidates or our own products being removed from the market or being less successful commercially.
30
We may also evaluate
our current or future product candidates in combination with one or more other cancer therapies that have not yet been approved for marketing
by the FDA or other comparable foreign regulatory authorities. We will not be able to market and sell any product candidate in combination
with any such unapproved cancer therapies that do not ultimately obtain marketing approval.
If the FDA or other comparable
foreign regulatory authorities do not approve or withdraw their approval of these other therapies, or if safety, efficacy, commercial
adoption, manufacturing or supply issues arise with the therapies we choose to evaluate in combination with any of our current or future
product candidates, we may be unable to obtain approval of or successfully market any one or all of the current or future product candidates
we develop. Additionally, if the third-party providers of therapies or therapies in development used in combination with our current or
future product candidates are unable to produce sufficient quantities for clinical trials or for commercialization of our current or future
product candidates, or if the cost of combination therapies are prohibitive, our development and commercialization efforts would be impaired,
which would have an adverse effect on our business, financial condition, results of operations and growth prospects.
The FDA and other
comparable foreign regulatory authorities may not accept data from trials conducted in locations outside of their jurisdiction.
We anticipate we will
conduct clinical trials of our product candidate and any additional product candidates that we may develop both in and outside the United
States. The acceptance of study data by the FDA or other comparable foreign regulatory authority from clinical trials conducted outside
of their respective jurisdictions may be subject to certain conditions. In cases where data from United States clinical trials are intended
to serve as the basis for marketing approval in the foreign countries outside the United States, the standards for clinical trials and
approval may be different. There can be no assurance that any United States or foreign regulatory authority would accept data from trials
conducted outside of its applicable jurisdiction. If the FDA or other comparable foreign regulatory authority does not accept such data,
it would result in the need for additional trials, which would be costly and time-consuming and delay aspects of our business plan, and
which may result in product candidates not receiving approval or clearance for commercialization in the applicable jurisdiction.
Obtaining and maintaining
regulatory approval of product candidates in one jurisdiction does not mean that we will be successful in obtaining regulatory approval
of product candidates in other jurisdictions.
Obtaining and maintaining
regulatory approval of product candidates in one jurisdiction does not guarantee that we will be able to obtain or maintain regulatory
approval in any other jurisdiction. For example, even if the FDA grants marketing approval of a product candidate, comparable regulatory
authorities in foreign jurisdictions must also approve the manufacturing, marketing and promotion and reimbursement of the product candidate
in those countries. However, a failure or delay in obtaining regulatory approval in one jurisdiction may have a negative effect on the
regulatory approval process in others. Approval procedures vary among jurisdictions and can involve requirements and administrative review
periods different from those in the United States, including additional preclinical studies or clinical trials as clinical trials conducted
in one jurisdiction may not be accepted by regulatory authorities in other jurisdictions. In many jurisdictions outside the United States,
a product candidate must be approved for reimbursement before it can be approved for sale in that jurisdiction. In some cases, the price
that we intend to charge for our products is also subject to governmental approval.
Obtaining foreign regulatory
approvals and establishing and maintaining compliance with foreign regulatory requirements could result in significant delays, difficulties
and costs for us and could delay or prevent the introduction of our products in certain countries. If we or any collaborator fails to
comply with the regulatory requirements in international markets or fail to receive applicable marketing approvals, our target market
will be reduced and our ability to realize the full market potential of our potential product candidates will be harmed.
31
Even if product
candidates receive regulatory approval, they will be subject to significant post-marketing regulatory requirements and oversight.
Any regulatory approvals
that we may receive for product candidates will require the submission of reports to regulatory authorities and on-going surveillance
to monitor the safety and efficacy of the product candidate, may contain significant limitations related to use restrictions for specified
age groups, warnings, precautions or contraindications, and may include burdensome post-approval study or risk management requirements
and regulatory inspection. In addition, if the FDA or other comparable foreign regulatory authorities approve product candidates, the
manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion, import, export and
recordkeeping for product candidates will be subject to extensive and ongoing regulatory requirements. These requirements include submissions
of safety and other post-marketing information and reports, as well as on-going compliance with cGMPs and GCPs for any clinical trials
that we conduct post-approval. In addition, manufacturers of drug products and their facilities are subject to continual review and periodic,
unannounced inspections by the FDA and other comparable foreign regulatory authorities for compliance with cGMP regulations and standards.
If we or a regulatory agency discover previously unknown problems with a product, such as adverse events of unanticipated severity or
frequency, or problems with the facilities where the product is manufactured, a regulatory agency may impose restrictions on that product,
the manufacturing facility or us, including requiring recall or withdrawal of the product from the market or suspension of manufacturing.
Later discovery of previously
unknown problems with any approved candidate, including adverse events of unanticipated severity or frequency, or with our third-party
manufacturers or manufacturing processes, or failure to comply with FDA and other comparable foreign regulatory requirements may subject
our company to administrative or judicially imposed sanctions, including:
●
delays in or the rejection
of product approvals;
●
restrictions on our ability
to conduct clinical trials, including full or partial clinical holds on ongoing or planned trials;
●
restrictions on the products,
manufacturers or manufacturing process;
●
warning or untitled letters;
●
civil and criminal penalties;
●
injunctions;
●
suspension or withdrawal of
regulatory approvals;
●
product seizures, detentions
or import bans;
●
voluntary or mandatory product
recalls and publicity requirements;
●
total or partial suspension
of production;
●
imposition of restrictions
on operations, including costly new manufacturing requirements;
●
revisions to the labeling,
including limitation on approved uses or the addition of additional warnings, contraindications or other safety information, including
boxed warnings;
●
imposition of a REMS, which
may include distribution or use restrictions; and
●
requirements to conduct additional
post-market clinical trials to assess the safety of the product.
The FDA and any other
regulatory authorities' policies may change and additional government regulations may be enacted that could prevent, limit or delay
regulatory approval of product candidates. We cannot predict the likelihood, nature or extent of government regulation that may arise
from future legislation or administrative action, either in the United States or abroad. If we are slow or unable to adapt to changes
in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we
may lose any marketing approval that we may have obtained and we may not achieve or sustain profitability. The occurrence of any event
or penalty described above may inhibit our ability to commercialize product candidates, if approved, and generate revenue from sales of
approved products.
32
The FDA and other
comparable foreign regulatory agencies actively enforce the laws and regulations governing advertising and promotion, including those
prohibiting the promotion of off-label uses.
The FDA and other comparable
foreign regulatory agencies strictly regulate the promotion and advertisement of prescription products, such as our products, if approved.
In particular, a product may not be promoted in the United States for uses that are not approved by the FDA as reflected in the product's
approved labeling, or in other jurisdictions for uses that differ from the labeling or uses approved by the applicable regulatory agencies.
While physicians may prescribe products for off-label uses, the FDA and any other regulatory agencies actively enforce laws and regulations
that prohibit the promotion of off-label uses by manufacturers, including promotional communications made by companies' sales force
with respect to off-label uses that are not consistent with the approved labeling. If we are found to have promoted such off-label uses,
we may become subject to significant liability. The U.S. federal government has levied large civil and criminal fines against companies
for alleged improper promotion of off-label use and has enjoined several companies from engaging in off-label promotion. The U.S. federal
government and state governments have also required that drug manufacturers enter into consent decrees or permanent injunctions under
which specified promotional conduct is changed or curtailed. If we cannot successfully manage the promotion of product candidates, if
approved, we could become subject to significant liability, which would materially adversely affect our business and financial condition.
If we are required
by the FDA or other comparable foreign regulatory authority to obtain approval of a companion diagnostic test in connection with approval
of any product candidates or a group of therapeutic products, and we do not obtain or we face delays in developing and obtaining approval
of a diagnostic test, we will not be able to commercialize the product candidate and our ability to generate revenue will be materially
impaired.
If we are required by
the FDA or other comparable foreign regulatory authority to obtain approval of a companion diagnostic test in connection with approval
of any product candidates, such companion diagnostic test would be used during our more advanced phase clinical trials as well as in connection
with the commercialization of product candidates. Companion diagnostics are regulated as medical devices by FDA and, unless an exemption
applies, require premarket clearance or approval by FDA. The two primary types of FDA marketing authorization applicable to a medical
device are clearance of a premarket notification under section 510(k) of the Federal Food, Drug, and Cosmetic Act, as amended, or the
FDCA, or 510(k), and approval of a premarket approval application, or PMA. According to FDA guidance, if the FDA determines that a companion
diagnostic device is essential to the safe and effective use of a novel therapeutic product or indication, the FDA generally will not
approve the therapeutic product or new therapeutic product indication if the companion diagnostic is not also approved or cleared at the
same time the product candidate is approved. To date, the FDA has required PMA approval of all companion diagnostic tests for cancer therapies.
Various foreign regulatory authorities, including the EMA in Europe, also regulate in vitro companion diagnostics as medical devices and,
under those regulatory frameworks, will likely require the conduct of clinical trials to demonstrate the safety and effectiveness of our
current diagnostics and any future diagnostics we may develop, which we expect will require separate regulatory clearance or approval
prior to commercialization.
The approval of a companion
diagnostic as part of the therapeutic product's labeling limits the use of the therapeutic product to only those patients who express
certain biomarkers or the specific genomic alteration that the companion diagnostic was developed to detect. If the FDA or other comparable
foreign regulatory authority requires approval of a companion diagnostic for any product candidates, whether before or concurrently with
approval of the product candidate, we and our collaborators, may encounter difficulties in developing and obtaining approval for these
companion diagnostics. Any delay or failure by us or third-party collaborators to develop or obtain regulatory approval of a companion
diagnostic could cause or contribute to delayed enrollment of our clinical trials, may prevent us from initiating a pivotal trial or may
delay or prevent approval or continued marketing of our related product candidates.
Further, in April 2020,
the FDA issued new guidance on developing and labeling companion diagnostics for a specific group of oncology therapeutic products, including
recommendations to support a broader labeling claim rather than individual therapeutic products. We will continue to evaluate the impact
of this guidance on our companion diagnostic development and strategy. This guidance and future issuances from the FDA and other comparable
foreign regulatory authorities may impact our development of a companion diagnostic for product candidates and result in delays in regulatory
approval. We may be required to conduct additional studies to support a broader labeling claim. Also, to the extent other approved diagnostics
are able to broaden their labeling claims to include our approved drug products, we may be forced to abandon our companion diagnostic
development plans or we may not be able to compete effectively upon approval, which could adversely impact our ability to generate revenue
from the sale of our approved products and our business operations.
33
To be successful in developing,
validating, obtaining approval of and commercializing a companion diagnostic, we or our collaborators will need to address a number of
scientific, technical, regulatory and logistical challenges. We have no prior experience with medical device or diagnostic test development.
If we choose to develop and seek FDA approval for companion diagnostic tests on our own, we will require additional personnel. Additionally,
we may rely on third parties for the design, development and manufacture of companion diagnostic tests for product candidates that may
require such tests. If we enter into such collaborative agreements, we will be dependent on the sustained cooperation and effort of our
collaborators in developing and obtaining approval for these companion diagnostics. It may be necessary to resolve issues such as selectivity/specificity,
analytical validation, reproducibility, or clinical validation of companion diagnostics during the development and regulatory approval
processes. Moreover, even if data from preclinical studies and early clinical trials appear to support development of a companion diagnostic
for a product candidate, data generated in later clinical trials may fail to support the analytical and clinical validation of the companion
diagnostic. We and our collaborators may encounter difficulties in developing, obtaining regulatory approval for, manufacturing and commercializing
companion diagnostics similar to those we face with respect to product candidates themselves, including issues with achieving regulatory
clearance or approval, production of sufficient quantities at commercial scale and with appropriate quality standards, and in gaining
market acceptance. In addition, a diagnostic company with whom we contract may decide to discontinue selling or manufacturing the companion
diagnostic test that we anticipate using in connection with development and commercialization of product candidates or our relationship
with such diagnostic company may otherwise terminate. We may not be able to enter into arrangements with another diagnostic company to
obtain supplies of an alternative diagnostic test for use in connection with the development and commercialization of product candidates
or do so on commercially reasonable terms, which could adversely affect and/or delay the development or commercialization of product candidates.
If we are unable to successfully
develop companion diagnostics for product candidates, or experience delays in doing so, the development of product candidates may be adversely
affected, product candidates may not obtain marketing approval, and we may not realize the full commercial potential of any product candidates
that obtain marketing approval. As a result, our business, results of operations and financial condition could be materially harmed.
Even if we seek
and receive accelerated approval from the FDA or other comparable foreign regulatory authorities, the FDA or such other comparable foreign
regulatory authorities may seek to withdraw accelerated approval in certain circumstances.
Where possible, we plan
to pursue accelerated development strategies in areas of high unmet need. We may seek an accelerated approval pathway for one or more
product candidates from the FDA or other comparable foreign regulatory authorities. Under the accelerated approval provisions in the Federal
Food, Drug, and Cosmetic Act, and the FDA's implementing regulations, the FDA may grant accelerated approval to a product candidate
designed to treat a serious or life-threatening condition that provides meaningful therapeutic benefit over available therapies upon a
determination that the product candidate has an effect on a surrogate endpoint or intermediate clinical endpoint that is reasonably likely
to predict clinical benefit. The FDA considers a clinical benefit to be a positive therapeutic effect that is clinically meaningful in
the context of a given disease, such as irreversible morbidity or mortality.
For the purposes of accelerated
approval, a surrogate endpoint is a marker, such as a laboratory measurement, radiographic image, physical sign, or other measure that
is thought to predict clinical benefit, but is not itself a measure of clinical benefit. An intermediate clinical endpoint is a clinical
endpoint that can be measured earlier than an effect on irreversible morbidity or mortality that is reasonably likely to predict an effect
on irreversible morbidity or mortality or other clinical benefit. The accelerated approval pathway may be used in cases in which the advantage
of a new drug over available therapy may not be a direct therapeutic advantage, but is a clinically important improvement from a patient
and public health perspective. If granted, accelerated approval is usually contingent on the sponsor's agreement to conduct, in
a diligent manner, additional post-approval confirmatory studies to verify and describe the drug's clinical benefit. If such post-approval
studies fail to confirm the drug's clinical benefit, the FDA may withdraw its approval of the drug.
34
Prior to seeking accelerated
approval, we will seek feedback from the FDA or other comparable foreign regulatory authorities and will otherwise evaluate our ability
to seek and receive such accelerated approval. There can be no assurance that after our evaluation of the feedback and other factors we
will decide to pursue or submit an NDA for accelerated approval or any other form of expedited development, review or approval. Similarly,
there can be no assurance that after subsequent feedback from the FDA or other comparable foreign regulatory authorities, we will continue
to pursue or apply for accelerated approval, even if we initially decide to do so. Furthermore, if we decide to submit an application
for accelerated approval or under another expedited regulatory designation (for example, Fast Track designation, Breakthrough Therapy
designation), there can be no assurance that such submission or application will be accepted or that any expedited development, review
or approval will be granted on a timely basis, or at all. The FDA or other comparable foreign regulatory authorities could also require
us to conduct further studies prior to considering our application or granting approval of any type. A failure to obtain accelerated approval
or any other form of expedited development, review or approval for our product candidate would result in a longer time period to commercialization
of such product candidate, could increase the cost of development of such product candidate and could harm our competitive position in
the marketplace.
We may seek Fast
Track designation from the FDA for one or more product candidates. Even if one or more product candidates receive Fast Track designation,
we may be unable to obtain or maintain the benefits associated with the Fast Track designation.
Fast Track designation
is designed to facilitate the development and expedite the review of therapies for serious conditions and fill an unmet medical need.
Programs with Fast Track designation may benefit from early and frequent communications with the FDA, potential priority review and the
ability to submit a rolling application for regulatory review. Fast Track designation applies to both the product candidate and the specific
indication for which it is being studied. If any product candidates receive Fast Track designation but do not continue to meet the criteria
for Fast Track designation, or if our clinical trials are delayed, suspended or terminated, or put on clinical hold due to unexpected
adverse events or issues with clinical supply, we will not receive the benefits associated with the Fast Track program. Furthermore, Fast
Track designation does not change the standards for approval. Fast Track designation alone does not guarantee qualification for the FDA's
priority review procedures.
Fast Track designation
is within the discretion of the FDA. Accordingly, even if we believe that a product candidate meets the criteria for this designation,
the FDA may disagree and instead determine not to make such designation. Further, even if we receive a designation, the receipt of such
designation for a product candidate may not result in a faster development or regulatory review or approval process compared to products
considered for approval under conventional FDA procedures and does not assure ultimate approval by the FDA. In addition, even if any product
candidate qualifies for Fast Track designation, the FDA may later decide that the product candidates no longer meet the conditions for
qualification or decide that the time period for FDA review or approval will not be shortened.
A Breakthrough
Therapy designation by the FDA, even if granted for any product candidates, may not lead to a faster development or regulatory review
or approval process and it does not increase the likelihood that product candidates will receive marketing approval.
We may seek Breakthrough
Therapy designation for one or more of our current or future product candidates. A breakthrough therapy is defined as a drug or biologic
that is intended, alone or in combination with one or more other drugs or biologics, to treat a serious or life-threatening disease or
condition and preliminary clinical evidence indicates that the drug or biologic may demonstrate substantial improvement over existing
therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.
Designation as a Breakthrough
Therapy is largely within the discretion of the FDA. Accordingly, even if we believe that a product candidate meets the criteria for designation
as a Breakthrough Therapy, the FDA may disagree and instead determine not to make such designation. In any event, the receipt of a Breakthrough
Therapy designation for a product candidate may not result in a faster development process, review or approval compared to candidate products
considered for approval under non-expedited FDA review procedures and does not assure ultimate approval by the FDA. In addition, even
if one or more product candidates qualify as breakthrough therapies, the FDA may later decide that the product no longer meets the conditions
for qualification and revoke the designation.
35
We may not be able
to obtain orphan drug designation or obtain or maintain orphan drug exclusivity for product candidates and, even if we do, that exclusivity
may not prevent the FDA or other comparable foreign regulatory authorities, from approving competing products.
Regulatory authorities
in some jurisdictions, including the United States and the EU, may designate drugs for relatively small patient populations as orphan
drugs. Under the Orphan Drug Act, the FDA may designate a product candidate as an orphan drug if it is a drug intended to treat a rare
disease or condition, which is generally defined as a patient population of fewer than 200,000 individuals annually in the United States,
or a patient population greater than 200,000 in the United States where there is no reasonable expectation that the cost of developing
the drug will be recovered from sales in the United States. Our target indications may include diseases with large patient populations
or may include orphan indications.
In the United States,
orphan drug designation entitles a party to financial incentives such as opportunities for grant funding towards clinical trial costs,
tax advantages and user-fee exemptions. In addition, if a product candidate that has orphan drug designation subsequently receives the
first FDA approval for the disease for which it has such designation, the product candidate is entitled to orphan drug exclusivity. Orphan
drug exclusivity in the United States provides that the FDA may not approve any other applications, including a full NDA, to market the
same drug for the same indication for seven years, except in limited circumstances. The applicable exclusivity period is 10 years in Europe.
The European exclusivity period can be reduced to six years if a drug no longer meets the criteria for orphan drug designation or if the
drug is sufficiently profitable so that market exclusivity is no longer justified.
There can be no assurances
that we will be able to obtain orphan designations for product candidates. Even if we obtain orphan drug designation for a product candidate,
we may not be able to obtain or maintain orphan drug exclusivity for that product candidate. We may not be the first to obtain marketing
approval of any product candidate for which we have obtained orphan drug designation for the orphan-designated indication due to the uncertainties
associated with developing pharmaceutical products. In addition, exclusive marketing rights in the United States may be limited if we
seek approval for an indication broader than the orphan-designated indication or may be lost if the FDA later determines that the request
for designation was materially defective or if we are unable to ensure that we will be able to manufacture sufficient quantities of the
product to meet the needs of patients with the rare disease or condition. Further, even if we obtain orphan drug exclusivity for a product,
that exclusivity may not effectively protect the product from competition because different drugs with different active moieties may be
approved for the same condition. Even after an orphan drug is approved, the FDA can subsequently approve the same drug with the same active
moiety for the same condition if the FDA concludes that the later drug is clinically superior in that it is shown to be safer, more effective
or makes a major contribution to patient care or the manufacturer of the product with orphan exclusivity is unable to maintain sufficient
product quantity. Orphan drug designation neither shortens the development time or regulatory review time of a drug nor gives the product
candidate any advantage in the regulatory review or approval process or entitles the product candidate to priority review.
We may face difficulties
from changes to current regulations and future legislation. Healthcare legislative measures aimed at reducing healthcare costs may have
a material adverse effect on our business and results of operations.
Existing regulatory policies
may change, and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of product candidates.
We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action,
either in the United States or abroad. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements
or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained, and
we may not achieve or sustain profitability.
36
In March 2010, the Patient
Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010, or, collectively,
the ACA, was passed, which substantially changed the way healthcare is financed by both the government and private insurers, and continues
to significantly impact the U.S. pharmaceutical industry. Certain provisions have been subject to judicial and Congressional challenges,
as well as efforts by a past U.S. presidential administration to repeal or replace certain aspects of the ACA. The Tax Cuts and Jobs Act
of 2017, or the TCJA, for example, included a provision repealing, effective January 1, 2019, the tax-based shared responsibility payment
imposed by the ACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred
to as the "individual mandate." The ACA has been challenged numerous times in various court cases, including challenges before
the U.S. Supreme Court. In the most recent case (decided in June 2021) the Supreme Court held that the individual plaintiffs and states
lacked standing to challenge the constitutionality of the ACA.
Other legislative changes
have been proposed and adopted in the United States since the ACA was enacted. These changes included reductions of Medicare payments
to providers of up to 2%, effective April 1, 2013, which, due to subsequent legislative amendments, will stay in effect through 2030 unless
additional congressional action is taken (including, for example, the temporary suspension due to the COVID-19 pandemic). Additionally,
in January 2013, President Obama signed into law the American Taxpayer Relief Act of 2012, which, among other things, reduced Medicare
payments to several providers, and increased the statute of limitations period for the government to recover overpayments to providers
from three to five years.
Most
recently, on August 16, 2022, President Biden signed the Inflation Reduction Act, or the IRA which provides for (i) the government to
set or negotiate prices for select high-cost Medicare Part D (beginning in 2026) and Medicare Part B drugs (beginning in 2028) that are
more than nine years (for small-molecule drugs) or 13 years (for biological products) from their FDA approval, (ii) manufacturers to pay
a rebate for Medicare Part B and Part D drugs when prices increase faster than inflation beginning in 2022 for Medicare Part D and 2023
for Medicare Part B drugs, and (iii) Medicare Part D redesign which replaces the current coverage gap provisions and establishes a $2,000
cap for out-of-pocket limits costs for Medicare beneficiaries beginning in 2025, with manufacturers being responsible for 10% of costs
up to the $2,000 cap and 20% after that cap is reached. Implementation of the IRA is expected to be carried out through upcoming actions
by regulatory authorities, the outcome of which is uncertain.
It is possible that new
laws that would result in additional reductions in Medicare and other healthcare funding, may be enacted, which could have a material
adverse effect on customers for our drugs, if approved, and accordingly, our financial operations.
Further, there has been
heightened governmental scrutiny over the manner in which drug manufacturers set prices for their marketed products, which has resulted
in numerous Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more
transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program
reimbursement methodologies for drug products. At the federal level, former President Trump used several means to propose or implement
drug pricing reform, including through federal budget proposals, executive orders, and policy initiatives. It is unclear whether the Biden
administration will reverse those measures or pursue similar or other policy initiatives, for example related to an independent review
board or other mechanisms that would impact drug pricing and reimbursement. On March 11, 2021, President Biden signed the American Rescue
Plan Act of 2021 into law, which eliminates the statutory Medicaid drug rebate cap, currently set at 100% of a drug's average manufacturer
price, for single source and innovator multiple source drugs, beginning January 1, 2024. In addition, at the state level, individual states
have increasingly proposed or adopted legislation and regulations related to pharmaceutical and biological product pricing, including
price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency
measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
37
We expect that additional
state and federal healthcare reform measures will be adopted in the future. Such reform measures may result in more rigorous coverage
criteria and in additional downward pressure on the price that we receive for any approved product. Any reduction in reimbursement from
Medicare or other government programs may result in a similar reduction in payments from private payors. We are, however, unable to predict
the future course of federal or state healthcare legislation in the United States directed at broadening the availability of healthcare
and containing or lowering the cost of healthcare, particularly in light of the new presidential administration. These and any further
changes in the law or regulatory framework that reduce our revenue or increase our costs could also have a material and adverse effect
on our business, financial condition and results of operations. The continuing efforts of the government, insurance companies, managed
care organizations and other payors of healthcare services to contain or reduce costs of healthcare and/or impose price controls may adversely
affect:
●
the demand for product candidates,
if we obtain regulatory approval;
●
our ability to set a price
that we believe is fair for our products;
●
our ability to obtain coverage
and reimbursement for a product;
●
our ability to generate revenue
and achieve or maintain profitability;
●
the level of taxes that we
are required to pay; and
●
the availability of capital.
Inadequate funding
for the FDA and other U.S. government agencies or other comparable foreign regulatory authorities could hinder their ability to hire and
retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner
or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could
negatively impact our business.
The ability of the FDA
and other U.S. government agencies or other comparable foreign regulatory authorities to review and approve new products can be affected
by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and accept the payment
of user fees, and statutory, regulatory, and policy changes. Average review times at the agency have fluctuated in recent years as a result.
In addition, government
funding of government agencies on which our operations may rely, including those that fund research and development activities, is subject
to the political process, which is inherently fluid and unpredictable. For example, in recent years, including in 2018 and 2019, the U.S.
government shut down several times and certain regulatory agencies, such as the FDA, had to furlough critical employees and stop critical
activities.
Separately, since March
2020 when foreign and domestic inspections were largely placed on hold due to the COVID-19 pandemic, the FDA has been working to resume
routine surveillance, bioresearch monitoring and pre-approval inspections on a prioritized basis. The FDA has developed a rating system
to assist in determining when and where it is safest to conduct prioritized domestic inspections and resumed inspections in China and
India in early 2021. In April 2021, the FDA issued guidance for industry formally announcing plans to employ remote interactive evaluations,
using risk management methods, to meet user fee commitments and goal dates, and in May 2021 announced plans to continue progress toward
resuming standard operational levels. Should FDA determine that an inspection is necessary for approval and an inspection cannot be completed
during the review cycle due to restrictions on travel, and the FDA does not determine a remote interactive evaluation to be appropriate,
the agency has stated that it generally intends to issue a complete response letter. Further, if there is inadequate information to make
a determination on the acceptability of a facility, FDA may defer action on the application until an inspection can be completed. In 2020,
several companies announced receipt of complete response letters due to the FDA's inability to complete required inspections for
their applications. Regulatory authorities outside the U.S. may adopt similar restrictions or other policy measures in response to the
COVID-19 pandemic and may experience delays in their regulatory activities.
Disruptions at the FDA
and other comparable foreign regulatory authority may also slow the time necessary for new drugs to be reviewed and/or approved by necessary
government agencies, which would adversely affect our business. If a prolonged government shutdown occurs, or if global health concerns
continue to prevent the FDA or other regulatory authorities from conducting business as usual or conducting inspections, reviews or other
regulatory activities, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions. Further,
in our operations as a public company, future government shutdowns could impact our ability to access the public markets and obtain necessary
capital in order to properly capitalize and continue our operations.
38
We and our third-party
business partners may be subject to federal and state healthcare fraud and abuse laws, false claims laws, transparency laws, government
price reporting, and health information privacy and security laws, which could each have a material and adverse impact on us.
Healthcare providers
and third-party payors play a primary role in the recommendation and prescription of any product candidates for which we obtain marketing
approval. Our current and future arrangements with healthcare professionals, clinical investigators, CROs, third-party payors and customers
may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial
arrangements and relationships through which we research, as well as market, sell and distribute product candidates for which we obtain
marketing approval.
The laws that may affect
our ability to operate include, but are not limited to: (i) the federal Anti-Kickback Statute; (ii) federal civil and criminal false claims
law; (iii) the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, relating to schemes to defraud any healthcare
benefit program; (iv) HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH,
relating to the privacy, security and transmission of individually identifiable health information without appropriate authorization;
(v) the federal Physician Payments Sunshine Act, created under the ACA and its implementing regulations, relating to reporting obligations
to HHS in respect of information related to payments or other transfers of value made to physicians and teaching hospitals; (vi) federal
consumer protection and unfair competition laws; and (vii) analogous state and foreign laws and regulations. See "Business—Government
Regulation—Healthcare Laws."
Federal and state enforcement
bodies have recently increased their scrutiny of interactions between healthcare companies and healthcare providers, which has led to
a number of investigations, prosecutions, convictions and settlements in the healthcare industry. Because of the breadth of these laws
and the narrowness of the statutory exceptions and safe harbors available, it is possible that governmental authorities will conclude
that our business practices do not comply with current or future statutes, regulations, agency guidance or case law involving applicable
fraud and abuse or other healthcare laws and regulations. The scope and enforcement of each of these laws is uncertain and subject to
rapid change in the current environment of healthcare reform, especially in light of the lack of applicable precedent and regulations.
Ensuring that our business arrangements with third parties comply with applicable healthcare and data privacy laws and regulations, as
well as responding to investigations by government authorities, can be time- and resource-consuming and can divert management's
attention from the business.
If our operations are
found to be in violation of any of the federal and state healthcare laws described above or any other governmental regulations that apply
to us, we may be subject to penalties, including without limitation, civil, criminal and/or administrative penalties, damages, fines,
disgorgement, imprisonment, exclusion from participation in government programs, such as Medicare and Medicaid, injunctions, private actions
brought by individual whistleblowers in the name of the government, exclusion, debarment or refusal to allow us to enter into government
contracts, contractual damages, reputational harm, administrative burdens, diminished profits and future earnings, additional reporting
requirements and/or oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance
with these laws, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our
business and our results of operations. Defending against any such actions can be costly, time-consuming and may require significant financial
and personnel resources. Therefore, even if we are successful in defending against any such actions that may be brought against us, our
business may be impaired. Further, if any of the physicians or other healthcare providers or entities with whom we expect to do business
is found to be not in compliance with applicable laws, they may be subject to significant criminal, civil or administrative sanctions,
including exclusions from government funded healthcare programs, which could have a material adverse effect on our business, results of
operations, financial condition and prospects.
39
Any of our employees
that we may hire, independent contractors, consultants, collaborators, principal investigators, CROs, suppliers and vendors may engage
in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.
We are exposed to the
risk that any of our employees that we may hire, independent contractors, consultants, collaborators, principal investigators, CROs, suppliers
and vendors may engage in misconduct or other improper activities. Misconduct by these parties could include intentional, reckless and/or
negligent conduct or disclosure of unauthorized activities to us that violates: (1) the Federal Food, Drug and Cosmetic Act, FDA regulations
or those of comparable foreign regulatory authorities , (2) cGMP, (3) federal and state health and data privacy, security, fraud and abuse,
government price reporting, transparency reporting requirements, and other healthcare laws and regulations in the United States and abroad,
(4) sexual harassment and other workplace misconduct, or (5) laws that require the true, complete and accurate reporting of financial
information or data. In particular, research, sales, marketing and business arrangements in the health care industry are subject to extensive
laws and regulations intended to prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices. These laws and regulations
may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs
and other business arrangements. Misconduct by these parties could also involve the improper use of information obtained in the course
of clinical trials, which could result in regulatory sanctions and serious harm to our reputation.
We plan to adopt a code
of conduct following the Merger, but it is not always possible to identify and deter misconduct by these parties, and the precautions
we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting
us from governmental investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations. If
any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could
have a significant impact on our business, including the imposition of significant penalties, including civil, criminal and administrative
penalties, damages, fines, disgorgement, imprisonment, exclusion from participation in government funded healthcare programs, such as
Medicare and Medicaid, integrity oversight and reporting obligations, contractual damages, reputational harm, diminished profits and future
earnings and the curtailment or restructuring of our operations.
Risks Related to Employee
Matters, Managing Our Growth and Other Risks Related to Our Business
Our success is
highly dependent on our ability to attract, hire and retain highly skilled executive officers, and we rely and will continue to rely on
our services agreement with Abet Solutions.
We currently have a small
team focused on research and development of small-molecule inhibitors. To succeed, we must recruit, hire, retain, manage and motivate
qualified clinical, scientific, technical and management personnel, and we face significant competition for experienced personnel. We
are highly dependent on the principal members of our management and scientific and medical staff, including Dr. Dukes and Dr. Savchuk.
We have historically relied on our services agreement with Eil, which we replaced with our services agreement with Abet Solutions in connection
with the Merger. We rely and will continue to rely on our consulting agreements with Dr. Dukes and Dr. Savchuk and on our services agreement
with Abet Solutions to support our operations. The loss of services from our consultants, our executive officers or Abet Solutions could
be detrimental to us if we cannot recruit suitable replacements in a timely manner. In particular, our research and development approach
was developed over years of our team's experience in developing approved therapeutics at other pharmaceutical companies. The loss
of any of these personnel could result in delays in our product development efforts and have a material adverse effect on our financial
condition, results of operations and prospects.
Moreover, if we do not
succeed in attracting and retaining qualified personnel, particularly at the management level, it could adversely affect our ability to
execute our business plan and harm our operating results. We could in the future have difficulty attracting and retaining experienced
personnel and may be required to expend significant financial resources in our employee recruitment and retention efforts. Many of the
pharmaceutical and biotechnology companies that we compete against for qualified personnel have greater financial and other resources,
different risk profiles and a longer history in the industry than we do. They also may provide higher compensation, more diverse opportunities
and better prospects for career advancement. Some of these characteristics may be more appealing to high-quality candidates than what
we have to offer. If we are unable to continue to attract and retain high-quality personnel, the rate and success at which we can discover,
develop and commercialize product candidates will be limited and the potential for successfully growing our business will be harmed.
40
We will need to
grow the size and capabilities of our organization, and we may experience difficulties in managing this growth.
Immediately after the
closing of the Merger, we had two consultants and rely on our services agreement with Abet Solutions to support our operations. In order
to successfully implement our development and clinical trial plans and strategies, and as we transition into operating as a public company,
we expect to need significant additional managerial, operational, sales, marketing, financial and other personnel. Future growth will
impose significant added responsibilities on members of management, including:
●
identifying, recruiting, integrating,
maintaining, retaining and motivating our current service providers and any additional employees;
●
managing our internal development
efforts effectively, including the preclinical, clinical, FDA and other comparable foreign regulatory agencies' review process
for our FLT3/IRAK4 inhibitor program, our in-licensed programs or other programs we may develop, license or acquire, while complying
with any contractual obligations to contractors and other third parties;
●
managing increasing operational
and managerial complexity; and
●
improving our operational,
financial and management controls, reporting systems and procedures.
Our future financial
performance and our ability to successfully develop and, if approved, commercialize product candidates developed from our current and
future programs will depend, in part, on our ability to effectively manage any future growth, and our management may also have to divert
a disproportionate amount of its attention away from day-to-day activities in order to devote a substantial amount of time to managing
these growth activities.
We currently rely, and
for the foreseeable future will continue to rely, in substantial part on Abet Solutions and certain independent organizations, advisors
and consultants to provide certain services, including key aspects of research, clinical development, manufacturing and regulatory approval.
In particular, we do not currently operate our own laboratory facilities, and we rely completely on the services of independent contractors
and consultants for the conduct of preclinical studies. There can be no assurance that the services of independent organizations, advisors
and consultants will continue to be available to us on a timely basis when needed, or that we can find qualified replacements. In addition,
if we are unable to effectively manage our outsourced activities or if the quality or accuracy of the services provided by third-party
service providers is compromised for any reason, our preclinical studies and clinical trials may be extended, delayed or terminated, and
we may not be able to obtain marketing approval for any product candidates or otherwise advance our business. There can be no assurance
that we will be able to manage our existing third-party service providers or find other competent outside contractors and consultants
on economically reasonable terms, or at all.
If we are not able to
effectively expand our organization by hiring new employees, receiving adequate support from Abet Solutions under our services agreement
and/or engaging additional third-party service providers, we may not be able to successfully implement the tasks necessary to further
develop and commercialize lomonitinib or lonitoclax, or any of our other product candidates and, accordingly, may not achieve our research,
development and commercialization goals.
Our management
has limited experience in operating a public company.
Our executive officers
have limited experience in the management of a public company. Our management team may not successfully or effectively manage our transition
to a public company that will be subject to significant regulatory oversight and reporting obligations under federal securities laws.
Their limited experience in dealing with the increasingly complex laws pertaining to public companies could be a significant disadvantage
in that it is likely that an increasing amount of their time may be devoted to these activities which will result in less time being devoted
to the management and growth of our business. We may not have adequate personnel with the appropriate level of knowledge, experience,
and training in the accounting policies, practices or internal controls over financial reporting required of public companies in the United
States. The development and implementation of the standards and controls necessary for us to achieve the level of accounting standards
required of a public company in the United States may require costs greater than expected. It is possible that we will be required to
expand our employee base and hire additional employees to support our operations as a public company which will increase its operating
costs in future periods.
41
Requirements associated
with being a public company will increase our costs significantly, as well as divert significant company resources and management attention.
We are subject to the
reporting requirements of the Exchange Act, the other rules and regulations of the SEC relating to public companies and expect to be subject
to the rules and regulations of the OTC. Compliance with the various reporting and other requirements applicable to public companies requires
considerable time and attention of management. We cannot assure you that we will satisfy our obligations as a public company on a timely
basis.
In addition, as a public
company, it may be more difficult or more costly for us to obtain certain types of insurance, including directors' and officers'
liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the
same or similar coverage. The impact of these events could also make it more difficult for us to attract and retain qualified personnel
to serve on our board of directors, our board committees or as executive officers.
Our internal computer
systems, or those of any of our CROs, manufacturers, other contractors or consultants or collaborators, may fail or suffer actual or suspected
security or data privacy breaches or other unauthorized or improper access to, use of, or destruction of our proprietary or confidential
data, employee data, or personal data, which could result in additional costs, loss of revenue, significant liabilities, harm to our brand
and material disruption of our operations, and potentially significant delays in our delivery to market.
We are increasingly dependent
upon information technology systems, infrastructure and data to operate our business. In the ordinary course of business, we collect,
store and transmit confidential information (including but not limited to intellectual property, proprietary business information and
personal information). It is critical that we do so in a secure manner to maintain the confidentiality and integrity of such confidential
information. We also have outsourced elements of our operations to third parties, and as a result we manage a number of third-party CROs,
other contractors (including sites performing our anticipated clinical trials) and consultants who have access to our confidential information.
Our internal information technology systems and infrastructure are also vulnerable to damage from natural disasters, terrorism, war, telecommunication
and electrical failures. System failures or outages, including any potential disruptions due to significantly increased global demand
on certain cloud-based systems arising after the COVID-19 pandemic, could compromise our ability to perform these functions in a timely
manner, which could harm our ability to conduct business or delay our financial reporting. Such failures could materially adversely affect
our operating results and financial condition.
Despite the implementation
of security measures in an effort to protect systems that store our information, given their size and complexity and the increasing amounts
of information maintained on our internal information technology systems and external processing and storage systems (for example, cloud),
and those of our third-party CROs, other contractors and consultants, these systems are potentially vulnerable to breakdown or other damage
or interruption from service interruptions, system malfunction, natural disasters, terrorism, war and telecommunication and electrical
failures, as well as security breaches from inadvertent or intentional actions by our employees, contractors, consultants, business partners,
and/or other third parties, or from cyber-attacks by malicious third parties (including the deployment of harmful malware, ransomware,
denial-of-service attacks, social engineering and other means to affect service reliability and threaten the confidentiality, integrity
and availability of information), which may compromise our system infrastructure or lead to the loss, destruction, alteration or dissemination
of, or damage to, our data. The risk of a security breach or disruption, particularly through cyber-attacks or cyber intrusion, including
by computer hackers, foreign governments, and cyber terrorists, has generally increased as the number, intensity and sophistication of
attempted attacks and intrusions from around the world have increased. The COVID-19 pandemic generally increased the attack surface available
for exploitation, as more companies and individuals work online and work remotely, and as such, the risk of a cybersecurity incident potentially
occurring, and our investment in risk mitigations against such an incident, is increasing. For example, there has been an increase in
phishing and spam emails as well as social engineering attempts from "hackers" hoping to use the recent COVID-19 pandemic
to their advantage.
We may not be able to
anticipate all types of security threats, nor may we be able to implement preventive measures effective against all such security threats.
The techniques used by cyber criminals change frequently, may not be recognized until launched and can originate from a wide variety of
sources, including outside groups such as external service providers, organized crime affiliates, terrorist organizations or hostile foreign
governments or agencies. While we have not experienced any such system failure, accident or security breach to date, we cannot assure
you that our data protection efforts and our investment in information technology will prevent significant breakdowns, data leakages,
breaches in our systems, or those of our third-party CROs, other contractors and consultants, or other cyber incidents that could have
a material adverse effect upon our reputation, business, operations or financial condition.
42
For example, if such
an event were to occur and cause interruptions in our operations, or those of our third-party CROs, other contractors and consultants,
it could result in a material disruption of our programs and the development of product candidates could be delayed. In addition, the
loss of data from preclinical studies or clinical trial data could result in delays in our marketing approval efforts and significantly
increase our costs to recover or reproduce the data. Furthermore, significant disruptions of our internal information technology systems
or those of our third-party CROs, other contractors and consultants, or security breaches could result in the loss, misappropriation,
and/or unauthorized access, use, or disclosure of, or the prevention of access to, data (including trade secrets or other confidential
information, intellectual property, proprietary business information, and personal information). Any such event that leads to unauthorized
access, use, or disclosure of personal information, including personal information regarding our clinical trial subjects or employees,
could harm our reputation directly, compel us to comply with federal and/or state breach notification laws and foreign law equivalents,
subject us to financial exposure related to investigation of the incident (including cost of forensic examinations), subject us to mandatory
corrective action, and otherwise subject us to liability under laws and regulations that protect the privacy and security of personal
information (including under HIPAA), which could result in significant legal and financial exposure and reputational damages that could
potentially have an adverse effect on our business. Moreover, if the information technology systems of our third-party CROs, other contractors
and consultants become subject to disruptions or security breaches, we may have insufficient recourse against such third parties and we
may have to expend significant resources to mitigate the impact of such an event, and to develop and implement protections to prevent
future events of this nature from occurring.
Our insurance policies
may not be adequate to compensate us for the potential losses arising from any such disruption in or, failure or security breach of our
systems or third-party systems where information important to our business operations or commercial development is stored. In addition,
such insurance may not be available to us in the future on economically reasonable terms, or at all. Further, our insurance may not cover
all claims made against us and could have high deductibles in any event, and defending a suit, regardless of its merit, could be costly
and divert management attention.
Accordingly, significant
breakdowns or breaches in systems or other cyber incidents that cause loss, destruction, unavailability, alteration or dissemination of,
or damage to, our data could have a material adverse effect upon our reputation, business, operations or financial condition.
Our business entails
a significant risk of product liability and if we are unable to obtain sufficient insurance coverage such inability could have an adverse
effect on our business and financial condition.
Our business exposes
us to significant product liability risks inherent in the development, testing, manufacturing and marketing of therapeutic treatments.
Product liability claims could delay or prevent completion of our development programs. If we succeed in marketing products, such claims
could result in an investigation by the FDA or any other regulatory authority of the safety and effectiveness of our products, our manufacturing
processes and facilities or our marketing programs. FDA or any other regulatory authority investigations could potentially lead to a recall
of our products or more serious enforcement action, limitations on the approved indications for which they may be used or suspension or
withdrawal of approvals. Regardless of the merits or eventual outcome, liability claims may also result in decreased demand for our products,
injury to our reputation, costs to defend the related litigation, a diversion of management's time and our resources and substantial
monetary awards to trial participants or patients. We currently have product liability insurance that we believe is appropriate for our
stage of development and may need to obtain higher levels prior to advancing product candidates into clinical trials or marketing any
product candidates, if approved. Any insurance we have or may obtain may not provide sufficient coverage against potential liabilities.
Furthermore, clinical trial and product liability insurance is becoming increasingly expensive. As a result, we may be unable to obtain
sufficient insurance at a reasonable cost to protect us against losses caused by product liability claims that could have an adverse effect
on our business and financial condition.
43
The amount of our
future losses is uncertain and our quarterly operating results may fluctuate significantly, which will make our future results difficult
to predict and may cause our results to fall below the expectations of investors or securities analysts, each of which may cause our stock
price to fluctuate or decline.
Our quarterly and annual
operating results may fluctuate significantly in the future due to a variety of factors, many of which are outside of our control and
may be difficult to predict, including the following:
●
the timing and success or failure
of preclinical studies and clinical trials for product candidates or competing product candidates, or any other change in the competitive
landscape of our industry, including consolidation among our competitors or partners;
●
our ability to successfully
recruit and retain subjects for clinical trials, and any delays caused by difficulties in such efforts;
●
our ability to obtain marketing
approval for product candidates, and the timing and scope of any such approvals we may receive;
●
the timing and cost of, and
level of investment in, research and development activities relating to product candidates, which may change from time to time;
●
the amount and timing of unforeseen
expenses;
●
the cost of manufacturing product
candidates, which may vary depending on the quantity of production and the terms of our agreements with manufacturers;
●
our ability to attract, hire
and retain qualified personnel;
●
expenditures that we will or
may incur to develop additional product candidates;
●
the level of demand for product
candidates should they receive approval, which may vary significantly;
●
the risk/benefit profile, cost
and reimbursement policies with respect to product candidates, if approved, and existing and potential future therapeutics that compete
with product candidates;
●
the changing and volatile U.S.
and global economic environments, including the impact of inflation, instability in the banking sector, war or the outbreak of other
hostilities; and
●
future accounting pronouncements
or changes in our accounting policies.
The cumulative effects
of these factors could result in large fluctuations and unpredictability in our quarterly and annual operating results. As a result, comparing
our operating results on a period-to-period basis may not be meaningful. This variability and unpredictability could also result in our
failing to meet the expectations of industry or financial analysts or investors for any period. If our revenue or operating results fall
below the expectations of analysts or investors or below any forecasts we may provide to the market, or if the forecasts we provide to
the market are below the expectations of analysts or investors, the price of our common stock could decline substantially. Such a stock
price decline could occur even when we have met any previously publicly stated guidance we may provide.
We may not be able
to utilize a significant portion of our net operating loss carryforwards.
We have generated, and
expect to continue to generate in the future, significant federal and state net operating loss, or NOL, carryforwards. At December 31,
2023, we had federal and state NOL carryforwards of approximately $9.6 million and $2.6 million, respectively, which may be available
to offset future taxable income. We do not anticipate generating revenue from sales of product candidates for the foreseeable future,
if ever, and we may never achieve profitability. These NOL carryforwards could expire unused and be unavailable to offset future income
tax liabilities because of their limited duration or because of restrictions under U.S. tax law. The state NOL carryforwards will begin
to expire in 2037. Additionally, under the TCJA, as modified by the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act,
although federal NOL carryforwards incurred in taxable years beginning after December 31, 2017 and in future taxable years may be carried
forward indefinitely, the deductibility of such federal NOL carryforwards incurred in the taxable year beginning after December 31, 2020
is limited. In particular, the deductibility of such federal NOL carryforwards may be limited to 80% of current year taxable income for
tax years beginning after December 31, 2020. In addition, at the state level, there may be periods during which the use of NOL carryforwards
is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed. It is uncertain how various states
will respond to the TCJA and CARES Act.
44
In addition, under Section
382 of the Internal Revenue Code of 1986, as amended, or the Code, and corresponding provisions of state law, if a corporation undergoes
an "ownership change," which is generally defined as a greater than 50% change, by value, in its equity ownership over a three-year
period, the corporation's ability to use its pre-change NOL carryforwards and other pre-change tax attributes to offset its post-change
income or taxes may be limited. The amount of the annual limitation is determined based on the value of a company immediately prior to
the ownership change. Subsequent ownership changes may further affect the limitation in future years. The completion of the Merger and
the Offering, together with private placements and other transactions that have occurred since our inception, may trigger such an ownership
change pursuant to Section 382 of the Code. We have not yet completed a Section 382 analysis. We may experience ownership changes as a
result of subsequent shifts in our stock ownership, some of which may be outside of our control. If an ownership change occurs or our
ability to use our NOL carryforwards is otherwise materially limited, it would harm our future operating results by effectively increasing
our future tax obligations. We have a full valuation allowance for deferred tax assets including NOLs.
Comprehensive tax
reform legislation could adversely affect our business and financial condition.
The rules dealing with
United States federal, state and local income taxation are constantly under review by persons involved in the legislative process and
by the Internal Revenue Service, or IRS, and the United States Treasury Department. Changes to tax laws (which changes may have retroactive
application) could adversely affect us or holders of our common stock. In recent years, many such changes have been made and changes are
likely to continue to occur in the future. For example, the TCJA was enacted in 2017 and made significant changes to corporate taxation,
including the reduction of the corporate tax rate from a top marginal rate of 35% to a flat rate of 21%, the limitation of the tax deduction
for net interest expense to 30% of adjusted taxable income (except for certain small businesses), the limitation of the deduction for
net operating losses from taxable years beginning after December 31, 2017 to 80% of current year taxable income and the elimination of
net operating loss carrybacks generated in taxable years ending after December 31, 2017 (though any such net operating losses may be carried
forward indefinitely), and the modification or repeal of many business deductions and credits, including a reduction of the business tax
credit for certain clinical testing expenses incurred in the testing of certain drugs for rare diseases or conditions generally referred
to as "orphan drugs."
Additionally, on March
27, 2020, former President Trump signed into law the CARES Act, which, among other things, suspends the 80% limitation on the deduction
for net operating losses in taxable years beginning before January 1, 2021, permits a 5-year carryback of net operating losses arising
in taxable years beginning after December 31, 2017 and before January 1, 2021, and generally caps the limitation on the deduction for
net interest expense at 50% of adjusted taxable income for taxable years beginning in 2019 and 2020.
The recent and upcoming
presidential and congressional elections in the United States could also result in significant changes in, and uncertainty with respect
to, tax legislation, regulation and government policy directly affecting us and our business. For example, the United States government
may enact significant changes to the taxation of business entities including, among others, a permanent increase in the corporate income
tax rate, an increase in the tax rate applicable to the global intangible low-taxed income and elimination of certain exemptions, and
the imposition of minimum taxes or surtaxes on certain types of income. The likelihood of these changes being enacted or implemented is
unclear.
It cannot be predicted
whether, when, in what form, or with what effective dates, new tax laws may be enacted, or regulations and rulings may be promulgated
or issued under existing or new tax laws, which could result in an increase in our or our stockholders' tax liability or require
changes in the manner in which we operate in order to minimize or mitigate any adverse effects of changes in tax law or in the interpretation
thereof.
45
Data collection
is governed by restrictive regulations governing the use, processing and cross-border transfer of personal information.
We are, and may increasingly
become, subject to various laws and regulations, as well as contractual obligations and mandatory industry standards relating to privacy
and security in the jurisdictions in which we operate. The regulatory environment related to data privacy and security is increasingly
rigorous, with new and constantly changing requirements applicable to our business, and enforcement practices are likely to remain uncertain
for the foreseeable future. These laws and regulations may be interpreted and applied differently over time and from jurisdiction to jurisdiction,
and it is possible that they will be interpreted and applied in ways that may have a material adverse effect on our business, financial
condition, results of operations and prospects.
In the United States,
various federal and state regulators, including governmental agencies like the Federal Trade Commission, have adopted, or are considering
adopting, laws and regulations concerning personal information and data security. Certain state laws may be more stringent or broader
in scope, or offer greater individual rights, with respect to personal information than federal, international or other state laws, and
such laws may differ from each other, all of which may complicate compliance efforts. For example, the California Consumer Privacy Act
of 2018, or the CCPA, which increases privacy rights for California residents and imposes obligations on companies that process their
personal information and meet certain revenue or volume processing thresholds, came into effect on January 1, 2020, and was further amended
by the California Privacy Rights Act, or the CPRA, on November 3, 2020. Among other things, the CCPA requires covered companies to provide
new disclosures to California residents and provide such residents new data protection and privacy rights, including the ability to opt-out
of certain sales of personal information. The CPRA significantly modifies the CCPA by expanding residents' rights with respect to
certain personal information and creates a new state agency to oversee implementation and enforcement efforts. Many of the CPRA's
provisions will become effective on January 1, 2023. The CCPA provides for civil penalties for violations, as well as a private right
of action for certain data breaches. This private right of action may increase the likelihood of, and risks associated with, data breach
litigation, including class action litigation. In addition, laws in all 50 U.S. states require businesses to provide notice to individuals
if certain of their personal information has been disclosed as a result of a qualifying data breach.
Moreover, the CCPA has
prompted a number of proposals for new federal and state-level privacy legislation. State laws and regulations are not necessarily preempted
by federal laws and regulations, such as HIPAA, particularly if a state affords greater protection to individuals than federal law. Where
state laws are more protective, we have to comply with the stricter provisions. In addition to fines and penalties imposed upon violators,
some of these state laws also afford private rights of action to individuals who believe their personal information has been misused.
The interplay of federal and state laws may be subject to varying interpretations by courts and government agencies, creating complex
compliance issues for us and data we receive, use and share, potentially exposing us to additional expense, adverse publicity and liability.
Legal requirements relating to the collection, storage, handling, and transfer of personal information and personal data continue to evolve
and may result in increased public scrutiny and escalating levels of enforcement, sanctions and increased costs of compliance. This legislation
may add additional complexity, variation in requirements, restrictions and potential legal risk, require additional investment of resources
in compliance programs, impact strategies and the availability of previously useful data and could result in increased compliance costs
and/or changes in business practices and policies.
46
Internationally, laws,
regulations and standards in many jurisdictions apply broadly to the collection, use, retention, security, disclosure, transfer, marketing
or other processing of personal data. For example, the EU General Data Protection Regulation, or GDPR, which became effective on May 25,
2018, is wide-ranging in scope and imposes numerous requirements on companies that process personal data. Specifically, the GDPR greatly
increased the European's Commission's jurisdictional reach of its data privacy and security laws and introduced a broad array
of requirements for handling personal data, including, for example, requirements to establish a legal basis for processing, higher standards
for obtaining consent from individuals to process their personal data, more robust disclosures to individuals, a strengthened individual
data rights regime, requirements to implement safeguards to protect the security and confidentiality of personal data that requires the
adoption of administrative, physical and technical safeguards, shortened timelines for data breach notifications to appropriate data protection
authorities or data subjects, limitations on retention and secondary use of information, increased requirements pertaining to health data
and obligations to take certain measures when engaging third party processors in connection with the processing of personal data. EU member
states are tasked under the GDPR to enact, and have enacted, certain implementing legislation that adds to and/or further interprets the
GDPR requirements and potentially extends our obligations and potential liability for failing to meet such obligations. The GDPR, together
with national legislation, regulations and guidelines of the EU member states governing the processing of personal data, impose strict
obligations and restrictions on the ability to collect, use, retain, disclose, transfer and otherwise process personal data. In particular,
the GDPR also imposes strict obligations, restrictions and rules concerning the rights of individuals to whom the personal data relates,
the transfer of personal data to countries outside the European Economic Area, including the United States, security breach notifications
and the security and confidentiality of personal data. The GDPR permits data protection authorities to impose large penalties for violations
of the GDPR, including potential fines of up to €20 million or 4% of annual global revenues, whichever is greater, and other administrative
penalties. The GDPR also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory
authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the GDPR. Compliance with the GDPR
will be a rigorous and time-intensive process that may increase our cost of doing business or require us to change our business practices,
and despite those efforts, there is a risk that we may be subject to fines and penalties, litigation, and reputational harm in connection
with our European activities. Following the withdrawal of the United Kingdom from the European Union, data privacy and security laws that
are substantially similar to the GDPR are in effect in the United Kingdom, which carry similar risks and authorize similar fines for certain
violations.
Certain legal regimes
outside of the United States, including in the United Kingdom and under the GDPR, prohibit the transfer of personal data to the United
States unless certain measures are in place, including, for example, executing Standard Contractual Clauses, or historically, relying
on the receiving entity's certification under the EU-US and/or Swiss-US Privacy Shield Frameworks, or, collectively, the Privacy
Shield Frameworks. The Privacy Shield Frameworks were invalidated, and the adequacy of Standard Contractual Clauses is now in question,
following the Court of Justice of the European Union's July 2020 decision in the so-called Schrems II case (Data Protection Commissioner
v. Facebook Ireland Limited, Maximillian Schrems (Case C-311/18)). There is no guarantee that any transfer mechanism upon which we rely
will be deemed to be valid by the relevant legal authorities, or that mechanisms that are currently deemed to be valid will remain valid
in the future. This uncertainty, and its eventual resolution, may increase our costs of compliance, impede our ability to transfer data
and conduct our business and harm our business or results of operations.
Compliance with U.S.
and international data protection laws and regulations could require us to take on more onerous obligations in our contracts, restrict
our ability to collect, use and disclose data, or in some cases, impact our ability to operate in certain jurisdictions. Any actual or
alleged failure to comply with U.S. or international laws and regulations relating to privacy, data protection, and data security could
result in governmental investigations, proceedings and enforcement actions (which could include civil or criminal penalties), private
litigation or adverse publicity, harm to our reputation, and could negatively affect our operating results and business. Moreover, clinical
trial subjects about whom we or our potential collaborators obtain information, as well as the providers who share this information with
us, may contractually limit our ability to use and disclose the information or impose other obligations or restrictions in connection
with our use, retention and other processing of information, and we may otherwise face contractual restrictions applicable to our use,
retention, and other processing of information. Claims that we have violated individuals' privacy rights, failed to comply with
data protection laws, or breached our contractual obligations, even if we are not found liable, could be expensive and time-consuming
to defend and could result in adverse publicity that could harm our business.
47
Risks Related to Intellectual
Property
We depend on intellectual
property licensed from Eil and Bala, the termination of which could result in the loss of significant rights, which would harm our business.
We are dependent on technology,
patents, know-how and proprietary materials, both our own and licensed from Eil and Bala. We entered into the Eil license agreement and
the Bala license agreement pursuant to which we obtained exclusive, perpetual, worldwide licensing rights for the development and future
ownership of (i) lonitoclax, a BCL-2 inhibitor for the treatment of AML and CLL from Eil, and (ii) an early-stage menin inhibitor for
the treatment of AML from Bala. See "
Business—License Agreement
s" for a description of the Eil license agreement
and the Bala license agreement.
Any termination of this
license will result in the loss of significant rights and will restrict our ability to develop and commercialize lonitoclax or a menin
inhibitor. For example, under such license agreements, we, but not Eil or Bala, as the case may be, have the right to terminate the applicable
license agreement for convenience upon 30 days' written notice. If we or Eil or Bala, as the case may be, materially breaches the
applicable license agreement, and such breach is not cured within 90 days after the receipt of notice of such breach, then the non-defaulting
party may terminate such license agreement. In addition, upon the occurrence of an event of default under the applicable promissory note,
the Eil license agreement or the Bala license agreement shall be terminated. See "—
Risks Related to Intellectual Property—Our
rights to develop and commercialize our technology and product candidates may be subject, in part, to the terms and conditions of licenses
granted to us by others" and "—Risks Related to Intellectual Property—If we fail to comply with our obligations
in the agreements under which we license intellectual property rights from third parties or otherwise experience disruptions to our business
relationships with our licensors, we could lose license rights that are important to our business.
"
Notwithstanding the foregoing, upon the payment
in full of the applicable promissory note, Eil and Bala have each agreed to transfer to us all of the intellectual property rights covered
by the Eil license agreement and the Bala license agreement, as applicable.
If we and our licensors
and collaborators, if any, are unable to obtain and maintain sufficient patent and other intellectual property protection for product
candidates and technology, our competitors could develop and commercialize products and technology similar or identical to ours, and we
may not be able to compete effectively in our market or successfully commercialize any of our current or future product candidates.
Our commercial success
depends in part on our ability and the ability of our licensors and collaborators, if any, to obtain, maintain, enforce and defend patents
and other intellectual property rights with respect to product candidates and technology and to operate our business without infringing,
misappropriating, or otherwise violating the intellectual property rights of others. If we and our licensors and our collaborators, if
any, are unable to obtain and maintain sufficient intellectual property protection for our product candidate, our licensed product candidates
and any additional product candidates that we may develop, or if the scope of the intellectual property protection obtained is not sufficiently
broad, our competitors and other third parties could develop and commercialize product candidates similar or identical to ours, and our
ability and the ability of our collaborators to successfully commercialize product candidates that we and our collaborators may pursue
may be impaired.
To establish our proprietary
position, we have filed patent applications in the United States related to our FLT3/IRAK4 program, our lead product candidate from this
program, lomonitinib, and other development candidates that are important to our business, and we have exclusively licensed certain patent
applications from Eil, including lonitoclax, and Bala; we may in the future also license or purchase issued patents or pending patent
applications filed by others. Given the very early stage of development of our only product candidate and development programs and our
licensed product candidates, our patent portfolio is similarly at a very early stage. In particular, as of June 30, 2024 we owned two
pending U.S. patent applications and pending patent applications in 16 jurisdictions outside the U.S.
Accordingly, our current
patent rights provide us with limited legal right to prevent third parties from competing with us in any way. If we do not obtain additional
meaningful patent coverage for product candidates, their respective components, formulations, combination therapies, methods used to manufacture
them and methods of treatment, competitors may be able to erode or negate any competitive advantage we may have, which would likely harm
our business and ability to achieve profitability. U.S. provisional patent applications are not eligible to become issued patents until,
among other things, we file a non-provisional patent application within 12 months of filing of one or more of our related provisional
patent applications. With regard to such U.S. provisional patent applications, if we do not timely file any non-provisional patent applications,
we may lose our priority date with respect to our provisional patent applications and any patent protection on the inventions disclosed
in our provisional patent applications. While we intend to timely file non-provisional patent applications relating to our provisional
patent applications, we cannot predict whether any such patent applications will result in the issuance of patents that provide us with
any competitive advantage. If we are unable to secure or maintain patent protection with respect to product candidates, our business,
financial condition, results of operations, and prospects could be materially harmed.
48
We cannot be certain
that the claims in U.S. patent applications (including provisional and non-provisional), corresponding international patent applications
and patent applications in certain foreign territories, or those of our licensors and collaborators, will be considered patentable by
the United States Patent and Trademark Office, or the USPTO, courts in the United States or by the patent offices and courts in foreign
countries, nor can we be certain that the claims in our future issued patents will not be found invalid or unenforceable if challenged.
Moreover, the patent application process is subject to numerous risks and uncertainties, and there can be no assurance that we, any licensors
or any collaborators will be successful in protecting product candidates by obtaining and defending patents. These risks and uncertainties
include the following:
●
the USPTO and various foreign
governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other provisions during the
patent process, the noncompliance with which can result in abandonment or lapse of a patent or patent application, and partial or complete
loss of patent rights in the relevant jurisdiction;
●
patent applications may not
result in any patents being issued;
●
patents may be challenged,
invalidated, modified, revoked, circumvented, found to be unenforceable or otherwise may not provide any competitive advantage;
●
our competitors, many of whom
have substantially greater resources than we do and many of whom have made significant investments in competing technologies, may seek
or may have already obtained patents that will limit, interfere with or eliminate our ability to make, use and sell our potential product
candidates;
●
there may be significant pressure
on the U.S. government and international governmental bodies to limit the scope of patent protection both inside and outside the United
States for disease treatments that prove successful, as a matter of public policy regarding worldwide health concerns; and
●
countries other than the United
States may have patent laws less favorable to patentees than those upheld by U.S. courts, allowing foreign competitors a better opportunity
to create, develop and market competing product candidates.
Pending patent applications
cannot be enforced against third parties practicing the technology claimed in such applications unless, and until, patents issue from
such applications, and then only to the extent the issued claims cover the technology. There can be no assurance that our patent applications
or the patent applications of our licensors and collaborators will result in patents being issued or that issued patents will afford sufficient
protection against competitors with similar technology.
The patent prosecution
process is also expensive and time-consuming, and we and our licensors and collaborators may not be able to file and prosecute all necessary
or desirable patent applications at a reasonable cost or in a timely manner or in all jurisdictions where protection may be commercially
advantageous. It is possible that we or our licensors and collaborators, if any, will fail to identify important patentable aspects of
our research and development efforts in time to obtain appropriate or any patent protection or fail to file patent applications covering
inventions made in the course of development and commercialization activities before a competitor or another third party files a patent
application covering, or publishes information disclosing, a similar, independently-developed invention. Such competitor's or other
third party's patent application may pose obstacles to our ability to obtain patent protection or limit the scope of the patent
protection we or our licensors and collaborators may obtain. In addition, although we enter into non-disclosure and confidentiality agreements
with parties who have access to patentable aspects of our research and development output, such as our employees, outside scientific collaborators,
CROs, third-party manufacturers, consultants, advisors and other third parties, any of these parties may breach such agreements and disclose
such output before a patent application is filed, thereby jeopardizing our ability to seek patent protection.
Furthermore, our ability
to obtain and maintain valid and enforceable patents depends on whether the differences between our technology and the prior art allow
our technology to be patentable over the prior art. Since patent applications in the United States and most other countries are confidential
for a period of time after filing or until issuance, we may not be certain that we or our licensors are the first to either (1) file any
patent application related to product candidates or (2) invent any of the inventions claimed in the patents or patent applications. Similarly,
publications of discoveries in the scientific and scholarly literature often lag behind the actual discoveries, and patent applications
in the United States and other jurisdictions are typically not published until 18 months after filing, or in some cases not at all. Consequently,
we cannot be certain that we or our licensors and collaborators were the first to make the inventions claimed in our owned or in-licensed
patent rights and patent applications or were the first to file for patent protection on the inventions claimed in our pending patent
applications. Further, given the amount of time required for the development, testing and regulatory review of new product candidates,
patents protecting such candidates might expire before or shortly after such candidates are commercialized.
49
The degree of future
protection for our and our licensors' proprietary rights is uncertain. Only limited protection may be available. Even issued patents
may later be found invalid or unenforceable or may be modified or revoked in proceedings instituted by third parties before various patent
offices or in courts, as described further throughout "
—Risks Related to Intellectual Property
." As a result,
our intellectual property may not provide us with sufficient rights to exclude others from commercializing products similar or identical
to ours, and may not adequately protect our rights or permit us to gain or keep any competitive advantage. These uncertainties and/or
limitations in our ability to properly protect the intellectual property rights relating to product candidates could have a material adverse
effect on our financial condition and results of operations.
If the scope of
any patent protection we obtain is not sufficiently broad, or if we lose any of our patent protection, our ability to prevent our competitors
from commercializing similar or identical product candidates would be adversely affected.
The patent position of
pharmaceutical and biotechnology companies generally is highly uncertain, involves complex legal and factual questions, and has been the
subject of much litigation in recent years. As a result, the issuance, scope, validity, enforceability and commercial value of our patent
rights are highly uncertain. Our pending and future patent applications and those of our licensors and collaborators may not result in
patents being issued that protect product candidates or which effectively prevent others from commercializing competitive product candidates.
Moreover, the coverage
claimed in a patent application can be significantly reduced before the patent is issued, and its scope can be reinterpreted after issuance.
Even if patent applications we own, have licensed or in-license in the future issue as patents, they may not issue in a form that will
provide us with any meaningful protection, prevent competitors or other third parties from competing with us, or otherwise provide us
with any competitive advantage. Any patents that we own or in-license may be challenged or circumvented by third parties or may be narrowed
or invalidated as a result of challenges by third parties. Consequently, we do not know whether product candidates will be protectable
or remain protected by valid and enforceable patents. Our competitors or other third parties may be able to circumvent our patents or
the patents of our licensors and collaborators by developing similar or alternative technologies or products in a non-infringing manner,
which could materially adversely affect our business, financial condition, results of operations and prospects.
The issuance of a patent
is not conclusive as to its inventorship, scope, validity or enforceability, and our patents or the patents of our licensors may be challenged
in the courts or patent offices in the United States and abroad. We may be subject to a third-party pre-issuance submission of prior art
to the USPTO or third-party observations at the European Patent Office, or become involved in opposition, derivation, revocation, reexamination,
post-grant review, or PGR, and inter partes review, or IPR, or other similar proceedings challenging our owned patent rights. An adverse
determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate or render unenforceable, our patent
rights, allow third parties to commercialize product candidates and compete directly with us, without payment to us, or result in our
inability to manufacture or commercialize products without infringing third-party patent rights. Moreover, our patents or the patents
of our licensors may become subject to post-grant challenge proceedings, such as oppositions in a foreign patent office, that challenge
our priority of invention or other features of patentability with respect to our patents and patent applications and those of our licensors.
Such challenges may result in loss of patent rights, loss of exclusivity or in patent claims being narrowed, invalidated or held unenforceable,
which could limit our ability to stop others from using or commercializing similar or identical technology and products, or limit the
duration of the patent protection of product candidates. Such proceedings also may result in substantial cost and require significant
time from our scientists and management, even if the eventual outcome is favorable to us. In addition, if the breadth or strength of protection
provided by our patents and patent applications or the patents and patent applications of our licensors is threatened, regardless of the
outcome, it could dissuade companies from collaborating with us to license, develop or commercialize current or future product candidates.
50
Intellectual property
rights do not necessarily address all potential threats to our competitive advantage.
The degree of future
protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations, and may not
adequately protect our business or permit us to maintain our competitive advantage. For example:
●
others may be able to make
products that are similar to any of our current or future product candidates or utilize similar technology but that are not covered by
the claims of our patents or the patents that we license or may own in the future;
●
we or our licensors might not
have been the first to make the inventions covered by an issued patent or pending patent application that we license or may own in the
future;
●
we or our licensors or collaborators
might not have been the first to file patent applications covering certain of our inventions;
●
others may independently develop
similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights;
●
it is possible that our pending
owned or licensed patent applications or those that we may own or license in the future will not lead to issued patents;
●
issued patents that we own
or license may be held invalid or unenforceable, as a result of legal challenges by our competitors;
●
our competitors might conduct
research and development activities in countries where we do not have patent rights and then use the information learned from such activities
to develop competitive products for sale in our major commercial markets;
●
we may not develop additional
proprietary technologies that are patentable;
●
the patents of others may have
an adverse effect on our business; and
●
we may choose not to file a
patent in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent covering such intellectual
property.
If any of these events
occurred, there could be a material and adverse effect on our business, results of operations and prospects.
Our commercial
success depends significantly on our ability to operate without infringing the patents and other proprietary rights of third parties.
Claims by third parties that we infringe their proprietary rights may result in liability for damages or prevent or delay our developmental
and commercialization efforts.
Our commercial success
depends significantly on avoiding infringement of the patents and proprietary rights of third parties. Numerous third-party U.S. and foreign
issued patents and pending patent applications exist in the fields in which we are developing product candidates. There may be third-party
patents or patent applications with claims to materials, formulations, methods of manufacture or methods for treatment related to the
use or manufacture of product candidates. There is a substantial amount of litigation, both within and outside the United States, involving
patent and other intellectual property rights in the pharmaceutical and biotechnology industries, including patent infringement lawsuits,
oppositions, reexaminations, IPR proceedings and PGR proceedings before the USPTO and/or corresponding foreign patent offices. Accordingly,
our research, development and commercialization activities may be subject to claims that we infringe or otherwise violate patents or other
intellectual property rights owned or controlled by third parties.
51
As the pharmaceutical
and biotechnology industries expand and more patents are issued, the risk increases that product candidates may be subject to claims of
infringement of the patent rights of third parties. Patent applications are maintained as confidential for a certain period of time, until
the relevant application is published. Moreover, because patent applications can take many years to issue, there may be currently-pending
patent applications that may later result in issued patents that product candidates may infringe. In addition, identification of third-party
patent rights that may be relevant to our technology is difficult because patent searching is imperfect due to differences in terminology
among patents, incomplete databases and the difficulty in assessing the meaning of patent claims. There is also no assurance that there
is not prior art of which we are aware, but which we do not believe is relevant to our business, which may, nonetheless, ultimately be
found to limit our ability to make, use, sell, offer for sale or import our products that may be approved in the future, or impair our
competitive position. In addition, third parties may obtain patents in the future and claim that use of our technologies infringes upon
these patents. Thus, we may be unaware of third-party patents that may be infringed by commercialization of any product candidates, and
we cannot be certain that we were the first to file a patent application related to a product candidate or technology.
Any claims of patent
infringement asserted by third parties would be time consuming and could:
●
result in costly litigation
that may cause negative publicity;
●
divert the time and attention
of our technical personnel and management;
●
cause development delays;
●
prevent us from commercializing
any product candidates until the asserted patent expires or is held finally invalid or not infringed in a court of law;
●
require us to develop non-infringing
technology, which may not be possible on a cost-effective basis;
●
subject us to significant liability
to third parties; or
●
require us to enter into royalty
or licensing agreements, which may not be available on commercially reasonable terms, or at all, or which might be non-exclusive, which
could result in our competitors gaining access to the same technology.
Although no third party
has asserted a claim of patent infringement against us as of the date of this prospectus, it is possible that a third party may assert
a claim of patent infringement directed at any product candidates in the future. Any patent-related legal action against us claiming damages
and seeking to enjoin commercial activities relating to product candidates, treatment indications, or processes could subject us to significant
liability for damages, including treble damages if we were determined to willfully infringe, and require us to obtain a license to manufacture
or market product candidates. Defense of these claims, regardless of their merit, would involve substantial litigation expense and would
be a substantial diversion of employee resources from our business. We cannot predict whether we would prevail in any such actions or
that any license required under any of these patents would be made available on commercially acceptable terms, if at all. Moreover, even
if we or our strategic partners or collaborators were able to obtain a license, the rights may be nonexclusive, which could result in
our competitors gaining access to the same intellectual property. In addition, we cannot be certain that we could redesign product candidates,
treatment indications, or processes to avoid infringement, if necessary. Accordingly, an adverse determination in a judicial or administrative
proceeding, or the failure to obtain necessary licenses, could prevent us from developing and commercializing product candidates, which
could harm our business, financial condition and operating results. In addition, intellectual property litigation, regardless of its outcome,
may cause negative publicity and could prohibit us from marketing or otherwise commercializing product candidates and technology.
Even if resolved in our
favor, litigation or other legal proceedings could cause us to incur significant expenses, distract our technical and management personnel
from their normal responsibilities, delay development of product candidates, subject us to significant uncertainties and harm our reputation,
all of which could have a material adverse effect on our business, financial condition, results of operations and prospects. See "
—Risks
Related to Intellectual Property—Intellectual property litigation could cause us to spend substantial resources and distract our
personnel from their normal responsibilities" and "—Risks Related to Intellectual Property—Intellectual property
litigation may lead to unfavorable publicity that harms our reputation and causes the market price of our common shares to decline.
"
52
Our rights to develop
and commercialize our technology and product candidates are subject, in part, to the terms and conditions of licenses granted to us by
others.
We have licensed patent
and intellectual rights from Eil and Bala, and we may in the future license, patent and other intellectual property rights from other
parties. We may enter into additional license agreements in the future with others to advance our existing or future research or allow
commercialization of our existing or future product candidates. These licenses may not provide exclusive rights to use such intellectual
property and technology in all relevant fields of use and in all territories in which we may wish to develop or commercialize our technology
and products in the future. We may also need to devote substantial time and attention to ensuring that we successfully integrate these
transactions into our existing operations and are compliant with our obligations under these agreements, which may divert management's
time and attention away from our research and development programs or other day-to-day activities.
In addition, subject
to the terms of any such license agreements, we may not have the right to control the preparation, filing, prosecution, maintenance, enforcement,
and defense of patents and patent applications covering the technology that we license from third parties. Accordingly, we cannot be certain
that these patents and patent applications will be prepared, filed, prosecuted, maintained, enforced, and defended in a manner consistent
with the best interests of our business. If our licensors fail to prosecute, maintain, enforce, and defend such patents or patent applications,
or lose rights to those patents or patent applications, the rights we have licensed may be reduced or eliminated, and our right to develop
and commercialize any of our future product candidates that are subject of such licensed rights could be adversely affected. See "
—Risks
Related to Intellectual Property—The patent protection and patent prosecution for some of product candidates may be dependent on
third parties.
"
Our licensors may rely
on third-party consultants or collaborators or on funds from third parties such that our licensors are not the sole and exclusive owners
of the patents we in-license. If other third parties have ownership rights to our future in-licensed patents, they may be able to license
such patents to our competitors, and our competitors could market competing products and technology. This could have a material adverse
effect on our competitive position, business, financial conditions, results of operations, and prospects.
It is possible that we
may be unable to obtain licenses at a reasonable cost or on reasonable terms, if at all. Even if we are able to obtain a license, it may
be non-exclusive, thereby giving our competitors access to the same technologies licensed to us. In that event, we may be required to
expend significant time and resources to redesign our technology, product candidates, or the methods for manufacturing them or to develop
or license replacement technology, all of which may not be feasible on a technical or commercial basis. If we are unable to do so, we
may be unable to develop or commercialize the affected product candidates, which could harm our business, financial condition, results
of operations, and prospects significantly.
If we fail to comply
with our obligations in the agreements under which we license intellectual property rights from third parties or otherwise experience
disruptions to our business relationships with our licensors, we could lose license rights that are important to our business.
Disputes may arise between
us and our licensors regarding intellectual property subject to a license agreement, including:
●
the scope of rights granted
under the license agreement and other interpretation-related issues;
●
whether and the extent to which
our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement;
●
our right to sublicense patents
and other rights to third parties;
●
our diligence obligations under
the license agreement and what activities satisfy those diligence obligations;
●
our right to transfer or assign
the license;
●
the inventorship and ownership
of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners;
and
●
the priority of invention of
patented technology.
53
In addition, the agreements
under which we license intellectual property or technology from third parties are complex, and certain provisions in such agreements may
be susceptible to multiple interpretations. In the event of any disagreement about the interpretation of these provisions, our management
may need to devote a disproportionate amount of its attention to resolving these disagreements. Such disruptions may cause delays in our
research and development programs and other business objectives. Additionally, the resolution of any contract interpretation disagreement
that may arise could narrow what we believe to be the scope of our rights to the relevant intellectual property or technology, or increase
what we believe to be our financial or other obligations under the relevant agreement, either of which could have a material adverse effect
on our business, financial condition, results of operations, and prospects. Moreover, if disputes over intellectual property that we license
in the future prevent or impair our ability to maintain our licensing arrangements on commercially acceptable terms, we may be unable
to successfully develop and commercialize the affected product candidates, which could have a material adverse effect on our business,
financial conditions, results of operations, and prospects.
In spite of our best
efforts, our licensors might conclude that we materially breached our license agreements and might therefore terminate the license agreements,
thereby removing our ability to develop and commercialize products and technology covered by these license agreements. If these in-licenses
are terminated, or if the underlying patents fail to provide the intended exclusivity, competitors would have the freedom to seek regulatory
approval of, and to market, products identical to ours. This could have a material adverse effect on our competitive position, business,
financial conditions, results of operations, and prospects.
We may not be successful
in obtaining or maintaining necessary rights to product candidates through acquisitions and in-licenses.
Because our development
programs may in the future require the use of proprietary rights held by third parties, the growth of our business may depend in part
on our ability to acquire, in-license, or use these third-party proprietary rights. As of this date, we do not believe that Bala and Eil
rely on, or infringe, material intellectual property rights owned by third parties, but there is no assurance that our belief will prove
to be correct. We may be unable to acquire or in-license any compositions, methods of use, processes or other third-party intellectual
property rights from third parties that we identify as necessary for product candidates. The licensing and acquisition of third-party
intellectual property rights is a competitive area, and a number of more established companies may pursue strategies to license or acquire
third-party intellectual property rights that we may consider attractive or necessary. These established companies may have a competitive
advantage over us due to their size, capital resources and greater clinical development and commercialization capabilities. In addition,
companies that perceive us to be a competitor may be unwilling to assign or license rights to us. We also may be unable to license or
acquire third-party intellectual property rights on terms that would allow us to make an appropriate return on our investment or at all.
Even if we are able to obtain a license, it may be non-exclusive, thereby giving our competitors access to the same technologies licensed
to us. If we are unable to successfully obtain rights to required third-party intellectual property rights or maintain the existing intellectual
property rights we have, we may have to abandon development of the relevant program or product candidate, which could have a material
adverse effect on our business, financial condition, results of operations, and prospects.
We may be involved
in lawsuits to protect or enforce our patents or our licensors' patents, which could be expensive, time consuming and unsuccessful.
Further, our issued patents or our licensors' patents could be found invalid or unenforceable if challenged in court.
Competitors and other
third parties may infringe or otherwise violate our patents or other intellectual property or the patents or other intellectual property
of our licensors. In addition, our patents or the patents of our licensors may become involved in inventorship or priority disputes. Our
pending patent applications cannot be enforced against third parties practicing the technology claimed in such applications unless and
until a patent issues from such applications. To counter infringement or other unauthorized use, we may be required to file infringement
claims, which can be expensive and time-consuming. Our ability to enforce patent rights also depends on our ability to detect infringement.
It may be difficult to detect infringers who do not advertise the components or methods that are used in connection with their products
and services. Moreover, it may be difficult or impossible to obtain evidence of infringement in a competitor's or potential competitor's
product or service. Any claims we assert against perceived infringers could provoke these parties to assert counterclaims against us alleging
that we infringe their patents or that our patents are invalid or unenforceable. In a patent infringement proceeding, a court may decide
that a patent of ours is invalid or unenforceable, in whole or in part, construe the patent's claims narrowly or refuse to stop
the other party from using the technology at issue on the grounds that our patents do not cover the technology. An adverse result in any
litigation proceeding could put one or more of our owned or licensed patents at risk of being invalidated, held unenforceable or interpreted
narrowly. We may find it impractical or undesirable to enforce our intellectual property against some third parties.
54
If we or our licensors
were to initiate legal proceedings against a third party to enforce a patent directed to our product candidate or any additional product
candidates that we may develop, license or acquire, the defendant could counterclaim that our patent or that of our licensor is invalid
or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity or unenforceability are commonplace.
Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty,
obviousness, non-enablement or insufficient written description. Grounds for an unenforceability assertion could be an allegation that
someone connected with prosecution of the patent withheld relevant information from the USPTO or made a misleading statement during prosecution.
Third parties may also
raise similar claims before the USPTO or an equivalent foreign body, even outside the context of litigation. Potential proceedings include
re-examination, PGR, IPR, interference proceedings, derivation proceedings and equivalent proceedings in foreign jurisdictions (for example,
opposition proceedings). Such proceedings could result in the revocation of, cancellation of, or amendment to our patents in such a way
that they no longer cover our technology or any of our current or future product candidates. The outcome following legal assertions of
invalidity and unenforceability is unpredictable. With respect to the validity question, for example, we cannot be certain that there
is no invalidating prior art of which we and the patent examiner were unaware during prosecution. If a defendant were to prevail on a
legal assertion of invalidity or unenforceability, we would lose at least part, and perhaps all, of the patent protection on the applicable
product candidates or technology covered by the patent rendered invalid or unenforceable.
Some of our competitors
are larger than we are and have substantially greater resources. They are, therefore, likely to be able to sustain the costs of complex
patent litigation or proceedings more effectively than we can because of their greater financial resources and more mature and developed
intellectual property portfolios. Accordingly, despite our efforts, we may not be able to prevent third parties from infringing upon,
misappropriating or otherwise violating our intellectual property.
Even if resolved in our
favor, litigation or other legal proceedings could cause us to incur significant expenses, distract our technical and management personnel
from their normal responsibilities, delay development of product candidates, subject us to significant uncertainties and harm our reputation,
all of which could have a material adverse effect on our business, financial condition, results of operations and prospects. See "
—Risks
Related to Intellectual Property—Intellectual property litigation could cause us to spend substantial resources and distract our
personnel from their normal responsibilities" and "—Risks Related to Intellectual Property—Intellectual property
litigation may lead to unfavorable publicity that harms our reputation and causes the market price of our common shares to decline.
"
Intellectual property
litigation could cause us to spend substantial resources, distract our personnel from their normal responsibilities and subject us to
significant uncertainties.
Even if resolved in our
favor, litigation or other legal proceedings relating to intellectual property claims may cause us to incur significant expenses, and
could distract our technical and management personnel from their normal responsibilities. Such litigation or proceedings could substantially
increase our operating losses and reduce the resources available for development activities or any future sales, marketing or distribution
activities. Moreover, some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than
we can because of their greater financial resources.
55
In addition, the uncertainties
associated with litigation could compromise our ability to raise the funds necessary to continue our preclinical studies or initiate clinical
trials, continue our internal research programs, in-license needed technology or other product candidates or enter into development collaborations
that would help us commercialize product candidates, if approved. If the breadth or strength of protection provided by our patents and
patent applications or the patents and patent applications of our licensors is threatened, it could dissuade companies from collaborating
with us to license, develop or commercialize current or future product candidates. Accordingly, these uncertainties could compromise our
ability to compete in the marketplace. Furthermore, because of the substantial amount of discovery required in connection with intellectual
property litigation or other legal proceedings relating to our intellectual property rights, there is a risk that some of our confidential
information could be compromised by disclosure during this type of litigation or other proceedings. These uncertainties could cause the
price of shares of our common stock to decline, as well as have a material adverse effect on our business, financial condition, results
of operations and prospects.
Intellectual property
litigation may lead to unfavorable publicity that harms our reputation and business.
During the course of
any intellectual property litigation, there could be public announcements of the initiation of the litigation as well as results of hearings,
rulings on motions, and other interim proceedings or developments in the litigation. If securities analysts or investors regard these
announcements as negative, the perceived value of our existing product candidates, approved products, programs or intellectual property
could be diminished. Such announcements could harm our reputation or the market for our future products, which could have a material adverse
effect on our business.
Derivation proceedings
may be necessary to determine priority of inventions, and an unfavorable outcome may require us to cease using the related technology
or to attempt to license rights from the prevailing party.
Derivation proceedings
provoked by third parties or brought by us or declared by the USPTO may be necessary to determine the priority of inventions with respect
to our patents or patent applications or those of our licensors. An unfavorable outcome could require us to cease using the related technology
or to attempt to license rights to it from the prevailing party. Our business could be harmed if the prevailing party does not offer us
a license on commercially reasonable terms. Our defense of derivation proceedings may fail and, even if successful, may result in substantial
costs and distract our management and other employees. In addition, the uncertainties associated with such proceedings could have a material
adverse effect on our ability to raise the funds necessary to continue our clinical trials, continue our development programs, license
necessary technology from third parties or enter into development or manufacturing partnerships that would help us bring product candidates
to market.
Changes in patent
law could diminish the value of patents in general, thereby impairing our ability to protect product candidates.
Obtaining and enforcing
patents in the pharmaceutical and biotechnology industries is inherently uncertain, due in part to ongoing changes in the patent laws.
Changes in either the patent laws or in the interpretations of patent laws in the United States and other countries may diminish the value
of our intellectual property and may increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement
or defense of issued patents. In the United States, depending on decisions by Congress, the federal courts, and the USPTO, the laws and
regulations governing patents, and interpretation thereof, could change in unpredictable ways that could weaken our and our licensors'
or collaborators' ability to obtain new patents or to enforce existing or future patents. Moreover, we cannot predict the breadth
of claims that may be allowed or enforced in our patents or in third-party patents. For example, the U.S. Supreme Court has ruled on several
patent cases in recent years, either narrowing the scope of patent protection available in certain circumstances or weakening the rights
of patent owners in certain situations. Therefore, there is increased uncertainty with regard to our and our licensors' or collaborators'
ability to obtain patents in the future, as well as uncertainty with respect to the value of patents once obtained.
56
In addition, Congress
or other foreign legislative bodies may pass patent reform legislation that is unfavorable to us. Patent reform legislation could increase
the uncertainties and costs surrounding the prosecution of our and our licensors' or collaborators' patent applications and
the enforcement or defense of our or our licensors' or collaborators' issued patents. For example, in the United States, the
Leahy-Smith America Invents Act, or the Leahy-Smith Act, which was signed into law in September 2011, includes a number of significant
changes to U.S. patent law. These include provisions that affect the way patent applications will be prosecuted and may also affect patent
litigation. In particular, under the Leahy-Smith Act, the United States transitioned in March 2013 to a "first inventor to file"
system in which, assuming that other requirements of patentability are met, the first inventor to file a patent application will be entitled
to the patent regardless of whether a third party was first to invent the claimed invention. A third party that files a patent application
in the USPTO after March 2013 but before us could therefore be awarded a patent covering an invention of ours even if we had made the
invention before it was made by such third party. This will require us to be cognizant going forward of the time from invention to filing
of a patent application.
The Leahy-Smith Act also
includes a number of significant changes that affect the way patent applications will be prosecuted and also may affect patent litigation.
These include allowing third-party submission of prior art to the USPTO during patent prosecution and additional procedures to attack
the validity of a patent by USPTO administered post-grant proceedings, including PGR, IPR, and derivation proceedings. An adverse determination
in any such submission or proceeding could reduce the scope or enforceability of, or invalidate, our patent rights, which could adversely
affect our competitive position. Because of a lower evidentiary standard in USPTO proceedings compared to the evidentiary standard in
United States federal courts necessary to invalidate a patent claim, a third party could potentially provide evidence in a USPTO proceeding
sufficient for the USPTO to hold a claim invalid even though the same evidence would be insufficient to invalidate the claim if first
presented in a district court action. Accordingly, a third party may attempt to use the USPTO procedures to invalidate our patent claims
that would not have been invalidated if first challenged by the third party as a defendant in a district court action.
The USPTO has developed
regulations and procedures to govern administration of the Leahy-Smith Act, and many of the substantive changes to patent law associated
with the Leahy-Smith Act, particularly the first inventor-to-file provisions. Accordingly, it is not clear what, if any, impact the Leahy-Smith
Act will have on the operation of our business. However, the Leahy-Smith Act and its implementation could increase the uncertainties and
costs surrounding the prosecution of our or our licensors' patent applications and the enforcement or defense of our or our licensors'
issued patents, including for the reasons described above. Similarly, statutory or judicial changes to the patent laws of other countries
may increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of issued patents.
Any of these could have a material adverse effect on our business, financial condition, results of operations and prospects.
We may be subject
to claims challenging the inventorship or ownership of our patents and other intellectual property.
We or our licensors may
be subject to claims that former employees, collaborators or other third parties have an interest in our owned or in-licensed patents,
trade secrets, or other intellectual property as an inventor or co-inventor. For example, we or our licensors may have inventorship disputes
arise from conflicting obligations of employees, consultants or others who are involved in developing product candidates. While it is
our policy to require our employees and contractors who may be involved in the development of intellectual property to execute agreements
assigning this intellectual property to us, we may be unsuccessful in executing such an agreement with each party who in fact develops
intellectual property that we regard as our own. Our and their assignment agreements may not be self-executing or may be breached, and
litigation may be necessary to defend against these and other claims challenging inventorship or our or our licensors' ownership
of our owned or in-licensed patents, trade secrets or other intellectual property. If we or our licensors fail in defending any such claims,
in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to
use, intellectual property that is important to product candidates. Even if resolved in our favor, litigation or other legal proceedings
could cause us to incur significant expenses, distract our technical and management personnel from their normal responsibilities, delay
development of product candidates, subject us to significant uncertainties and harm our reputation, all of which could have a material
adverse effect on our business, financial condition, results of operations and prospects. See
"—Risks Related to Intellectual
Property—Intellectual property litigation could cause us to spend substantial resources and distract our personnel from their normal
responsibilities" and "—Risks Related to Intellectual Property—Intellectual property litigation may lead to unfavorable
publicity that harms our reputation and business.
"
57
Patent terms may
be inadequate to protect our competitive position on product candidates for an adequate amount of time.
Patents have a limited
lifespan. In the United States, if all maintenance fees are timely paid, the natural expiration of a patent is generally 20 years from
its earliest U.S. non-provisional filing date. Various extensions may be available, but the life of a patent, and the protection it affords,
is limited. Even if patents covering product candidates are obtained, once the patent life has expired, we may be open to competition
from competitive products. Given the amount of time required for the development, testing and regulatory review of new product candidates,
patents protecting such candidates might expire before or shortly after such candidates are commercialized. In addition, the issuance
of a patent does not give us the right to practice the patented invention. Third parties may have blocking patents that could prevent
us from marketing our own patented product and practicing our own patented technology. As a result, our owned and licensed patent portfolio
may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours.
If we or our licensors
do not obtain patent term extension for product candidates, our business may be materially harmed.
Depending upon the timing,
duration and specifics of FDA marketing approval of product candidates, one or more of our U.S. patents or those of our licensors may
be eligible for limited patent term restoration under the Drug Price Competition and Patent Term Restoration Act of 1984, or the Hatch-Waxman
Amendments. The Hatch-Waxman Amendments permit a patent restoration term of up to five years as compensation for patent term lost during
product development and the FDA regulatory review process. A maximum of one patent may be extended per FDA approved product as compensation
for the patent term lost during the FDA regulatory review process. A patent term extension cannot extend the remaining term of a patent
beyond a total of 14 years from the date of product approval and only those claims covering such approved drug product, a method for using
it or a method for manufacturing it may be extended. Patent term extension may also be available in certain foreign countries upon regulatory
approval of product candidates. However, we may not be granted an extension because of, for example, failing to apply within applicable
deadlines, failing to apply prior to expiration of relevant patents or otherwise failing to satisfy applicable requirements. Moreover,
the applicable time period or the scope of patent protection afforded could be less than we request. If we are unable to obtain patent
term extension or restoration or the term of any such extension is less than we request, our competitors may obtain approval of competing
products following our patent expiration, and our revenue could be reduced, possibly materially. Further, if this occurs, our competitors
may take advantage of our investment in development and trials by referencing our clinical and preclinical data and launch their product
earlier than might otherwise be the case.
We and our licensors
may not be able to protect intellectual property rights throughout the world.
Although we or our licensors
have pending patent applications in the United States and other countries, filing, prosecuting and defending patents in all countries
throughout the world would be prohibitively expensive, and our intellectual property rights and those of our licensors in some countries
outside the United States can be less extensive than those in the United States. In addition, the laws of some foreign countries do not
protect intellectual property rights to the same extent as federal and state laws in the United States. Consequently, we may not be able
to prevent third parties from practicing our inventions in all countries outside the United States or from selling or importing products
made using our inventions in and into the United States or other jurisdictions. Competitors may use our intellectual property in jurisdictions
where we have not obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories
where we have patent protection, but enforcement is not as strong as that in the United States. These products may compete with our product
candidate and any additional product candidates that we may develop, and our patents, the patents of our licensors, or other intellectual
property rights may not be effective or sufficient to prevent them from competing.
Many companies have encountered
significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of many foreign
countries do not favor the enforcement of patents and other intellectual property protection, which could make it difficult for us to
stop the infringement of our patents or our licensors' patents or marketing of competing products in violation of our proprietary
rights. Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and
attention from other aspects of our business, could put our patents or the patents of our licensors at risk of being invalidated or interpreted
narrowly and our patent applications or the patent applications of our licensors at risk of not issuing and could provoke third parties
to assert claims against us. We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may
not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate
to obtain a significant commercial advantage from the intellectual property that we develop or license.
58
Many countries have compulsory
licensing laws under which a patent owner may be compelled to grant licenses to third parties. In addition, many countries limit the enforceability
of patents against government agencies or government contractors. In those countries, we may have limited remedies if patents are infringed
or if we are compelled to grant a license to a third party, which could materially diminish the value of the applicable patents. This
could limit our potential revenue opportunities. Accordingly, our efforts to enforce our intellectual property rights around the world
may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.
Obtaining and
maintaining our patent protection depends on compliance with various procedural, documentary, fee payment and other requirements imposed
by regulations and governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these
requirements.
Periodic maintenance
fees, renewal fees, annuity fees and various other governmental fees on patents and/or applications will be due to the USPTO and various
foreign patent offices at various points over the lifetime of our patents and/or applications and those of our licensors. Additionally,
the USPTO and various foreign patent offices require compliance with a number of procedural, documentary, fee payment and other similar
provisions during the patent application process. Non-compliance events that could result in abandonment or lapse of a patent or patent
application include failure to respond to official communications within prescribed time limits, non-payment of fees and failure to properly
legalize and submit formal documents. While an inadvertent lapse can in some cases be cured by payment of a late fee or by other means
in accordance with the applicable rules, there are situations in which non-compliance can result in irrevocable abandonment or lapse of
the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. If we or our licensors
or collaborators fail to maintain the patents and patent applications covering product candidates, our competitors might be able to enter
the market with similar or identical products or technology, which would harm our business, financial condition, results of operations
and prospects.
If our trademarks
and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business
may be adversely affected.
We use and intend to
use registered or unregistered trademarks or trade names to brand and market ourselves and our products. Our trademarks or trade names
may be challenged, infringed, circumvented or declared generic or determined to be infringing on other marks. We may not be able to protect
our rights to these trademarks and trade names, which we need to build name recognition among potential partners or customers in our markets
of interest. At times, competitors may adopt trade names or trademarks similar to ours, thereby impeding our ability to build brand identity
and possibly leading to market confusion. In addition, there could be potential trade name or trademark infringement claims brought by
owners of other registered trademarks or trademarks that incorporate variations of our registered or unregistered trademarks or trade
names. Over the long term, if we are unable to establish name recognition based on our trademarks and trade names, then we may not be
able to compete effectively, and our business may be adversely affected. Our efforts to enforce or protect our proprietary rights related
to trademarks, trade secrets, domain names, copyrights or other intellectual property may be ineffective and could result in substantial
costs and diversion of resources and could adversely affect our financial condition or results of operations.
If we are unable
to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.
We rely on the protection
of our trade secrets, including unpatented know-how, technology and other proprietary information to maintain our competitive position.
Although we have taken steps to protect our trade secrets and unpatented know-how, including entering into confidentiality agreements
with third parties, and confidential information and inventions agreements with service providers, employees, consultants and advisors,
we cannot provide any assurances that all such agreements have been duly executed, and any of these parties may breach the agreements
and disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches.
Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the
outcome is unpredictable. In addition, some courts inside and outside the United States are less willing or unwilling to protect trade
secrets.
59
Moreover, third parties
may still obtain this information or may come upon this or similar information independently, and we would have no right to prevent them
from using that technology or information to compete with us. If any of these events occurs or if we otherwise lose protection for our
trade secrets, the value of this information may be greatly reduced, and our competitive position would be harmed. If we do not apply
for patent protection prior to such publication or if we cannot otherwise maintain the confidentiality of our proprietary technology and
other confidential information, then our ability to obtain patent protection or to protect our trade secret information may be jeopardized.
We may be subject
to claims that we or our service providers have wrongfully used or disclosed alleged confidential information or trade secrets.
We have entered into
and may in the future enter into non-disclosure and confidentiality agreements to protect the proprietary positions of third parties,
such as outside scientific collaborators, CROs, third-party manufacturers, consultants, advisors, potential partners, and other third
parties. We may become subject to litigation where a third party asserts that we or our service providers inadvertently or otherwise breached
the agreements and used or disclosed trade secrets or other information proprietary to the third parties. Failure to successfully defend
against any such claim could subject us to significant liability for monetary damages or prevent or delay our developmental and commercialization
efforts, which could adversely affect our business. Even if resolved in our favor, litigation or other legal proceedings could cause us
to incur significant expenses, distract our technical and management personnel from their normal responsibilities, delay development of
product candidates, subject us to significant uncertainties and harm our reputation, all of which could have a material adverse effect
on our business, financial condition, results of operations and prospects. See "
—Risks Related to Intellectual Property—Intellectual
property litigation could cause us to spend substantial resources and distract our personnel from their normal responsibilities"
and "—Risks Related to Intellectual Property—Intellectual property litigation may lead to unfavorable publicity that
harms our reputation and causes the market price of our common shares to decline.
"
We may be subject
to claims that we have wrongfully hired an employee from a competitor or that we or our employees have wrongfully used or disclosed alleged
confidential information or trade secrets of their former employers.
Many of our consultants,
advisors and service providers were previously employed at other biotechnology or pharmaceutical companies and our consultants and advisors
may work for other biotechnology or pharmaceutical companies in addition to us. Although we try to ensure that our employees, consultants
and advisors do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or
these individuals have used or disclosed intellectual property, including trade secrets or other proprietary information, of any of these
individuals' former or concurrent employers or clients. We may also be subject to claims that patents and applications we have filed
to protect inventions of our employees, consultants and advisors, even those related to one or more product candidates, are rightfully
owned by their former or concurrent employer. Litigation may be necessary to defend against these claims.
If we fail in defending
any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. Even if resolved
in our favor, litigation or other legal proceedings could cause us to incur significant expenses, distract our technical and management
personnel from their normal responsibilities, delay development of product candidates, subject us to significant uncertainties and harm
our reputation, all of which could have a material adverse effect on our business, financial condition, results of operations and prospects.
See
"—Risks Related to Intellectual Property—Intellectual property litigation could cause us to spend substantial
resources and distract our personnel from their normal responsibilities" and "—Risks Related to Intellectual Property—Intellectual
property litigation may lead to unfavorable publicity that harms our reputation and business.
"
60
The patent protection
and patent prosecution for some product candidates may be dependent on third parties.
While we normally seek
to obtain the right to control prosecution, maintenance and enforcement of the patents relating to product candidates, there may be times
when the filing and prosecution activities for patents and patent applications relating to product candidates are controlled by our licensors
or collaboration partners. If any of our licensors or collaboration partners fail to prosecute, maintain and enforce such patents and
patent applications in a manner consistent with the best interests of our business, including by payment of all applicable fees for patents
covering product candidates, we could lose our rights to the intellectual property or our exclusivity with respect to those rights, our
ability to develop and commercialize those product candidates may be adversely affected and we may not be able to prevent competitors
from making, using and selling competing products. In addition, even where we have the right to control patent prosecution of patents
and patent applications we have licensed from third parties, we may still be adversely affected or prejudiced by actions or inactions
of our licensors and their counsel that took place prior to the date upon which we assumed control over patent prosecution.
Risks Related to Our
Reliance on Related Parties and Third Parties
We rely on third
parties and related parties to conduct preclinical studies and clinical trials, and those parties may not perform satisfactorily, including
failing to meet deadlines for the completion of such trials, research and studies.
We do not have the ability
to independently conduct all aspects of our preclinical studies or clinical trials ourselves. We utilize and depend upon related and third-party
investigators and collaborators, such as medical institutions, CROs, clinical trial sites and CMOs, to conduct and support our preclinical
studies under agreements with us and also do so for our current and anticipated clinical trials. These related and third parties have
had and will continue to have a significant role in the conduct of our preclinical studies and anticipated clinical trials and the subsequent
collection and analysis of data.
These related and third
parties are not our employees, and except for remedies available to us under our agreements with such parties, we have limited ability
to control the amount or timing of resources that any such party will devote to our preclinical studies or our clinical trials. The related
and third parties we rely on for these services may also have relationships with other entities, some of which may be our competitors,
for whom they may also be conducting preclinical studies, clinical trials or other drug development activities, which could affect their
performance on our behalf. Some of these related and third parties may terminate their engagements with us at any time. We also expect
to have to negotiate budgets and contracts with CROs, clinical trial sites and CMOs and we may not be able to do so on favorable terms,
which may result in delays to our development timelines and increased costs. If we need to enter into alternative arrangements with, or
replace or add any related or third parties, it would involve substantial cost and require extensive management time and focus, or involve
a transition period, and may delay our drug development activities, as well as materially impact our ability to meet our desired clinical
development timelines.
Our heavy reliance on
these related and third parties for such drug development activities will reduce our control over these activities. As a result, we will
have less direct control over the conduct, timing and completion of preclinical studies and clinical trials and the management of data
developed through preclinical studies and clinical trials than would be the case if we were relying entirely upon our own staff. Nevertheless,
we are responsible for ensuring that each of our studies and trials is conducted in accordance with applicable protocol, legal and regulatory
requirements and scientific standards, and our reliance on third parties does not relieve us of our regulatory responsibilities. For example,
we will remain responsible for ensuring that each of our clinical trials is conducted in accordance with the general investigational plan
and protocols for the trial. Moreover, the FDA requires us to comply with GCP standards, regulations for conducting, recording and reporting
the results of clinical trials to assure that data and reported results are reliable and accurate and that the rights, integrity and confidentiality
of trial participants are protected. Regulatory authorities enforce these GCP requirements through periodic inspections of trial sponsors,
principal investigators and trial sites. If we or any of our CROs or any clinical trial sites fail to comply with applicable GCP requirements,
the clinical data generated in our clinical trials may be deemed unreliable and the FDA or other comparable foreign regulatory authorities
may require us to perform additional clinical trials before approving our marketing applications. There can be no assurance that upon
inspection by a given regulatory authority, such regulatory authority will determine that any of our clinical trials substantially comply
with GCP regulations. In addition, our clinical trials must be conducted with product produced under current cGMP regulations and will
require a large number of test patients. Our failure or any failure by these third parties to comply with these regulations or to recruit
a sufficient number of study subject, may require us to repeat clinical trials, which would delay the regulatory approval process. Moreover,
our business may be implicated if any of these third parties violates federal or state fraud and abuse or false claims laws and regulations
or healthcare privacy and security laws.
61
There is no guarantee
that any CROs, clinical trial investigators or other third parties on which we rely will devote adequate time and resources to our development
activities or perform as contractually required. If any of these third parties fail to meet expected deadlines, adhere to our clinical
protocols or meet regulatory requirements, otherwise perform in a substandard manner, or terminate their engagements with us, the timelines
for our development programs may be extended or delayed or our development activities may be suspended or terminated. If our clinical
trial site terminates for any reason, we may experience the loss of follow-up information on subjects enrolled in such clinical trial
unless we are able to transfer those subjects to another qualified clinical trial site, which may be difficult or impossible.
Accordingly, if these
related or third parties do not successfully carry out their contractual duties, meet expected deadlines or conduct our clinical trials
in accordance with regulatory requirements or our stated protocols, or if these third parties need to be replaced, we will not be able
to obtain, or may be delayed in obtaining, marketing approvals for product candidates and will not be able to, or may be delayed in our
efforts to, successfully commercialize product candidates. As a result, our financial results and the commercial prospects for product
candidates would be harmed, our costs could increase and our ability to generate revenue could be delayed.
We contract with
related and third parties for the manufacture of our only product candidate for preclinical studies and expect to continue to do so for
additional preclinical studies, anticipated clinical trials and ultimately for commercialization. This reliance on related and third parties
increases the risk that we will not have sufficient quality and quantities of product candidates or such quantities at an acceptable cost,
which could delay, prevent or impair our development or commercialization efforts.
We do not currently have
the infrastructure or internal capability to manufacture supplies of product candidates for use in development and commercialization.
We rely, and expect to
continue to rely, on both related and third-party manufacturers for the production of product candidates for preclinical studies and anticipated
clinical trials under the guidance of members of our organization. We do not have long-term supply agreements, and we purchase our required
drug product on a purchase order basis, which means that aside from any binding purchase orders we have from time to time, our supplier
could cease supplying to us or change the terms on which it is willing to continue supplying to us at any time. Even if we are able to
replace any raw materials or other materials with an alternative, such alternatives may cost more, result in lower yields or not be as
suitable for our purposes. In addition, some of the materials that we use to manufacture product candidates are complex materials, which
may be more difficult to substitute. If we were to experience an unexpected loss of supply of any product candidates for any reason, whether
as a result of manufacturing, supply or storage issues or otherwise, we could experience delays, disruptions, suspensions or terminations
of, or be required to restart or repeat, any pending or ongoing preclinical studies or anticipated clinical trials, which could result
in delays and additional regulatory submissions.
If we obtain marketing
approval for any product candidates, given that our limited existing supply arrangements do not extend to commercial supply, we will need
to establish one or more agreements with third parties to develop and scale up the drug manufacturing process. We may be unable to maintain
or establish required agreements with our manufacturers or to do so on acceptable terms. Our product candidates and any additional product
candidates that we may develop may compete with other product candidates and products for access to manufacturing facilities. As a result,
we may not obtain access to these facilities on a priority basis or at all. There are a limited number of manufacturers that operate under
cGMP regulations and that might be capable of manufacturing for us.
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Even if we are able to
establish agreements with third-party manufacturers, they may be unable to successfully increase the manufacturing capacity for any product
candidates in a timely or cost-effective manner, or at all. In addition, quality issues may arise during scale-up or commercial activities.
Reliance on related and third-party manufacturers also entails additional risks, including:
●
the failure of the party to
manufacture product candidates according to our schedule and specifications, or at all, including if our contractors give greater priority
to the supply of other products over product candidates or otherwise do not satisfactorily perform according to the terms of the agreements
between us and them;
●
the reduction or termination
of production or deliveries by suppliers, or the raising or prices or renegotiation of terms;
●
the termination or nonrenewal
of arrangements or agreements by our contractors at a time that is costly or inconvenient for us;
●
the breach by the contractors
of our agreements with them;
●
the failure of contractors
to comply with applicable regulatory requirements, including cGMPs;
●
the breach by the contractors
of our agreements with them;
●
the failure of the to manufacture
product candidates according to our specifications;
●
the mislabeling of clinical
supplies, potentially resulting in the wrong dose amounts being supplied or active drug or placebo not being properly identified;
●
clinical supplies not being
delivered to clinical sites on time, leading to clinical trial interruptions, or of drug supplies not being distributed to commercial
vendors in a timely manner, resulting in lost sales; and
●
the misappropriation of our
proprietary information, including our trade secrets and know-how.
Our anticipated future
dependence upon others for the manufacture of product candidates may adversely affect our future profit margins and our ability to commercialize
any product candidates that receive marketing approval on a timely and competitive basis.
Our manufacturing
process needs to comply with FDA regulations relating to the quality and reliability of such processes. Any failure to comply with relevant
regulations could result in delays in or termination of our clinical programs and suspension or withdrawal of any regulatory approvals.
Third-party manufacturers
may not be able to comply with cGMP regulations or similar regulatory requirements outside of the United States. If our contract manufacturers
cannot successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the FDA or other
comparable foreign regulatory authorities, they will not be able to secure and/or maintain marketing approval for their manufacturing
facilities. In addition, we do not have control over the ability of our contract manufacturers to maintain adequate quality control, quality
assurance and qualified personnel. If the FDA or other comparable foreign regulatory authority does not approve these facilities for the
manufacture of product candidates or if it withdraws any such approval in the future, we will need to find alternative manufacturing facilities,
and those new facilities would need to be inspected and approved by FDA or other comparable foreign regulatory authority prior to commencing
manufacturing, which would significantly impact our ability to develop, obtain marketing approval for or market product candidates, if
approved. Our failure, or the failure of our third-party manufacturers, to comply with applicable regulations could result in sanctions
being imposed on us, including fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation,
seizures or recalls of product candidates or drugs, operating restrictions and criminal prosecutions, any of which could significantly
and adversely affect supplies of product candidates or drugs and harm our business and results of operations.
63
If our related
or third-party manufacturers use hazardous materials in a manner that causes injury or violates applicable law, we may be liable for damages.
Our research and development
activities involve the controlled use of potentially hazardous substances, including chemical materials, by our third-party manufacturers.
Our manufacturers are subject to federal, state and local laws and regulations in the United States governing the use, manufacture, storage,
handling and disposal of medical and hazardous materials. Although we believe that our manufacturers' procedures for using, handling,
storing and disposing of these materials comply with legally prescribed standards, we cannot completely eliminate the risk of contamination
or injury resulting from medical or hazardous materials. As a result of any such contamination or injury, we may incur liability or local,
city, state or federal authorities may curtail the use of these materials and interrupt our business operations. In the event of an accident,
we could be held liable for damages or penalized with fines, and the liability could exceed our resources. Compliance with applicable
environmental laws and regulations is expensive, and current or future environmental regulations may impair our research, development
and production efforts, which could harm our business, prospects, financial condition or results of operations.
We have entered
into certain related party transactions and may continue to rely on related parties for certain development and support
activities.
We have entered into,
and may continue to enter into, transactions with affiliates for certain development and support activities. For example, have entered
into a services agreement with Abet Solutions, pursuant to which Abet Solutions provides us, administrative support services, including
general management and operations services, as well as financial and accounting services, among other items. Dr. Savchuk, our President
and Chief Operating Officer, has a material direct interest in Abet Solutions. For additional information related to this and other related
party transactions, please see the section entitled "
Certain Relationships and Related Party Transactions.
" Such related
party transactions may not have been entered into on an arm's-length basis, and we may have achieved more favorable terms because
such transactions were entered into with our related parties. We rely on, and will continue to rely on, our related parties to
maintain these services. If the pricing for these services changes, or if our related parties cease to provide these services,
including by terminating agreements with us, we may be unable to obtain replacements for these services on the same terms without disruption
to our business. This could have a material effect on our business, results of operations and financial condition.
If we decide to
establish collaborations, but are not able to establish those collaborations on commercially reasonable terms, we may have to alter our
development and commercialization plans.
Our drug development
programs and the potential commercialization of product candidates will require substantial additional cash to fund expenses. Although
we have not entered into any collaborations to date, we may seek to selectively form collaborations to expand our capabilities, potentially
accelerate research and development activities and provide for commercialization activities by third parties. Any of these relationships
may require us to incur non-recurring and other charges, increase our near- and long-term expenditures, issue securities that dilute our
existing stockholders, or disrupt our management and business.
We face significant competition
in seeking appropriate collaborators and the negotiation process is time-consuming and complex. Whether we reach a definitive agreement
for a collaboration depends, among other things, upon our assessment of the collaborator's resources and expertise, the terms and
conditions of the proposed collaboration and the proposed collaborator's evaluation of a number of factors. Those factors may include
the design or results of preclinical studies or clinical trials, the likelihood of approval by the FDA or other comparable foreign regulatory
authorities, the potential market for the subject product candidate, the costs and complexities of manufacturing and delivering such product
candidate to patients, the potential of competing drugs, the existence of uncertainty with respect to our ownership of intellectual property
and industry and market conditions generally. The potential collaborator may also consider alternative product candidates or technologies
for similar indications that may be available to collaborate on and whether such collaboration could be more attractive than the one with
us for our product candidate. Further, we may not be successful in our efforts to establish a collaboration or other alternative arrangements
for product candidates because they may be deemed to be at too early of a stage of development for collaborative effort and third parties
may not view them as having the requisite potential to demonstrate safety and efficacy.
In addition, there have
been a significant number of recent business combinations among large pharmaceutical companies that have resulted in a reduced number
of potential collaborators. Even if we are successful in entering into a collaboration, the terms and conditions of that collaboration
may restrict us from entering into future agreements on certain terms with potential collaborators.
64
If and when we seek to
enter into collaborations, we may not be able to negotiate collaborations on a timely basis, on acceptable terms, or at all. If we are
unable to do so, we may have to curtail the development of a product candidate, reduce or delay its development program or one or more
of our other research programs, delay its potential commercialization or reduce the scope of any sales or marketing activities, or increase
our expenditures and undertake development or commercialization activities at our own expense. If we elect to increase our expenditures
to fund development or commercialization activities on our own, we may need to obtain additional capital, which may not be available to
us on acceptable terms or at all. If we do not have sufficient funds, we may not be able to further develop product candidates or bring
them to market and generate revenue.
If conflicts arise
between us and our collaborators or strategic partners, these parties may act in a manner adverse to us and could limit our ability to
implement our strategies.
If conflicts arise between
any corporate or academic collaborators or strategic partners and us, the other party may act in a manner adverse to us and could limit
our ability to implement our strategies. Collaborators or strategic partners may develop, either alone or with others, products in related
fields that are competitive with the products or potential products that are the subject of these collaborations. Competing products,
either developed by the collaborators or strategic partners or to which the collaborators or strategic partners have rights, may result
in the withdrawal of partner support for product candidates. Our collaborators or strategic partners may preclude us from entering into
collaborations with their competitors, fail to obtain timely regulatory approvals, terminate their agreements with us prematurely, or
fail to devote sufficient resources to the development and commercialization of products. Any of these developments could harm our product
development efforts.
We may not realize
the benefits of any acquisitions, in-license or other collaborations or strategic alliances that we enter into.
We entered into the Eil
license agreement and Bala license agreement in October 2024, and in the future, we may seek and form strategic alliances, create joint
ventures or collaborations, or enter into acquisitions or additional licensing arrangements with third parties that we believe will complement
or augment our development and commercialization efforts with respect to our product candidate and any additional product candidates that
we may develop.
These transactions can
entail numerous operational and financial risks, including exposure to unknown liabilities, disruption of our business and diversion of
our management's time and attention in order to manage a collaboration or develop acquired products, product candidates or technologies,
incurrence of substantial debt or dilutive issuances of equity securities to pay transaction consideration or costs, higher than expected
collaboration, acquisition or integration costs, write-downs of assets or goodwill or impairment charges, increased amortization expenses,
difficulty and cost in facilitating the collaboration or combining the operations and personnel of any acquired business, impairment of
relationships with key suppliers, manufacturers or customers of any acquired business due to changes in management and ownership and the
inability to retain key employees of any acquired business. We may agree to and be bound by negative covenants which may limit our development
and commercial opportunities. As a result, if we enter into collaboration agreements, strategic partnerships or license our products,
we may not be able to realize the benefit of such transactions if we are unable to successfully integrate them with our existing operations
and company culture, which could delay our timelines or otherwise adversely affect our business.
We also cannot be certain
that, following a strategic transaction or license, we will achieve the revenue or specific net income that justifies such transaction
or such other benefits that led us to enter into the arrangement. Failure to realize the benefits of any collaborations or strategic alliances
may further cause us to curtail the development of a product candidate, reduce or delay its development program or one or more of our
other development programs, delay its potential commercialization or reduce the scope of any planned sales or marketing activities, or
increase our expenditures and undertake development or commercialization activities at our own expense. If we elect to fund and undertake
development or commercialization activities on our own, we will need to obtain additional expertise and additional capital, which may
not be available to us on acceptable terms or at all. If we fail to enter into collaborations and do not have sufficient funds or expertise
to undertake the necessary development and commercialization activities, we may not be able to further develop product candidates or bring
them to market and generate product sales revenue, which would harm our business prospects, financial condition and results of operations.
65
Risks Related to Our
Common Stock
There is currently
no market for our common stock and there can be no assurance that any market will ever develop. You may therefore be unable to re-sell
shares of our common stock at times and prices that you believe are appropriate.
Our common stock is not
listed on a national securities exchange or any other exchange, or quoted on an over-the-counter market. Furthermore, we will not be able
to apply to list our common stock on any national securities exchange until the one-year anniversary of the filing of the closing 8-K
on the Merger, at the earliest. Therefore, there is no trading market, active or otherwise, for our common stock and our common stock
may never be included for trading on any stock exchange, automated quotation system or any over-the-counter market. Accordingly, our common
stock is highly illiquid and you will likely experience difficulty in re-selling such shares at times and prices that you may desire.
Our common stock
is not listed on a securities exchange and is not quoted on an over-the-counter trading system, and it may not ever be eligible for listing
or quotation on any securities exchange or on a given over-the-counter trading system.
We do not currently meet
the initial quantitative listing standards of any national securities exchange and certain over-the-counter trading systems. For example,
we have very few stockholders, and therefore do not have sufficient round lot holders to meet the initial listing requirements of the
New York Stock Exchange or The Nasdaq Stock Market LLC. We cannot assure you that we will be able to meet the initial listing standards
of any national securities exchange, or, if we do meet such initial listing standards, that we will be able to maintain any such listing.
Further, the national securities exchanges have adopted so-called "seasoning" rules that will require that we meet certain
requirements, including prescribed periods of time trading over-the-counter and minimum filings of periodic reports with the SEC, before
we are eligible to apply for listing on such national securities exchanges. We intend to contact an authorized market maker for an over-the-counter
quotation system for sponsorship of our common stock, but we cannot guarantee that such sponsorship will be approved and our common stock
listed and quoted for sale. Even if our common stock is quoted for sale on an over-the-counter quotation system, buyers may be insufficient
in numbers to allow for a robust market and it may prove impossible to sell your shares. In addition, an investor may find it difficult
to obtain accurate quotations as to the market value of our common stock. In addition, if we fail to meet the criteria set forth in SEC
regulations, various requirements would be imposed by law on broker-dealers who sell our securities to persons other than established
customers and accredited investors. Consequently, such regulations may deter broker-dealers from recommending or selling our common stock,
which may further affect its liquidity. This would also make it more difficult for us to raise additional capital.
The designation
of our common stock as a "penny stock" would limit the liquidity of our common stock.
Our common stock may
be deemed a "penny stock" (as that term is defined under Rule 3a51-1 of the Exchange Act) in any market that may develop in
the future. Generally, a "penny stock" is a common stock that is not listed on a securities exchange and trades for less than
$5.00 a share. Prices often are not available to buyers and sellers and the market may be very limited. Penny stock in start-up companies
is among the riskiest equity investments. Broker-dealers who sell penny stock must provide purchasers with a standardized risk-disclosure
document prepared by the SEC. The document provides information about penny stock and the nature and level of risks involved in investing
in the penny stock market. A broker must also provide purchasers with bid and offer quotations and information regarding broker and salesperson
compensation and make a written determination that the penny stock is a suitable investment for the purchaser and obtain the purchaser's
written agreement to the purchase. Many brokers choose not to participate in penny stock transactions. If our common stock is deemed "penny
stock", because of penny stock rules, there may be less trading activity in any market that develops for our common stock in the
future and stockholders are likely to have difficulty selling their shares.
FINRA sales practice
requirements may limit a stockholder's ability to buy and sell our common stock.
The Financial Industry
Regulatory Authority, or FINRA, has adopted rules requiring that, in recommending an investment to a customer, a broker-dealer must have
reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative or low-priced securities
to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial
status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA has indicated its belief
that there is a high probability that speculative or low-priced securities will not be suitable for at least some customers. If these
FINRA requirements are applicable to us or our securities, they may make it more difficult for broker-dealers to recommend that at least
some of their customers buy our common stock, which may limit the ability of our stockholders to buy and sell our common stock and could
have an adverse effect on the market for and price of our common stock.
66
The trading price
of our common stock may be volatile and may fluctuate substantially or may decline regardless of our operating performance and you may
not be able to resell your shares for a profit, if at all.
There is currently no public market for Lomond's common stock.
The market price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control,
including:
●
overall performance of the
equity markets;
●
our operating performance and
the performance of other similar companies;
●
results from any clinical trials
with our current and future product candidates or those of our competitors;
●
changes in recommendations
by securities analysts that elect to follow our common stock;
●
regulatory or legal developments
in the United States and other countries;
●
the level of expenses related
to future product candidates or clinical development programs;
●
our failure to achieve product
development goals in the timeframe we announce;
●
announcements of acquisitions,
strategic alliances or significant agreements by us or by our competitors;
●
recruitment or departure of
key personnel;
●
the economy as a whole and
market conditions in our industry, including inflation and instability in the banking sector;
●
trading activity by a limited
number of stockholders who together beneficially own a significant amount of our outstanding common stock;
●
the expiration of market standoff
or contractual lock-up agreements;
●
the size of our market float;
and
●
any other factors discussed
in this prospectus.
In addition, the stock
markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities
of many biotechnology companies. Stock prices of many biotechnology companies have fluctuated in a manner unrelated or disproportionate
to the operating performance of those companies. In the past, securities class-action litigation has often been instituted against companies
following periods of volatility in the market price of their shares. This type of litigation could result in substantial costs and divert
our management's attention and resources, which could have a material adverse effect on us.
As a result of these
factors, you may not be able to resell your shares of our common stock for a profit, or at all.
The shares of common
stock issued in the Merger and the Offering are "restricted securities" and, as such, may not be sold except in limited circumstances.
None of the shares of
common stock issued in the Merger and the Offering were registered under the Securities Act of 1933, as amended, or the Securities Act,
or registered or qualified under any state securities laws. The shares of common stock issued in the Merger and the Offering were sold
and/or issued pursuant to exemptions contained in and under those laws. Accordingly, these shares are deemed "restricted securities"
under Rule 144 of the Securities Act, until the effectiveness of this registration statement and must, therefore, be held indefinitely
unless registered under applicable federal and state securities laws, or an exemption is available from the registration requirements
of those laws. The book entries representing the shares of common stock issued in the Merger reflect their restricted status.
67
We are registering the
shares of common stock issued in the Merger and the Offering. There can be no assurance, however, that the SEC will declare this registration
statement effective, thereby enabling the shares of common stock issued in the Merger or the Offering to be freely tradable, subject to
restrictions arising under lock-up agreements.
Venetian-1 Acquisition
Corp. was a shell company under the federal securities laws, and Rule 144 is not available for the resale of securities initially issued
by shell companies or issuers that have been at any time previously a shell company. However, Rule 144 also includes an important exception
to this prohibition if the following conditions are met:
●
the issuer of the securities
that was formerly a shell company has ceased to be a shell company;
●
the issuer of the securities
is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;
●
the issuer of the securities
has filed all Exchange Act reports and materials required to be filed, as applicable, during the preceding 12 months (or such shorter
period that the issuer was required to file such reports and materials), other than Current Reports on Form 8-K; and
●
at least one year has elapsed
from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell
company.
Because we are a former
shell company, the reporting requirements of Rule 144(i) will apply regardless of holding period. Therefore, the restrictive legends on
the shares of common stock issued in the Merger and the Offering cannot be removed except in connection with an actual sale that is effected
pursuant to an effective registration statement or under an applicable exemption from the registration requirements of the Securities
Act.
If we are unable
to register in a timely manner the shares of common stock issued to stockholders in the Merger or the Offering, then the stockholders
holding those shares may not be able to resell those shares on the timeline they expect.
In connection with the Merger, we agreed, at our expense, to prepare
this registration statement, or the resale registration statement, and to file it with the SEC in order to register the resale of an aggregate
of 27,473,624 shares of our common stock issued in connection with the Merger and the Offering.
There are many reasons,
including some over which we have little or no control, which could keep the resale registration statement from being declared effective
by the SEC, including delays resulting from the SEC review process and comments raised by the SEC during that process. In fact, the SEC
may subject the resale registration statement to heightened scrutiny because the Merger was a reverse merger with a shell company.
The shares of common
stock covered by the resale registration statement will not be eligible for resale until the resale registration statement is declared
effective or a valid exemption from registration, such as Rule 144, becomes available. See the section above titled "
Description
of the Merger, the Offering, and Related Transactions—Registration Rights Agreement
" for more information.
If securities or
industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading
volume could decline.
The trading market for
our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business.
Securities and industry analysts do not currently, and may never, publish research on our company. This risk is heightened because Lomond
became public by a reverse merger instead of by some other means and because we are not listed on a national securities exchange. In addition,
investment banks may be less likely to agree to underwrite securities offerings on our behalf or on behalf of our stockholders than they
might if we became a public reporting company by means of an underwritten initial public offering, because they may be less familiar with
our company as a result of more limited coverage by analysts and the media, and because we became public at an early stage in our development.
68
The failure to receive
research coverage would be likely to have an adverse effect on our ability to develop a liquid market for our common stock. If no or only
very few securities analysts commence coverage of us, or if industry analysts cease coverage of us, the trading volume in our common stock
may decline, which would negatively affect the trading price for our common stock. If one or more of the analysts who covers us downgrades
our common stock or publishes inaccurate or unfavorable research about our business, our common stock price would likely decline. If one
or more of these analysts cease coverage of us or fails to publish reports on us regularly, demand for our common stock could decrease,
which might cause our common stock price and trading volume to decline.
Sales of a substantial
number of shares of our common stock in the public market could cause our stock price to fall.
The price of our common
stock could decline if there are substantial sales of our common stock, particularly sales by our directors, executive officers and significant
stockholders, or if there is a large number of shares of our common stock available for sale and the market perceives that sales will
occur.
Upon the consummation
of the Merger and the Offering, there were 27,198,214 outstanding shares of our common stock and warrants to purchase 275,410 shares of
our common stock. Of the shares outstanding as of the Closing Date and shares underlying warrants outstanding as of the Closing Date,
27,473,624 are currently restricted from resale as a result of securities laws. Once the resale registration statement is effective, 27,198,214
shares of our common stock will be able to be sold freely in the public market, subject to lock-up agreements, if applicable. Sales of
a substantial number of such shares, the perception that such sales may occur, or early release of these agreements, could cause the market
price of our common stock to fall or make it more difficult for you to sell your common stock at a time and price that you deem appropriate.
In addition, we also
intend to register shares of common stock that we have issued and may issue under our employee equity plans. As of November 1, 2024, there
were 4,329,617 shares of common stock that were subject to outstanding options under Lomond's 2024 Stock Plan, or the Lomond Plan,
which we assumed effective upon the closing of the Merger. We adopted our 2024 Equity Incentive Plan, or the 2024 Plan, in November 2024,
which became effective upon the closing of the Merger, pursuant to which 1,759,608 shares were reserved for future issuance. The number
of shares of our common stock that may be issued under the 2024 Plan is equal to the sum of (x) 1,759,608 shares, plus (y) up to 4,329,627
shares subject to the awards granted under the Lomond Plan that were outstanding on the date of the Merger and that are subsequently forfeited,
expire or lapse unexercised or unsettled or are reacquired by us, plus (z) the annual increase in shares described in the section entitled
"
Executive Compensation - Equity Plans - 2024 Equity Incentive Plan
." Accordingly, these will be available for sale
in the open market, subject to Rule 144 volume limitations applicable to affiliates, and subject to any vesting restrictions and lock-up
agreements applicable to these shares.
The sale or possibility
of sale of these additional securities trading in the public market may negatively impact the market price of our common stock.
We may issue additional
shares of common stock or other equity securities without your approval, which would dilute your ownership interests and may depress the
market price of our common stock.
We may issue additional
shares of common stock or other equity securities without your approval, subject to the restrictions set forth in the Subscription Agreement.
For example, we may issue an aggregate of up to 1,759,608 shares of our common stock pursuant to the 2024 Plan, which amount may be subject
to increase from time to time. For additional information about this plan, please read the discussion under the headings "
Executive
Compensation — Equity Plans
."
69
Subject to the restrictions
set forth in the Subscription Agreement, we may also issue additional shares of common stock or other equity securities of equal or senior
rank in the future in connection with, among other things, future acquisitions or repayment of outstanding indebtedness, without stockholder
approval, in a number of circumstances.
The issuance of additional
shares or other equity securities of equal or senior rank would have the following effects:
●
existing stockholders'
proportionate ownership interest in our company will decrease;
●
the amount of cash available
per share, including for payment of dividends in the future, may decrease;
●
the relative voting strength
of each previously outstanding common stock may be diminished; and
●
the market price of our common
stock may decline.
We have identified
material weaknesses in our internal control over financial reporting in the past. If our remediation of the material weaknesses is not
effective, our ability to produce accurate and timely financial statements could be impaired, which could result in sanctions or other
penalties that would harm our business and the trading price of our common stock may decline.
Prior to the Closing,
Lomond was a private company with limited accounting personnel to adequately execute its accounting processes and limited supervisory
resources with which to address its internal control over financial reporting. In connection with the audits of our financial statements
as of and for each of the years ended December 31, 2022 and 2023, we identified material weaknesses in our internal control over financial
reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that
there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected
on a timely basis. The material weaknesses related to having inadequate accounting personnel and controls over the recording of transactions,
including those with related parties, to achieve complete, accurate and timely financial accounting, reporting and disclosures, resulting
in adjustments to several accounts and disclosures.
We have taken and are
taking steps to remediate this material weakness, including through the hiring of external financial consultants and finance personnel
to provide needed levels of expertise in our internal accounting function and to implement appropriate controls over the financial reporting.
However, we are still in the process of implementing these steps and cannot assure you that these measures will significantly improve
or remediate the material weaknesses described above. We have identified other deficiencies in our internal control over financial reporting
that have not risen to the level of a material weakness, which we are in the process of remediating. We expect to incur additional costs
to remediate these control deficiencies, though there can be no assurance that our efforts will be successful or avoid potential future
material weaknesses.
We, and our independent
registered public accounting firm, were not required to perform an evaluation of our internal control over financial reporting as of December
31, 2023 in accordance with the provisions of the Sarbanes-Oxley Act. Accordingly, we cannot assure you that we have identified all, or
that we will not in the future have additional, material weaknesses. A material weakness may still exist when we report on the effectiveness
of our internal control over financial reporting for purposes of our attestation when required by reporting requirements under the Securities
Exchange Act of 1934, as amended, or the Exchange Act, or Section 404 of the Sarbanes-Oxley Act.
If we are unable to successfully
remediate our existing or any future material weaknesses in our internal control over financial reporting, or if we identify any additional
material weaknesses, the accuracy and timing of our financial reporting may be adversely affected, we may be unable to maintain compliance
with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements,
investors may lose confidence in our financial reporting, and our stock price may decline as a result. We also could become subject to
investigations by the SEC or other regulatory authorities.
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If we fail to maintain
proper and effective internal controls, our ability to produce accurate and timely financial statements could be impaired, which could
result in sanctions or other penalties that would harm our business and the trading price of our common stock may decline.
We are subject to the
reporting requirements of the Exchange Act, the Sarbanes-Oxley Act and, if approved, the rules and regulations of the OTC. The Sarbanes-Oxley
Act requires, among other things, that we maintain effective disclosure controls and procedures and internal controls over financial reporting.
We must perform system and process design evaluation and testing of the effectiveness of our internal controls over financial reporting
to allow management to report on the effectiveness of our internal controls over financial reporting in our Form 10-K filing for that
year, as required by Section 404 of the Sarbanes-Oxley Act. To achieve compliance with Section 404 within the prescribed period, we will
be engaged in a process to document and evaluate our internal control over financial reporting, which is both costly and challenging.
In this regard, we will need to continue to dedicate internal resources, including through hiring additional financial and accounting
personnel, potentially engage outside consultants and adopt a detailed work plan to assess and document the adequacy of internal control
over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning
as documented and implement a continuous reporting and improvement process for internal control over financial reporting. This will require
that we incur substantial additional professional fees and internal costs to expand our accounting and finance functions and that we expend
significant management efforts. Prior to the Merger, Lomond was never required to test its internal controls within a specified period
and, as a result, we may experience difficulty in meeting these reporting requirements in a timely manner.
We have identified material
weaknesses in our internal control over financial reporting, and we may in the future discover additional weaknesses in our system of
internal financial and accounting controls and procedures that could result in a material misstatement of our financial statements. Our
internal control over financial reporting will not prevent or detect all errors and all fraud. A control system, no matter how well designed
and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. Because of
the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error
or fraud will not occur or that all control issues and instances of fraud will be detected.
If we are not able to
comply with the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner, or if we are unable to maintain proper and effective
internal controls over financial reporting, we may not be able to produce timely and accurate financial statements. If that were to happen,
our investors could lose confidence in our reported financial information, the market price of our stock could decline and we could be
subject to sanctions or investigations by the SEC or other regulatory authorities, including equivalent foreign authorities.
Our disclosure
controls and procedures may not prevent or detect all errors or acts of fraud.
Upon the consummation
of the Merger, we became subject to the periodic reporting requirements of the Exchange Act. We designed our disclosure controls and procedures
to reasonably assure that information we must disclose in reports we file or submit under the Exchange Act is accumulated and communicated
to management, and recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. We
believe that any disclosure controls and procedures or internal controls and procedures, no matter how well-conceived and operated, can
provide only reasonable, not absolute, assurance that the objectives of the control system are met. These inherent limitations include
the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. For example,
our directors or executive officers could inadvertently fail to disclose a new relationship or arrangement causing us to fail to make
any related party transaction disclosures. Additionally, controls can be circumvented by the individual acts of some persons, by collusion
of two or more people or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in our control
system, misstatements due to error or fraud may occur and not be detected.
We are an "emerging
growth company" as defined in the JOBS Act and a "smaller reporting company" as defined in the Exchange Act, and any
decision on our part to take advantage of the reduced reporting requirements applicable to emerging growth companies and smaller reporting
companies could make our common stock less attractive to investors.
We are an "emerging
growth company" as defined in the Jumpstart Our Business Startups Act of 2012, as amended, or the JOBS Act, and we intend to take
advantage of some of the exemptions from reporting requirements that are applicable to other public companies that are not emerging growth
companies, including:
●
being permitted to provide
only two years of audited financial statements, in addition to any required unaudited interim financial statements, with correspondingly
reduced "Management's Discussion and Analysis of Financial Condition and Results of Operations" disclosure;
71
●
not being required to comply
with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act in the assessment of our internal control over
financial reporting;
●
not being required to comply
with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or
a supplement to the auditor's report providing additional information about the audit and the financial statements;
●
reduced disclosure obligations
regarding executive compensation; and
●
not being required to hold
a non-binding advisory vote on executive compensation or obtain stockholder approval of any golden parachute payments not previously
approved.
In addition, as an emerging
growth company, the JOBS Act allows us to delay adoption of new or revised accounting pronouncements applicable to public companies until
such pronouncements are made applicable to private companies. We have elected to use this extended transition period under the JOBS Act.
As a result, our financial statements may not be comparable to the financial statements of issuers who are required to comply with the
effective dates for new or revised accounting standards that are applicable to public companies, which may make comparison of our financials
to those of other public companies more difficult.
We cannot predict if
investors will find our common stock less attractive because we will rely on these exemptions. If some investors find our common stock
less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.
We may take advantage of these reporting exemptions until we are no longer an emerging growth company. We will remain an emerging growth
company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the first sale of our common equity
securities pursuant to an effective registration statement under the Securities Act of 1933, as amended, (b) in which we have total annual
gross revenue of at least $1.235 billion or (c) in which we are deemed to be a large accelerated filer, which means, among other things,
the market value of our common stock that is held by non-affiliates exceeds $700.0 million as of the prior June 30th and (2) the date
on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.
Even after we no longer
qualify as an emerging growth company, we may still qualify as a "smaller reporting company," as defined in the Exchange Act,
which would allow us to continue to take advantage of many of the same exemptions from disclosure requirements, including not being required
to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and reduced disclosure obligations regarding
executive compensation in our periodic reports and proxy statements.
We cannot predict if
investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock
less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.
We do not intend
to pay dividends for the foreseeable future.
Neither Venetian-1 Acquisition
Corp. nor Lomond ever declared or paid cash dividends on their respective capital stock, and we currently intend to retain any future
earnings to finance the operation and expansion of our business, and we do not expect to declare or pay any dividends in the foreseeable
future. Consequently, stockholders must rely on sales of their common stock after price appreciation, which may never occur, as the only
way to realize any future gains on their investment.
The concentration
of our stock ownership will likely limit your ability to influence corporate matters, including the ability to influence the outcome of
director elections and other matters requiring stockholder approval.
As of November 1, 2024,
after giving effect to the Merger and the closing of the Offering, our executive officers, directors and principal stockholders, together
with their respective affiliates, beneficially owned approximately 89.1% of our outstanding common stock. As a result, these stockholders,
acting together, will have significant influence over all matters that require approval by our stockholders, including the election of
directors and approval of significant corporate transactions. Corporate actions might be taken even if other stockholders oppose them.
This concentration of ownership might also have the effect of delaying or preventing a change of control of our company that other stockholders
may view as beneficial.
72
Delaware law and
provisions in our amended and restated certificate of incorporation and amended and restated bylaws could make a merger, tender offer
or proxy contest difficult, thereby depressing the trading price of our common stock.
Our status as a Delaware
corporation and the anti-takeover provisions of the Delaware General Corporation Law may discourage, delay or prevent a change in control
by prohibiting us from engaging in a business combination with an interested stockholder for a period of three years after the person
becomes an interested stockholder, even if a change of control would be beneficial to our existing stockholders. In addition, our amended
and restated certificate of incorporation and amended and restated bylaws contain provisions that may make the acquisition of our company
more difficult, including the following:
●
a classified board of directors
with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of our board of
directors;
●
the ability of our board of
directors to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting
rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquiror;
●
the exclusive right of our
board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death
or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors;
●
a prohibition on stockholder
action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders;
●
the requirement that a special
meeting of stockholders may be called only by a majority vote of our entire board of directors, the chairman of our board of directors
or our chief executive officer, which could delay the ability of our stockholders to force consideration of a proposal or to take action,
including the removal of directors;
●
the requirement for the affirmative
vote of holders of at least 66 2/3% of the voting power of all of the then-outstanding shares of the voting stock, voting together as
a single class, to amend the provisions of our amended and restated certificate of incorporation relating to the management of our business
or our amended and restated bylaws, which may inhibit the ability of an acquiror to effect such amendments to facilitate an unsolicited
takeover attempt; and
●
advance notice procedures with
which stockholders must comply to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders'
meeting, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror's own
slate of directors or otherwise attempting to obtain control of us.
In addition, as a Delaware
corporation, we are subject to Section 203 of the Delaware General Corporation Law. These provisions may prohibit large stockholders,
in particular those owning 15% or more of our outstanding voting stock, from merging or combining with us for a certain period of time.
A Delaware corporation may opt out of this provision by express provision in its original certificate of incorporation or by amendment
to its certificate of incorporation or bylaws approved by its stockholders. However, we have not opted out of this provision.
These and other provisions
in our amended and restated certificate of incorporation, amended and restated bylaws and Delaware law could make it more difficult for
stockholders or potential acquirors to obtain control of our board of directors or initiate actions that are opposed by our then-current
board of directors, including delay or impede a merger, tender offer or proxy contest involving our company. The existence of these provisions
could negatively affect the price of our common stock and limit opportunities for you to realize value in a corporate transaction.
For information regarding
these and other provisions, see the section titled "
Description of Capital Stock
."
73
Our amended and
restated certificate of incorporation designates the Court of Chancery of the State of Delaware and federal court within the State of
Delaware as the exclusive forum for certain types of actions and proceedings that our stockholders may initiate, which could limit a stockholder's
ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
Our amended and restated
certificate of incorporation provides that, subject to limited exceptions, the Court of Chancery of the State of Delaware and federal
court within the State of Delaware will be exclusive forums for any:
●
derivative action or proceeding
brought on our behalf;
●
action asserting a claim of
breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders;
●
action asserting a claim against
us arising pursuant to any provision of the Delaware General Corporation Law, our amended and restated certificate of incorporation or
bylaws; or
●
other action asserting a claim
against us that is governed by the internal affairs doctrine.
This choice of forum
provision does not apply to actions brought to enforce a duty or liability created under the Exchange Act. Our amended and restated certificate
of incorporation also provides that the federal district courts of the United States are the exclusive forum for the resolution of any
complaint asserting a cause of action arising under the Securities Act. We intend for this provision to apply to any complaints asserting
a cause of action under the Securities Act despite the fact that Section 22 of the Securities Act creates concurrent jurisdiction for
the federal and state courts over all actions brought to enforce any duty or liability created by the Securities Act or the rules and
regulations promulgated thereunder. There is uncertainty as to whether a court would enforce such a provision with respect to claims under
the Securities Act, and our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules
and regulations thereunder. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be
deemed to have notice of and to have consented to the provisions of our amended and restated certificate of incorporation described above.
These choice of forum
provisions may limit a stockholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with us or
our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and employees. Alternatively,
if a court were to find these provisions of our amended and restated certificate of incorporation inapplicable to, or unenforceable in
respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such
matters in other jurisdictions, which could adversely affect our business and financial condition.
We could be subject
to securities class action litigation.
In the past, securities
class action litigation has often been brought against a company following a decline in the market price of its securities. This risk
is especially relevant for us because biotechnology companies have experienced significant stock price volatility in recent years and
because the trading price of our common stock may be very volatile due to there not being an active trading market. If we face such litigation,
it could result in substantial costs and a diversion of management's attention and resources, which could harm our business.
74
DESCRIPTION
OF THE MERGER, THE OFFERING, AND RELATED TRANSACTIONS
Merger Agreement
On November 1, 2024,
we, Acquisition Sub and Lomond entered into the Merger Agreement. Pursuant to the terms of the Merger Agreement, on November 1, 2024 (the
"Closing Date"), Acquisition Sub merged with and into Lomond, with Lomond continuing as the surviving corporation and our
wholly-owned subsidiary.
Pursuant to the terms
of the Merger Agreement, at the time the certificate of merger reflecting the Merger was filed with the Secretary of State of Delaware
(the "Effective Time"), each share of Lomond's capital stock (comprising of Lomond common stock and Lomond preferred
stock) issued and outstanding immediately prior to the closing of the Merger was cancelled and converted into the right to receive one
share of our common stock (the "Exchange Ratio"), with the maximum number of shares of our common stock issuable to the former
holder of Lomond's capital stock equal to 14,420,383 (which is equal to 758,967 shares of Lomond common stock and 13,661,416 shares
of Lomond preferred stock issued and outstanding immediately prior to the closing of the Merger). In addition, pursuant to the Merger
Agreement, immediately prior to the Effective Time, an aggregate of 3,625,000 shares of the 5,000,000 then-outstanding shares of our common
stock owned by our stockholders prior to the Merger were forfeited and cancelled (the "Stock Forfeiture").
In addition, pursuant
to the Merger Agreement, at the Effective Time, options to purchase an aggregate of 4,329,617 shares of Lomond common stock at an exercise
price of $1.30 per share issued and outstanding immediately prior to the closing of the Merger under Lomond's 2024 Stock Plan (the
"Lomond Plan") were assumed and converted into options to purchase 4,329,617 shares of our common stock at an exercise
price of $1.30 per share.
The issuance of shares
of our common stock to Lomond's stockholders and the assumption of Lomond's options outstanding immediately prior to the Effective
Time pursuant to the Merger Agreement are collectively referred to as the "Share Conversion."
The Merger Agreement
contained customary representations and warranties and pre- and post-closing covenants of each party and customary closing conditions.
As a condition to the
Merger, we entered into a Pre-Merger Indemnity Agreement with each of our former officers and directors, pursuant to which we agreed to
indemnify such individuals for actions taken by him or her in his or her official capacities relating to the consideration, approval and
consummation of the Merger and certain related transactions.
We expect the Merger
to be treated as a recapitalization and reverse acquisition for us for financial reporting purposes. Lomond is considered the acquirer
for accounting purposes, and our historical financial statements before the Merger will be replaced with the historical financial statements
of Lomond before the Merger in future filings with the United States Securities and Exchange Commission (the "SEC"). The Merger
is intended to be treated as a tax-free reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended.
The Subscription Agreement
The Offering
Immediately following
the Effective Time of the Merger, we issued an aggregate of $43.9 million of our shares of common stock pursuant to a private placement
offering and the conversion of certain simple agreements for future equity ("SAFEs") issued by Lomond, which included (i)
8,241,375 shares of our common stock issued and sold at a purchase price of $4.00 per share in cash (the "Offering Price")
pursuant to the Subscription Agreement; (ii) 1,078,124 shares of our common stock at a price of $3.20 pursuant to the conversion of certain
SAFEs issued by Lomond in October 2024, and (iii) 2,083,332 shares of our common stock at a price of $3.60 pursuant to the conversion
of certain SAFEs issued by Lomond in August 2024. The private placement offering is referred to herein as the "Offering."
75
The aggregate gross proceeds
from the Offering, including the aggregate amount previously received from the issuance of the SAFEs, were $43.9 million (before
deducting placement agent fees and expenses of the Offering, which are estimated at $2.6 million).
Pursuant to the Subscription
Agreement, we may hold one or more subsequent closings prior to November 30, 2024, to sell up to an additional 4,021,125 shares at the
Offering Price. Each investor in any subsequent closing will be required to represent that, as of the date of entering into the Subscription
Agreement and the date of the applicable closing, it (i) has a substantive, pre-existing relationship with us or has direct contact with
us or the Placement Agents outside of the Offering, and (ii) did not independently contact us or a Placement Agent or become interested
in the Offering as a result of reading or otherwise being aware of this prospectus, any press release or any other public disclosure disclosing
the terms of the Offering. In connection with the Offering and subject to the closing of the Offering, we agreed to pay the placement
agents, Raymond James & Associates, Inc. ("Raymond James"), Wedbush & Co., LLC ("Wedbush" and with Raymond
James, the "Lead Placement Agents") and Aegis Capital Corp. ("Aegis" and together with Raymond James and Wedbush,
the "Placement Agents"), each a U.S. registered broker-dealer a cash placement fee and issue Placement Agent Warrants to the
Placement Agents as follows. The Lead Placement Agents will be paid a cash placement fee equal to the sum of (x) 4% of the gross proceeds
raised from OrbiMed Advisors LLC ("OrbiMed") and Torrey Pines Investment LLC and/or their respective affiliates and/or certain
other investors (collectively "Insider Investors"), (y) 6% of the gross proceeds raised from certain other investors introduced
by Lomond or its affiliates ("Lomond Investors") and (z) 8% of the gross proceeds raised from all other Purchasers resulting
from the efforts of the Lead Placement Agents (other than Co-Agent Investors (as defined below), the "Lead Placement Agent Investors").
Aegis will be paid a cash placement fee equal to 8% of the gross proceeds raised from Purchasers resulting from the efforts of Aegis (the
"Co-Agent Investors"). Further, we agreed to issue Placement Agent Warrants to the Placement Agents covering a number of shares
of our common stock equal to 8% of the number of shares of Common Stock sold in the Offering to the Lead Placement Agent Investors and
Co-Agent Investors, as applicable, with a term of four years and an exercise price of $4.00 per share (as may be adjusted for stock splits,
stock dividends, combinations, recapitalizations or similar events).
As a result of the foregoing,
in connection with the closing of the Offering, we paid the Placement Agents an aggregate cash commission of $2.5 million and issued Placement
Agent Warrants to purchase an aggregate of 275,410 shares of our Common Stock. We have also reimbursed or will reimburse the Placement
Agents for approximately $0.1 million of expenses incurred in connection with the Offering.
Subject to certain customary
exceptions, we have agreed to indemnify the Placement Agents to the fullest extent permitted by law against certain liabilities that
may be incurred in connection with the Offering, including certain civil liabilities under the Securities Act, and, where such indemnification
is not available, to contribute to the payments the Placement Agents and their sub-agents may be required to make in respect of such liabilities.
Restrictions on
Certain Equity Sales and Certain Governance Changes
Pursuant to the Subscription
Agreement, we agreed that without the prior written consent of holders of at least a majority of the shares sold in the Offering, including
at least a majority of the shares held by certain outside investors who participated in the Offering (the "Requisite Holders"),
we will not, for a period commencing on the date of the Subscription Agreement until the date that is the latest of (x) 180 days after
the closing of the Offering, (y) the date on which a registration statement with respect to the resale of all of the shares issued in
the Offering is declared effective by the SEC and (z) the date on which the common stock is listed on a national securities exchange (such
period, the "Restricted Period"), cause or direct any of our affiliates to (i) offer, sell, contract to sell, pledge, grant
any option to purchase, make any short sale or otherwise transfer or dispose of, directly or indirectly, any shares of our common stock
or any securities convertible into or exchangeable for, or that represent the right to receive, shares of our common stock, or (B) file
with the SEC a registration statement under the Securities Act relating to any shares of our common stock or any securities convertible
into or exchangeable for, or that represent the right to receive, shares of our common stock, except pursuant to the terms of the Registration
Rights Agreement and a registration statement on Form S-8 to register under the Securities Act the offer and sale of securities under
the 2024 Plan. Notwithstanding anything to the contrary contained in the Subscription Agreement, such restrictions do not apply to (i)
our issuance and sale of shares in the Offering, (ii) our issuance and sale of the Placement Agent Warrants, (c) the issuance of shares
of our common stock upon exercise of the Placement Agent Warrants (without amendment or modification, (iv) the issuance of awards (and
shares of our common stock in respect thereof) pursuant to the 2024 Plan in accordance with its terms (without amendment or modification),
(v) the issuance of our common stock upon the conversion, exercise or vesting of equity incentive awards outstanding as of the date hereof
under the 2024 Plan and (f) the issuance of our common stock in respect of Lomond's SAFEs.
76
In addition, pursuant
to the Subscription Agreement, we agreed that without the prior written consent of the Requisite Holders, we will not, for a period commencing
on the date of the Subscription Agreement until the date that is one year after the end of the Restricted Period, effect or enter into
any agreement to effect any issuance by us of any shares of our common stock, or any securities convertible into or exchangeable
for, or that represent the right to receive, shares of common stock, involving a transaction in which we:
●
issue or sell any debt or equity
securities that are convertible into, exchangeable or exercisable for, or include the right to receive, additional shares of our common
stock either (i) at a conversion price, exercise price or exchange rate or other price that is based upon, and/or varies with, the trading
prices of or quotations for our common stock at any time after the initial issuance of such debt or equity securities, or (ii) with a
conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or
equity security or upon the occurrence of specified or contingent events directly or indirectly related to our business or the market
for our common stock, or
●
enter into, or effect a transaction
under, any agreement, including, but not limited to, an equity line of credit, whereby we may issue securities at a future determined
price.
Moreover, we agreed that,
without the prior written consent of the Requisite Holders, we would not at any time during the Restricted Period amend or otherwise modify
our certificate of incorporation or bylaws in any manner that adversely affects, or could reasonably be deemed to adversely affect, any
of the rights or benefits of any investor participating in the Offering or any other holder of shares of our common stock (in his, her
or its capacity as such) or that imposes any obligation on such stockholders (in his, her or its capacity as such) or any rights of exculpation
and indemnification of any of our directors. Pursuant to the Subscription Agreement, such restrictions did not apply to the amendment
and restatement of our certificate of incorporation or our bylaws in connection with the Merger as disclosed in this prospectus.
Conversion of SAFEs
upon the Closing of the Offering
As described above, in
connection with the closing of the Offering, an aggregate of 3,161,456 shares of our common stock were issued to the holders of SAFEs
issued by Lomond in August 2024 and October 2024, in each case, in accordance with the terms of such instruments.
Lock-Up Agreements
As a condition to the
closing of the Offering pursuant to the Subscription Agreement, our directors and officers entered into the Lock-Up Agreements. Pursuant
to such Lock-Up Agreements, our directors and officers each agreed that, subject to certain exceptions, they will not, for a period commencing
on the closing date of the Merger and ending on the earlier of: (i) 60 days after the common stock is listed on a National Securities
Exchange (as defined in the Registration Rights Agreement) and (ii) the later of (A) 18 months after the final closing of the Offering
and (B) 60 days after the first day on which both the common stock is traded on an Approved OTC Market (as defined in the Registration
Rights Agreement) and a registration statement with respect to the resale of all of the Shares and Other Shares (as defined in the Subscription
Agreement) has been declared effective by the SEC, exchange, dispose of, or enter into any swap, hedge or similar arrangement regarding,
any shares of common stock or securities convertible into or exercisable or exchangeable for shares of common stock in each case held
immediately following the closing of the private placement offering or thereafter acquired by any means (including, for the avoidance
of doubt, through the receipt of equity incentive awards from us), and whether held beneficially or of record, but excluding (i) any shares
of common stock purchased such persons or their affiliates in the private placement offering, and (ii) any shares of common stock received
by such persons or their affiliates upon the conversion of the SAFEs. The Lock-Up Agreements contain customary transfer exceptions.
77
Registration Rights
Agreement
In connection with the
Merger and the Offering, we entered into a registration rights agreement (the "Registration Rights Agreement"), pursuant to
which we have agreed that promptly, but no later than 20 trading days from the closing date of the Offering, we will file, subject to
customary exceptions, a registration statement with the SEC (the "Registration Statement"), covering the reoffer and resale
of (i) the shares of our common stock issued in the Offering, (ii) the shares of our common stock issuable upon exercise of the Placement
Agent Warrants, (iii) the shares of our common stock issued to Lomond stockholders as Merger consideration; (iv) the shares of our
common stock held by our stockholders prior to the Merger, and (v) any other shares of our common stock held that are subject to resale
restrictions pursuant to the Securities Act acquired or issuable in respect of the foregoing shares of our common stock by way of conversion,
dividend, stock-split, distribution or exchange, merger, consolidation, recapitalization or reclassification or similar transaction ((i)-(v)
collectively, the "Registrable Shares"). We will use our commercially reasonable efforts to ensure that such Registration
Statement is declared effective within 90 calendar days after the closing of the Offering (the "Registration Effectiveness Date").
Subject to customary
exceptions, if (i) we are late in filing the Registration Statement, (ii) the Registration Statement is not declared effective by the
Registration Effectiveness Date, (iii) we are late in filing any additional registration statement to cover Registrable Shares required
by the Registration Rights Agreement (a "New Registration Statement"), (iv) any New Registration Statement has not been declared
effective by the date set forth in the Registration Rights Agreement, (v) the Registration Statement or any New Registration Statement
ceases for any reason to remain effective or the holders of Registrable Shares are otherwise not permitted to utilize the prospectus therein
to resell the Registrable Shares for a period of more than five consecutive trading days except for during specified blackout periods
set forth in the Registration Rights Agreement, (vi) following the inclusion for quotation on the OTCQB or OTCQX market of OTC Markets
Group (each such market, the "OTC Markets), the Registrable Shares, if issued and outstanding, are not listed or included for quotation
on the OTC Markets or a national securities exchange, or the trading of our common stock is suspended or halted for more than three full,
consecutive trading days on the OTC Markets, which at the time serves as the principal market for our common stock, other than as a result
of suspension or halt of substantially all trading in equity securities in such marketplace, or (vii) following the inclusion for quotation
on the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, the NYSE American
and any other U.S. national securities exchange which the holder of a majority of the Registrable Shares then issuable and/or outstanding
identify in writing as a national securities exchange (each such exchange, a "National Securities Exchange"), the Registrable
Shares, if issued and outstanding, are not listed on such National Securities Exchange, or the, trading of our common stock is suspended
or halted for more than three full, consecutive trading days other than as a result of suspension or halt of substantially all trading
in equity securities in such marketplace ((i)-(vii) collectively, "Registration Events"), we will make payments to each holder
of Registrable Shares as monetary penalties at a rate equal to 12% per annum of the total value of Registrable Shares held or purchased
by such holder and affected during the period, based on the Offering Price; provided that the maximum amount of monetary penalties paid
by us will not exceed 5% of such total value. No penalties will accrue with respect to (1) any Registrable Shares required to be removed
from the Registration Statement in response to a comment from the SEC limiting the number of shares of Registrable Securities which may
be included in the Registration Statement, (2) if the Registrable Shares cease to be Registrable Shares, or (3) any Registrable Shares
excluded from a Registration Statement because a holder fails to provide information concerning the holder and the manner of distribution
of the holder's Registrable Shares that is required by the SEC or in response to SEC comments to be disclosed. In addition, if we
are unable to file a New Registration Statement in certain circumstances, then our compliance in such circumstances with such limitation
shall not be deemed a failure to use reasonable efforts and shall not require the payment of liquidated damages under the Registration
Rights Agreement.
We must use reasonable
efforts to keep the Registration Statement effective for five years from the date it is declared effective by the SEC or until the date
on which all Registrable Shares have been sold or otherwise transferred other than to assignees pursuant to the Registration Rights Agreement.
We will pay all expenses
in connection with the registration obligations provided in the Registration Rights Agreement, including, without limitation, all registration,
filing, and stock exchange fees, printing expenses, all fees and expenses of complying with applicable securities laws, the fees and disbursements
of our counsel and of our independent public accountants, and the reasonable fees and disbursements of a single counsel to the holders
of the Registrable Securities, not to exceed $35,000 per registration statement. Each holder will be responsible for its own sales commissions,
if any, transfer taxes and the expenses of any other attorney or advisor such holder decides to employ.
78
OTC Quotation
Our common stock is currently
not listed on a national securities exchange or any other exchange, or quoted on an over-the-counter market. We intend to cause our common
stock to be quoted on the OTC Markets QB or QX tier as soon as practicable. However, we cannot assure you that we will be able to do so
and, even if we do so, there can be no assurance that our common stock will continue to be quoted on the OTC Markets or quoted or listed
on any other market or exchange, or that an active trading market for our common stock will develop or continue. See "
Risk Factors—There
is currently no market for our common stock and there can be no assurance that any market will ever develop. You may therefore be unable
to re-sell shares of our common stock at times and prices that you believe are appropriate
." above.
The Lomond Plan and Outstanding Awards
Thereunder
Pursuant to the Merger
Agreement and upon the closing of the Merger, we assumed each option to purchase Lomond common stock that remained outstanding under the
Lomond Plan, whether vested or unvested, and we converted it into an option to purchase such number of shares of our common stock equal
to the number of Lomond common stock subject to the option immediately prior to the Merger, multiplied by the Exchange Ratio applicable
to outstanding common stock, with any fraction rounded down to the nearest whole number. The exercise price per share of each such assumed
option is equal to the exercise price of the Lomond option prior to the assumption, divided by the Exchange Ratio applicable to outstanding
common stock (rounded up to the nearest whole cent). Otherwise, each assumed option continues to have, and will be subject to, substantially
the same terms and conditions as applied to the Lomond option immediately prior to the Merger, including the same vesting schedule. The
terms of the Lomond Plan continue to govern the options covering an aggregate of 4,329,617 shares of our common stock subject to awards
assumed by us, except that all references in the Lomond Plan to Lomond will now be deemed to refer to us. No additional awards will be
issued under the Lomond Plan. See "
Executive Compensation—Equity Plans
" below for more information about the
Lomond Plan and the outstanding awards thereunder.
Our 2024 Equity Incentive Plan
Pursuant to the Merger
Agreement and upon the closing of the Merger, we adopted our 2024 Equity Incentive Plan (the "2024 Plan"), which provides
for the issuance of incentive awards of stock options, restricted stock awards, restricted stock units, stock appreciation rights, performance
awards, cash awards, and stock bonus awards. We reserved 1,759,608 shares for future issuance under the 2024 Plan. The number of shares
of our common stock that may be issued under the 2024 Plan is equal to the sum of (x) 1,759,608 shares, plus (y) up to 4,329,617 shares
subject to awards granted under the Lomond Plan that were outstanding on the date of the Merger and that are subsequently forfeited, expire
or lapse unexercised or unsettled or are reacquired by us. Further, the number of shares reserved for issuance under our 2024 Plan will
increase automatically on January 1 of each of 2026 through 2034 by the number of shares equal to the lesser of 5% of the total number
of outstanding shares of our common stock as of the immediately preceding December 31, or a number as may be determined by our board of
directors. See "
Executive Compensation—Equity Plans
" below for more information about the 2024 Plan.
Indemnification Agreements
In connection with the
Closing, we entered into indemnification agreements with each of its directors and executive officers. Each indemnification agreement
provides for indemnification and advancements by us of certain expenses and costs relating to claims, suits or proceedings arising from
his or her service to us or, at our request, service to other entities, as officers or directors to the maximum extent permitted by applicable
law.
Agreements with Eil
and Bala
In October 2024, we
entered into the Eil License Agreement and the Bala License Agreement. Pursuant to the Eil License Agreement and the Bala License Agreement,
we obtained exclusive, perpetual, worldwide licensing rights for the development and future ownership of (i) lonitoclax, a BCL-2, inhibitor
for the treatment of acute myeloid leukemia "AML" and chronic lymphocytic leukemia "CLL" from Eil Therapeutics,
Inc. ("Eil"), and (ii) an early-stage menin inhibitor for the treatment of AML from Bala Therapeutics, Inc. ("Bala").
The Eil License Agreement
and the Bala License Agreement became effective in October 2024 when we issued promissory notes to Eil and Bala, respectively. The principal
amount of the promissory notes with Eil and Bala are $1.7 million and $1.2 million, respectively. Each such promissory note bears interest
at a rate of 7% per annum, compounded annually and the principal and accrued interest under each note are due and payable on demand at
any time after October 17, 2026. Each such promissory note may be prepaid without penalty. In addition, the two promissory notes each
provide for customary events of default.
79
Upon the payment in full
of the applicable promissory note, Eil and Bala have each agreed to transfer to us all of the intellectual property rights covered by
the Eil License Agreement and the Bala License Agreement, as the case may be.
The license rights are
sublicensable at our option. Under such license agreements, we, but not Eil or Bala, as the case may be, have the right to terminate the
applicable license agreement for convenience upon 30 days' written notice. If we or Eil or Bala, as the case may be, materially
breaches the applicable license agreement, and such breach is not cured within 90 days after the receipt of notice of such breach, then
the non-defaulting party may terminate such license agreement. In addition, upon the occurrence of an event of default under the applicable
promissory note, the Eil License Agreement or the Bala License Agreement shall be terminated.
Eil and Bala, related
parties, are each wholly-owned by Eilean Therapeutics, LLC, Lomond's former parent company, which beneficially owned 53.0% of our
common stock upon the closing of the Merger and the Offering.
Departure and Appointment
of Directors and Officers
Our board of directors
consists of four members. As of the Effective Time, Mark Tompkins and Ian Jacobs resigned from our board of directors, and Iain Dukes,
Nikolay Savchuk, Carl Gordon and Eddie Wang Rodriguez were appointed to our board of directors.
Also, as of the Effective
Time, Ian Jacobs resigned from all officer positions with us, and Iain Dukes and Nikolay Savchuk were appointed as our Chief Executive
Officer and Chairman and President and Chief Operating Officer, respectively.
See "
Management
"
below for information about our current directors and executive officers.
Pro Forma Ownership
Immediately after giving
effect to the Merger (and the issuance of an aggregate of 14,420,383 shares of our common stock in the Merger), the Stock Forfeiture,
and the closing of the Offering, there were 27,198,214 shares of our common stock issued and outstanding as of the Closing Date, as follows:
●
the stockholder of Lomond prior
to the Merger held 14,420,383 shares of our common stock;
●
investors in the Offering held
8,241,375 shares of our common stock;
●
holders of Lomond's SAFEs
held 3,161,456 shares of our common stock, and
●
1,375,000 shares are held by
persons who held stock in us prior to the Merger.
In addition, there were
outstanding as of the Closing Date:
●
options to purchase an aggregate
of 4,329,617 shares of our common stock at an exercise price of $1.30 per share that were subject to options originally granted under
the Lomond Plan to former Lomond option holders and assumed by us in connection with the Merger; and
●
Placement Agent Warrants to
purchase an aggregate of 275,410 shares of our common stock at an exercise price of $4.00 per share.
In addition, as of the
Closing Date, there were 1,759,608 shares of our common stock reserved for future issuance under the 2024 Plan, subject to adjustment
as provided above.
No other securities convertible
into or exercisable or exchangeable for our common stock are outstanding as of the date of this prospectus.
Accounting Treatment
The Merger is expected
to be accounted for as a "reverse merger" or "reverse acquisition," and Lomond is deemed to be the acquirer in
the reverse merger. Consequently, the assets and liabilities and the historical operations that will be reflected in our financial statements
relating to periods prior to the Merger will be those of Lomond, and will be recorded at the historical cost basis of Lomond, and the
consolidated financial statements after completion of the Merger will include the assets and liabilities of Lomond, historical operations
of Lomond, and operations of the Company from the Closing Date. As a result of the issuance of the shares of our common stock pursuant
to the Merger, a change in control of the Company occurred as of the date of consummation of the Merger.
80
DESCRIPTION
OF OUR BUSINESS
Company Overview
We are a biopharmaceutical
company focused on the discovery and development of multiple product candidates to address hematological malignancies. We were co-founded
by OrbiMed Advisors LLC, or OrbiMed, Torrey Pines Investment LLC, or Torrey Pines, and Dr. John C. Byrd. We are utilizing a platform
offered by Expert Systems Inc., or Expert Systems, which is powered by artificial intelligence and machine learning, or AI/ML, to choose
molecular mechanisms of pathology and to rationally design, accelerate discovery and optimize development of potential therapies. Our
goal is to utilize this AI/ML platform to become a leader in developing novel breakthrough medicines to maximize clinical benefit when
treating hematologic malignancies.
Our initial focus is
on developing a next-generation inhibitor of FMS-like tyrosine kinase 3, or FLT3, and interleukin-1 receptor-associated kinase 4, or IRAK4,
for the treatment of acute myeloid leukemia, or AML and myelodysplastic syndrome, or MDS.
Our History and Team
Our management and leadership
are composed of individuals with extensive experience in the discovery, development and commercialization of cancer therapeutics and specifically
in developing novel therapeutics.
Our Chief Executive Officer
and Chairman, Iain Dukes, MA DPhil., most recently served as Chairman of the Board for Theseus Pharmaceuticals, where he was also a co-founder,
Iovance Biotherapeutics and Angiex Inc. Our President and Chief Operating Officer, Nikolay Savchuk, Ph.D., is the Managing Director and
Partner of Torrey Pines Investment and Teal Ventures Fund. Our Chief Scientific Officer Amy Burd, PhD was previously senior director of
the Leukemia and Lymphoma Society's, or LLS, Therapy Acceleration Program, a strategic initiative whereby LLS partners directly
with biotechnology companies to help accelerate development of promising new therapies. Our co-founder and acting Chief Medical Officer,
Dr. John C. Byrd, MD, is Chairman of Internal Medicine at the University of Cincinnati. Our Head of CMC, Fraser Pickersgill, Ph.D., was
the VP of Pharmaceutical Sciences at Galera Therapeutics. Our Head of Clinical Operations, Kate DoKukina, was Head of Clinical Operations
at ChemDiv. Our Chief Development Officer, Brian Ledwith, Ph.D., was previously Vice President and Global Team leader at Alexion Pharmaceuticals.
As of October 17, 2024,
we have raised approximately $16.5 million, including our Series Seed preferred stock financing, which was completed in August 2021
and from the sale of "simple agreements for future equity," or SAFEs, in August 2024 and October 2024. Our investors include
entities affiliated with OrbiMed and Torrey Pines Investment.
Our Strategy
We are a biopharmaceutical
company focused on improving the lives of cancer patients through the discovery, development and commercialization of transformative targeted
therapies. Our development programs are designed to address drug resistance mutations in key driver oncogenes, which are mutated genes
that cause cancer. The key elements of our strategy to achieve our mission are:
●
Advance the clinical
development of lomonitinib.
We designed lomonitinib as a differentiated pan-FLT3/IRAK4 inhibitor for the
treatment of patients with AML with FLT3 mutations, or FLT3 AML. We believe that the lomonitinib could become a safe and effective pan-FLT3/IRAK4
inhibitor. We have conducted extensive evaluation of lomonitinib in healthy volunteers in Australia and determined what we believe to
be an effective dose that is not associated with any adverse events. We have advanced lomonitinib into previously treated FLT3 positive
AML patients in Australia. Separately, we submitted an Investigational New Drug, or IND, application to the U.S. Food and Drug Administration,
or the FDA, for lomonitinib in the first quarter of 2024, and this clinical trial, also in patients with previously treated
FLT3-positive AML is ongoing, with initial Phase 1b data expected to be announced in the fourth quarter of 2024. Our initial registration
strategy will focus on relapsed and refractory AML, or R/R AML, where there are currently no effective therapies and therefore a significant
unmet medical need. We also plan to evaluate lomonitinib in first-line FLT3-positive AML in light of this candidate's
potential for inhibiting certain FLT3 mutations. Based on its preclinical profile, we believe lomonitinib has the potential
to deliver meaningful clinical benefits over the currently available standard of care.
81
●
Advance the clinical
development of the drug products that we have licensed from Eil and Bala.
We have exclusive, perpetual, worldwide licensing
rights for the development and future ownership of (i) lonitoclax, a B-cell lymphoma 2, or BCL-2, inhibitor for the treatment of AML,
chronic lymphocytic leukemia, or CLL, which we obtained from Eil Therapeutics, Inc., or Eil, and (ii) an early-stage menin inhibitor
for the treatment of AML, which we obtained from Bala Therapeutics, Inc., or Bala. We believe that these two drug products could be synergistic
with lomonitinib and with each other.
●
Build a leading, fully
integrated precision oncology company to maximize the clinical impact and value of our pipeline
. We believe the targeted nature
of our research and discovery approach, which is guided in part by an AI/ML platform, allows for efficient and focused clinical development.
We are building a lean, experienced team to rapidly advance product candidates in a capital-efficient manner. We intend to retain the
commercialization rights to product candidates; however, we may opportunistically enter into strategic collaborations in certain geographic
or clinical settings to maximize the value of our pipeline.
Our Research and Discovery
Approach
Our approach to drug
discovery is characterized by the identification of therapeutic solutions responsive to resistance mutations in certain cancers with clear
unmet need. Our drug discovery approach is built on three pillars:
●
Clinically validated
targets with clear unmet need.
We are focused exclusively on well validated targets in hematological malignancies that are
directly linked to the proliferation and survival of a tumor, known as driver oncogenes, for which the clinical activity of inhibitors
has already been established, and where there is a clear unmet need. We believe this approach can allow us to more reliably identify
targets for our programs since data in patients have shown that successful inhibition of these targets will typically have the intended
biological effect. We focus on target selectivity to minimize side effects and allow optimal target engagement. We further focus on targets
where there is documented observation of resistance mutations, providing further treatment options for patients that have failed existing
standard of care. These settings have a clear unmet need with a strong rationale for the development of safe and effective inhibitors.
●
Structure-guided drug
design integrated with predictive screening methodologies.
We design small molecule inhibitors based on deep structural
knowledge of our targets and candidate molecules at the molecular level. We utilize a hybrid AI/ML platform to choose potentially highly
valuable molecular mechanism of pathology, to rationally design, accelerate discovery and optimize development. We use these approaches
to guide iterative rounds of synthesis and testing of molecules. This allows us to design novel small molecule inhibitors that target
major activating and resistance mutations.
●
Translationally-driven,
biomarker-guided clinical development.
We design clinical development programs that are intended to supply rich biomarker
datasets to provide us with an early assessment of activity against the desired targets. Our initial assessment of our drugs in healthy
volunteers enable us to determine that off-target toxicities can be mitigated. By monitoring mutational status of patients before and
during treatment, we aim to validate the inhibition of individual mutant forms of the target protein, then correlate this with overall
clinical response. We believe this will provide us with insights of potential clinical activity and inform our investment decisions
given that the process of clinical development is inherently uncertain.
Our Pipeline
Our current program focuses
on developing lomonitinib, a potentially next-generation pan-FLT3/IRAK4 inhibitor, to address the key limitation of drug safety and resistance.
As discussed below, we have exclusive, worldwide perpetual rights to research, develop, manufacture, use and commercialize inhibitors
developed by Eil and Bala that may complement lomonitinib and each other.
82
Program
(product candidate)
Targeted
Indications
Current Stage
Next Planned
Milestone
Product Rights
Lomonitinib
(ZE46-0134)
AML, MDS
Phase 1b
Initial Phase 1b data expected in Q4 2024
Lomond Therapeutics
Lonitoclax
(ZE50-0134)
AML, CLL
Phase 1
Data from healthy volunteer study expected in Q4 2024
Eil #
Lead Menin
Inhibitor
AML
Pre-clinical
Nomination of drug candidate expected in Q4 2024
Bala *
#
For more information about Eil's license to us, see the subsection "
License Agreements
" below.
*
For more information about Bala's license to us, see the subsection titled "
License Agreements
" below.
Pan-FLT3/IRAK4 Program – Lomonitinib
One of our lead product
candidates, lomonitinib (ZE46-0134), is a pan-FLT3/ IRAK4 inhibitor, for the treatment of patients with AML and MDS. Lomonitinib is
a novel small molecule inhibitor that has been designed to block activity of all major known resistance mutations of FLT3 that drive AML
as well as IRAK4, a significant known compensatory escape pathway. Existing FLT3 inhibitors are limited by the emergence of resistance
mutations or escape pathways, lack of selectivity and safety profile, as clinical data have demonstrated their inability to inhibit disease
progression.
The compound for lomonitinib
is derived from intellectual property owned by us, utilizing a third-party hybrid AI/ML platform. Lomonitinib has completed single and
multiple dose escalation stages of a Phase 1 trial in healthy volunteers in Australia, and in the second quarter of 2024, we initiated
a Phase 1b clinical trial in Australia and the United States to assess the safety, tolerability, pharmacokinetics, pharmacodynamic responses,
and efficacy of lomonitinib as a single agent in patients with R/R AML who test positive for a FLT3 mutation.
In addition, we plan
to test lomonitinib for efficacy and safety in patients with MDS, due to the importance of IRAK4 amplification in this disease setting,
which would present an additional market opportunity for us.
Based on the preliminary
safety and efficacy profile of lomonitinib that has been generated to date, we believe that lomonitinib, if approved, could do the following:
(1) it could serve as an agent for the treatment of R/R FLT3-positive patients with the potential for improved durability of response
and a high rate of complete remissions (2) it could become the preferred FLT3/IRAK4 inhibitor in front line AML patients with FLT3 positive
disease (3) it could become the preferred kinase inhibitor for inclusion in doublet combinations with venetoclax or other BCL 2 agents
(including lonitoclax) for second line R/R AML patients, and (4) it could serve as an effective agent for maintenance therapy to prevent
relapse in patients who achieved a complete remission through a stem cell transplant or through drug-based therapy.
Overview of AML and FLT3 Mutations
AML comprises a heterogeneous
group of aggressive blood cell cancers that arise from clonal expansion of malignant hematopoietic precursor cells in the bone marrow
and is the most commonly diagnosed adult leukemia with approximately 20,000 new cases and 11,000 deaths in the United States in 2022.
The median age at diagnosis is 68 years of age, with an overall survival, or OS, of 29.8%. As patients age, there is a 10% decrease in
5-year OS for every additional decade of life, with a 5-year OS of 0.4% in patients older than 85 years old. Along with age, remission
rates and OS depend on a number of other factors, including cytogenetics, previous bone marrow disorders and comorbidities.
83
FLT3 is a receptor tyrosine
kinase mainly expressed on immature hematopoietic progenitors and hematopoietic stem cells. FLT3 signaling is initiated when a FLT3 ligand
binds to FLT3. This event leads to cell proliferation and suppression of apoptosis (Figure 1A).
FLT3 is the major driver
mutation underlying AML, and it is also directly implicated in the causation of other hematological malignancies. FLT3 mutations are the
most frequently identified mutations in AML patients. Activating mutations in FLT3, which are FLT3 Internal Tandem Duplication, or FLT3-ITD,
and FLT3 Tyrosine Kinase Domain, or FLT3-TKD, mutations, account for 30% of all AML cases Figure 1B. The most common FLT3-ITD mutation
is the substitution of tyrosine or histidine at residue 590-592 and substitution of asparagine or aspartic acid of TKD1 and TKD2 at residues
of 676 and 835, respectively. The acquired resistant mutation, F691 in TKD1, the "gatekeeper" mutation, confers resistance
to certain FDA-approved FLT3 inhibitors. Patients with FLT3-ITD mutations have shown increased relapse and decreased OS compared to patients
without a FLT3-ITD mutation.
As a result of these
mutations, the FLT3 receptor is continuously activated leading to the continuous activation of downstream signaling pathways, which in
turn results in increased cell proliferation and decreased apoptosis.
A.
B.
Figure 1: A. Schematic
of FLT3 signaling; B. FLT3 mutations.
84
Market Opportunity in AML
Front-line intervention
in FLT3-driven AML is treated with two available FLT3 inhibitors, midostaurin and quizartinib. FLT3-positive R/R AML is treated with a
different FLT3 inhibitor, gilteritinib. The lack of uniform approval of FLT3 inhibitors independent of line is partly due to the differing
mechanism of action of the respective drugs. Midostaurin and quizartinib predominantly block FLT3 ITD and are less effective against FLT3
TKD mutations. The latter occur with greater frequency in the R/R setting. Hence these drugs failed to show good efficacy. Gilteritinib
is effective against both ITD and TKD mutations but is too myelosuppressive because of overlapping off-target toxicities so that the drug
failed in front-line studies when combined with the more intensive chemotherapy regimen used during the disease induction phase of treatment.
Most patients receiving
commercially available FLT3 inhibitors relapse due to disease progression resulting from insufficient target coverage (due to dose limiting,
off-target toxicities), development of FLT3 resistance mutations, or the development of escape pathways independent of FLT3 signaling.
Each year, nearly 20,000 patients are diagnosed with AML in the United States, and about half of the AML patients have a FLT3 or an IRAK4
mutation. We estimate that in the United States, there are 7,700 R/R AML patients who have been previously treated with a FLT3 inhibitor.
In addition, we estimate that in the United States, there are approximately 38,000 patients who have not been treated with a FLT3 inhibitor
before. We therefore believe that lomonitinib's current addressable market in AML consists of approximately 45,000 patients in the
United States.
Current Treatment Paradigm in FLT3 AML
and Its Limitations
To date, drugs have been
developed and approved to inhibit FLT3's primary mutation, known as FLT3-ITD, as well as its secondary mutation, known as FLT3-TKD.
In one clinical trial, midostaurin, an approved small molecule that inhibits multiple receptor tyrosine kinases including wild type, or
wt, FLT3, FLT3-ITD and FLT3-TKD, demonstrated a median OS of 74.7 months while a placebo demonstrated a median OS of 25.6 months when
administered in combination with standard cytarabine and daunorubicin induction and cytarabine consolidation. Similarly, in a separate
clinical trial for FLT3-positive R/R AML, gilteritinib, another approved small molecule inhibitor of FLT3-ITD and FLT3-TKD, demonstrated
an OS of 9.3 months while salvage therapy demonstrated an OS of 5.6 months.
However, patients often
develop drug resistance, which is a persistent limitation to their long-term use. In addition, FLT3 inhibitors often have poor selectivity
against other kinases, which means that they cause side effects by inhibiting kinases other than FLT3. As a result, FLT3 inhibitors have
safety and tolerability concerns that narrow the number of effective treatment options available to patients with AML FLT3 AML. Drug resistance
occurs through two major mechanisms. First, patients may develop drug resistance to a FLT3 inhibitor due to incomplete suppression of
target FLT3-ITD and FLT3-ITD mutations because of that inhibitor's narrow therapeutic margins or because of the development of drug-resistant
mutations in FLT3-TKD, such as the T691X, gatekeeper mutation. Second, patients may develop drug resistance to a FLT3 inhibitor because
that inhibitor activates accessory escape pathways for cancer cells that are independent of FLT3 mutations. A gene known as NRAS provides
one such escape pathway. IRAK4 is a predominantly immune cell-expressed kinase that regulates the activation of several cell signaling
pathways, including NRAS. It is currently believed that the overactivation of IRAK4 provides an escape mechanism for FLT3-driven malignancies.
In addition to drug resistance,
the other major limitation of current approved FLT3 inhibitors is their limited efficacy. The most common response among AML patients
treated with current FLT3 inhibitors is a Complete Remission with incomplete recovery of the bone marrow or, alternatively, a Complete
Remission with incomplete recovery of blood platelets. We believe that these results occur due to two mechanisms: off-target kinase activity,
leading to myelosuppression or potent inhibition of wt FLT3, which is important for normal bone marrow regeneration and recovery. In addition,
we believe that FDA approval of a FLT3 inhibitor will require the submission of data relating to Complete Remission.
Newly diagnosed, FLT3
positive AML adult patients are treated with either quizartinib, which targets FLT3-ITD and wt FLT3, in combination with induction therapy
or midostaurin, which targets FLT3-ITD, FLT3-TKD and wt FLT3, in combination with induction therapy. For FLT3-positive R/R AML, patients
are treated with gilteritinib, which targets FLT3-ITD, FLT3-TKD and wt FLT3. As summarized in Figure 2 below, the majority of patients
receiving a FLT3 inhibitor or venetoclax combination therapy will experience disease progression due to either acquired resistant FLT3
mutations or an escape pathway via IRAK4 activity.
85
Line
Therapy
Target
Median OS
First-line
Quizartinib
FLT3-ITD, wt FLT3
18.9 months
First-line
Midostaurin
FLT3-ITD, FLT3-TKD, wt FLT3
74.7 months
Second-line
Gilteritinib
FLT3-ITD, FLT3-TKD, wt FLT3
9.3 months
Figure 2. Median Overall of FLT3 targeted
therapies for newly diagnosed for FLT3 AML and R/R AML
In addition, the toxicity
profile of some of these therapies also significantly limits their utility in treating patients with FLT3-positive AML. In particular,
quizartinib and gilteritinib are associated with cardiac toxicity and myelosuppression, which we believe is due to the inhibition of wt
FLT3.
Our Solution:  Lomonitinib, a Pan-FLT3/IRAK4 Inhibitor
We believe that a selective
pan-FLT3/IRAK4 inhibitor that spares both wt FLT3, and other myelosuppressive kinases could inhibit the heterogeneous mix of FLT3 resistance
mutations found in patients as well as accessory escape pathways. As a result, we believe that such an inhibitor can limit the emergence
of new FLT3 mutations whether it is used in early or later lines of therapy.
Lomonitinib is a
novel small molecule inhibitor that has been designed to block activity of all major known resistance mutations of FLT3 that drive AML
as well as IRAK4, a significant known compensatory escape pathway. Existing FLT3 inhibitors are limited by the emergence of resistance
mutations or escape pathways, lack of selectivity and safety profile, as clinical data have demonstrated their inability to inhibit disease
progression. Lomonitinib has demonstrated anti-tumor activity in cellular assays and in animal models against both activating and
resistance mutations. We believe lomonitinib, if approved, could become a next-generation FLT3 inhibitor based on its inhibitory
profile and favorable properties, as well as its ability to achieve predicted pan-FLT3 inhibitory blood concentrations at tolerable
doses in healthy volunteers.
Broad FLT3 Mutation
Coverage Supported by In Vitro Data
We performed in vitro
preclinical studies to evaluate the selectivity of lomonitinib and gilteritinib for FLT3 mutants in cell lines engineered with FLT3 mutations
over 72 hours. Table 1 shows results from this preclinical study. Lower IC
50
numbers indicate greater potency as they
represent the concentration of a substance required to inhibit a biological process by half. As shown by Table 1 below, this preclinical
study showed that lomonitinib was more potent than gilteritinib in inhibiting cell lines except in the wt FLT3 cell line, which suggests
that lomonitinib covers many mutations without necessarily inhibiting wt FLT3.
BaF3 Cell Line
Lomonitinib IC
50
, nM
Gilteritinib IC
50
, nM
ITD F691L
4.7
18.49
ITD D835H
0.61
10.26
ITD D835Y
1.32
7.75
D835Y
1.40
7.42
D835H
0.32
2.05
ITD
0.36
3.81
GFP + IL-3 (FLT3 WT)
88.43
45.95
Table 1. List of clinically
relevant activating and resistant FLT3 mutations in AML incorporated into our engineered Ba/F3 cell lines.
In addition, we performed
in
vitro
studies to observe the effect of lomonitinib on a variety of genes, including a variety of FLT3 mutations, IRAK4 and others.
As demonstrated by Table 2, lomonitinib's dissociation constant, or Kd, was less than 1 nanomolar, or nM, across all but 2 FLT3
genes in the study and IRAK4. In this
in vitro
study, lomonitinib's Kd was 8.1 nM or higher across a variety of
other genes, which indicates lomonitinib's selectivity profile. Based on third party studies, gilteritinib and quizartinib have
appeared to have overlapping effects on other genes.
86
Table 2. Lomonitinib
Dissociation Constant for Kinases.
Tumor Regression in In Vivo Mouse Models
Harboring FLT3-ITD Activating and Resistance Mutations
Lomonitinib demonstrated
potent antitumor efficacy in different murine xenograft and models of disseminated AML. MOLM-13 or MV-4;11 are human AML cell lines harboring
FLT3-ITD aberration. The MOLM-14-ITD-F691L is a human AML cell line derived from parent MOLM-14 (harboring FLT33-ITD) and expressing FLT33
with gatekeeper mutation F691L, the acquired resistance to Gilteritinib. A second model demonstrating the FLT3 gatekeeper mutation, a
syngeneic Mx1
Cre
; Npm1
CA
; FLT3-ITD model harboring the FLT3-F691L mutation was also used. In this preclinical
study, lomonitinib demonstrated a two-times survival benefit compared to the mouse maximum tolerated dose of gilteritinib.
Figure 2: Lomonitinib
extends survival compared in gilteritinib in FLT3-ITD AML model
As shown in Figures 3
and 4, lomonitinib demonstrated
in vivo
activity in two separate FLT3-ITD-gatekeeper AML models. In the study underlying
Figure 3, MOLM-14 cells were engineered with FLT3-F691L creating MOLM-14-F691L cells that also harbor the FLT3-ITD.
In vivo
activity
was measured by the percentage of MOLM-14-F691L cells in bone marrow and the graph showed differences in % hCD45+ cells in bone marrow
aspirates. Lomonitinib dose-dependently decreased the tumor burden in bone marrow early, after 8 days of treatment, with highest effect
at a dose of 20 mg/kg compared to vehicle. Gilteritinib tested at the same dose did not affect the tumor burden in bone marrow.
87
Figure 3: Lomonitinib
demonstrated superior potency compared to gilteritinib activity in FLT3-ITD-gatekeeper model
In a second FLT3-ITD-gatekeeper
AML model (CD45.2 Mx1
cre
; Npm1
c+
; FLT3
ITD
murine model, SJL-
Ptprc
a
Pepc
b
/BoyJ
(also known as B6 CD45.1 and Pep Boy)), lomonitinib demonstrated superior in vivo activity over gilteritinib. The results of this second
study are shown in Figure 4 and showed that mice with FLT3-ITD-gatekeeper mutations treated with lomonitinib had a higher chance of surviving
than the other mice in the trial which were treated with gilteritinib or with a placebo.
Figure 4: Lomonitinib
demonstrated superior potency compared to gilteritinib activity in FLT3-ITD-gatekeeper model
88
Based on the results
of our preclinical study shown in Figure 5, we believe that lomonitinib has synergistic activity with venetoclax. In that study, we analyzed
mice that were treated with a combination of lomonitinib and venetoclax and compared to either lomonitinib or venetoclax alone. The mice
that were treated with venetoclax and lomonitinib survived longer than the mice that were treated with lomonitinib or venetoclax alone.
These preclinical results are consistent with third-party clinical trials that have reported synergistic activity of FLT3 inhibitors,
on the one hand, and BCL2 inhibitors or menin inhibitors, on the other hand in AML patients.
Figure 5. Efficacy
of lomonitinib in combination with BCL-2 Inhibitor (venetoclax) in MOLM-13 Model
IRAK4 Activity
We performed a preclinical
study of mice with high leukemic burden in their bone marrow. On day 19 of this study, four mice were treated with lomonitinib in doses
equal to 20 mg/kg over 8 days. Figure 6 shows the percentage of cells suffering from leukemic burden in the two populations of mice. The
average percentage in the population of mice treated with lomonitinib was approximately 20% of the percentage in the population of mice
that was not treated. WE believe that the mechanism of action in this study related to IRAK4 inhibition because existing FLT3 inhibitors
have not been reported to affect leukemic burden in bone marrow. In addition, a known IRAK4 inhibitor has been reported to have a similar
effect on bone marrow.
Figure 6. Percentages
of MOLM-14-F691L Cells in Bone Marrow "Rescue" Treatment.
89
Healthy Volunteer
Study
In the healthy volunteers
studied in our Phase 1 trial in Australia, there were no dose limiting toxicities or adverse events at all four dose levels, and there
was no significant food effect among the six patients treated with lomonitinib. To date, lomonitinib has caused no QTc prolongations or
differentiation syndrome in treated patients and has caused no myelosuppression with continuous dosing of patients, unlike gilteritinib
and quizartinib, which are approved FLT3 inhibitors. This study also provided findings that FLT3-ITD was inhibited in the healthy volunteers.
During the healthy volunteer
study, lomonitinib showed strong exposures and had a long half-life following a single dose in healthy volunteers. The increase in exposure
appeared to be proportional to increases in doses as can be seen in Figure 7. In particular, we examined exposure from plasma samples
taken from the healthy volunteers across all three dose levels, 2 mg, 10 mg and 50 mg. The graph shows pharmacokinetics.
Figure 7. Pharmacokinetics
of Lomonitinib Following Single Dose in Healthy Volunteers.
Loading Doses
Based on our preclinical
and healthy volunteer studies, we believe that lomonitinib could be administered using a loading dose, which is a dose taken before the
beginning of a regular cycle of treatment. The use of a loading dose reduces the amount of time required to expose a patient to a steady
state of a given drug, which provides the opportunity for earlier and more sustainable anti-tumor activity. We extrapolated from our findings
in the healthy volunteer study to estimate that patients taking lomonitinib with a loading dose would reach steady state exposures fifteen
to twenty days earlier than if they had taken gilteritinib or quizartinib.
Clinical Development
Plan for Lomonitinib in AML
In the second quarter
of 2024, we initiated our initial, first-in-human phase 1b clinical trial in Australia, which has expanded to the United States, with
the goal of evaluating monotherapy lomonitinib in patients with FLT3 positive R/R AML. This clinical trial consists of two phases:
●
Phase 1 – Dose Escalation:
patients with FLT3-positive R/R AML will be enrolled in order to evaluate lomonitinib's safety profile and preliminary efficacy
of lomonitinib as well as to determine a recommended phase 2 dose.
●
Phase 2 – Dose Expansion: patients with FLT3 positive R/R AML
will be enrolled at two doses to determine the recommended phase 2 dose. The phase 1b portion of the clinical trial will further characterize
the efficacy and safety profile of lomonitinib and potentially lead to a Phase 2 study designed for accelerated approval, which we anticipate
could occur as early as the first half of 2026.
90
Our initial registration
strategy is focused on FLT3 gatekeeper R/R AML, where there is currently no available therapy and therefore a significant unmet medical
need, as well as on R/R AML patients who have already received prior lines of FLT3 inhibitors, where resistance has emerged rendering
existing therapeutic options ineffective.
We expect to have initial,
topline data from the ongoing Phase 1b trial in the fourth quarter of 2024.
The data from the ongoing
phase 1b clinical trial and feedback from regulatory authorities will inform the design of a potential initial registration trial. Gilteritinib
is currently the only FDA approved FLT3 inhibitor for FLT3-positive R/R AML patients. The FLT3-gatekeeper mutation confers resistance
to gilteritinib. By selecting patients with FLT3-gatekeeper mutation, a randomized trial may not be needed, and an accelerated approval
could be possible with a single arm study.
We also plan to prioritize
the evaluation of lomonitinib in first-line AML, where we believe our pan-FLT3/IRAK4 inhibitor could deliver meaningful clinical benefit
over the current standard of care due to its activity against relevant classes of activating and resistance mutations.
Given its broad mutational
coverage as a pan-FLT3 and IRAK4 inhibitor, we also plan to evaluate lomonitinib in newly diagnosed AML patients as monotherapy
and combination, as well as MDS based on the IRAK4 inhibitory activity observed by others for those cancers. Based on the preclinical
profile, we believe lomonitinib has the potential to deliver meaningful clinical benefit over the currently available standard
of care in FLT3 positive AML and MDS.
Programs That We
Have Licensed
In October 2024, we entered
into a license agreement with Eil, or the Eil license agreement, and a license agreement with Bala, or the Bala license agreement. Pursuant
to the Eil license agreement and the Bala license agreement, we obtained exclusive, perpetual, worldwide licensing rights for the development
and future ownership of (i) lonitoclax, a BCL-2 inhibitor for the treatment of AML and CLL from Eil, and (ii) an early-stage menin inhibitor
for the treatment of AML from Bala.
As discussed below, we
believe that lonitoclax, the BCL-2 inhibitor we licensed from Eil, and the menin inhibitor we licensed from Bala could complement lomonitinib
and each other.
Lonitoclax (ZE50-0134)
Eil has developed, and
we plan to continue developing, lonitoclax (ZE50-0134), which is an inhibitor of the anti-apoptotic protein BCL-2 for the treatment of
patients with AML and CLL. Currently, venetoclax is the only approved inhibitor of BCL2 for the indications of AML and CLL. The phase
3 studies underlying these two approvals reported an 82% rate of Grade 3 or higher hematological toxicities, comprising neutropenia, thrombocytopenia
and anemia. We believe this toxicity profile stemmed from its incomplete selectivity against a related BCL-2 homology, or BH3, family
member known as BCLXL. Unlike BCL2, BCLXL is highly expressed in normal human hematopoietic cells. Based on our analysis of venetoclax
using our hybrid AI/ML platform, we believe that we have determined the molecular basis of the lack of selectivity of venetoclax. Based
on these molecular docking simulations, we believe that other BCL2 inhibitors in clinical development, which are chemically similar to
venetoclax also lack sufficient selectivity against BCLXL. Venetoclax has an extremely long half life of 26 hours and is susceptible to
inhibitors of microsomal drug metabolism that are commonly used in the treatment of AML, necessitating dose reduction or dose holidays.
In the treatment of CLL, initial therapy with venetoclax (and other BCL2 inhibitors) causes tumor lysis syndrome, or TLS, a potentially
life threatening condition which can be obviated by therapeutic interventions and obviated by slow titration, usually over multiple weeks.
Whether TLS is related to the drug's prolonged exposure or its lack of selectivity to BCLXL remains undetermined. Escape mutations
to venetoclax, particularly in residue 101 can occur and render patients insensitive to therapy. Whether the incidence of these mutations
is hastened by the necessary slow sub-therapeutic titration protocol of existing BCL-2 inhibitors remains unclear
91
Lonitoclax was designed
to avoid binding to a specific pocket that is shared by BCL2 and BCLXL. Eil's preclinical studies have indicated that lonitoclax
is much more selective for BCL2 than it is for BCLXL. In Eil's preclinical studies, loniticlax also showed similar activity as venetoclax
in inhibiting the proliferation of primary CLL cells. Moreover, in Eil's preclinical studies of lonitoclax and venetoclax in animal
models, there were smaller decreases in B cells and T cells in the animals treated with lonitoclax. In addition, the drug-like properties
were enhanced by design to limit susceptibility to microsomal drug metabolism and to reduce the half-life of the drug. A reduced half-life
should still result in acceptable efficacy as once intracellular caspase enzymes are activated following BCL-2 inhibition- an irreversible
commitment to apoptosis or cell death results. Pre-clinical studies suggest the optimal time of drug exposure to be several hours. In
support of this contention we showed equivalent efficacy to venetoclax when dosing lonitoclax once daily in mice where the half-life was
several hours
A single ascending dose
study of lonitoclax in healthy volunteers is in progress in Australia, and it has been designed to measure safety, exposure and
ex
vivo
target engagement. Initial data from this trial is expected to be announced in the fourth quarter of 2024. Early results
have confirmed a much shorter half-life than venetoclax, nine hours as opposed to 26 hours, and
ex vivo
target engagement
(caspase activation) over only several hours. An IND to examine the effect of lonitoclax in CLL patients was submitted in September 2024
and was cleared by the FDA in October 2024.
Going forward, we expect
that a clinical trial for lonitoclax would consist of two phases:
●
Phase 1 – Dose Escalation:
CLL patients that have never been treated with venetoclax will be enrolled in order to evaluate lonitoclax's safety profile and
lonitoclax's preliminary efficacy of as well as to determine a recommended phase 2 dose.
●
Phase 2 – Dose Expansion:
a similar population of patients will be enrolled at two doses to determine the recommended phase 2 dose. The phase 1b portion of the
clinical trial will further characterize the efficacy and safety profile of lonitoclax in combination with other drugs to treat AML.
Such trials in patients who were not previously treated with venetoclax could lead to a Phase 2 study designed for accelerated approval.
The data from the ongoing
healthy volunteer study and feedback from regulatory authorities will inform the design of a potential initial registration trial.
Lead Series Menin
Inhibitor
Bala has developed, and
we expect to continue developing, a class of menin inhibitors for the treatment of NPM-1 and MLL-rearranged AML. Menin is a central player
in cells that brings other proteins together to regulate the expression of genes thar are key to cell growth. Menin has been validated
as a target for AML in the clinic by two menin inhibitors, revumenib and ziftomenib. Both agents have reported meaningful clinical efficacy
responses both as a monotherapy and in combination studies with venetoclax for the treatment of AML. However, clinical trials have also
demonstrated certain limitations of these two agents. In clinical trials involving revemenib, 14% of patients experienced dose-limiting
toxicities related to QTc prolongation , and revemenib is susceptible to inhibitors of cyp3A4. In clinical trials involving ziftomenib
in MLL-rearranged AML, 31% of patients experienced differentiation syndrome, which is linked to toxicity, and a zero CR rate. Both agents
have also been reported to be susceptible to drug-induced mutations in menin following several cycles of therapy.
Bala used an AI/ML platform
to design its menin inhibitors to mitigate the risk of QTc prolongation risk, to have low cyp3A4 liability, and to have reduced susceptibility
to hot spot mutation-induced decreases in drug efficacy. In preclinical studies, two of Bala's menin inhibitors were shown to have
dose proportional exposure in multiple species, and our GLP toxicology studies preliminarily indicated a favorable safety profile.
In the fourth quarter
of 2024, we expect to select one of Bala's menin inhibitors as a candidate for further preclinical study and, if the results are
supportive, potentially clinical study.
92
Competition
The pharmaceutical and
biotechnology industries, particularly the field of oncology, are characterized by rapidly advancing technologies, intense competition
and a strong emphasis on proprietary and novel products and product candidates. We believe that our pipeline, knowledge, experience and
scientific resources provide us with differentiated competitive advantages. However, we have competitors both in the United States and
internationally, which include major multinational pharmaceutical companies, established biotechnology companies, specialty pharmaceutical
companies, emerging and start-up companies, universities and other research institutions.
There are several approved
therapies for the treatment of conditions for which we are attempting or may attempt to develop product candidates. In addition, we believe
that a significant number of product candidates are currently under development, and may become commercially available in the future.
We expect lomonitinib to compete against approved drugs from various pharmaceutical companies, including Astellas Pharma Inc.'s
gilteritinib, Novartis AG's midostaurin and Daiichi Sankyo, Inc.'s quizartinib. In addition, several biopharmaceutical companies,
including Beigene, Ltd, Curis, Inc., Aptose Biosciences Inc., Biomea Fusion, Inc. or PharsoBio, Ryvu Therapeutics S.A., Ellipses Pharma
Limited, Sunshine Lake Co., Ltd, AROG Pharmaceuticals, Inc., Nerviana, A.Menarini Industrie Farmaceutiche Riunite S.r.l., Fujifilm Corporation,
Maxinovel Co., Ltd., LaNova Medicines Ltd., Beijing Novruns, Tarapeutics, Haihe Biopharma Co., Ltd., Oscotec Inc., Shanghai Fosun Pharmaceutical
Co., Ltd., and Tyligand Bioscience (Shanghai) Limited, are also developing FLT3 inhibitors for the treatment of AML.
The key competitive factors
that will affect the success of product candidates, if approved, are likely to be their efficacy, safety, convenience, price, the level
of generic competition and the availability of reimbursement from government and other third-party payors. We also compete with these
organizations to recruit and retain qualified scientific and management personnel. We will also face competition in establishing clinical
trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our
programs.
Our competitors have
developed, are developing, or may develop products, product candidates and processes competitive with ours. Any product candidates that
we successfully develop and commercialize will compete with existing therapies and new therapies that may become available in the future.
Many of our competitors, either alone or with their collaborators, have significantly greater financial resources, established presences
in markets, expertise in research and development, manufacturing, preclinical and clinical testing, obtaining regulatory approvals, gaining
reimbursement and marketing approved products than we do. Our competitors may succeed in obtaining approval from the FDA or other comparable
foreign regulatory authorities or in discovering, developing and commercializing product candidates in our field before we do.
We also face competition
broadly across the oncology market for cost-effective and reimbursable cancer treatments. There are a variety of available drug therapies
marketed for cancer. In many cases, these drugs are administered in combination to enhance efficacy. While product candidates, if any
are approved, may compete with these existing drugs and other therapies, to the extent they are ultimately used in combination with or
as an adjunct to these therapies, product candidates may not be competitive with them. Additionally, product candidates may need to compete
with drugs that physicians use off-label to treat the indications for which we seek approval. Moreover, many companies are developing
new oncology therapeutics, and we cannot predict what the standard of care will be as product candidates progress through clinical development.
License Agreements
In October 2024, we entered
into a license agreement with Eil, or the Eil license agreement, and a license agreement with Bala, or the Bala license agreement. Pursuant
to the Eil license agreement and the Bala license agreement, we obtained exclusive, perpetual, worldwide licensing rights for the development
and future ownership of (i) lonitoclax a BCL-2 inhibitor for the treatment of AML and CLL from Eil, and (ii) an early-stage menin inhibitor
for the treatment of AML from Bala.
The Eil license agreement
and the Bala license agreement became effective in October 2024 when we issued promissory notes to Eil and Bala, respectively. The principal
amount of the promissory notes with Eil and Bala are $1.7 million and $1.2 million, respectively. Each such promissory note bears interest
at a rate of 7% per annum, compounded annually and the principal and accrued interest under each note are due and payable on demand at
any time after October 17, 2026. Each such promissory note may be repaid without penalty. In addition, the two promissory notes each provide
for customary events of default.
93
Upon the payment in full
of the applicable promissory note, Eil and Bala have each agreed to transfer to us all of the intellectual property rights covered by
the Eil license agreement and the Bala license agreement, as the case may be.
The license rights are
sublicensable at our option through multiple tiers, in whole or in part. Under such license agreements, we, but not Eil or Bala, as the
case may be, have the right to terminate the applicable license agreement for convenience upon 30 days' written notice. If we or
Eil or Bala, as the case may be, materially breaches the applicable license agreement, and such breach is not cured within 90 days after
the receipt of notice of such breach, then the non-defaulting party may terminate such license agreement. In addition, upon the occurrence
of an event of default under the applicable promissory note, the Eil license agreement or the Bala license agreement shall be terminated.
Eil and Bala are each
wholly-owned by Eilean Therapeutics, LLC, our former parent company, which beneficially owned 53.0% of our common stock upon the closing
of the Merger and the Offering. Further, Dr. Savchuk is the President and CEO of each of Bala and Eil.
Intellectual Property
We seek to protect the
intellectual property and proprietary technology that we consider important to our business, including by pursuing patent applications
that cover our product candidates and any additional product candidates we may develop, and methods of using the same, as well as any
other relevant inventions and improvements that we believe to be commercially important to the development of our business. Our policy
is to seek to protect our proprietary position by, among other methods, filing patent applications in the United States and in jurisdictions
outside of the United States directed to our proprietary technology, inventions, improvements and product candidates (including compositions,
methods of use, dosing and formulations) that are important to the development and implementation of our business. We may also pursue
patent protection with respect to manufacturing and drug development processes and technologies. We also rely on trade secrets, know-how
and continuing technological innovation to develop and maintain our proprietary and intellectual property position. We also plan to rely
on data exclusivity, market exclusivity and patent term extensions when available. Our commercial success depends, in part, on our ability
to obtain, maintain, enforce and protect our intellectual property and other proprietary rights for the technology, inventions and improvements
we consider important to our business, and to defend any patents we may own or in-license in the future, prevent others from infringing
any patents we may own or in-license in the future, preserve the confidentiality of our trade secrets, and operate without infringing,
misappropriating or otherwise violating the valid and enforceable patents and proprietary rights of third parties.
As of June 30, 2024,
Lomond owned two pending U.S. patent applications. As of June 30, 2024, Lomond owned pending patent applications in 16 jurisdictions outside
the U.S. Any patents that may issue from our pending patent applications are expected to have nominal expiration dates ranging from October
2042 to April 2044, absent any patent term adjustments or patent term extensions for regulatory delay. Our patent portfolio includes filings
covering compositions of matter and methods of using one of our lead product candidates, lomonitinib, as well as exclusively-licensed
rights to patents and patent applications related to our other lead product candidate, lonitoclax, and Bala's menin inhibitors.
Issued patents can provide
protection for varying periods of time, depending upon the date of filing of the patent application, the date of patent issuance and the
legal term of patents in the countries in which they are obtained. In the United States, if all maintenance fees are timely paid, the
natural expiration of a patent is generally 20 years from its earliest U.S. non-provisional filing date. In addition, in certain instances,
the term of an issued U.S. patent that covers or claims an FDA approved product can be extended to recapture a portion of the term effectively
lost as a result of the FDA regulatory review period, which is called patent term extension. The restoration period cannot be longer than
five years and the total patent term, including the restoration period, must not exceed 14 years following FDA approval. The term of patents
outside of the United States varies in accordance with the laws of the foreign jurisdiction, but typically is also 20 years from the earliest
effective filing date. However, the actual protection afforded by a patent varies on a product-by-product basis, from country-to-country
and depends upon many factors, including the type of patent, the scope of its coverage, the availability of regulatory-related extensions,
the availability of legal remedies in a particular country and the validity and enforceability of the patent.
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The patent position of
pharmaceutical and biotechnology companies generally is highly uncertain, involves complex legal and factual questions, and has been the
subject of much litigation in recent years. As a result, the issuance, scope, validity, enforceability and commercial value of our patent
rights are highly uncertain. Our pending and future patent applications and those of our licensors and collaborators may not result in
patents being issued which protect product candidates or which effectively prevent others from commercializing competitive product candidates.
Moreover, obtaining and enforcing patents in the pharmaceutical and biotechnology industries is inherently uncertain, due in part to ongoing
changes in the patent laws. Changes in either the patent laws or in the interpretations of patent laws in the United States and other
countries may diminish the value of our intellectual property and may increase the uncertainties and costs surrounding the prosecution
of patent applications and the enforcement or defense of issued patents. Even if resolved in our favor, litigation or other legal proceedings
relating to intellectual property claims may cause us to incur significant expenses, and could distract our technical and management personnel
from their normal responsibilities.
Commercial Strategy
We intend to retain significant
development and commercial rights to product candidates and, if marketing approval is obtained, to commercialize product candidates on
our own, or potentially with a partner, in the United States and other regions. We currently have no sales, marketing or commercial product
distribution capabilities. However, we intend to build a focused sales and marketing organization and the necessary infrastructure and
capabilities over time in the United States, and potentially other regions, following further advancement of product candidates. We believe
that such an organization will be able to address the community of oncologists who are the key specialists in treating the patient populations
for which product candidates and programs are being developed. The responsibilities of the marketing organization would include developing
educational initiatives with respect to approved products and establishing relationships with researchers and practitioners in relevant
fields of medicine. Clinical data, the size of the addressable patient population, the size of the commercial infrastructure and manufacturing
needs may all influence or alter our commercialization plans.
Manufacturing
We do not own or operate,
and currently have no plans to establish, any manufacturing facilities. We rely, and expect to continue to rely, on third parties for
the manufacture of our small molecule product candidate, our in-licensed product candidates as well as any other product candidates we
may develop through our programs, for preclinical and clinical testing. We also expect to rely on third parties for the manufacture of
our product candidate and any other product candidates we may acquire or develop through our programs for commercial supply, if any product
candidates obtain marketing approval. We also rely, and expect to continue to rely, on third parties to package, label, store and distribute
our product candidate and any other product candidates we may develop through our programs and, if marketing approval is obtained, our
commercial products.
For our initial clinical
trials, we plan to rely on sole source suppliers. However, as we progress towards commercialization of product candidates, we anticipate
expanding the supply chain to include multiple contract manufacturing organizations, or CMOs. We believe this strategy will allow us to
maintain a more efficient infrastructure by eliminating the need for us to invest in our own manufacturing facilities and equipment, while
also enabling us to focus our expertise and resources on the development of product candidates.
Manufacturing is subject
to extensive regulations that impose procedural and documentation requirements. These regulations govern record keeping, manufacturing
processes and controls, personnel, quality control and quality assurance. Our CMOs are required to comply with these regulations and are
assessed through regular monitoring and formal audits. Our third-party manufacturers are required to manufacture any product candidates
we develop under current Good Manufacturing Practice, or cGMP, requirements and other applicable laws and regulations.
We generally expect to
rely on third parties for the manufacture of companion diagnostics, which are assays or tests that identify an appropriate patient population,
if needed for any product candidates that receive marketing approval.
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Government Regulation
The U.S. Food and Drug
Administration, or FDA, and other regulatory authorities at federal, state and local levels, as well as outside the United States, extensively
regulate, among other things, the research, development, testing, manufacture, quality control, import, export, safety, effectiveness,
labeling, packaging, storage, distribution, recordkeeping, approval, advertising, promotion, marketing, post-approval monitoring and post-approval
reporting of drugs and biologics. We, along with our vendors, CROs, clinical investigators, clinical trial sites and CMOs, will be required
to navigate the various preclinical, clinical, manufacturing and commercial approval requirements of the governing regulatory agencies
of the countries in which we wish to conduct studies or seek marketing approval of product candidates. The process of obtaining regulatory
approvals of drugs and biologics and ensuring subsequent compliance with appropriate federal, state, local and foreign statutes and regulations
requires the expenditure of substantial time and financial resources.
In the United States
where we are initially focusing our drug commercialization, we believe our product candidates, as small molecule drugs, would be regulated
as new drugs rather than biologics. The FDA regulates new drug products under the FDCA, and its implementing regulations. New drug products
are also subject to other federal, state and local statutes and regulations. If we fail to comply with applicable FDA or other requirements
at any time with respect to product development, clinical testing, approval or any other regulatory requirements relating to product manufacture,
processing, handling, storage, quality control, safety, marketing, advertising, promotion, packaging, labeling, export, import, distribution,
or sale, we may become subject to administrative or judicial sanctions or other legal consequences. These sanctions or consequences could
include, among other things, the FDA's refusal to approve pending applications, issuance of clinical holds for proposed or ongoing
studies, suspension or revocation of approvals, warning or untitled letters, product withdrawals or recalls, product seizures, relabeling
or repackaging, total or partial suspensions of manufacturing or distribution, injunctions, fines, civil penalties or criminal prosecution.
Product candidates must
be approved for therapeutic indications by the FDA before they may be marketed in the United States. For new drug products regulated under
the FDCA such as our lead product candidates, a sponsor must submit a New Drug Application, or NDA, to FDA for review and approval. The
NDA review and approval process may take multiple years and involves the following steps:
●
completion of extensive preclinical
studies in accordance with applicable regulations, including studies conducted in accordance with GLP requirements;
●
completion of the manufacture,
under cGMP conditions of the drug substance, drug product, and labeling and packaging that the sponsor intends to use in human clinical
trials along with required analytical and stability testing;
●
submission to the FDA of an
IND, which must become effective before clinical trials may begin and must be updated annually and amended when certain changes are made;
●
approval by an institutional
review board, or IRB, or independent ethics committee, or IEC, at each clinical trial site before each trial may be initiated;
●
performance of adequate and
well-controlled clinical trials in accordance with applicable IND regulations, good clinical practice, or GCP, requirements, including
informed consent, financial disclosure by investigators and other clinical trial-related regulations, to establish the safety and efficacy
of the investigational product for each proposed indication and other condition of use;
●
preparation and submission
to the FDA of an NDA;
●
a determination by the FDA
within 60 days of its receipt of an NDA to file the application for review;
●
satisfactory completion of
one or more FDA pre-approval inspections of the manufacturing facility or facilities where the drug will be produced to assess compliance
with cGMP requirements to assure that the facilities, methods and controls are adequate to preserve the drug product's identity,
strength, quality and purity;
●
satisfactory completion of
FDA inspection of select clinical trial sites involved in conducting pivotal studies that generated the data in support of the NDA;
●
payment of user fees for FDA
review of the NDA; and
●
FDA review and approval of
the NDA, including of the proposed prescribing information and, where applicable, consideration of the views of any FDA advisory committee,
prior to any commercial marketing or sale of the drug in the United States.
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Preclinical Studies
and Clinical Trials for Drugs
Before testing any drug
in humans, the product candidate must undergo rigorous preclinical testing. Preclinical studies include laboratory evaluations of product
chemistry, formulation and stability, as well as
in vitro
and animal studies to assess safety and in some cases to establish
the rationale for therapeutic use. The conduct of preclinical studies is subject to federal and state regulation and requirements, including
GLP requirements under 21 C.F.R. Part 58 and animal testing requirements under the Animal Welfare Act Amendments of 1976 (7 U.S.C. 2131
et seq.). The results of the preclinical studies, together with manufacturing information and analytical data, must be submitted to the
FDA as part of an IND.
An IND is a submission
to the FDA under which a sponsor proposes to administer an investigational product to humans. An IND must become effective before the
proposed clinical trials may begin. The central focus of an IND submission is on the general investigational plan and the protocol(s)
for clinical studies. The IND also includes the results of animal and
in vitro
studies assessing the toxicology, pharmacokinetics,
pharmacology, and pharmacodynamic characteristics of the product; chemistry, manufacturing, and controls information; and any available
human data or literature to support the use of the investigational product. Some long-term preclinical testing may continue after the
IND is submitted. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day time period,
raises concerns or questions about the conduct of the proposed clinical trial, including concerns that human research subjects will be
exposed to unreasonable health risks, refuses to allow the IND to take effect until the FDA's concerns and questions have been addressed
and/or imposes a full or partial clinical hold. The FDA must notify the sponsor of the grounds for the hold, and any identified deficiencies
must be resolved before the clinical trial can begin. Submission of an IND may result in the FDA not allowing clinical trials to commence
or not allowing clinical trials to commence on the terms originally specified in the IND. A clinical hold can also be imposed once a trial
has already begun, thereby halting the trial until the deficiencies articulated by FDA are corrected.
The clinical stage of
development involves the administration of the product candidate to healthy volunteers or patients under the supervision of qualified
investigators, who generally are physicians not employed by or under the trial sponsor's control, in accordance with GCP requirements,
which include the requirements that all research subjects provide their informed consent for their participation in any clinical trial.
Clinical trials are conducted under protocols detailing, among other things, the objectives of the clinical trial, dosing procedures,
subject selection and exclusion criteria, and the parameters and criteria to be used in monitoring safety and evaluating effectiveness.
Each protocol, and any subsequent amendments to the protocol, must be submitted to the FDA as part of the IND.
Furthermore, each clinical
trial must be reviewed and approved by an IRB or IEC for each institution at which the clinical trial will be conducted to ensure that
the risks to individuals participating in the clinical trials are minimized and are reasonable compared to the anticipated benefits. The
IRB or IEC also approves the informed consent form that must be provided to each clinical trial subject or his or her legal representative
and must monitor the clinical trial until completed. The FDA, the IRB or IEC, or the sponsor may suspend or discontinue a clinical trial
at any time on various grounds, including a finding that the subjects are being exposed to an unacceptable health risk. There also are
requirements governing the reporting of ongoing clinical trials and completed clinical trials to public registries. Information about
clinical trials, including results for clinical trials other than phase 1 investigations, must be submitted within specific timeframes
for publication on www.ClinicalTrials.gov, a clinical trials database maintained by the National Institutes of Health.
A sponsor who wishes
to conduct a clinical trial outside of the United States is subject to the requirements of the applicable jurisdiction and may, but need
not, obtain FDA authorization to conduct the clinical trial under an IND. If a foreign clinical trial is not conducted under an IND, the
FDA will nevertheless accept the results of the study in support of an NDA if the study was conducted in accordance with GCP requirements,
and the FDA is able to validate the data through an onsite inspection if deemed necessary.
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Clinical trials to evaluate
therapeutic indications to support NDAs for marketing approval are typically conducted in three sequential phases, which may overlap.
●
Phase 1—Phase 1 clinical
trials involve initial introduction of the investigational product in a limited population of healthy human volunteers or patients with
the target disease or condition. These studies are typically designed to test the safety, dosage tolerance, absorption, metabolism and
distribution of the investigational product in humans, evaluate the side effects associated with increasing doses, and, if possible,
to gain early evidence of effectiveness.
●
Phase 2—Phase 2 clinical
trials typically involve administration of the investigational product to a limited patient population with a specified disease or condition
to evaluate the drug's potential efficacy, to determine the optimal dosages and dosing schedule, and to identify possible adverse
side effects and safety risks.
●
Phase 3—Phase 3 clinical
trials typically involve administration of the investigational product to an expanded patient population to further evaluate dosage,
to provide statistically significant evidence of clinical efficacy, and to further test for safety, generally at multiple geographically
dispersed clinical trial sites. These clinical trials are intended, with the other available evidence, to establish the overall risk/benefit
ratio of the investigational product and to provide an adequate basis for product approval and physician labeling. Generally, two adequate
and well-controlled phase 3 trials are required by the FDA for approval of an NDA. Under certain circumstances, FDA can conclude that
one adequate and well-controlled clinical investigation plus confirmatory evidence is sufficient to establish effectiveness.
Post-approval trials,
sometimes referred to as phase 4 clinical trials or post-marketing studies, may be conducted after initial marketing approval. These trials
are used to gain additional evidence from the treatment of study subjects in the intended therapeutic indication and are commonly intended
to generate additional safety data regarding use of the product in a clinical setting, or in some cases to confirm clinical benefit. In
certain instances, the FDA may mandate the performance of phase 4 clinical trials as a condition of NDA approval.
Progress reports detailing
the results of the clinical trials, among other information, must be submitted at least annually to the FDA. Written IND safety reports
must be submitted to the FDA and the investigators fifteen days after the trial sponsor determines the information qualifies for reporting
for serious and unexpected suspected adverse events, findings from other studies or animal or
in vitro
testing that suggest
a significant risk for human volunteers, and any clinically important increase in the rate of a serious suspected adverse reaction over
that listed in the protocol or investigator brochure. The sponsor must also notify the FDA of any unexpected fatal or life-threatening
suspected adverse reaction as soon as possible but in no case later than seven calendar days after the sponsor's initial receipt
of the information.
Concurrent with clinical
trials, companies usually complete additional animal studies and must also develop additional information about the chemistry and physical
characteristics of the product candidate and finalize a process for manufacturing the drug product in commercial quantities in accordance
with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the product candidate and
manufacturers must develop, among other things, methods for testing the identity, strength, quality and purity of the final drug product.
Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the product
candidate does not undergo unacceptable deterioration over its shelf life.
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Expanded Access
Expanded access, sometimes
called "compassionate use," is the use of investigational products outside of controlled clinical trials to treat patients
with serious or immediately life-threatening diseases or conditions when there are no comparable or satisfactory alternative treatment
options. FDA regulations allow access to investigational products under an IND by the sponsor or the treating physician for treatment
purposes on a case-by-case basis for the following groups: individual patients (single-patient IND applications for treatment in emergency
settings and non-emergency settings); intermediate-size patient populations; and larger populations for use of the investigational product
under a treatment protocol or treatment IND.
A clinical trial sponsor
is not obligated under the law to provide expanded access to its investigational product. However, if a sponsor decides to make its investigational
product available for expanded access, FDA reviews each request for expanded access and determines if treatment may proceed. Expanded
access may be appropriate when all of the following criteria apply: the patient has a serious or immediately life-threatening disease
or condition, and there is no comparable or satisfactory alternative therapy to diagnose, monitor, or treat the disease or condition;
the potential patient benefit justifies the potential risks of the treatment and the potential risks are not unreasonable in the context
of the disease or condition to be treated; and providing the investigational product for the requested use will not interfere with the
initiation, conduct, or completion of clinical investigations that could support marketing approval of the expanded access use or otherwise
compromise the potential development of the expanded access use.
In addition, on May 30,
2018, the Right to Try Act was signed into law. The law, among other things, provides an additional mechanism for patients with a life-threatening
condition who have exhausted approved treatments and are unable to participate in clinical trials to access certain investigational products
that have completed a phase 1 clinical trial, are the subject of an active IND, and are undergoing investigation in a clinical trial that
is intended to form the primary basis of a claim of effectiveness in support of FDA approval. Unlike the expanded access framework described
above, the Right to Try Act does not require FDA to review or approve requests for use of the investigational product, although the law
requires sponsors to report annually to the FDA on use of the pathway and require the FDA to post certain annual summaries. There is no
obligation for a sponsor to make its investigational products available to eligible patients under the Right to Try Act.
Under the 21st Century
Cures Act, the manufacturer or distributor of one or more investigational products for the diagnosis, monitoring and treatment of a serious
disease or condition must make publicly available their policy for evaluating and responding to requests for expanded access for individual
patients. The manufacturer or distributor is required to make such policies publicly available upon the earlier of initiation of a phase
2 or phase 3 study, or as applicable, 15 days after the investigational drug receives designation as a breakthrough therapy, fast track
product, or regenerative medicine advanced therapy. The posting of the expanded access policies by manufacturers and distributors does
not serve as a guarantee of access to any specific investigational drug by any individual patient, but the sponsor must develop a policy
and respond to patient requests according to that policy.
U.S. Marketing
Approval for Drugs
Assuming successful completion
of the required clinical testing, the results of the preclinical studies and clinical trials, together with detailed information relating
to the product's chemistry, manufacture, controls and proposed labeling, among other things, are submitted to the FDA as part of
an NDA package requesting approval to market the drug product for one or more indications. An NDA is an application to FDA for approval
to market a new drug for one or more specified indications and must contain proof of the drug's safety and efficacy for the requested
indication(s). An NDA is required to include both negative and ambiguous results of preclinical studies and clinical trials, as well as
positive findings, together with detailed information relating to the product's chemistry, manufacturing, controls, and proposed
labeling, among other things. Data may come from company-sponsored clinical trials intended to test the safety and efficacy of a product's
use or from a number of alternative sources, including studies initiated by investigators. To support marketing approval, the data submitted
must be sufficient in quality and quantity to establish the safety and efficacy of the investigational drug, to the satisfaction of the
FDA. The FDA must approve an NDA before a drug may be marketed in the United States.
The FDA reviews all submitted
NDAs to ensure they are sufficiently complete to permit substantive review before it accepts them for filing and may request additional
information rather than accepting the NDA for filing. The FDA must make a decision on accepting an NDA for filing within 60 days of receipt,
and such decision could include a "refuse-to-file" decision by the FDA. Once the submission is accepted for filing, the FDA
begins an in-depth substantive review of the NDA. The FDA reviews an NDA to determine, among other things, whether the product is safe
and effective for the indications sought and whether the facility in which it is manufactured, processed, packaged or held meets standards
designed, including cGMP requirements, designed to assure and preserve the product's continued identity, strength, quality and purity.
Under the goals and polices agreed to by the FDA under the Prescription Drug User Fee Act, as amended, or the PDUFA, the FDA targets ten
months, from the filing date, in which to complete its initial review of a new molecular entity NDA and respond to the applicant, and
six months from the filing date of a new molecular entity NDA for priority review. The FDA does not always meet its PDUFA goal dates for
standard or priority NDAs, and the review process is often extended by FDA requests for additional information or clarification.
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Further, under PDUFA,
each NDA must be accompanied by a substantial user fee. PDUFA also imposes an annual program fee for each approved prescription drug.
The FDA adjusts the PDUFA user fees on an annual basis. Fee waivers or reductions are available in certain circumstances, including a
waiver of the application fee for the first application filed by a small business. Additionally, no user fees are assessed on applications
for products designated as orphan drugs, unless the product also includes a non-orphan indication.
The FDA also may require
submission of a Risk Evaluation and Mitigation Strategy, or REMS, if it believes that a risk evaluation and mitigation strategy is necessary
to ensure that the benefits of the drug outweigh its risks. A REMS can include use of risk evaluation and mitigation strategies like medication
guides, physician communication plans, assessment plans, and/or elements to assure safe use, or ETASU, such as restricted distribution
methods, patient registries, special monitoring or other risk-minimization tools.
The FDA may refer an
application for a novel drug to an advisory committee. An advisory committee is a panel of independent experts, including clinicians and
other scientific experts, which reviews, evaluates and provides advice and recommendations to FDA as to whether the application should
be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations
carefully when making decisions.
Before approving an NDA,
the FDA typically will inspect the facility or facilities where the product is manufactured. The FDA will not approve an application unless
it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and are adequate to assure consistent
production of the product within required specifications. Additionally, before approving an NDA, the FDA may inspect one or more select
clinical trial sites involved in conducting pivotal studies to assure compliance with GCP and other requirements and the integrity of
the clinical data submitted to the FDA.
After evaluating the
NDA and all related information, including the advisory committee recommendation, if any, and inspection reports regarding the manufacturing
facilities and clinical trial sites, the FDA may issue an approval letter, or, in some cases, a Complete Response Letter. A Complete Response
Letter indicates that the review cycle of the application is complete and the application is not ready for approval. A Complete Response
Letter generally contains a statement of specific conditions that must be met in order to secure final approval of the NDA, except that
where the FDA determines that the data supporting the application are inadequate to support approval, the FDA may issue the Complete Response
Letter without first conducting required inspections, testing submitted product lots, and/or reviewing proposed labeling. In issuing the
Complete Response Letter, the FDA may require additional clinical or preclinical testing or recommend other actions, such as requests
for additional information or clarification, that the applicant might take in order for the FDA to reconsider the application. Even with
submission of this additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria
for approval. If and when those conditions have been met to the FDA's satisfaction, the FDA will typically issue an approval letter.
An approval letter authorizes commercial marketing of the product with specific prescribing information for specific indication(s).
Even if the FDA approves
a product, depending on the specific risk(s) to be addressed it may limit the approved indications for use of the product, require that
contraindications, warnings or precautions be included in the product labeling, require that post-approval studies, including phase 4
clinical trials, be conducted to further assess a product's safety and efficacy after approval, require testing and surveillance
programs to monitor the product after commercialization, or impose other conditions, including distribution and use restrictions or other
risk management mechanisms under a REMS, which can materially affect the potential market and profitability of the product. The FDA may
prevent or limit further marketing of a product based on the results of post-marketing studies or surveillance programs. After approval,
some types of changes to the approved product, such as adding new indications, manufacturing changes, and additional labeling claims,
are subject to further testing requirements and FDA review and approval.
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Orphan Drug Designation
and Exclusivity
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 a disease or condition
with either a patient population of fewer than 200,000 individuals in the United States, or a patient population greater than 200,000
individuals in the United States when there is no reasonable expectation that the cost of developing and making the product available
in the United States for the disease or condition will be recovered from sales of the product. Orphan drug designation must be requested
before submitting a marketing application. After the FDA grants orphan drug designation, the generic identity of the therapeutic agent
and its designated orphan use are disclosed by the FDA on its website. Orphan drug designation does not convey any advantage in or shorten
the duration of the regulatory review and approval process, though companies developing orphan products are eligible for certain incentives,
including tax credits for qualified clinical testing and waiver of application fees.
If a product that has
orphan designation subsequently receives the first FDA approval for the use for which it has such designation, the product is entitled
to a seven-year period of marketing exclusivity from the date of FDA approval during which the FDA may not approve any other applications
to market the "same drug" for the same use, except in limited circumstances, such as a subsequent product's showing
of "clinical superiority" over the product with orphan exclusivity or where the original applicant cannot produce sufficient
quantities of product. The FDA defines "same drug" with respect to small molecule drugs as a drug that contains the same active
moiety as a previously approved drug and is intended for the same use as the previously approved drug. To demonstrate a drug is "clinically
superior" to the previously approved orphan drug, a sponsor must show that the drug provides a significant therapeutic advantage
over and above the previously already approved drug in terms of greater efficacy, greater safety, or by providing a major contribution
to patient care. Since the enactment of the FDA Reauthorization Act of 2017, the FDA publishes clinical superiority findings on its website
for those drugs approved on or after August 18, 2017. Competitors, however, may receive approval of different therapeutic agents for the
indication for which the orphan product has exclusivity or obtain approval for the same therapeutic agent for a different indication than
that for which the orphan product has exclusivity. If an orphan designated product receives marketing approval for an indication broader
than what is designated, it may not be entitled to orphan exclusivity. Further, orphan drug exclusive marketing rights in the United States
may be lost if the FDA later determines that the request for designation was materially defective or the manufacturer of the approved
product is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition, or
if the manufacturer chooses to provide consent to approval of other applications.
Expedited Development
and Review Programs for Drugs
The FDA maintains several
programs intended to facilitate and expedite development and review of new drugs to address unmet medical needs in the treatment of serious
or life-threatening diseases or conditions. These programs include Fast Track designation, Breakthrough Therapy designation, Priority
Review and Accelerated Approval, and the purpose of these programs is to either expedite the development or review of important new drugs
and biologics to get them to patients more quickly than standard FDA review timelines typically permit. We intend to apply for these programs
for product candidates, as applicable.
A new drug is eligible
for Fast Track designation if it is intended to treat a serious or life-threatening disease or condition and demonstrates the potential
to address unmet medical needs for such disease or condition. Fast Track designation applies to the product candidate and the specific
indication for which it is being studied. The sponsor of a new drug product may request the FDA to designate the drug as a Fast Track
product at any time during the clinical development of the product, but ideally no later than the pre-NDA meeting because many of the
features of Fast Track designation will not apply after that time. Fast Track designation provides increased opportunities for sponsor
interactions with the FDA during preclinical and clinical development, in addition to the potential for rolling review once a marketing
application is filed. Rolling review means that the FDA may review portions of the marketing application before the sponsor submits the
complete application.
In addition, a new drug
may be eligible for Breakthrough Therapy designation if it is intended to treat a serious or life-threatening disease or condition and
preliminary clinical evidence indicates that the drug, alone or in combination with one or more other drugs, may demonstrate substantial
improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early
in clinical development. A sponsor may request that a drug product be designated as a Breakthrough Therapy at any time during the clinical
development of the product and ideally before initiation of the pivotal clinical trial intended to serve as the primary basis for demonstration
of efficacy to obtain the full benefits of the designation. Breakthrough Therapy designation provides all the features of Fast Track designation,
in addition to intensive guidance on an efficient product development program beginning as early as phase 1 and FDA organizational commitment
to expedited development, including involvement of senior managers and experienced review staff in a cross-disciplinary review, where
appropriate.
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Any product submitted
to the FDA for approval, including a product with Fast Track or Breakthrough Therapy designation, may also be eligible for additional
FDA programs intended to expedite the review and approval process, including Priority Review and Accelerated Approval. A product is eligible
for Priority Review, once an NDA is submitted, if the product that is the subject of the marketing application has the potential to provide
a significant improvement in safety or effectiveness in the treatment, diagnosis or prevention of a serious disease or condition. Significant
improvement may be illustrated by the following examples: evidence of increased effectiveness in treatment, prevention, or diagnosis of
a condition, elimination or substantial reduction of a treatment-limiting adverse reaction, documented enhancement of patient compliance
that is expected to lead to an improvement in serious outcomes, and evidence of safety and effectiveness in a new subpopulation. Under
Priority Review, the FDA's goal date to take action on the marketing application is six months compared to ten months for a standard
review.
The FDA may grant Accelerated
Approval to a product for a serious or life-threatening condition that provides meaningful therapeutic advantage to patients over existing
treatments based upon a determination that the product has an effect on a surrogate endpoint that is reasonably likely to predict clinical
benefit. The FDA may also grant Accelerated Approval for such a condition when the product has an effect on an intermediate clinical endpoint
that can be measured earlier than an effect on irreversible morbidity or mortality, or IMM, and that is reasonably likely to predict an
effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity or prevalence of the
condition and the availability or lack of alternative treatments. Products granted accelerated approval must meet the same statutory standards
for safety and effectiveness as those granted traditional approval.
For the purposes of Accelerated
Approval, a surrogate endpoint is a marker, such as a laboratory measurement, radiographic image, physical sign or other measure that
is thought to predict clinical benefit, but is not itself a measure of clinical benefit. Surrogate endpoints can often be measured more
easily or more rapidly than clinical endpoints. An intermediate clinical endpoint is a measurement of a therapeutic effect that is considered
reasonably likely to predict the clinical benefit of a drug, such as an effect on IMM. The FDA has limited experience with accelerated
approvals based on intermediate clinical endpoints, but has indicated that such endpoints generally may support Accelerated Approval where
the therapeutic effect measured by the endpoint is not itself a clinical benefit and basis for traditional approval, if there is a basis
for concluding that the therapeutic effect is reasonably likely to predict the ultimate clinical benefit of a product.
The Accelerated Approval
pathway is most often used in settings in which the course of a disease is long and an extended period of time is required to measure
the intended clinical benefit of a product, even if the effect on the surrogate or intermediate clinical endpoint occurs rapidly. Thus,
Accelerated Approval has been used extensively in the development and approval of products for treatment of a variety of cancers in which
the goal of therapy is generally to improve survival or decrease morbidity and the duration of the typical disease course requires lengthy
and sometimes large trials to demonstrate a clinical or survival benefit. Thus, the benefit of Accelerated Approval derives from the potential
to receive approval based on surrogate endpoints sooner than possible for trials with clinical or survival endpoints, rather than deriving
from any explicit shortening of the FDA approval timeline, as is the case with priority review.
The Accelerated Approval
pathway is usually contingent on a sponsor's agreement to conduct, in a diligent manner, additional post-approval confirmatory studies
to verify and describe the product's clinical benefit. As a result, a product candidate approved on this basis is subject to rigorous
post-marketing compliance requirements, including the completion of phase 4 or post-approval clinical trials to confirm the effect on
the clinical endpoint. Failure to conduct required post-approval studies, or confirm a clinical benefit during post-marketing studies,
would allow the FDA to initiate expedited proceedings to withdraw approval of the product. All promotional materials for product candidates
approved under accelerated regulations are subject to prior review by the FDA. In addition, the FDA generally requires, as a condition
for Accelerated Approval, that all advertising and promotional materials intended for dissemination or publication within 120 days of
marketing approval be submitted to the agency for review during the pre-approval review period. After the 120-day period has passed, all
advertising and promotional materials must be submitted at least 30 days prior to the intended time of initial dissemination or publication.
Even if a product qualifies
for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for qualification or the time
period for FDA review or approval may not be shortened. Furthermore, Fast Track designation, Breakthrough Therapy designation, Priority
Review and Accelerated Approval do not change the scientific or medical standards for approval or the quality of evidence necessary to
support approval, though they may expedite the development or review process.
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Pediatric Study
Plan and Pediatric Exclusivity
Under the Pediatric Research
Equity Act, as amended, or the PREA, certain NDAs and certain NDA supplements must contain data that can be used to assess the safety
and efficacy of the product candidate for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration
for each pediatric subpopulation for which the product is safe and effective. For a cancer drug directed at a molecular target, the pediatric
testing requirement extends to pediatric cancers involving the molecular target even if different than the claimed adult cancer in the
NDA. The FDA may grant deferrals for submission of pediatric data or full or partial waivers. The PREA requires that a sponsor who is
planning to submit a marketing application for a product candidate that includes a new active ingredient, new indication, new dosage form,
new dosing regimen or new route of administration submit an initial Pediatric Study Plan, or the PSP, within 60 days of an end-of-phase
2 meeting or, if there is no such meeting, as early as practicable before the initiation of the phase 3 or phase 2/3 study. The initial
PSP must include an outline of the pediatric study or studies that the sponsor plans to conduct, including study objectives and design,
age groups, relevant endpoints and statistical approach, or a justification for not including such detailed information, and any request
for a deferral of pediatric assessments or a full or partial waiver of the requirement to provide data from pediatric studies along with
supporting information. The FDA and the sponsor must reach an agreement on the PSP. A sponsor can submit amendments to an agreed-upon
initial PSP at any time if changes to the pediatric plan need to be considered based on data collected from preclinical studies, early
phase clinical trials and/or other clinical development programs. Unless otherwise required by regulation, the PREA does not apply to
a drug for an indication for which orphan designation has been granted, except that the PREA will apply to an original NDA for a new active
ingredient that is orphan-designated if the drug is a molecularly targeted cancer product intended for the treatment of an adult cancer
and is directed at a molecular target that the FDA determines to be substantially relevant to the growth or progression of a pediatric
cancer.
A drug can also obtain
pediatric market exclusivity in the United States. Pediatric exclusivity, if granted, adds six months to existing exclusivity periods
and patent terms. This six-month exclusivity, which runs from the end of other exclusivity protection or patent term, may be granted based
on the voluntary completion of a pediatric study in accordance with an FDA-issued "Written Request" for such a study.
U.S. Post-Approval
Requirements for Drugs
Drugs approved by FDA
are subject to continuing regulation by the FDA, including, among other things, requirements relating to manufacturing establishment registration
and product listing, recordkeeping, periodic reporting, product sampling and distribution, reporting of adverse experiences with the product,
field alerts regarding issues with distributed product, promotion and advertising compliance, which include restrictions on promoting
products for unapproved uses or patient populations (known as "off-label use") and limitations on industry-sponsored scientific
and educational activities. Although physicians may prescribe approved products for off-label uses, manufacturers may not market or promote
such uses. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, as well as
other advertising and promotion requirements, including not only by company employees but also by agents of the company or those speaking
on the company's behalf, and a company that is found to have improperly promoted may be subject to significant liability, including
investigation by federal and state authorities. Failure to comply with these requirements can result in, among other things, adverse publicity,
warning letters, untitled letters, corrective advertising, and potential civil and criminal penalties, including liabilities under the
False Claims Act where products obtain reimbursement under federal health care programs. Promotional materials for approved drugs must
be submitted to the FDA in conjunction with their first use or first publication, and for products approved under accelerated approval
prior to their first use. Further, if there are any modifications to the drug, including changes in indications, labeling or manufacturing
processes or facilities, the applicant may be required to submit and obtain FDA approval of a new NDA or NDA supplement, which may require
the development of additional data or preclinical studies and clinical trials.
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The FDA may withdraw
approval of a product if compliance with regulatory requirements and standards is not maintained or if problems occur after the product
reaches the market. Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity
or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved
labeling to add new safety information, requirements for post-market studies or clinical trials to assess new safety risks, or imposition
of distribution or other restrictions under a REMS. Other potential consequences include, among other things:
●
restrictions on the marketing
or manufacturing of the product, complete withdrawal of the product from the market or product recalls;
●
the issuance of safety alerts,
Dear Healthcare Provider letters, press releases or other communications containing warnings or other safety information about the product;
●
fines, warning letters or holds
on post-approval clinical trials;
●
refusal of the FDA to approve
applications or supplements to approved applications, or suspension or revocation of product approvals;
●
product seizure or detention,
or refusal to permit the import or export of products;
●
injunctions or the imposition
of civil or criminal penalties;
●
consent decrees, corporate
integrity agreements, debarment or exclusion from federal healthcare programs; or
●
mandated modification of promotional
materials and labeling and issuance of corrective information.
Abbreviated New
Drug Applications and 505(b)(2) Applications
In seeking approval for
a drug through an NDA, applicants are required to list with the FDA each patent with claims that cover the applicant's drug or an
approved method of use of the drug. Upon approval of a drug, each of the patents listed in the application for the drug is then published
in the FDA's Approved Drug Products with Therapeutic Equivalence Evaluations, commonly known as the "Orange Book." Drugs
listed in the Orange Book can, in turn, be cited by competitors in support of approval of an Abbreviated New Drug Application, or ANDA,
or a 505(b)(2) application. In this case, the original NDA (the so-called pioneer drug) is known as the "listed" drug or "reference-listed"
drug. An ANDA provides for marketing of a drug that has the same active ingredient and the same strength, route of administration and
dosage form as the listed drug and has been shown through testing to be bioequivalent to the listed drug or receives a waiver from bioequivalence
testing. ANDA applicants are generally not required to conduct or submit results of preclinical or clinical tests to prove the safety
or effectiveness of their drug, other than the requirement for bioequivalence testing. Drugs approved in this way are considered therapeutically
equivalent, and are commonly referred to as "generic equivalents" to the listed drug. These drugs then generally can be substituted
by pharmacists under prescriptions written for the original listed drug.
A 505(b)(2) application
is a type of NDA that relies, in part, upon data the applicant does not own and to which it does not have a right of reference. Such applications
often are submitted for changes to previously approved drug products, and rely on the FDA's prior findings of safety and effectiveness
for a third party's NDA to abbreviate the showings the sponsor of the 505(b)(2) application must make to establish that its product
is safe and effective.
The ANDA or 505(b)(2)
applicant is required to certify to FDA concerning any patents listed for the referenced approved drug in FDA's Orange Book. Specifically,
for each listed patent, the applicant must certify that: (1) the required patent information has not been filed; (2) the listed patent
has expired; (3) the listed patent has not expired but will expire on a particular date and approval is sought after patent expiration;
or (4) the listed patent is invalid, unenforceable or will not be infringed by the new drug. A certification that the new drug will not
infringe the already approved drug's listed patents or that such patents are invalid or unenforceable is called a Paragraph IV certification.
If the ANDA or 505(b)(2) applicant does not include a Paragraph IV certification, the ANDA or 505(b)(2) application will not be approved
until all of the listed patents claiming the referenced drug have expired, except for any listed patents that only apply to uses of the
drug not being sought by the ANDA or 505(b)(2) applicant.
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If the ANDA or 505(b)(2)
applicant has made a Paragraph IV certification, the applicant must also send notice of a Paragraph IV Notice Letter to the NDA and patent
holders once the ANDA or 505(b)(2) application has been accepted for filing by FDA. The NDA and patent holders may then initiate a patent
infringement lawsuit in response to the notice of the Paragraph IV Notice Letter. The filing of a patent infringement lawsuit within 45
days of the receipt of notice of a Paragraph IV Notice Letter automatically prevents FDA from approving the ANDA until the earlier of
30 months, expiration of the patent, settlement of the lawsuit, modification by a court or a decision in the infringement case that is
favorable to the ANDA or 505(b)(2) applicant.
As discussed in the next
section, the ANDA or 505(b)(2) application also will not be approved until any applicable non-patent exclusivity, such as a new chemical
entity exclusivity, listed in the Orange Book for the reference-listed drug has expired.
United States Patent
Term Restoration and Marketing Exclusivity
Depending upon the timing,
duration and specifics of FDA approval of our future product candidates, some of our United States patents may be eligible for limited
patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, commonly referred to as the Hatch-Waxman
Amendments. The Hatch-Waxman Amendments permit restoration of the patent term of up to five years as compensation for patent term lost
during the FDA regulatory review process for a drug that has not been previously approved for commercial marketing. Patent-term restoration,
however, cannot extend the remaining term of a patent beyond a total of 14 years from the product's approval date and only those
claims covering such approved drug product, a method for using it or a method for manufacturing it may be extended. The patent-term restoration
period is generally one-half the time between the effective date of an IND and the submission date of an NDA plus the time between the
submission date of an NDA and the approval of that application, except that the review period is reduced by any time during which the
applicant failed to exercise due diligence. Only one patent applicable to an approved drug is eligible for the extension and the application
for the extension must be submitted prior to the expiration of the patent. The U.S. Patent and Trademark Office, in consultation with
the FDA, reviews and approves the application for any patent term extension or restoration. In the future, we may apply for restoration
of patent term for our currently owned or licensed patents to add patent life beyond its current expiration date, depending on the expected
length of the clinical trials and other factors involved in the filing of the relevant NDA.
Regulatory exclusivity
provisions under the FDCA also can delay the submission or the approval of certain applications. The FDCA provides a five-year period
of non-patent marketing exclusivity within the United States to the first applicant to gain approval of an NDA for a new chemical entity.
A drug is a new chemical entity if the FDA has not previously approved any other new drug containing the same active moiety, which is
the molecule or ion responsible for the action of the drug substance. During the exclusivity period, the FDA may not accept for review
an ANDA, or a 505(b)(2) NDA, submitted by another company for another version of such drug where the applicant does not own or have a
legal right of reference to all the data required for approval. However, an application may be submitted after four years if it contains
a certification of patent invalidity or non-infringement.
The FDCA also provides
three years of exclusivity for an NDA, 505(b)(2) NDA, or supplement to an existing NDA, if new clinical investigations, other than bioavailability
studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application, for
example, new indications, dosages or strengths of an existing drug. This three-year exclusivity covers only the conditions of use associated
with the new clinical investigations, and prevents FDA approval of an ANDA or 505(b)(2) NDA for such conditions of use, but does not prevent
FDA acceptance for filing and review of an ANDA or 505(b)(2) NDA. The three-year exclusivity does not prohibit the FDA from approving
ANDAs or 505(b)(2) NDAs for drugs containing the original active agent for other conditions of use outside those protected by the exclusivity.
Five-year and three-year exclusivity will not delay the submission or approval of a full NDA. However, an applicant submitting a full
NDA would be required to conduct or obtain a right of reference to all of the preclinical studies and adequate and well-controlled clinical
trials necessary to demonstrate safety and effectiveness.
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Regulation of Companion
Diagnostics
Companion diagnostics
provide information that is essential for the safe and effective use of a corresponding therapeutic product and can identify patients
who are most likely to benefit from a particular therapeutic product; identify patients likely to be at increased risk for serious side
effects as a result of treatment with a particular therapeutic product; or monitor response to treatment with a particular therapeutic
product for the purpose of adjusting treatment to achieve improved safety or effectiveness. Companion diagnostics are regulated as medical
devices by the FDA. In the United States, the FDCA, and its implementing regulations, and other federal and state statutes and regulations
govern, among other things, medical device design and development, preclinical and clinical testing, premarket clearance or approval,
registration and listing, manufacturing, labeling, storage, advertising and promotion, sales and distribution, export and import, and
post-market surveillance. Unless an exemption or FDA exercise of enforcement discretion applies, diagnostic tests generally require marketing
clearance or approval from the FDA prior to commercialization. The two primary types of FDA marketing authorization applicable to a medical
device are clearance of a premarket notification under section 510(k) of the FDCA, or 510(k), and approval of a premarket approval application,
or PMA.
To obtain 510(k) clearance
for a medical device, or for certain modifications to devices that have received 510(k) clearance, a manufacturer must submit a premarket
notification demonstrating that the proposed device is substantially equivalent to a legally marketed predicate device, which may be a
previously 510(k)-cleared device or a pre-amendment device that was in commercial distribution before May 28, 1976, or a device that was
originally on the market as a class III device and later down-classified to class II or I. A proposed device is substantially equivalent
to a predicate device if the subject device (1) has the same intended use as the predicate device and (2) either (a) has the same technological
characteristics as the predicate device or (b) has different technological characteristics but does not raise different questions of safety
and effectiveness than the predicate device and the submitted information demonstrates that the subject device is as safe and effective
as the predicate device. If the FDA determines that the subject device is substantially equivalent to the predicate device, the subject
device may be cleared for marketing. The 510(k) premarket notification pathway generally takes from three to twelve months from the date
the application is completed, but can take significantly longer.
A PMA must be supported
by valid scientific evidence, which typically requires extensive data, including technical, preclinical, clinical and manufacturing data,
to demonstrate to the FDA's satisfaction the safety and effectiveness of the device. For diagnostic tests, a PMA typically includes
data regarding analytical and clinical validation studies. As part of its review of the PMA, the FDA will conduct a pre-approval inspection
of the manufacturing facility or facilities to ensure compliance with the quality system regulation, or QSR, which requires manufacturers
to follow design, testing, control, documentation and other quality assurance procedures. FDA has committed to performance goals of reviewing
original PMAs that are not referred to an Advisory Committee within 180 days and reviewing PMAs referred to an Advisory Committee within
320 days (excluding days when a request for additional information is pending with the applicant), although the process typically takes
longer, and may require several years to complete. If the FDA evaluations of both the PMA and the manufacturing facilities are favorable,
the FDA will either issue an approval order or an approvable letter, which usually contains a number of conditions that must be met in
order to secure the final approval of the PMA. If the FDA's evaluation of the PMA or manufacturing facilities is not favorable,
the FDA will deny the approval of the PMA or issue a not approvable letter. A not approvable letter will outline the deficiencies in the
application and, where practical, will identify what is necessary to make the PMA approvable. Once granted, PMA approval may be withdrawn
by the FDA if compliance with post-approval requirements, conditions of approval or other regulatory standards is not maintained or the
device is determined to be unsafe or ineffective following initial marketing.
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On August 6, 2014, the
FDA issued a final guidance document addressing the development and approval process for "In Vitro Companion Diagnostic Devices."
According to the guidance document, for novel therapeutic products that depend on the use of a diagnostic test and where the diagnostic
device could be essential for the safe and effective use of the corresponding therapeutic product, the companion diagnostic device should
be developed and approved or cleared contemporaneously with the therapeutic, although the FDA recognizes that there may be cases when
contemporaneous development may not be possible. However, in cases where a drug cannot be used safely or effectively without the companion
diagnostic, the FDA's guidance indicates it will generally not approve the drug without the approval or clearance of the diagnostic
device. The FDA also issued a draft guidance in July 2016 setting forth the principles for co-development of an in vitro companion diagnostic
device with a therapeutic product. The draft guidance describes principles to guide the development and contemporaneous marketing authorization
for the therapeutic product and its corresponding
in vitro
companion diagnostic.
Once cleared or approved,
the companion diagnostic device must adhere to post-marketing requirements including the requirements of the FDA's QSR, establishment
registration and device listing, adverse event reporting, reporting of recalls and corrections, along with product marketing requirements
and limitations. Like drug makers, companion diagnostic makers are subject to unannounced FDA inspections at any time during which the
FDA will conduct an audit of the product(s) and the company's facilities for compliance with its authorities.
Other Regulatory
Matters
Manufacturing, sales,
promotion and other activities of products following product approval, where applicable, or commercialization are also subject to regulation
by numerous regulatory authorities in the United States in addition to the FDA, which may include the Centers for Medicare & Medicaid
Services, or CMS, other divisions of the U.S. Department of Health and Human Services, or HHS, the Department of Justice, 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 and governmental agencies.
Healthcare Laws
Healthcare providers,
physicians, and third-party payors will play a primary role in the recommendation and prescription of any products for which we obtain
marketing approval. Our business operations and any current or future arrangements with third-party payors, healthcare providers, and
physicians may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business
or financial arrangements and relationships through which we develop, market, sell and distribute any drugs for which we obtain marketing
approval. In the United States, these laws include federal and state anti-kickback, false claims, physician transparency, and patient
data privacy and security laws and regulations, including those described below.
●
The federal Anti-Kickback Statute,
which prohibits, among other things, persons from knowingly and willfully soliciting, receiving, offering or paying any remuneration
(including any kickback, bribe, or rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce, or in return
for, either the referral of an individual, or the purchase, lease, order or recommendation of any good, facility, item or service for
which payment may be made, in whole or in part, under a federal healthcare program, such as the Medicare and Medicaid programs. A person
or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.
Violations are subject to civil and criminal fines and penalties for each violation, plus up to three times the remuneration involved,
imprisonment, and exclusion from federal health care programs. In addition, the government may assert that a claim including items or
services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the
False Claims Act, or the FCA. There are a number of statutory exceptions and regulatory safe harbors protecting some common activities
from prosecution, but the exceptions and safe harbors are drawn narrowly and require strict compliance in order to offer protection.
●
The federal civil and criminal
false claims laws, including the FCA, which can be enforced through civil "whistleblower" actions, and civil monetary penalty
laws, impose criminal and civil penalties against individuals or entities for, among other things, knowingly presenting, or causing to
be presented, claims for payment or approval from Medicare, Medicaid, or other federal health care programs that are false or fraudulent;
knowingly making or causing a false statement material to a false or fraudulent claim or an obligation to pay money to the federal government;
or knowingly concealing or knowingly and improperly avoiding or decreasing such an obligation. Manufacturers can be held liable under
the FCA even when they do not submit claims directly to government payors if they are deemed to "cause" the submission of
false or fraudulent claims. When an entity is determined to have violated the federal civil FCA, the government may impose civil fines
and penalties for each false claim, plus treble damages, and exclude the entity from participation in Medicare, Medicaid and other federal
healthcare programs.
●
The federal civil monetary
penalties laws impose civil fines for, among other things, the offering or transfer or remuneration to a Medicare or state healthcare
program beneficiary, if the person knows or should know it is likely to influence the beneficiary's selection of a particular provider,
practitioner, or supplier of services reimbursable by Medicare or a state health care program, unless an exception applies.
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●
The federal Health Insurance
Portability and Accountability Act of 1996, or HIPAA, which created additional federal criminal statutes that prohibit knowingly and
willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent
pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit
program, regardless of the payor (including, public or private) and knowingly and willfully falsifying, concealing or covering up by
any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare
benefits, items or services relating to healthcare matters. Similar to the federal Anti-Kickback Statute, a person or entity can be found
guilty of violating HIPAA without actual knowledge of the statute or specific intent to violate it.
●
HIPAA, as amended by the Health
Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and their respective implementing regulations, which
impose requirements on certain covered healthcare providers, health plans, and healthcare clearinghouses and their respective business
associates that perform services for them that involve the use, or disclosure of, individually identifiable health information as well
as their covered subcontractors, relating to the privacy, security and transmission of individually identifiable health information without
appropriate authorization. HITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties
directly applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions
in federal courts to enforce the federal HIPAA laws and seek attorneys' fees and costs associated with pursuing federal civil actions.
●
The federal Physician Payments
Sunshine Act, enacted as part of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation
Act of 2010, or collectively, the ACA, imposed annual reporting requirements for certain manufacturers of drugs, devices, biologics,
and medical supplies for which payment is available under Medicare, Medicaid, or the Children's Health Insurance Program, for certain
payments and "transfers of value" provided to physicians (currently defined to include doctors, dentists, optometrists, podiatrists
and chiropractors) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family
members. Effective January 1, 2022, these reporting obligations will extend to include transfers of value made in the previous year to
certain non-physician providers such as physician assistants and nurse practitioners.
●
Federal consumer protection
and unfair competition laws broadly regulate marketplace activities and activities that potentially harm consumers.
●
Analogous state and foreign
laws and regulations, such as state and foreign anti-kickback, false claims, consumer protection and unfair competition laws which may
apply to pharmaceutical business practices, including but not limited to, research, distribution, sales and marketing arrangements as
well as submitting claims involving healthcare items or services reimbursed by any third-party payor, including commercial insurers;
state laws that require pharmaceutical companies to comply with the pharmaceutical industry's voluntary compliance guidelines and
the relevant compliance guidance promulgated by the federal government that otherwise restricts payments that may be made to healthcare
providers and other potential referral sources; state laws that require drug manufacturers to file reports with states regarding pricing
and marketing information, such as the tracking and reporting of gifts, compensations and other remuneration and items of value provided
to healthcare professionals and entities; state and local laws requiring the registration of pharmaceutical sales representatives; and
state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each
other in significant ways and may not have the same effect, thus complicating compliance efforts.
The scope and enforcement
of each of these laws is uncertain and subject to rapid change in the current regulatory and healthcare environment, especially in light
of the lack of applicable precedent and regulations. Federal and state enforcement bodies have recently increased their scrutiny of interactions
between healthcare companies and healthcare providers, which has led to a number of investigations, prosecutions, convictions and settlements
in the healthcare industry.
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Insurance Coverage
and Reimbursement
In the United States
and markets in other countries, patients who are prescribed treatments for their conditions and providers performing healthcare services
generally rely on third-party payors to reimburse all or part of the associated healthcare costs. Thus, even if a product candidate is
approved, sales of the product will depend, in part, on the extent to which third-party payors, including government healthcare programs
in the United States such as Medicare and Medicaid, private health insurers, managed care organizations and other third-party payors,
provide coverage, and establish adequate reimbursement levels for, the product. In the United States, principal decisions about Medicare
reimbursement for new products are typically made by CMS and regional contractors responsible for administering the Medicare program.
CMS and these contractors decide whether and to what extent a new product will be covered and reimbursed under Medicare, and private third-party
payors often follow CMS's decisions regarding coverage and reimbursement to a substantial degree.
Reimbursement by a third-party
payor may depend upon a number of factors, including, but not limited to, the third-party payor's determination that use of a product
is (1) a covered benefit under its health plan; (2) safe, effective and medically necessary; (3) appropriate for the specific patient;
(4) cost-effective; and (5) neither experimental nor investigational. Reimbursement rates may vary according to the use of the drug and
the clinical setting in which it is used, may be based on reimbursement levels already set for lower cost drugs and may be incorporated
into existing payments for other services. However, one third-party payor's determination to provide coverage for a product candidate
does not assure that other payors will also provide coverage for the product candidate. No uniform policy of coverage and reimbursement
for products exists among third-party payors, and coverage and reimbursement levels for products can differ significantly from payor to
payor.
Third-party payors are
increasingly challenging the prices charged, examining the medical necessity, reviewing the cost-effectiveness of medical products and
services and imposing controls to manage costs. In order to secure coverage and reimbursement for any product that might be approved for
sale, a company may need to conduct expensive pharmaco-economic studies in order to demonstrate the cost effectiveness of the product,
which will require additional expenditure above and beyond the costs required to obtain FDA or other comparable regulatory approvals.
Third-party payors may limit coverage to specific products on an approved list, also known as a formulary, which might not include all
of the FDA-approved products for a particular indication. Moreover, the containment of healthcare costs has become a priority of federal,
state and foreign governments, and the prices of products have been a focus in this effort. Governments have shown significant interest
in implementing cost-containment programs, including price controls or price increase penalties, restrictions on reimbursement and requirements
for substitution of generic products.
In addition, companion
diagnostic tests require coverage and reimbursement separate and apart from the coverage and reimbursement for their companion pharmaceutical
products. Similar challenges to obtaining coverage and reimbursement, applicable to pharmaceutical products, will apply to companion diagnostics.
Current and Future
Healthcare Reform Legislation
In the United States
and certain foreign jurisdictions, there have been, and likely will continue to be, a number of proposed and adopted legislative and regulatory
changes regarding the healthcare system directed at broadening the availability of healthcare, improving the quality of healthcare, and
containing or lowering the cost of healthcare. For example, in March 2010, the United States Congress enacted the ACA, which, among other
things, includes changes to the coverage and payment for products under government health care programs. The ACA includes provisions of
importance to our potential product candidates that:
●
created an annual, nondeductible
fee on any entity that manufactures or imports specified branded prescription drug products, apportioned among these entities according
to their market share in certain government healthcare programs;
●
expanded eligibility criteria
for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to certain individuals with income at or below
133% of the federal poverty level, thereby potentially increasing a manufacturer's Medicaid rebate liability;
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●
expanded manufacturers'
rebate liability under the Medicaid Drug Rebate Program by increasing the minimum rebate for both branded and generic drugs and revising
the definition of "average manufacturer price," or AMP, for calculating and reporting Medicaid drug rebates on outpatient
prescription drug prices;
●
addressed a new methodology
by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled,
implanted or injected;
●
expanded the types of entities
eligible for the 340B drug discount program;
●
established the Medicare Part
D coverage gap discount program by requiring manufacturers to provide point-of-sale-discounts off the negotiated price of applicable
brand drugs to eligible beneficiaries during their coverage gap period as a condition for the manufacturers' outpatient drugs to
be covered under Medicare Part D; and
●
created a new Patient-Centered
Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding
for such research.
Since its enactment,
there have been numerous judicial, administrative, executive, and legislative challenges to certain aspects of the ACA, and we expect
there will be additional challenges and amendments to the ACA in the future. For example, various portions of the ACA have faced legal
and constitutional challenges, including in the United States Supreme Court; the Trump administration issued various Executive Orders
which eliminated cost sharing subsidies and various provisions that would impose a fiscal burden on states or a cost, fee, tax, penalty
or regulatory burden on individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or medical devices; and
Congress introduced several pieces of legislation aimed at significantly revising or repealing the ACA. It is unclear whether the ACA
will be overturned, repealed, replaced, or further amended in the future, and we cannot predict what effect further changes to the ACA
would have on our business.
Other legislative changes
have been proposed and adopted in the United States since the ACA was enacted. For example, in August 2011, the Budget Control Act of
2011, among other things, included reductions of Medicare payments to providers of 2%, which went into effect in April 2013 and, due to
subsequent legislative amendments to the statute, will remain in effect through 2030 unless additional Congressional action is taken.
The reductions have been suspended temporarily through December 2021 in response to the COVID-19 pandemic. In January 2013, the American
Taxpayer Relief Act of 2012 was signed into law, which, among other things, further reduced Medicare payments to several providers, including
hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover
overpayments to providers from three to five years.
Moreover, payment methodologies
may be subject to changes in healthcare legislation and regulatory initiatives. For example, CMS may develop new payment and delivery
models, including bundled payment models. In addition, recently there has been heightened governmental scrutiny over the manner in which
manufacturers set prices for their commercial products, which has resulted in numerous Congressional inquiries and proposed and enacted
state and federal legislation designed to, among other things, bring more transparency to product pricing, review the relationship between
pricing and manufacturer patient programs, and reform government program reimbursement methodologies for pharmaceutical products. At the
federal level, former President Trump used several means to propose or implement drug pricing reform, including through federal budget
proposals, executive orders, and policy initiatives. It is unclear whether the Biden administration will work to reverse those measures
or pursue similar or other policy initiatives, for example related to an independent review board or other mechanisms that would impact
drug pricing and reimbursement.
On November 20, 2020,
CMS and the HHS Office of the Inspector General issued two final rules implementing changes to the Physician Self-Referral Law, or Stark
Law, and the Anti-Kickback Statute. These new rules provide new value-based enterprise exceptions and safe harbors to the Stark Law and
the Anti-Kickback Statute, as well as offer additional clarification in the form of updated definitions.
Compliance with
Other Federal and State Laws or Requirements; Changing Legal Requirements
If any products that
we may develop are made available to authorized users of the Federal Supply Schedule of the General Services Administration, additional
laws and requirements apply. Products must meet applicable child-resistant packaging requirements under the U.S. Poison Prevention Packaging
Act. Manufacturing, labeling, packaging, distribution, sales, promotion and other activities also are potentially subject to federal and
state consumer protection and unfair competition laws, among other requirements to which we may be subject. The distribution of pharmaceutical
products is subject to additional requirements and regulations, including extensive recordkeeping, licensing, storage and security requirements
intended to prevent the unauthorized sale of pharmaceutical products, and state licensure.
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The failure to comply
with any of these laws or regulatory requirements may subject firms to legal or regulatory action. Depending on the circumstances, failure
to meet applicable regulatory requirements can result in criminal prosecution, fines or other penalties, injunctions, exclusion from federal
healthcare programs, requests for recall, seizure of products, total or partial suspension of production, denial or withdrawal of product
approvals, relabeling or repackaging, or refusal to allow a firm to enter into supply contracts, including government contracts. Any claim
or action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal
expenses and divert our management's attention from the operation of our business. Prohibitions or restrictions on marketing, sales
or withdrawal of future products marketed by us could materially affect our business in an adverse way.
Changes in regulations,
statutes or the interpretation of existing regulations could impact our business in the future by requiring, for example: (1) changes
to our manufacturing arrangements; (2) additions or modifications to product labeling or packaging; (3) the recall or discontinuation
of our products; or (4) additional recordkeeping requirements. If any such changes were to be imposed, they could adversely affect the
operation of our business.
Government Regulation
of Drugs Outside of the United States
To market any product
outside of the United States, we would need to comply with numerous and varying regulatory requirements of other countries regarding safety
and efficacy and governing, among other things, clinical trials, marketing authorization, manufacturing, commercial sales and distribution
of our products. These regulatory requirements may be similarly complex and even more stringent in certain regards than those described
above. If we fail to comply with applicable regulatory requirements in the jurisdiction where we conduct clinical trials or seek regulatory
approvals, we may be subject to, among other things, fines, suspension or withdrawal of regulatory approvals, product recalls, seizure
of products, operating restrictions and criminal prosecution.
Australia
Conducting clinical trials
for therapeutic drug candidates in Australia is subject to regulation by Australian regulatory bodies. The Therapeutic Goods Administration,
or TGA, and the National Health and Medical Research Council set the codes of Good Clinical Practice, or GCP, for clinical research in
Australia, and compliance with these codes is mandatory. Australia has also adopted international codes, such as those promulgated by
the International Conference on Harmonization of Technical Requirements for Registration of Pharmaceuticals for Human Use, or the ICH.
The ICH guidelines must be complied with across all fields of clinical research, including those related to pharmaceutical quality, nonclinical
and clinical data requirements and trial designs. The basic requirements for preclinical data to support a first-in-human trial under
ICH guidelines are applicable in Australia. Requirements related to adverse event reporting in Australia are similar to those required
in other major jurisdictions.
Clinical trials conducted
using "unapproved therapeutic goods" in Australia, being those which have not yet been evaluated by the TGA for quality, safety
and efficacy must occur pursuant to either the Clinical Trial Notification Scheme, or CTN Scheme, or the Clinical Trial Exemption Scheme,
or the CTX Scheme. In each case, the trial is supervised by a Human Research Ethics Committee, or an HREC, an independent review committee
set up under guidelines of the Australian National Health and Medical Research Council that ensures the protection of rights, safety and
well-being of human subjects involved in a clinical trial. An HREC does this by reviewing, approving and providing continuing examination
of trial protocols and amendments, and of the methods and material to be used in obtaining and documenting informed consent of the trial
subjects.
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The CTN Scheme broadly
involves:
●
completion of pre-clinical
laboratory and animal testing;
●
submission to a HREC, of all
material relating to the proposed clinical trial, including the trial protocol;
●
the institution or organization
at which the trial will be conducted, referred to as the "Approving Authority", giving final approval for the conduct of
the trial at the site, having regard to the advice from the HREC;
●
the investigator submitting
a 'Notification of Intent to Conduct a Clinical Trial' form, or the CTN Form, to the TGA. The CTN form must be signed by
the sponsor, the principal investigator, the chairman of the HREC and a person responsible from the Approving Authority. The TGA does
not review any data relating to the clinical trial however CTN trials cannot commence until the trial has been notified to the TGA.
Under the CTX Scheme:
●
a sponsor submits an application
to conduct a clinical trial to the TGA for evaluation and comment; and
●
a sponsor must forward any
comments made by the TGA Delegate to the HREC(s) at the sites where the trial will be conducted.
A sponsor cannot commence
a trial under the CTX Scheme until written advice has been received from the TGA regarding the application and approval for the conduct
of the trial has been obtained from an ethics committee and the institution at which the trial will be conducted.
Approval for inclusion
in the Australian Register of Therapeutic Goods, or ARTG, is required before a pharmaceutical product may be marketed (or imported, exported
or manufactured) in Australia. In order to obtain registration of the product on the ARTG, it is required that:
●
adequate and well-controlled
clinical trials demonstrate the quality, safety and efficacy of the therapeutic product;
●
evidence is compiled which
demonstrates that the manufacture of the therapeutic product complies with the principles of cGMP;
●
manufacturing and clinical
data is derived to submit to the Advisory Committee on Prescription Medicines, which makes recommendations to the TGA as to whether or
not to grant approval to include the therapeutic product in the ARTG; and
●
an ultimate decision is made
by the TGA whether to include the therapeutic product in the ARTG.
112
European Economic
Area
For instance, in the
European Economic Area, or the EEA (comprising the 27 EU member states plus Iceland, Liechtenstein and Norway), medicinal products must
be authorized for marketing by using either the centralized authorization procedure or national authorization procedures.
●
Centralized procedure—The
centralized procedure provides for the grant of a single marketing authorization by the European Commission that is valid throughout
the EEA. Pursuant to Regulation (EC) No. 726/2004, the centralized procedure is compulsory for specific products, including for medicines
produced by certain biotechnological processes, products designated as orphan medicinal products, advanced therapy products (gene therapy,
somatic cell therapy and tissue engineered products) and products with a new active substance indicated for the treatment of certain
diseases, which includes products for the treatment of cancer. For medicines that do not fall within one of the mandatory categories,
an applicant still has the option of submitting an application for a centralized marketing authorization to the European Medicines Agency,
or the EMA, as long as the medicine concerned contains a new active substance not authorized in the EEA prior to May 20, 2004, is a significant
therapeutic, scientific or technical innovation, or if its authorization would be in the interest of public health in the EEA. If pursuing
marketing authorization of a product candidate for a therapeutic indication under the centralized procedure, the EMA's Committee
for Medicinal Products for Human Use, or the CHMP, is responsible for conducting an initial assessment of whether a product meets the
required quality, safety and efficacy requirements, and whether a product has a positive benefit/risk ratio. Under the centralized procedure
the maximum timeframe for the evaluation of a marketing authorization application, or the MAA, by the EMA is 210 days, excluding clock
stops, when additional written or oral information is to be provided by the applicant in response to questions asked by the CHMP. Clock
stops may extend the timeframe of evaluation of a MAA considerably beyond 210 days. Where the CHMP gives a positive opinion, it provides
the opinion together with supporting documentation to the European Commission, who make the final decision to grant a marketing authorization,
which is issued within 67 days of receipt of the EMA's recommendation. Accelerated assessment might be granted by the CHMP in exceptional
cases, when a medicinal product is expected to be of major public health interest, particularly from the point of view of therapeutic
innovation. The timeframe for the evaluation of a MAA under the accelerated assessment procedure is 150 days, excluding clock stops,
but it is possible that the CHMP may revert to the standard time limit for the centralized procedure if it determines that the application
is no longer appropriate to conduct an accelerated assessment.
●
National authorization procedures—There
are also two other possible routes to authorize products for therapeutic indications in several countries, which are available for products
that fall outside the scope of the centralized procedure:
o
Decentralized procedure—Using
the decentralized procedure, an applicant may apply for simultaneous authorization in more than one EEA Member State for a medicinal
product that has not yet been authorized in any EEA Member State and that does not fall within the mandatory scope of the centralized
procedure.
o
Mutual recognition procedure—In
the mutual recognition procedure, a medicine is first authorized in one EEA Member State, in accordance with the national procedures
of that country. Following this, additional marketing authorizations can be sought from other EEA Member States in a procedure whereby
the countries concerned recognize the validity of the original, national marketing authorization.
In both cases, as with
the centralized procedure, the competent authorities of the EEA Member States assess the risk-benefit balance of the product on the basis
of scientific criteria concerning its quality, safety and efficacy before granting the marketing authorization.
In the EEA, new products
for therapeutic indications that are authorized for marketing (so called "references products") qualify for eight years of
data exclusivity and an additional two years of market exclusivity upon marketing authorization. The data exclusivity period prevents
generic or biosimilar applicants from referencing the preclinical and clinical trial data contained in the dossier of the reference product
when applying for a generic or biosimilar marketing authorization in the EEA during a period of eight years from the date on which the
reference product was first authorized in the EEA. The additional two-year period of market exclusivity period prevents a successful generic
or biosimilar applicant from commercializing its product in the EEA until ten years have elapsed from the initial authorization of the
reference product in the EU. The overall ten-year period can be extended to a maximum of eleven years if, during the first eight years
of those ten years, the marketing authorization holder obtains an authorization for one or more new therapeutic indications which, during
the scientific evaluation prior to their authorization, are held to bring a significant clinical benefit in comparison with existing therapies.
Even if a compound is considered to be a new active substance so that the innovator gains the prescribed period of data exclusivity, another
company may market another version of the product if such company obtained marketing authorization based on a MAA with a complete independent
data package of pharmaceutical tests, preclinical tests and clinical trials.
113
The criteria for designating
an "orphan medicinal product" in the EEA are similar in principle to those in the United States. Under Article 3 of Regulation
(EC) 141/2000, in the EEA a medicinal product may be designated as orphan if it meets the following criteria (1) it is intended for the
diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition; and (2) either (a) such condition affects
no more than five in 10,000 persons in the EEA when the application is made, or (b) it is unlikely that the product, without the benefits
derived from orphan status, would generate sufficient return in the EEA to justify the investment needed for its development; and (3)
there exists no satisfactory method of diagnosis, prevention or treatment of such condition, or if such a method exists, the product will
be of significant benefit to those affected by the condition. Orphan medicinal products are eligible for financial incentives such as
reduction of fees or fee waivers and are, upon grant of a marketing authorization, entitled to ten years of market exclusivity for the
approved therapeutic indication. During this ten-year orphan market exclusivity period, no marketing authorization application shall be
accepted, and no marketing authorization shall be granted for a similar medicinal product for the same indication, although similar, is
safer, more effective or otherwise clinically superior than the authorized product; (ii) the marketing authorization holder of the authorized
product consents to a second orphan medicinal product application; or (iii) the marketing authorization holder of the authorized product
cannot supply enough orphan medicinal product. An orphan product can also obtain an additional two years of market exclusivity in the
EEA for pediatric studies. The ten-year market exclusivity may be reduced to six years if, at the end of the fifth year, it is established
that the product no longer meets the criteria for orphan designation, for example, if the product is sufficiently profitable not to justify
maintenance of market exclusivity. The application for orphan drug designation must be submitted before the application for marketing
authorization. The applicant will receive a fee reduction for the MAA if the orphan drug designation has been granted, but not if the
designation is still pending at the time the marketing authorization is submitted. Orphan drug designation does not convey any advantage
in, or shorten the duration of, the regulatory review and approval process.
Similar to the United
States, the various phases of non-clinical and clinical research in the European Union are subject to significant regulatory controls.
The Clinical Trials Directive
2001/20/EC, the Directive 2005/28/EC on GCP and the related national implementing provisions of the individual EU member states govern
the system for the approval of clinical trials in the European Union. Under this system, an applicant must obtain prior approval from
the national competent authority, or the NCA, of the EU member states in which the clinical trial is to be conducted. Furthermore, the
applicant may only start a clinical trial at a specific study site after the competent ethics committee, or the EC, has issued a favorable
opinion. The clinical trial application must be accompanied by, among other documents, an investigational medicinal product dossier (the
Common Technical Document) with supporting information prescribed by Directive 2001/20/EC, Directive 2005/28/EC, and the provisions of
the individual EU member states' legislation implementing the Clinical Trials Directive. Under the current regime (the EU Clinical
Trials Directive 2001/20/EC and corresponding national laws) all suspected unexpected serious adverse reactions to the investigated drug
that occur during the clinical trial have to be reported to the NCA and ECs of the Member State where they occurred.
In April 2014, the new
Clinical Trials Regulation, (EU) No 536/2014, or the Clinical Trials Regulation, was adopted, which is expected to apply following confirmation
of full functionality of the Clinical Trials Information System, the centralized European Union portal and database for clinical trials
foreseen by the regulation, through an independent audit. The regulation becomes applicable six months after the European Commission publishes
notice of this confirmation, which it has not yet done. The Clinical Trials Regulation will be directly applicable in all the EU member
states, repealing the current Clinical Trials Directive 2001/20/EC. Conduct of all clinical trials performed in the European Union will
continue to be bound by the Clinical Trials Directive and the Member States' national implementing legislation until the new Clinical
Trials Regulation becomes applicable. The extent to which ongoing clinical trials will be governed by the Clinical Trials Regulation will
depend on when the Clinical Trials Regulation becomes applicable and on the duration of the individual clinical trial. If a clinical trial
continues for more than three years from the day on which the Clinical Trials Regulation becomes applicable the Clinical Trials Regulation
will at that time begin to apply to the clinical trial. The new Clinical Trials Regulation aims to simplify and streamline the approval
of clinical trials in the European Union. The main characteristics of the regulation include: a streamlined application procedure via
a single-entry point, the "EU portal"; a single set of documents to be prepared and submitted for the application as well
as simplified reporting procedures for clinical trial sponsors; and a harmonized procedure for the assessment of applications for clinical
trials, which is divided in two parts. Part I is assessed by the competent authorities of all EU member states in which an application
for authorization of a clinical trial has been submitted (Member States concerned). Part II is assessed separately by each Member State
concerned. Strict deadlines have been established for the assessment of clinical trial applications. The role of the relevant ethics committees
in the assessment procedure will continue to be governed by the national law of the concerned EU member state. However, overall related
timelines will be defined by the Clinical Trials Regulation.
114
Outside the United States,
ensuring coverage and adequate payment for a product also involves challenges. Pricing of prescription pharmaceuticals is subject to government
control in many countries. Pricing negotiations with government authorities can extend well beyond the receipt of regulatory approval
for a product and may require a clinical trial that compares the cost-effectiveness of a product to other available therapies. The conduct
of such a clinical trial could be expensive and result in delays in commercialization. For example, in the European Union, pricing and
reimbursement schemes vary widely from country to country. Some countries provide that products may be marketed only after a reimbursement
price has been agreed upon. Some countries may require the completion of additional studies that compare the cost-effectiveness of a particular
product candidate to currently available therapies or so-called health technology assessments, in order to obtain reimbursement or pricing
approval. For example, the European Union provides options for its member states to restrict the range of products for which their national
health insurance systems provide reimbursement and to control the prices of medicinal products for human use. European Union member states
may approve a specific price for a product or may instead adopt a system of direct or indirect controls on the profitability of the company
placing the product on the market. Other member states allow companies to fix their own prices for products, but monitor and control prescription
volumes and issue guidance to physicians to limit prescriptions. Recently, many countries in the European Union have increased the amount
of discounts required on pharmaceuticals and these efforts could continue as countries attempt to manage healthcare expenditures, especially
in light of the severe fiscal and debt crises experienced by many countries in the European Union. The downward pressure on healthcare
costs in general, particularly prescription products, has become intense. As a result, increasingly high barriers are being erected to
the entry of new products. Political, economic and regulatory developments may further complicate pricing negotiations, and pricing negotiations
may continue after reimbursement has been obtained. Reference pricing used by various European Union member states, and parallel trade,
in other words, arbitrage between low-priced and high-priced member states, can further reduce prices. 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 products, if approved in those countries.
Government Regulation
of Data Collection outside of the United States
In the event we conduct
clinical trials in the European Union, we will be subject to additional privacy restrictions. The collection and use of personal health
data in the EEA is governed by the General Data Protection Regulation, or the GDPR, which became effective on May 25, 2018. The GDPR applies
to the processing of personal data by any company established in the EEA and to companies established outside the EEA to the extent they
process personal data in connection with the offering of goods or services to data subjects in the EEA or the monitoring of the behavior
of data subjects in the EEA. The GDPR enhances data protection obligations for data controllers of personal data, including stringent
requirements relating to the consent of data subjects, expanded disclosures about how personal data is used, enhanced requirements for
securing personal data, requirements to conduct privacy impact assessments for "high risk" processing, limitations on retention
of personal data, mandatory data breach notification and "privacy by design" requirements, and creates direct obligations
on service providers acting as processors. The GDPR also imposes strict rules on the transfer of personal data outside of the EEA to countries
that do not ensure an adequate level of protection, like the United States. Failure to comply with the requirements of the GDPR and the
related national data protection laws of the EEA Member States, which may deviate slightly from the GDPR, may result in fines of up to
4% of a company's global revenue for the preceding financial year, or €20 million, whichever is greater. Moreover, the GDPR
grants data subjects the right to claim material and non-material damages resulting from infringement of the GDPR. Given the breadth and
depth of changes in data protection obligations, maintaining compliance with the GDPR will require significant time, resources and expense,
and we may be required to put in place additional controls and processes ensuring compliance with the new data protection rules. There
has been limited enforcement of the GDPR to date, particularly in biopharmaceutical development, so we face uncertainty as to the exact
interpretation of the new requirements on any future trials and we may be unsuccessful in implementing all measures required by data protection
authorities or courts in interpretation of the new law. Further, the United Kingdom's decision to leave the European Union, means
that it has in force its own legislation which is aligned with the GDPR, known as the Data Protection Act 2018. The requirements are similar
except that the United Kingdom is now regarded as a "third country" for the purposes of transfers of personal data from the
EEA. Transfers continue to flow freely from the UK to the EEA following an adequacy decision from the European Commission adopted on June
28, 2021 and valid for four years.
Data protection authority
activity differs across the EU, with certain authorities applying their own agenda which shows there is uncertainty in the manner in which
data protection authorities will seek to enforce compliance with GDPR. For example, it is not clear if the authorities will conduct random
audits of companies doing business in the EU, or if the authorities will wait for complaints to be filed by individuals who claim their
rights have been violated. Enforcement uncertainty and the costs associated with ensuring GDPR compliance are onerous and may adversely
affect our business, financial condition, results of operations and prospects.
Should we utilize third-party
distributors, compliance with such foreign governmental regulations would generally be the responsibility of such distributors, who may
be independent contractors over whom we have limited control.
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Properties
We neither own nor lease
any real property.
Human Capital
In general, Lomond did
not have any full-time employees prior to the Merger. Instead, Lomond relied on its administrative services agreement with Eil. In connection
with the Merger, we replaced this administrative services agreement with an administrative services & co-employment agreement, or
services agreement, with Abet Solutions Inc., or Abet Solutions. Following the Merger, we will not have any employees. Effective as of
November 1, 2024, we entered into consulting agreements with Dr. Dukes as our Chief Executive Officer and Chairman and with Dr. Savchuk
as our Chief Operating Officer and President.
Our human capital resources
objectives include, as applicable, identifying, recruiting, retaining, motivating and integrating our existing and future employees. The
principal purposes of our equity incentive plans are to attract, retain and motivate selected employees, consultants and directors through
grants of stock-based compensation awards and payments of cash-based performance bonus awards, in order to increase stockholder value
and the success of our company by motivating our employees to perform to the best of their abilities and achieve our objectives.
Litigation
From time to time, we
may become involved in various lawsuits and legal proceedings that arise in the ordinary course of business. However, litigation is subject
to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm business.
We are currently not
aware of any pending legal proceedings to which we are a party or of which any of our property is the subject, nor are we aware of any
such proceedings that are contemplated by any governmental authority.
Available Information
Our website is www.lomondther.com,
and we can be contacted at info@lomondther.com. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form
8-K and any amendments to such reports are filed with the SEC. We are subject to the informational requirements of the Exchange Act and
file or furnish reports, proxy statements, and other information with the SEC. Such reports and other information filed by us with the
SEC will be available free of charge on our website at www.lomondther.com when such reports are available on the SEC's website.
The SEC maintains a website that contains reports, proxy and information statements, and other information that issuers file electronically
with the SEC at www.sec.gov.
The contents of the websites
referred to above are not incorporated into this filing. Further, our references to the URLs for these websites are intended to be inactive
textual references only.
116
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
You should read the
following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements
and the related notes and other financial information included in this prospectus. Some of the information contained in this discussion
and analysis or set forth elsewhere in this prospectus, including information with respect to our plans and strategy for our business,
includes forward-looking statements that involve risks and uncertainties as described under the heading "Special Note Regarding
Forward-Looking Statements" elsewhere in this prospectus. Accordingly, you should review the disclosure under the heading "Risk
Factors" in this prospectus for a discussion of important factors that could cause actual results to differ materially from the
results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Unless otherwise indicated
or the context otherwise requires, references in this "Management's Discussion and Analysis of Financial Condition and Results
of Operations" section to "we," "us,""our," and "Lomond" refer to Lomond Therapeutics
Holdings, Inc., and references to "Legacy Lomond" refer to Lomond Therapeutics, Inc.
Overview
We are a biopharmaceutical
company focused on the discovery and development of multiple product candidates to address hematological malignancies. We are utilizing
a platform offered by Expert Systems, which is powered by AI/ML, to choose molecular mechanisms of pathology and to rationally design,
accelerate discovery and optimize development of potential therapies. Our goal is to utilize this AI/ML platform to become a leader in
developing novel breakthrough medicines to maximize clinical benefit when treating hematologic malignancies.
Our initial focus is
on developing a next-generation inhibitor of FMS-like tyrosine kinase 3, or FLT3, and interleukin-1 receptor-associated kinase 4, or IRAK4,
for the treatment of acute myeloid leukemia, or AML.
We have incurred significant
operating losses since our inception in 2020.
Our net losses were $5.4 million and $1.9 million
for the three months ended September 30, 2024 and 2023, respectively. Our net losses were $8.7 million and $5.8 million for the nine months
ended September 30, 2024 and 2023, respectively. As of September 30, 2024, we had an accumulated deficit of $30.4 million.
We do
not have any product candidates approved for sale and have not generated any revenue from product sales. To date, we have funded our operations
primarily with proceeds from sales of convertible preferred stock, promissory notes and "simple agreements for future equity",
which we call SAFEs. We will incur significant expenses and increasing operating losses for the foreseeable future. Our expenses and capital
expenditures will increase substantially in connection with our ongoing activities, particularly if, and as we:
●
Continue
our research and development efforts to develop lomonitinib,
lonitoclax, and the product candidates licensed from related parties Eil Therapeutics, Inc., or Eil, and Bala Therapeutics, Inc., or Bala,
to identify and develop other product candidates and to submit investigational new drug applications, or INDs, for such product candidates;
●
Pay in full the promissory notes issued by us in connection with
the Eil license agreement and the Bala license agreement;
●
Conduct preclinical studies and commence clinical trials for our
investigational product candidates and future product candidates;
●
Develop processes suitable for manufacturing and clinical development;
●
Continue to develop and expand our manufacturing capabilities;
●
Seek marketing approvals for any product candidates that successfully
complete clinical trials;
●
Build commercial infrastructure to support sales and marketing for
our product candidates;
●
Expand, maintain and protect our intellectual property portfolio;
●
Hire additional clinical, regulatory and other business personnel;
and
●
Operate as a public company.
We will not generate
revenue from sales of any of our product candidates unless and until we successfully complete development and clinical trials and obtain
regulatory approvals for one or more of our product candidates. If we obtain regulatory approval for any of our product candidates, we
expect to incur significant expenses related to developing our commercialization capability to support the sales, marketing and distribution
of our product candidates. Further, we expect to incur additional costs associated with operating as a public company.
117
As a result, we will
need substantial additional funding to support our continuing operations, research and development activities and generally pursue our
growth strategy. Until such time as we can generate significant revenue from sales of approved product candidates, if ever, we expect
to finance our operations through a combination of equity offerings, debt financings, or other dilutive and non-dilutive capital sources,
including collaborations with other companies, and other strategic transactions. We may be unable to raise additional funds or enter into
such other agreements or arrangements when needed on favorable terms, or at all. If we fail to raise capital or enter into such agreements
as, and when, needed, we may have to significantly delay, scale back, or discontinue the development and commercialization of one or more
of our product candidates.
Because of the numerous
risks and uncertainties associated with the development of pharmaceutical products, including lomonitinib and lonitoclax, we are unable
to accurately predict the timing or amount of increased expenses or when, or if, we will be able to achieve or maintain profitability.
Even if we are able to generate sales of our product candidates, we may not become profitable. If we fail to become profitable or are
unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced
to reduce or terminate our operations.
The Company's financial
statements have been prepared on the basis of the Company continuing as a going concern, which assumes the continuity of operations, the
realization of assets and the settlement of liabilities and commitments as they come due in the normal course of business.
The Merger
On November 1, 2024,
Venetian 1 Acquisition Corp., Acquisition Sub and Legacy Lomond entered into the Merger Agreement. Pursuant to the terms of the Merger
Agreement, on the Closing Date, Acquisition Sub merged with and into Legacy Lomond, with Legacy Lomond continuing as the surviving corporation
and our wholly-owned subsidiary.
We expect to account
for the Merger as a reverse recapitalization. Legacy Lomond will be the deemed acquiror for accounting purposes and Lomond Therapeutics
Holdings, Inc. will be the successor SEC registrant, meaning that Legacy Lomond's financial statements for previous periods will
be disclosed in our future periodic reports filed with the SEC. Under this method of accounting, Venetian 1 Acquisition Corp. will be
treated as the acquired company for financial statement reporting purposes. The Merger was intended to qualify as a tax-free reorganization
under the U.S. Internal Revenue Code.
As a result of the Merger,
we have become the successor to a public reporting company, which will require the hiring of additional personnel and implementation of
procedures and processes to comply with public company regulatory requirements, including the Exchange Act, and customary practices. We
expect to incur additional expenses as a public company related to, among other things, directors' and officers' liability
insurance, director fees and additional internal and external accounting, legal and administrative resources, including increased audit
and legal fees.
Private Placement
Offering
Immediately following
the Effective Time of the Merger, we issued an aggregate of $43.9 million of our shares of common stock pursuant to a private placement
offering and pursuant to the conversion of certain SAFEs issued by Legacy Lomond, which included (i) 8,241,375 shares of our common stock
issued and sold at a purchase price of $4.00 per share in cash (the "Offering Price") pursuant to the Subscription Agreement;
(ii) 1,078,124 shares of our common stock at a price of $3.20 pursuant to the conversion of certain simple agreements for future equity,
or SAFEs, issued by Legacy Lomond in October 2024, and (iii) 2,083,332 shares of our common stock at a price of $3.60 pursuant to the
conversion of certain SAFEs issued by Legacy Lomond in August 2024. The aggregate gross proceeds from the Offering, including the aggregate
amount previously received from the issuance of the SAFEs, were $43.9 million (before deducting placement agent fees and expenses
of the Offering).
Pursuant to the Subscription
Agreement, we may hold one or more subsequent closings prior to November 30, 2024, to sell up to an additional 4,021,125 shares at the
Offering Price.
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Agreements
with Eil and Bala
On
October 17, 2024, we entered into the Eil license agreement and the Bala license agreements, respectively, which are described above
under the section titled "
Business—License Agreements
". The Eil license agreement and the Bala license agreement
became effective in October 2024 when we issued promissory notes to Eil and Bala, as the case may be. The principal amount of the promissory
notes with Eil and Bala are $1.7 million and $1.2 million, respectively. Each such promissory note bears interest at a rate of 7% per
annum, compounded annually and the principal and accrued interest under each note are due and payable on demand at any time after October
17, 2026. Each such promissory note may be repaid without penalty.
Upon
the payment in full of the applicable promissory note, Eil and Bala have each agreed to assign to us all of the intellectual property
rights covered by the Eil license agreement and the Bala license agreement, as applicable.
SAFEs
In
August 2024, we issued "simple agreements for future equity", or the August SAFEs, for an aggregate purchase price of $7.5
million in a private financing round. Upon consummation of the Offering, the August SAFEs automatically converted into 2,083,332 shares
of common stock.
In
October 2024, we issued "simple agreements for future equity," or the Contribution SAFEs, after converting a $3.5 million
capital contribution made in May 2024 by Eilean Therapeutics, LLC, or Eilean, our former parent company. The Contribution SAFEs converted
into 1,078,124 shares of common stock upon consummation of the Offering. Such shares are held by TPAV, LLC and entities affiliated with
OrbiMed, each of which is a member of Eilean and received an equity distribution from Eilean.
Components
of Our Results of Operations
Operating
Expenses
Research
and Development Expenses
Research
and development expenses consist primarily of costs incurred for our research activities and the development of our proprietary product
candidates, including lomonitinib and the product candidates licensed from related parties Eil and Bala, and include:
●
Expenses
                                            i
ncurred in connection with the preclinical and clinical
                                            development of our product candidates, including development and studies with contract research
                                            organizations, or CROs, and consultants;
●
The
                                            cost of contract manufacturing organizations, or CMOs, that manufacture drug product for
                                            use in our preclinical studies and clinical trials and perform analytical testing, scale-up
                                            and other services in connection with our development activities;
●
Costs
                                            related to other expenses, which include direct and allocated expenses for insurance and
                                            supplies;
●
Costs
                                            related to compliance with regulatory and quality requirements; and
●
Payments
                                            made under third-party licensing agreements
We
recognize external development costs based on an evaluation of the progress to completion of specific tasks using information provided
to us by our service providers. This process involves reviewing ongoing contracts, communicating with our personnel to identify services
that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service
when we have not yet been invoiced or otherwise notified of actual costs. Any nonrefundable advance payments that we make for goods or
services to be received in the future for use in research and development activities are recorded as prepaid expenses. Such amounts are
expensed as the related goods are delivered or the related services are performed, or until it is no longer expected that the goods will
be delivered or the services rendered.
Research
and development activities are central to our business model. Product candidates in later stages of clinical development generally have
higher development costs than those in earlier stages of clinical development or those in preclinical development. As a result, we expect
that our research and development expenses will continue to increase substantially over the next several years as we advance into clinical
development toward potential regulatory approval, as well as conduct translational research efforts and other preclinical development,
including submitting regulatory filings for product candidates we may acquire or develop. In addition to the expected increase in third-party
costs, we expect that our personnel costs, including costs associated with stock-based compensation, will also increase substantially
in the future. In addition, as we advance into clinical trials and, subject to positive data and regulatory approvals, potentially commercialization,
we expect to incur additional expenses.
119
We
do not believe that it is possible at this time to accurately project total program-specific expenses through commercialization or any
product candidates we may acquire or develop. This is due to numerous factors, some of which are beyond our control, that are associated
with the successful development and commercialization of product candidates we may acquire or develop, including the following:
●
The
                                            scope,
progress, outcome and costs of our preclinical
                                            studies and clinical trials for any product candidates we may develop;
●
Making
                                            arrangements with third-party manufacturers for preclinical, clinical and commercial supplies
                                            of any product candidates;
●
Successful
                                            patient
enrollment in, and the initiation and completion
                                            of clinical trials;
●
Raising
                                            additional funds necessary to complete clinical development and the potential commercialization
                                            of any other product candidates;
●
Receipt,
                                            timing and related terms of marketing approvals from applicable regulatory authorities;
●
The
                                            extent of any required post-marketing approval commitments to applicable regulatory authorities;
●
Developing
                                            and implementing marketing and reimbursement strategies;
●
establishing
                                            sales, marketing and distribution capabilities and launching commercial sales of any products,
                                            if approved, whether alone or in collaboration with others;
●
acceptance
                                            of any other products, if approved, by patients, the medical community and third-party payors;
●
effectively
                                            competing with other therapies and/or changes in the standard of care;
●
obtaining
                                            and maintaining third-party coverage and adequate reimbursement;
●
obtaining
                                            and maintaining patent, trade secret and other intellectual property protection and regulatory
                                            exclusivity for our product candidates;
●
protecting
                                            and enforcing our rights in our intellectual property portfolio;
●
significant
                                            and changing government regulations; and
●
maintaining
                                            an acceptable tolerability profile of the products following approval, if any.
A
change in the outcome of any of these factors with respect to the development of any future product candidates could significantly change
the costs and timing associated with the development of that product candidate. We may never succeed in obtaining regulatory approval
for any product candidate.
General
and Administrative Expenses
General
and administrative expenses consist primarily of professional fees and stock-based compensation.
We
anticipate that our general and administrative expenses will continue to increase in the future as we increase our headcount to support
the continued advancement toward potential commercialization and the future development of any product candidates that we may pursue.
We also anticipate that we will continue to experience an increase in accounting, audit, legal, regulatory, compliance and director and
officer insurance costs as well as investor and public relations expenses associated with operating as a public company. Additionally,
if we believe a regulatory approval of any product candidate appears likely, we anticipate an increase in payroll and other employee-related
expenses as a result of our preparation for commercial operations to market and sell that product candidate.
Interest
Expense
Interest
expense primarily consists of interest on related-party promissory notes. The notes were assumed by Eilean in December 2023 and are no
longer outstanding.
120
Income
Taxes
There
were no provisions for income taxes for the years ended December 31, 2022 and 2023 because we have historically incurred operating losses
and we maintain a full valuation allowance against our net deferred tax assets.
Results
of Operations
The
following table sets forth our historical operating results for the periods indicated:
Year Ended
December 31,
2023
2022
Variance
% Variance
Operating expenses:
Research and development - related party
$
9,729,437
$
4,164,438
$
5,564,999
134
%
General and administrative
20,642
75,982
(55,340
)
-73
%
Total operating expenses
9,750,079
4,240,420
5,509,659
130
%
Loss from operations
(9,750,079
)
(4,240,420
)
(5,509,659
)
130
%
Other expense:
Interest expense
(191,205
)
(114,879
)
(76,326
)
66
%
Net loss
$
(9,941,284
)
$
(4,355,299
)
$
(5,585,985
)
128
%
Comparison
of Years Ended December 31, 2023 and 2022
Operating
Expenses
Research
and Development Expenses
Research
and development expenses increased by $5.6 million, or 134%, in the year ended December 31, 2023 compared to the year ended December
31, 2022. The increase of $5.6 million was primarily attributable to the start of clinical development of lomonitinib in the second half
of 2023.
General
and Administrative Expenses
General
and administrative expenses decreased by $55,000, or 73%, in the year ended December 31, 2023 compared to the year ended December 31,
2022. The decrease of $55,000 was primarily attributable to a decrease in legal services.
Interest
Expense
Interest
expense increased by $76,000, or 66%, in the year ended December 31, 2023 compared to the year ended December 31, 2022. Interest expense
consists of interest on related-party promissory notes. The notes were assumed by Eilean in December 2023 and are no longer outstanding.
Comparison
of the three months ended September 30, 2024 and 2023
Three months ended
September 30,
2024
2023
Variance
% Variance
Operating expenses:
Research and development - related party
$
4,000,000
$
1,861,756
$
2,138,244
115
%
General and administrative
616,091
2,459
613,632
24955
%
Total operating expenses
4,616,091
1,864,215
2,751,876
148
%
Loss from operations
(4,616,091
)
(1,864,215
)
(2,751,876
)
148
%
Other expense:
Loss on change in fair value of SAFE liability
(924,479
)
-
(924,479
)
100
%
Interest expense - related party
-
(51,760
)
51,760
-100
%
Net loss
$
(5,540,570
)
$
(1,915,975
)
$
(3,264,595
)
189
%
121
Operating
Expenses
Research
and Development Expenses
Research
and development expenses increased by $2.1 million, or 115%, in the three months ended September 30, 2024 compared to the three months
ended September 30, 2023. The increase of $2.1 million was primarily attributable to the increase of clinical development of lomonitinib
in 2024 as compared to 2023.
General
and Administrative Expenses
General
and administrative expenses increased by $0.5 million, or 20704%, in the three months ended September 30, 2024 compared to the three
months ended September 30, 2023. The increase of $0.5 million was primarily attributable to an increase in accounting expenses of $0.2
million and administrative service expenses of $0.2 million.
Loss
on change in fair value of SAFE liability
Loss
on change in fair value of SAFE liability increased by $0.9 million, or 100%, in the three months ended September 30, 2024 compared to
the three months ended September 30, 2023. The increase of $0.9 million was attributable to the Company's issuance of SAFE instruments
to investors in the third quarter of 2024.
Interest
Expense
Interest
expense decrease by $51,760, or 100%, in the three months ended September 30, 2024 compared to the three months ended September 30, 2023.
Interest expense consists of interest on related-party promissory notes. The notes were assumed by Eilean in December 2023 and are no
longer outstanding as of September 30, 2024.
Comparison
of the nine months ended September 30, 2024 and 2023
Nine months ended
September 30,
2024
2023
Variance
% Variance
Operating expenses:
Research and development - related party
$
7,000,000
$
5,639,607
$
1,360,393
24
%
General and administrative
836,663
14,729
821,934
5580
%
Total operating expenses
7,836,663
5,654,336
2,182,321
39
%
Loss from operations
(7,836,663
)
(5,654,336
)
(2,182,327
)
39
%
Other expense:
Loss on change in fair value of SAFE liability
(924,479
)
-
(924,479
)
100
%
Interest expense - related party
-
(152,948
)
152,948
-100
%
Net loss
$
(8,761,142
)
$
(5,807,284
)
$
2,953,858
51
%
Operating
Expenses
Research
and Development Expenses
Research
and development expenses increased by $1.4 million, or 24%, in the nine months ended September 30, 2024 compared to the nine months ended
September 30, 2023. The increase of $1.4 million was primarily attributable to the increase of clinical development of lomonitinib in
2024 as compared to 2023.
122
General
and Administrative Expenses
General
and administrative expenses increased by $0.7 million, or 4871%, in the nine months ended September 30, 2024 compared to the nine months
ended September 30, 2023. The increase of $0.7 million was primarily attributable to an increase in legal expenses of $0.2 million, accounting
expenses of $0.3 million, and administrative service expenses of $0.2 million.
Loss
on change in fair value of SAFE liability
Loss
on change in fair value of SAFE liability increased by $0.9 million, or 100%, in the nine months ended September 30, 2024 compared to
the nine months ended September 30, 2023. The increase of $0.9 million was attributable to the Company's issuance of SAFE instruments
to investors in the third quarter of 2024.
Interest
Expense
Interest
expense decreased by $0.2 million, or 100%, in the nine months ended September 30, 2024 compared to the nine months ended September 30,
2023. Interest expense consists of interest on related-party promissory notes. The notes were assumed by Eilean in December 2023 and
are no longer outstanding as of September 30, 2024.
Liquidity
and Capital
Resources
Sources
of Liquidity
Since
our inception, we have incurred significant losses in each period and on an aggregate basis. We have not yet commercialized any product
candidates. We have not generated cash from our operations, and we do not expect to generate revenue from sales of any product candidates
or from other sources for several years, if at all. We have funded our operations primarily from sales of our preferred stock, issuance
of promissory notes, and issuance of SAFEs through September 30, 2024. As of September 30, 2024 and December 31, 2023, we had cash and
cash equivalents of $3.6 million and $0.8 million, respectively.
Cash
Flows
The
following table shows a summary of our cash flows for the periods indicated:
Nine months ended
September 30,
Year ended
December 31,
2024
2023
2023
2022
Net cash used in operating activities
$
(8,133,064
)
$
(2,151,952
)
$
(8,412,873
)
$
(1,516,853
)
Net cash provided by financing activities
10,950,000
1,740,000
8,706,164
1,981,447
Net (decrease) increase in cash and cash equivalents
$
2,816,936
$
(411,952
)
$
293,291
$
464,594
Operating
Activities
During
the nine months ended September 30, 2024, we used $8.1 million of cash in operating activities. Cash used in operating activities reflects
our net loss of $8.7 million and changes in operating assets and liabilities relating to accrued expenses and other current liabilities
of $0.2 million, partially offset by non-cash adjustments of $0.9 million. Non-cash adjustments primarily consisted of changes in the
fair value of the Company's SAFE liability of $0.9 million.
123
During
the nine months ended September 30, 2023, we used $2.2 million of cash in operating activities. Cash used in operating activities reflects
our net loss of $5.8 million, partially offset by changes in operating assets and liabilities of $3.7 million relating to accrued expenses
and other current liabilities.
Net
cash used in operating activities in 2023 was $8.4 million, which consisted of net loss of $9.9 million, primarily adjusted by changes
in accrued expenses and other current liabilities of $1.5 million.
Net
cash used in operating activities in 2022 was $1.5 million, which consisted of net loss of $4.3 million, primarily adjusted by net cash
changes in accrued expenses and other liabilities of $2.8 million.
Financing
Activities
During
the nine months ended September 30, 2024, financing activities provided $11.0 million of net cash, which was attributable to $7.5 million
in capital contributions by Eilean and $7.5 million in proceeds from the issuance of SAFEs to investors, partially offset by $4.0 million
in cash provided to Eilean in exchange for promissory notes.
During
the nine months ended September 30, 2024, financing activities provided $1.7 million of net cash, attributable to capital contributions
by Eilean.
Net
cash provided by financing activities was $8.7 million in 2023 and was due to capital contributions by Eilean.
Net
cash provided by financing activities was $2.0 million in 2022 and was due to capital contributions by Eilean.
Funding
Requirements
As
of September, 2024, we had $3.6 million in cash and cash equivalents and an accumulated deficit of $30.4 million. We expect our expenses
to increase substantially in connection with our ongoing research and development activities, particularly as we continue research and
development, pursue clinical development of lomonitinib, lonitoclax and a menin inhibitor and repay our promissory notes with Eil and
Bala. In addition, we expect to incur additional costs associated with operating as a public company. As a result, we expect to incur
substantial operating losses and negative operating cash flows for the foreseeable future.
We
believe that our cash and cash equivalents, after the consummation of the Merger and the Offering, will enable us to fund our planned
operations for at least twelve months following the date of this prospectus. However, we have based this estimate on assumptions that
may prove to be wrong, and we could exhaust our capital resources sooner than we expect.
Because
of the numerous risks and uncertainties associated with research, development and commercialization of product candidates, we are unable
to estimate the exact amount of our working capital requirements. Our future funding requirements will depend on, and could increase
significantly as a result of, many factors, including:
●
the
                                            scope,
timing, progress, results and costs of preclinical
                                            and clinical development activities;
●
the
                                            costs, timing and outcome of regulatory review of product candidates;
●
the
                                            costs of future activities, including product sales, medical affairs, marketing, manufacturing
                                            and distribution, for any product candidates for which we receive marketing approval;
●
the
                                            costs of establishing and maintaining arrangements with third party manufacturers for preclinical
                                            and clinical development activities and commercial supply of products that receive marketing
                                            approval, if any;
●
the
                                            revenue, if any, received from commercial sale of our approved products, should any product
                                            candidates receive marketing approval;
●
the
                                            cash requirements of any future acquisitions or discovery of product candidates;
●
the
                                            cost and timing of attracting, hiring and retaining skilled personnel to support our operations
                                            and continued growth;
●
the
                                            cost of implementing operational, financial and management systems;
●
the
                                            costs of preparing, filing and prosecuting patent applications, maintaining and enforcing
                                            our intellectual property rights and defending intellectual property-related claims;
124
●
our
                                             ability to establish and maintain collaborations, strategic partnerships or marketing,
                                            distribution, licensing or other strategic arrangements with third parties on favorable terms,
                                            if at all; and
●
the
                                            costs associated with operating as a public company.
A
change in the outcome of any of these or other variables with respect to the development of lomonitinib, lonitoclax, a menin inhibitor
or any of the other product candidates we may develop, license or acquire in the future could significantly change the costs and timing
associated with our development plans. Further, our operating plans may change in the future, and we may need additional funds to meet
operational needs and capital requirements associated with such operating plans. Until such time, if ever, as we can generate substantial
product revenues, we expect to finance our cash needs through a combination of equity offerings, debt financings or other dilutive or
non-dilutive capital sources, which could include collaborations, strategic alliances or licensing arrangements. We currently have no
credit facility or committed sources of capital. Adequate additional funds may not be available to us on acceptable terms, or at all.
To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interests of
our existing stockholders may be diluted, and the terms of these securities may include liquidation or other preferences that could adversely
affect the rights of such stockholders. Debt financing, if available, may involve agreements that include restrictive covenants that
limit our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends, that
could adversely impact our ability to conduct our business.
If
we raise additional funds through collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish
valuable rights to our technologies, future revenue streams, research program or product candidates, or grant licenses on terms that
may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required
to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market
product candidates that we would otherwise prefer to develop and market ourselves.
Contractual
Obligations and Commitments
We
do not currently have any material contractual obligations or other commitments except with respect to our promissory notes with Eil
and Bala. We entered into the promissory notes with Eil and Bala in October 2024. Such promissory notes each bear interest at a rate
of 7% per year, mature on October 17, 2026 and permit early repayment without penalty. The promissory notes have an aggregate principal
amount of $2.9 million.
Critical
Accounting Policies and Estimates
Our
financial statements are prepared in accordance with generally accepted accounting principles in the United States, or GAAP. The preparation
of our financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets,
liabilities, costs and expenses, and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates
on historical experience, known trends and events, and various other factors that we believe are reasonable under the circumstances,
the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent
from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates
under different assumptions or conditions. While our significant accounting policies are described in more detail in Note 2 to our audited
financial statements contained in this prospectus, we believe that the following accounting policies are those most critical to the judgments
and estimates used in the preparation of our financial statements.
Research
and development costs
Research
and development costs consist primarily of cost of subcontractors and materials used for research and development activities, including
preclinical studies, clinical trials, materials and supplies, and professional services. The costs of services performed by others in
connection with the research and development activities of the Company, including research and development conducted by others, including
by our vendors, related parties and third-party service providers on behalf of the Company, is included in research and development costs
and expensed as the contracted work is performed. The Company accrues for costs incurred as the services are being provided by monitoring
the status of the project and the invoices received from its external service providers. Where contingent milestone payments are due
to third parties under research and development arrangements, the milestone payment obligations are expensed when the milestone results
are probable to be achieved.
125
Stock-Based
Compensation Expenses
The
Company measures its share-based awards, including grants issued by the Company or Eilean to the Company's employees and non-employees,
based on their grant date fair value. The Company's share-based awards as of September 30, 2024 include common units in its parent,
Eilean. The Company records compensation expense for these service-based awards beginning on the grant date over the requisite service
period in which the awards are expected to vest on a straight-line basis, subject to a minimum expense amount based on the awards that
have vested to date. The common units issued to option holders upon the exercise of option awards are authorized and previously unissued
common units of Eilean. Forfeitures are recognized as they occur.
The
grant date fair value of employee and non-employee awards are determined using the Black-Scholes option pricing model, which includes
inputs such as the fair value of the Company's common stock, expected term, risk-free rate, expected stock price volatility over
the expected term, and expected dividend yield. For all options granted, the Company calculated the expected term based on the simplified
method. The Company has no publicly available stock information and therefore, the Company used the historical volatility of the stock
price of similar publicly traded peer companies. The risk-free rate for periods within the contractual life of the option is based on
the U.S. Treasury yield curve in effect at the time of the grant. The Company does not anticipate that dividends will be distributed
in the near future.
Recent
Accounting Pronouncements
Recently
issued and adopted/unadopted accounting pronouncements are described in Note 2 to our audited financial statements contained in
this prospectus.
Emerging
Growth Company Status
In
April 2012, the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, was enacted. Section 107 of the JOBS Act provides that
an "emerging growth company" may take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities
Act for complying with new or revised accounting standards. Therefore, an emerging growth company can delay the adoption of certain accounting
standards until those standards would otherwise apply to private companies. We have irrevocably elected to avail ourselves of this extended
transition period and, as a result, we will not be required to adopt new or revised accounting standards on the relevant dates on which
adoption of such standards is required for other public companies.
In
addition, as an emerging growth company, we may take advantage of specified reduced disclosure and other requirements that are otherwise
applicable generally to public companies. These provisions include:
●
reduced
                                            disclosure about the compensation paid to our executive officers;
●
not
                                            being required to submit to our stockholder's advisory votes on executive compensation
                                            or golden parachute arrangements;
●
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; and
●
an
                                            exemption from compliance with any new requirements adopted by the Public Company Accounting
                                            Oversight Board requiring mandatory audit firm rotation.
We
may take advantage of these exemptions until such time that we are no longer an emerging growth company. We would cease to be an emerging
growth company on the date that is the earliest of (1) the last day of the fiscal year in which we have total annual gross revenues of
$1.235 billion or more; (2) the last day of our fiscal year following the fifth anniversary of the date of the completion of this offering;
(3) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or (4) the date on
which we are deemed to be a large accelerated filer under the rules of the Securities and Exchange Commission. We may choose to take
advantage of some but not all of these exemptions.
126
Internal
Control Over Financial Reporting
In
the preparation of our financial statements to meet the requirements of this prospectus, we determined that material weaknesses in our
internal control over financial reporting existed during 2023 and remained unremedied as of December 31, 2023. Such material weaknesses
related to having inadequate accounting personnel and controls over the recording of transactions, including those with related parties,
to achieve complete, accurate and timely financial accounting, reporting and disclosures, resulting in adjustments to several accounts
and disclosures. As defined in the standards established by the U.S. Public Company Accounting Oversight Board, a "material weakness"
is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility
that a material misstatement of our company's annual or interim consolidated financial statements will not be prevented or detected
on a timely basis.
We
are working to remediate the material weaknesses and are taking steps to strengthen our internal control over financial reporting. The
actions that we are taking are subject to ongoing executive management review and will also be subject to audit committee oversight (once
constituted). To date, we have hired external financial consultants and plan to add additional resources, technology and headcount as
warranted by the growth of the Company. We are still implementing formal policies, processes, and documentation procedures related to
our financial reporting process. We will not be able to fully remediate these material weaknesses until these steps have been completed
and have been operating effectively for a sufficient period of time. If we are unable to successfully remediate the material weaknesses,
or if in the future, we identify further material weaknesses in our internal control over financial reporting, we may not detect errors
on a timely basis and our consolidated financial statements may be materially misstated.
Quantitative
and Qualitative Disclosures and Market Risk
We
are exposed to market risks in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial
position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily the result of fluctuations
in interest rates.
As
of September 30, 2024, we had cash and cash equivalents of $3.6 million, which were primarily invested in money market funds, federal
agency notes, corporate debt securities, commercial paper and U.S. treasury bills. The securities in our investment portfolio are not
leveraged and are classified as available-for-sale due to their short-term nature. We currently do not engage in hedging activities.
Interest income is sensitive to changes in the general level of interest rates; however, due to the nature of these investments, an immediate
10% change in interest rates would not have a material effect on the fair market value of our investment portfolio.
Inflation
generally affects us by increasing our cost of labor and research and development contracts. We do not believe that inflation has had
a material effect on our financial results during the periods presented.
127
MANAGEMENT
Executive Officers and Directors
The following table provides
information regarding our executive officers and directors, including their ages as of November 21, 2024:
NAME
AGE
POSITION(S)
Executive Officers:
Iain Dukes, MA, D.Phil.
66
Chief Executive Officer, Chairman and Director
Nikolay Savchuk, Ph.D.
55
President, Chief Operating Officer and Director
Non-Employee Directors:
Carl Gordon, CFA, Ph.D.
59
Director
Eddie Wang Rodriguez
57
Director
Executive Officers
Iain Dukes, MA, D.Phil
,
has served as our Chief Executive Officer, Chairman and director since the consummation of the Merger and served as Chairman and director
of Lomond from January 2020 to the consummation of the Merger. Dr. Dukes is a Venture Partner at OrbiMed Advisors LLC, or OrbiMed, a global
investment firm, which he joined in August 2016. Dr. Dukes has served as the Chief Executive Officer of Viriom Inc. since February 2019
and has also served as the Executive Chair of Angiex Inc. since February 2020, the Chief Executive Officer and Chairman of Eilean Therapeutics
LLC since July 2022 and President of Dinas Therapeutics, Inc. since March 2022. In June 2018, Dr. Dukes co-founded Theseus Pharmaceuticals,
Inc. where he served as chairman and director until its acquisition by Concentra Biosciences, LLC in April 2024. In September 2017, Dr,
Dukes co-founded Kartos Therapeutics, Inc. and currently serves as President and as a member of its board of directors. Dr. Dukes previously
served as Senior Vice President and Head of Business Development and Licensing for Merck Research Laboratories from August 2013 through
May 2016. Prior to joining Merck, Dr. Dukes was Vice President of External Research & Development at Amgen, Inc. from August 2010
to August 2013. He has also served as President and Chief Executive Officer, as well as a member of the Board of Directors of Essentialis
Therapeutics, a clinical stage biotechnology company focused on the treatment of rare metabolic diseases. Previously, Dr. Dukes was Vice
President of Scientific and Technology Licensing at GlaxoSmithKline, and he held various positions at Glaxo Wellcome, including Head of
Exploratory Development for Metabolic and Urogenital Diseases and Head of Ion Channel Drug Discovery Group. From October 2017 to July
2020, Dr. Dukes was a board member and Chairman of KaNDy Therapeutics, which was acquired by Bayer AG in September 2020. From January
2020 to June 2020, Dr. Dukes served as supervisory board member of Themis BioScience GmbH, until it was acquired by Merck & Co. Dr.
Dukes also co-founded Telios Pharmaceuticals, Inc., where he serves as President. Dr. Dukes currently serves on the boards of directors
of NeRRe Therapeutics, Rathlin Therapeutics Limited and ENYO Therapeutics. Since August 2016, Dr. Dukes has also served as chairman of
the board of directors of Iovance Biotherapeutics Inc. In addition, he has served on the board of directors of Ikena Oncology, Inc. since
November 2016 and as executive chairman of Traws Pharma, Inc. since April 2024. He previously served on the board of directors of ReViral
Limited until its acquisition by Pfizer Inc. in June 2022. Dr. Dukes holds Master of Jurisprudence and Doctor of Philosophy degrees from
the University of Oxford, a Master of Science degree in Cardiovascular Studies from the University of Leeds and a Bachelor of Science
degree in Pharmacology from the University of Bath. We believe that Dr. Dukes is qualified to serve as a member of our board of directors
because of his extensive experience in the pharmaceutical industry, including his service in senior management roles.
Nikolay Savchuk, Ph.D.
has
served as our President and Chief Operating Officer and as a director since the consummation of the Merger and served as Chief Executive
Officer and President of Lomond from March 2020 to the consummation of the Merger and director of Lomond from January 2020 to the consummation
of the Merger. Dr. Savchuk has been a Managing Director and Founder at Torrey Pines Investment LLC, an investment firm, since November
2002. Since March 2019, he has been a Member at i2020 Accelerator, which is an accelerator program backed by Torrey Pines Investment.
He has served on the board of directors of Traws Pharma, Inc. since April 2024. Dr. Savchuk has served as Chief Operating Officer and
President of Eilean Therapeutics, LLC since September 2022, as President and Chief Executive Officer of Eil Therapeutics, Inc. since February
2020, as President and Chief Executive Officer of Bala Therapeutics, Inc. since June 2018 and as Chief Executive Officer of Dinas Therapeutics,
Inc. since March 2022. In addition, since October 2018, he has been a Founder and Managing General Partner at Teal Ventures, a venture
capital fund. Since November 2015, he has been the Chairman of the board of directors of Viriom Inc., a private biotechnology company.
he has been the Chairman of the board of directors at ChemDiv, Inc. since November 2013, and he served as Chief Executive Officer at such
company from April 2008 to January 2022. Dr. Savchuk holds a Masters of Science degree in Physics and a Ph.D. in Applied Mathematics,
each from the Moscow Institute of Physics and Technology. We believe that Dr. Savchuk is qualified to serve as a member of our board of
directors because of his deep knowledge of our business and industry and his experience managing life sciences companies.
128
Non-Employee Directors
Carl Gordon, CFA,
Ph.D.
, has served as a member of our board of directors since the consummation of the Merger and was a director of Lomond from January
2020 to the consummation of the Merger. Dr. Gordon is a founding member and Managing Partner and Co-Head of Global Private Equity at OrbiMed,
an investment firm, and has served in such roles since 1998 and 2018, respectively. Dr. Gordon currently serves on the boards of directors
of Adicet Bio, Inc., ArriVent Biopharma Inc., Compass Therapeutics Inc., Keros Therapeutics Inc. and Terns Pharmaceuticals, Inc., as well
as several private companies. Dr. Gordon previously served on the boards of directors of several companies, including Alector Inc., Arsanis,
Inc. (which merged with X4 Pharmaceuticals, Inc.), Intellia Therapeutics, Inc., ARMO Biosciences, Inc., Gemini Therapeutics Inc. (merged
with Disc Medicine, Inc.), Kinnate Biopharma, Inc., ORIC Pharmaceuticals, Inc., Passage Bio Inc., Prevail Therapeutics Inc. (which was
acquired by Eli Lilly), Selecta Biosciences, Inc., SpringWorks Therapeutics Inc., Theseus Pharmaceuticals, Inc. (which was acquired by
Concentra Biosciences LLC) and Turning Point Therapeutics, Inc. (which was acquired by Bristol Myers Squibb Co.). Dr. Gordon received
a B.A. in Chemistry from Harvard College, a Ph.D. in Molecular Biology from the Massachusetts Institute of Technology, and was a Fellow
at The Rockefeller University. We believe that Dr. Gordon is qualified to serve on our Board of Directors due to his scientific expertise,
extensive business experience, and experience in venture capital and the life sciences industry.
Eddie Wang Rodriguez
has
served as a member of our board of directors since the consummation of the Merger and was a director of Lomond from July 2022 to the consummation
of the merger. Since November 2018, Mr. Rodriguez has served as a co-founder and general partner of Teal Ventures, a venture capital fund.
Since November 2019, he has served as the General Counsel at Viriom, Inc., a private biotechnology company. M. Rodriguez has served as
general counsel at Aracari Biosciences, Inc. since February 2023, ScaleCapacity, Inc. since February 2024, Cognitive Medical Systems,
Inc. since January 2019, and Kurin, Inc. since July 2016. Prior to launching Teal Ventures, Mr. Rodriguez was a partner at several national
law firms and a nationally recognized corporate attorney in the venture capital and M&A fields. Mr. Rodriguez made partner at Brobeck,
Phelger & Harrison after just six years and in 2006, Mr. Rodriguez opened the San Diego office of Mintz Levin, where he served as
the managing partner of the Mintz Levin San Diego office and also served on the firmwide management committee. In 25 years of practice
in law firms, Mr. Rodriguez has represented many startup and emerging growth companies throughout their life cycles, numerous private
and public companies in connection with financing and M&A transactions and counseled many companies in corporate governance matters,
in industries including life science, medical devices, technology, ecommerce and telecommunications. In addition to his legal practice,
Mr. Rodriguez has co-founded several companies in the medical device areas. Mr. Rodriguez has also served and continues to serve on numerous
boards of directors in various industries, including life science and medical devices. Mr. Rodriguez received a B.S. in Political Science
from the University of California, Los Angeles, and a J.D. from Stanford Law School. We believe that Mr. Rodriguez is qualified to serve
on our Board of Directors due to his extensive business experience, understanding of corporate governance and experience in venture capital
and the life sciences industry.
129
Board Composition
Our board of directors
currently consists of four members. In accordance with the terms of our amended and restated certificate of incorporation and amended
and restated bylaws, our board of directors is divided into three classes with staggered three-year terms. At each annual meeting of stockholders,
the successors to directors whose terms then expire will be elected to serve from the time of election and qualification until the third
annual meeting following election. Our directors will be divided among the three classes as follows:
●
the Class I director is
Eddie Wang Rodriguez, and his term will expire at the first annual meeting of stockholders to be held after the closing of the Merger;
●
the Class II director
is Carl Gordon, and his term will expire at the second annual meeting of stockholders to be held after the closing of the Merger; and
●
the Class III directors
are Iain Dukes and Nikolay Savchuk, and their terms will expire at the third annual meeting of stockholders to be held after the closing
of the Merger.
Directors in a particular
class are elected for three-year terms at the annual meeting of stockholders in the year in which their terms expire. As a result, only
one class of directors is elected at each annual meeting of our stockholders, with the other classes continuing for the remainder of their
respective three-year terms. Each director's term continues until the election and qualification of his or her successor, or the
earlier of his or her death, resignation or removal.
Our amended and restated
certificate of incorporation and amended and restated bylaws provide that only our board of directors can fill vacant directorships, including
newly-created seats. Any additional directorships resulting from an increase in the authorized number of directors would be distributed
pro rata among the three classes so that, as nearly as possible, each class would consist of one-third of the authorized
number of directors.
The classification of
our board of directors may have the effect of delaying or preventing changes in our control or management. See the section titled "
Description
of Capital Stock—Amended and Restated Certificate of Incorporation and Amended and Restated Bylaw Provisions
" elsewhere
in this prospectus.
Director Independence
Currently, our securities
are not listed on a national securities exchange or on any inter-dealer quotation system that has a requirement that a majority of directors
be independent. Nevertheless, our board of directors has undertaken a review of the independence of each director using the standards
for director independence set forth in the rules of the Nasdaq Stock Market, or Nasdaq,
and
considered whether any director has a material relationship with us that could compromise his or her ability to exercise independent judgment
in carrying out his or her responsibilities
.
Under the rules of Nasdaq,
a director will only qualify as an "independent director" if, in the opinion of that company's board of directors, that
person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities
of a director.
Based upon information requested from and provided by each director concerning
his background, employment and affiliations, including family relationships, our board of directors has determined that each of Dr. Gordon
and Mr. Rodriguez does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities
of a director and that he is "independent" as that term is defined under the rules of Nasdaq.
In making these determinations,
our board of directors considered the current and prior relationships that each non-employee director has with our company and
all other facts and circumstances our board of directors deemed relevant in determining independence, including the beneficial ownership
of our capital stock by each non-employee director, and the transactions involving them described in the section titled "
Certain
Relationships, Related Party Transactions
" elsewhere in this prospectus.
We anticipate that our
common stock will be quoted on the OTCQB Venture Market of the OTC Markets Group Inc., or the OTCQB. For companies subject to reporting
obligations under Section 13 or 15(d) of the Exchange Act, the rules of OTCQB do not provide for any requirements relating to director
independence or board committees.
130
In the future, we intend
to apply to have our common stock listed on a national securities exchange, such as Nasdaq, where our common stock is currently ineligible
to be listed. Under the rules of Nasdaq, independent directors must comprise a majority of a listed company's board of directors
within 12 months from the date of listing.
In addition, the rules
of Nasdaq require that, subject to specified exceptions, (i) a majority of the members of a listed company's audit, compensation
and nominating and corporate governance committees be independent within 90 days from the date of listing and (ii) each member of such
committees must be independent within 12 months from the date of listing. Audit committee members of companies listed on Nasdaq must also
satisfy the independence criteria set forth in Rule 10A-3 under the Securities Exchange Act of 1934, as amended, or the Exchange Act.
Our board of directors has determined that none of our current directors satisfy Nasdaq's requirements for independence that apply
to audit committees. Our board of directors has also determined that each of its members can read and understand fundamental financial
statements and that Dr. Gordon qualifies as an audit committee financial expert within the meaning of SEC regulations and would meets
the financial sophistication requirements of Nasdaq.
In addition, to be considered
independent for purposes of Rule 10C-1 and under the rules of Nasdaq, the board of directors must affirmatively determine that each member
of the compensation committee is independent, including a consideration of all factors specifically relevant to determining whether the
director has a relationship to the company which is material to that director's ability to be independent from management in connection
with the duties of a compensation committee member, including, but not limited to: (i) the source of compensation of such director, including
any consulting, advisory or other compensatory fee paid by the company to such director and (ii) whether such director is affiliated with
the company, a subsidiary of the company or an affiliate of a subsidiary of the company. Our board of directors has determined that Dr.
Gordon satisfies Nasdaq's requirements for independence that apply to compensation committees.
As of the date of this
prospectus, we would be a "controlled company" within the meaning of the Nasdaq rules because Eilean Therapeutics, LLC holds
more than 50% of the voting power for the election of our directors. As a result, we would be eligible to take advantage of exemptions
from certain corporate governance requirements, including the requirement to have a majority independent board, certain heightened independence
standards for compensation committee members and rules regarding the selection and recommendation of director nominees.
Family Relationships
There are no family relationships
among any of our directors or executive officers.
Role of the Board
in Risk Oversight
One of the key functions
of our board of directors is informed oversight of our risk management process. In particular, our board of directors is responsible for
monitoring and assessing strategic risk exposure. Our executive officers are responsible for the day-to-day management of the
material risks we face. Our board of directors administers its oversight function directly as a whole, including with respect to cybersecurity,
our financial reporting, accounting and auditing matters.
Committees of the
Board of Directors
Our board of directors
has not established any committees of the board of directors. Currently, our entire board of directors performs all functions that would
otherwise be performed by committees. Our board of directors does not have a policy with regard to the consideration of any director candidates
recommended by security holders. If we later apply to be listed on Nasdaq or another national securities exchange, we intend to expand
the size of our board and establish audit, compensation and nominating and corporate governance committees.
Compensation Committee
Interlocks and Insider Participation
During the year ended
December 31, 2023, neither Venetian-1 nor Lomond had a compensation committee or a separate committee performing equivalent functions.
During the year ended December 31, 2023, Venetian-1 did not compensate any of its directors or executive officers. In addition, during
the year ended December 31, 2023, all members of Lomond's board of directors, including Dr. Dukes and Dr. Savchuk, participated
in deliberations of Lomond's board of directors concerning executive officer compensation. None of our executive officers serves,
or served during the year ended December 31, 2023, as a member of the board of directors or compensation committee of any other entity
that has or has had one or more executive officers serving as a member of our board of directors.
Code of Conduct
Our board of directors
intends to adopt a Code of Conduct, or the Conduct Code. The Conduct Code will apply to all of our employees, officers and directors,
as well as all of our contractors, consultants, suppliers and agents in connection with their work for us. The Code will be available
on our website at www.lomondther.com. Information contained on or accessible through this website is not a part of this prospectus,
and the inclusion of such website address in this prospectus is an inactive textual reference only. Any amendments to the Conduct Code,
once adopted, or any waivers of its requirements, are expected to be disclosed on its website to the extent required by applicable rules
and exchange requirements.
131
EXECUTIVE
COMPENSATION
From the inception of
Venetian-1 Acquisition Corp. to the date when the Merger was consummated, no compensation was earned by or paid to its executive officers.
Upon the consummation
of the Merger, Lomond became the wholly-owned subsidiary of Venetian-1 Acquisition Corp., and Lomond's senior management became
the senior management of Venetian-1 Acquisition Corp. The following table summarizes the compensation of Lomond's principal executive
officer and its most highly compensated executive officer (other than its chief executive officer) who were serving as executive officers
as of December 31, 2023, whom we refer to herein as our "named executive officers."
Summary Compensation
Table
The following table shows
information regarding the compensation awarded to, earned by or paid to each of Lomond's named executive officers for the year ended
December 31, 2023. Lomond had only two named executive officers during 2023.
NAME AND PRINCIPAL POSITION
YEAR
SALARY
($)
BONUS
($)
OPTION
AWARDS
($)
NON-EQUITY
INCENTIVE PLAN
COMPENSATION
($)
ALL OTHER
COMPENSATION
($)
TOTAL
($)
Iain Dukes
2023
-
-
-
-
-
-
Chief Executive Officer, Chairman and Director
Nikolay Savchuk
2023
-
-
-
-
-
-
President, Chief Operating Officer and Director
Narrative Disclosure
to Summary Compensation Table
During 2023, Lomond's
executive officers did not receive any compensation.
Currently, Dr. Dukes
and Dr. Savchuk are our consultants. We generally do not provide our named executive officers with perquisites or other personal benefits.
However, we do reimburse our named executive officers for their necessary and reasonable business and travel expenses incurred in connection
with their services to us.
Consulting Arrangements
with our Named Executive Officers
On November 1, 2024,
Lomond entered into a consulting agreement with each of Dr. Dukes and Dr. Savchuk and, as described below, granted our named executive
officers certain compensatory stock options. Prior to taking such actions, compensation paid to Lomond's named executive officers
consisted of grants of common limited liability units by Eilean Therapeutics, LLC, or Eilean, prior to the Merger, under Eilean's
2022 Equity Incentive Plan and, in the case of Dr. Dukes, vesting under a stock purchase agreement.
The grants of Eilean's
limited liability units were paid in respect of services provided to Eilean and its subsidiaries, including Lomond, and were subject to
time-based service requirements. In October 2022, Dr. Dukes was granted (1) 1,243,416 common units in Eilean of which 50% were vested
as of July 7, 2022, with the remaining units vesting in equal monthly installments over the following 24 months and (2) 520,354 common
units, or the Second 2022 Tranche, in Eilean with a vesting commencement date of July 7, 2022 that vested or will vest in 48 equal monthly
installments. The units in the Second 2022 Tranche shall also vest if Eilean is subject to a change in control before Dr. Dukes's
service as Eilean's Chief Executive Officer terminates and Dr. Dukes is terminated by Eilean without cause or he resigns for good
reason within 12 months of such change in control. In October 2022, Dr. Savchuk was granted 1,121,836 common units in Eilean of which
50% were vested as of July 7, 2022, with the remaining units vesting in equal monthly installments over the following 24 months.
132
In February 2020, Dr.
Dukes purchased 120,000 shares of Lomond's common stock pursuant to a stock purchase agreement. Such shares were subject to Lomond's
right of repurchase and vested according to a time-based service requirement. In particular, the shares subject to such agreement vested
in equal installments over a 36-month period and became fully vested in February 2023. Pursuant to the exchange agreement described in
the section entitled "
Reorganization,
" each share of common stock issued by Lomond held by stockholders were exchanged
for limited liability units of Eilean, including such shares purchased by Dr. Dukes in February 2020.
Consulting Agreement
with Dr. Dukes
Lomond entered into a
consulting agreement with Dr. Dukes, our Chief Executive Officer and Chairman, on November 1, 2024. Pursuant to the terms of Dr. Dukes'
consulting agreement, Dr. Dukes serves as our Chief Executive Officer and Chairman, is eligible to receive consulting fees at an annual
rate of $400,000 and is eligible to receive an annual incentive payment equal to up to 50% of such annual consulting fees, subject to
the achievement of applicable performance metrics as determined by our board of directors. Dr. Dukes' consulting agreement contains
customary invention assignment and confidentiality provisions.
In connection with Dr.
Dukes' services to the Company, Dr. Dukes was granted an option to purchase 2,096,667 shares of Lomond's common stock on September
19, 2024, or the Dukes option. The Dukes option vests as follows: commencing with the date on which Lomond completed a merger, consolidation
or share exchange with a special purpose acquisition company or other similar entity in which the common stock (or similar securities)
of the surviving or parent entity was registered under Section 12 of the Exchange Act on or prior to December 31, 2024, or the vesting
milestone, 1/48th of the shares underlying the Dukes option shall vest on each month thereafter, subject to Dr. Dukes continued services
to us through the relevant vesting dates. Pursuant to the Dukes option, the achievement of the vesting milestone is determined by our
board of directors in its discretion, and the vesting milestone was achieved when the Merger closed. In October 2024, the Board approved
an amendment to the vesting of the Dukes option, such that all remaining unvested shares subject to the Dukes option vest if (a) Lomond
is subject to a Change in Control before his service with the Company terminates and (b) he is subject to an Involuntary Termination
within 12 months after that Change in Control.
Consulting Agreement with Dr. Savchuk
Lomond entered into a
consulting agreement with Dr. Savchuk, our Chief Operating Officer and President, on November 1, 2024. Pursuant to the terms of Dr. Savchuk's
consulting agreement, Dr. Savchuk serves as our Chief Operating Officer and President, is eligible to receive consulting fees at an annual
rate of $400,000 and is eligible to receive an annual incentive payment equal to up to 50% of such annual consulting fees, subject to
the achievement of applicable performance metrics as determined by our board of directors. Dr. Savchuk's consulting agreement contains
customary invention assignment and confidentiality provisions.
In connection with Dr.
Savchuk's services to the Company, Dr. Savchuk was granted an option to purchase 1,258,000 shares of Lomond's common stock
on September 19, 2024, or the Savchuk option. The Savchuk option vests as follows: commencing with the date on which Lomond completed
a merger, consolidation or share exchange with a special purpose acquisition company or other similar entity in which the common stock
(or similar securities) of the surviving or parent entity was registered under Section 12 of the Exchange Act on or prior to December
31, 2024, or the vesting milestone, 1/48th of the shares underlying the Savchuk option shall vest on each month thereafter, subject
to Dr. Savchuk continued services to us through the relevant vesting dates. Pursuant to the Savchuk option, the achievement of the vesting
milestone is determined by our board of directors in its discretion, and the vesting milestone was achieved when the Merger closed. In
October 2024, the Board approved an amendment to the vesting of the Savchuk option, such that all remaining unvested shares subject to
the Savchuk option vest if (a) Lomond is subject to a Change in Control before his service with the Company terminates and (b) he
is subject to an Involuntary Termination within 12 months after that Change in Control.
133
Applicable Definitions
Relating to Involuntary Termination
"Cause" generally
means unauthorized disclosure of confidential information that causes material harm to us; the executive's material breach of an
agreement with us; the executive's material failure to comply with our written policies or rules; the executive's conviction
of, or plea of "guilty" or "no contest" to, a felony under the laws of the United States or any state; the executive's
gross negligence or willful misconduct in connection with the performance of his or her duties to us; the executive's continuing
failure to perform assigned duties after receiving written notification of the failure from our board of directors; or the executive's
failure to cooperate in good faith with a governmental or internal investigation of the company or its directors, officers or employees,
if we have requested such executive's cooperation.
"Change in Control"
generally means a dissolution, liquidation or winding up of the company, a sale of all or substantially all of our assets, or the consummation
of a merger or consolidation of the company into another entity following which holders of our capital stock do not hold a majority of
the voting power of the surviving or acquiring entity in substantially the same proportions.
"Resignation for
Good Reason" generally means a resignation by the executive within 12 months following a material diminution of base salary, a material
diminution of authorities, duties or responsibilities or our material breach of any agreement by us with such executive.
"Involuntary Termination"
shall mean the executive's involuntary discharge by us for reasons other than Cause, or the executive's Resignation for Good
Reason.
Outstanding Equity
Awards as of December 31, 2023
As of December 31, 2023,
our named executive officers did not hold any outstanding equity awards in Lomond.
Equity Plans
Lomond Stock Plan
General.
Lomond's
board of directors adopted, and its stockholder approved, the Lomond Stock Plan in September 2024, or the Lomond Plan. The Lomond Plan
was terminated in connection with the closing of the Merger.
Share Reserve
.
As of September 19, 2024, Lomond reserved 4,329,617 shares of its common stock for issuance under the Lomond Plan. Immediately prior to
the consummation of the Merger, 4,329,617 options were outstanding under the Lomond Plan at an exercise price of $1.30 per share. Unissued
shares subject to awards that expire, are forfeited, or are cancelled, shares reacquired by us and shares withheld in payment of the purchase
price or exercise price of an award or in satisfaction of withholding taxes will again become available for issuance under the 2024 Plan
(as defined below).
2024 Equity Incentive
Plan
Our board of directors
adopted our 2024 Equity Incentive Plan, or the 2024 Plan, and the 2024 Plan was approved by our stockholders, in November 2024. The 2024
Plan became effective upon closing of the Merger. The 2024 Plan is intended to replace the Lomond Plan. However, awards outstanding under
the Lomond Plan will continue to be governed by their existing terms.
Types of Awards.
The
2024 Plan provides for the grant of stock options, which may be ISOs or nonstatutory stock options, or NSOs, stock appreciation rights,
or SARs, restricted shares and restricted stock units, or RSUs, or collectively, awards.
Administration.
The
2024 Plan is administered by our board of directors and/or by one or more committees to which our board of directors delegates such administration,
or the 2024 Plan Administrator, as applicable. Subject to the terms of the 2024 Plan, the 2024 Plan Administrator will have the complete
discretion to determine the eligible individuals who are to receive awards under the plan, to determine the terms and conditions of awards
granted under the 2024 Plan and to make all decisions related to the 2024 Plan and awards granted thereunder.
134
Share Reserve.
The
number of shares of our common stock that may be issued under the 2024 Plan is equal to the sum of (x) 1,759,608 shares, plus (y) up
to 4,329,617 shares subject to awards granted under the Lomond Plan that were outstanding on the date of the Merger and that are subsequently
forfeited, expire or lapse unexercised or unsettled or are reacquired by us, plus (z) the annual increase in shares described below.
While a maximum of 4,329,617 shares may be added to the 2024 Plan from the Lomond Plan, since this assumes that all awards outstanding
under the Lomond Plan on the date of this merger will be forfeited, we expect the actual number of shares added to the 2024 Plan to be
less.
On the first day of each
of our fiscal years during the term of the 2024 Plan, beginning on January 1, 2026 and ending on (and including) January 1, 2034, the
number of shares of our common stock that may be issued under the 2024 Plan will increase by a number of shares equal to the lesser of
(a) 5% of the outstanding shares on the last day of the immediately preceding fiscal year or (b) a number of shares (including zero)
that the 2024 Plan Administrator determines for purposes of the annual increase for that fiscal year.
If options, stock appreciation
rights, restricted stock units or any other awards are forfeited, cancelled or expire, the shares subject to such awards will again be
available for issuance under the 2024 Plan. If stock appreciation rights are exercised or restricted stock units are settled, only the
number of shares actually issued upon exercise or settlement of such awards will reduce the number of shares available under the 2024
Plan. If restricted shares or shares issued upon exercise of an option are reacquired by us pursuant to a forfeiture provision, repurchase
right or for any other reason, then such shares will again be available for issuance under the 2024 Plan. Shares applied to pay the exercise
price of an option or satisfy withholding taxes related to any award will again become available for issuance under the 2024 Plan. To
the extent an award is settled in cash, the cash settlement will not reduce the number of shares available for issuance under the 2024
Plan.
Shares issued under the
2024 Plan may be authorized but unissued shares or treasury shares. As of the date hereof, no awards have been granted under the 2024
Plan.
Incentive Stock Option
Limit.
No more than 22,003,540 shares of our common stock may be issued under the 2024 Plan upon the exercise of ISOs.
Eligibility.
Employees
(including officers), non-employee directors and consultants who render services to us or a parent, subsidiary or affiliate
of us (whether now existing or subsequently established) are eligible to receive awards under the 2024 Plan. ISOs may only be granted
to employees of us or a parent or subsidiary of us (whether now existing or subsequently established). As of the date of this prospectus,
approximately seven persons (including 2 executive officers and one non-employee director) would be eligible to participate
in the 2024 Plan.
International Participation.
The
2024 Plan Administrator has the authority to implement sub-plans (or otherwise modify applicable grant terms) for purposes of
satisfying applicable foreign laws, conforming to applicable market practices or for qualifying for favorable tax treatment under applicable
foreign laws, and the terms and conditions applicable to awards granted under any such sub-plan or modified award may differ
from the terms of the 2024 Plan. Any shares issued in satisfaction of awards granted under a sub-plan will come from the 2024
Plan share reserve.
Repricing.
The
2024 Plan Administrator has full authority, without specific stockholder approval, to reprice (reduce the exercise price of) options and
stock appreciation rights or to approve programs in which options and stock appreciation rights are exchanged for cash or other equity
awards on terms the 2024 Plan Administrator determines.
Stock Options.
A
stock option is the right to purchase a certain number of shares of stock at a fixed exercise price which, pursuant to the 2024 Plan,
may not be less than 100% of the fair market value of our common stock on the date of grant. Subject to limited exceptions, an option
may have a term of up to 10 years and will generally expire sooner if the optionee's service terminates. Options will vest
at the rate determined by the 2024 Plan Administrator. An optionee may pay the exercise price of an option in cash, or, with the administrator's
consent, with shares of common stock the optionee already owns, with proceeds from an immediate sale of the option shares through a broker
approved by us, through a net exercise procedure or by any other method permitted by applicable law.
Stock Appreciation
Rights
. A stock appreciation right provides the recipient with the right to the appreciation in a specified number of shares of stock.
The 2024 Plan Administrator determines the exercise price of stock appreciation rights granted under the 2024 Plan, which may not be less
than 100% of the fair market value of our common stock on the date of grant. Subject to limited exceptions, a stock appreciation right
may have a term of up to 10 years and will generally expire sooner if the recipient's service terminates. SARs will vest at
the rate determined by the 2024 Plan Administrator. Upon exercise of a SAR, the recipient will receive an amount in cash, stock, or a
combination of stock and cash determined by the 2024 Plan Administrator, equal to the excess of the fair market value of the shares being
exercised over their exercise price.
135
Tax Limitations on
Incentive Stock Options.
The aggregate fair market value, determined at the time of grant, of our common stock with respect to
ISOs that are exercisable for the first time by an optionholder during any calendar year under all of our stock plans may not exceed $100,000.
Options or portions thereof that exceed such limit will generally be treated as NSOs. No ISO may be granted to any person who, at the
time of the grant, owns or is deemed to own stock possessing more than 10% of our total combined voting power or that of any of our affiliates
unless the option exercise price is at least 110% of the fair market value of the stock subject to the option on the date of grant and
the term of the ISO does not exceed five years from the date of grant.
Restricted Stock Awards.
Shares
of restricted stock may be issued under the 2024 Plan for such consideration as the 2024 Plan Administrator may determine, including cash,
services rendered or to be rendered to us, promissory notes or such other forms of consideration permitted under applicable law. Restricted
shares may be subject to vesting, as determined by the 2024 Plan Administrator. Recipients of restricted shares generally have all of
the rights of a stockholder with respect to those shares, including voting rights, however any dividends and other distributions on restricted
shares will generally be subject to the same restrictions and conditions as the underlying shares.
Restricted Stock Units.
A
restricted stock unit is a right to receive a share, at no cost to the recipient, upon satisfaction of certain conditions, including vesting
conditions, established by the 2024 Plan Administrator. RSUs vest at the rate determined by the 2024 Plan Administrator and any unvested
RSUs will generally be forfeited upon termination of the recipient's service. Settlement of restricted stock units may be made in
the form of cash, common stock or a combination of cash and common stock, as determined by the 2024 Plan Administrator. Recipients of
restricted stock units generally will have no voting or dividend rights prior to the time the vesting conditions are satisfied and the
award is settled. At the 2024 Plan Administrator's discretion and as set forth in the applicable restricted stock unit agreement,
restricted stock units may provide for the right to dividend equivalents which will generally be subject to the same conditions and restrictions
as the restricted stock units to which they pertain.
Other Awards.
The
2024 Plan Administrator may grant other awards based in whole or in part by reference to our common stock and may grant awards under other
plans and programs that will be settled with shares issued under the 2024 Plan. The 2024 Plan Administrator will determine the terms and
conditions of any such awards.
Changes to Capital
Structure.
In the event of certain changes in capitalization, including a stock split, reverse stock split or stock dividend,
proportionate adjustments will be made in the number and kind of shares available for issuance under the 2024 Plan, the number of shares
that may be added to the 2024 Plan from Lomond's 2024 Plan, the limit on the number of shares that may be issued under the 2024
Plan as ISOs, the number and kind of shares subject to each outstanding award and/or the exercise or repurchase price applicable to each
outstanding award.
Corporate Transactions.
If
we are party to a merger, consolidation or certain change in control transactions, each outstanding award will be treated as described
in the definitive transaction agreement or as the 2024 Plan Administrator determines, which may include the continuation, assumption or
substitution of an outstanding award, the cancellation of an outstanding award after an opportunity to exercise or the cancellation of
an outstanding award in exchange for a payment equal to the value of the shares subject to such award less any applicable exercise price.
136
Change of Control.
The
2024 Plan Administrator may provide, in an individual award agreement or in any other written agreement with a participant, that the award
will be subject to acceleration of vesting and exercisability in the event of a change of control or in connection with a termination
of employment in connection with or following a change in control.
Transferability of
Awards.
Unless the 2024 Plan Administrator determines otherwise, an award generally will not be transferable other than by beneficiary
designation, a will or the laws of descent and distribution. The 2024 Plan Administrator may permit transfer of an award in a manner consistent
with applicable law.
Amendment and Termination.
The
2024 Plan Administrator may amend or terminate the 2024 Plan at any time. Any such amendment or termination will not affect outstanding
awards. If not sooner terminated, the 2024 Plan will terminate automatically in 2034, 10 years after its adoption by our board of
directors. Shareholder approval is not required for any amendment of the 2024 Plan, unless required by applicable law or exchange listing
standards
Director Compensation
Venetian-1 did not provide
compensation to any members of its board of directors during the year ended December 31, 2023. In addition, Lomond did not provide
compensation to any non-employee members of its board of directors in their capacity as such during the year ended December 31,
2023. Lomond historically reimbursed its non-employee directors for reasonable travel and out-of-pocket expenses incurred
in connection with attending board of director and committee meetings.
Non-Employee Director
Compensation Program
Our board of directors
intends to adopt a compensation program for our non-employee directors that will consist of annual retainer fees and long-term equity
awards, the material terms of which have not yet been determined.
Disclosure of Action
to Recover Erroneously Awarded Compensation
To date, our securities
have not been listed on a national securities exchange. As a result, we have not been required to adopt, nor have we adopted, a compensation
recovery policy required by listing standards adopted pursuant to Rule 10D-1 under the Exchange Act.
137
CERTAIN
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
We
describe below all the transactions to which we, since the consummation of the Merger, or Lomond, since January 1, 2021, have been a party
in which the amount involved exceeded the lesser of (i) $120,000 or (ii) one percent of the average of its total assets at year
end for the last two completed fiscal years; and in which any of our or Lomond's executive officers, directors or beneficial holders
of more than 5% of our or Lomond's capital stock (or any immediate family member of, or person sharing the household with, any of
these individuals or entities), which are collectively referred to as a related person, had or will have a direct or indirect material
interest, other than compensation arrangements which are described in the section titled "
Executive Compensation
" and
the Registration Rights Agreement describe in the section titled "
Description of the Merger, the Offering, and Related
Transactions—Registration Rights Agreement
." The following description is historical and has not been adjusted to give
effect to the Merger.
Series Seed Preferred
Stock Financing
Between March 2020 and
August 2021, Lomond issued and sold an aggregate of 13,661,416 shares of Series Seed preferred stock, par value $0.0001 per share, or
Series Seed Preferred Stock, at a purchase price of approximately $0.402594 per share for an aggregate purchase price of approximately
$5.5 million.
The following table summarizes
purchases of shares of Series Seed Preferred Stock by Lomond's executive officers, directors and holders of more than 5% of its
capital stock:
Purchaser
(1)
Shares of
Series Seed
Preferred
Stock
Total
Purchase
Price
Entities affiliated with OrbiMed
(2)
6,830,708
$
2,750,000.41
TPAV, LLC
(3)
6,830,708
$
2,750,000.41
Total
13,661,416
$
5,500,000.82
(1)
See "
Security Ownership
of Certain Beneficial Owners and Management
" for additional information about shares held by these entities.
(2)
OrbiMed Private Investments
VII, LP, an entity affiliated with OrbiMed, held more than 5% of our capital stock at the time of the transaction. Dr. Gordon, one of
our directors is a member of OrbiMed.
(3)
Nikolay Savchuk is our President
and Chief Operating Officer, one of our directors and an affiliate of TPAV, LLC. In addition, at the time of the transaction, there was
an additional member of Lomond's board who was an affiliate of Torrey Pines.
Pursuant to the exchange
agreement described further in the section below titled "
Reorganization
," each share of Seed Preferred Stock held by
the stockholders was exchanged for limited liability units of Eilean, and Lomond became a direct, wholly-owned subsidiary of Eilean. Dr.
Dukes is the Chief Executive Officer and Chairman of Eilean and Dr. Savchuk is the Chief Operating Officer and President of Eilean.
Services Agreements
In March 2020, we entered
into an administrative services agreement with Eil, an entity in which our 5% or greater stockholders at the time, which were entities
affiliated with OrbiMed and Torrey Pines, and Eilean, since the reorganization described above, had or have an indirect material interest.
Further, Dr. Savchuk, our President and Chief Operating Officer is President and Chief Executive Officer of Eil. Pursuant to such administrative
services agreement, Eil agreed to provide Lomond, directly or indirectly through its contractors, administrative support services and
access to Eil's staff's management experience and knowledge. Such services included general management and operations, including
financial and accounting services, and various tax-related services, among other services. Pursuant to the administrative services agreement,
we paid Eil $4.0 million, $0.3 million, and $1.0 million during the years ended December 31, 2021, 2022 and 2023, respectively. The administrative
services agreement with Eil was terminated in October 2024.
138
In connection with such
termination, in October 2024, we entered into an administrative services & co-employment agreement, or services agreement, with Abet
Solutions. Pursuant to such use of services agreement, Abet Solutions agreed to provide Lomond, directly or indirectly through its contractors,
administrative support services and access to staff's management experience and knowledge. Such services included general management
and operations, including financial and accounting services, insurance program marketing and administration and various tax-related services.
In exchange, Lomond agreed to, among other items, pay cash compensation and indemnify Abet Solutions in certain instances. We and Eil
share certain employment-related expenses in connection with the Abet services agreement. Dr. Savchuk, our President and Chief Operating
Officer, has a material direct interest in Abet Solutions.
AI/ML Platform
Since July 2024, Lomond
has used an AI/ML platform offered by Expert Systems pursuant to a master research and development agreement. A family member of Dr. Savchuk,
our President and Chief Operating Officer, has a direct interest in Expert Systems. The Company expects to pay Expert Systems approximately
$670,000 during the year ending December 31, 2024.
Research and Development
Agreement
Since March 2020, Lomond
purchased research and development services from ChemDiv, Inc., an entity in which Dr. Savchuk, our President and Chief Operating Officer,
was Chief Executive Officer from November 2013 to January 2022. Lomond did not enter into any agreements with ChemDiv, Inc. other than
agreeing to such company's standard terms and conditions. During the fiscal years ended December 31, 2021, 2022 and 2023, Lomond
paid ChemDiv, Inc. $5.3 million, $4.0 million and $6.2 million, respectively.
Master Services Agreement
In January 2023, Lomond and Eilean Therapeutics AU Pty Ltd., or Eilean
AU, a CRO, entered into a master services agreement pursuant to which Eilean AU provides Lomond with clinical trial-related services and
data and research services. Lomond agreed to pay fees under the agreement as well as a 1% royalty on the gross revenue on commercialized
products produced under the agreement. Eilean AU is a wholly owned subsidiary of Eilean Therapeutics, LLC, or Eilean, Lomond's former
parent company and currently greater than 5% holder of our common stock. Dr. Dukes is the Chief Executive Officer and Chairman of Eilean
and Dr. Savchuk is the Chief Operating Officer and President of Eilean. During the fiscal years ended December 31, 2021, 2022 and 2023,
Lomond paid Eilean AU $0, $0 and $3.0 million, respectively.
Promissory Notes
Between May 2022 and
January 2023, Lomond issued to Eil and Dinas Therapeutics, Inc., each wholly-owned subsidiaries of Eilean, an aggregate of approximately
$5.1 million of promissory notes with interest rates between 2.5% and 5%, or the Eilean promissory notes. In December 2023, Eilean assumed
the Eilean promissory notes and forgave all of such outstanding indebtedness. Lomond agreed to treat such debt as a capital contribution
to Lomond. As a result, as of December 7, 2023, Lomond had no outstanding indebtedness pursuant to any of the Eilean promissory notes.
While the Eilean promissory notes were outstanding, Lomond did not make any payments in respect of principal or interest. Eilean is a
greater than 5% holder of our common stock. Dr. Dukes is the Chief Executive Officer and Chairman of Eilean and President of Dinas. Dr.
Savchuk is the Chief Operating Officer and President of Eilean, President and Chief Executive Officer of Eil, and Chief Executive Officer
of Dinas.
139
Reorganization
In July 2022, Lomond
was reorganized pursuant to a share contribution and exchange agreement dated as of July 5, 2022, by and between Eilean, Lomond and the
other parties thereto, or the exchange agreement. Pursuant to the exchange agreement, stockholders of Lomond contributed all of the capital
stock in Lomond to Eilean in exchange for limited liability units of Eilean and Lomond became a direct, wholly-owned subsidiary of Eilean.
Pursuant to the exchange agreement, Lomond agreed to terminate its then-existing stockholders agreement dated March 5, 2020, by and between
Lomond and certain holders of its preferred stock, or the stockholders agreement, and agreed to the termination of the Series Seed Preferred
Stock Purchase Agreement dated March 5, 2020, as amended, by and between Lomond and certain investors, or the purchase agreement. Pursuant
to this agreement, Lomond waived its right of first refusal under the stockholders agreement and terminated the stockholders agreement
and the purchase agreement. In addition, all outstanding compensatory stock options to purchase shares of Lomond's common stock
were cancelled in connection with this reorganization. Dr. Dukes, our Chief Executive Officer and Chairman, is the Chief Executive Officer
and Chairman of Eilean. Further, Dr. Savchuk, our Chief Operating Officer and President, is the Chief Operating Officer and President
of Eilean.
SAFEs Issued Based
on Capital Contribution in May 2024
In May 2024, Eilean,
Lomond's former parent company, made a capital contribution to Lomond in an aggregate amount of $3.5 million. In October 2024, Eilean
requested that such capital contribution be converted to "simple agreements for future equity," or the Contribution SAFEs,
and immediately distributed to Eilean's members, TPAV, LLC and entities affiliated with OrbiMed. Upon consummation of the Offering,
the Contribution SAFEs automatically converted into 1,078,124 shares of common stock.
The following table summarizes
the Contribution SAFEs held by Lomond's executive officers, directors and holders of more than 5% of its capital stock immediately
prior to the closing of the merger:
Purchaser
(1)
Number of
Shares of
Common Stock
Issued Upon the
Conversion of
the Contribution
SAFEs
Total
Purchase
Price
Entities affiliated with OrbiMed
(2)
539,062
$
1,725,000.00
TPAV, LLC
(3)
539,062
$
1,725,000.00
Total
1,078,124
$
3,450,000.00
(1)
See "
Security Ownership
of Certain Beneficial Owners and Management
" for additional information about shares held by these entities.
(2)
Consists of (i) 323,916 shares
held by OrbiMed Private Investments VII, LP and (ii) 215,146 shares held by OrbiMed Private Investments VIII, LP, each of which are affiliates
of OrbiMed. Dr. Gordon is one of our directors and is a member of OrbiMed.
(3)
Nikolay Savchuk is our President
and Chief Operating Officer, one of our directors and an affiliate of TPAV, LLC.
140
August 2024 SAFEs
In August 2024, Lomond
issued "simple agreements for future equity", or the August SAFEs, for an aggregate purchase price of $7.5 million in a private
financing round. Immediately prior to the consummation of the Offering, the August SAFEs automatically converted into 2,083,332 shares
of common stock.
The following table summarizes
purchases of the August SAFEs by Lomond's executive officers, directors and holders of more than 5% of its capital stock:
Purchaser
(1)
Number of
Shares of
Common Stock
Issued Upon the
Conversion of
the August
SAFEs
Total
Purchase
Price
Entities affiliated with OrbiMed
(2)
694,444
$
2,500,000.00
TPAV, LLC
(3)
694,444
$
2,500,000.00
American Financial Group
(4)
472,222
$
1,700,000.00
Total
1,861,110
$
6,700,000.00
(1)
See "
Security Ownership
of Certain Beneficial Owners and Management
" for additional information about shares held by these entities.
(2)
Consists of (i) 389,078 shares
held by OrbiMed Private Investments VII, LP, (ii) 230,753 shares held by OrbiMed Private Investments VIII, LP, and (iii) 74,613 shares
held by OrbiMed Private Investments IX, LP, each of which are affiliates of OrbiMed. Dr. Gordon is one of our directors and is a member
of OrbiMed.
(3)
Dr. Savchuk is our President
and Chief Operating Officer, one of our directors and an affiliate of TPAV, LLC.
(4)
Consists of shares of common
stock held directly by Great American Insurance Company, or Great American. Great American is a wholly-owned subsidiary of American Financial
Group, Inc., or AFG, which may be deemed to have beneficial ownership over the shares held by Great American.
Agreements with Eil
and Bala
On October 17, 2024,
we entered into a license agreement with Eil, or the Eil license agreement, and a license agreement with Bala, or the Bala license agreement.
Pursuant to the Eil license agreement and the Bala license agreement, we obtained exclusive, worldwide, royalty-bearing licensing rights
for the development and future ownership of (i) lonitoclax, a BCL-2 inhibitor for the treatment of AML and CLL from Eil, and (ii) an early-stage
menin inhibitor for the treatment of AML from Bala.
The Eil license agreement
and the Bala license agreement became effective on October 17, 2024 when we issued promissory notes to Eil and Bala, respectively. The
principal amount of the promissory notes with Eil and Bala are $1.7 million and $1.2 million, respectively. Each such promissory note
bears interest at a rate of 7% per annum, compounded annually and the principal and accrued interest under each note are due and payable
on demand at any time after October 17, 2026. Each such promissory note may be repaid without penalty. In addition, the two promissory
notes each provide for customary events of default. Upon the payment in full of the applicable promissory note, Eil and Bala have each
agreed to transfer to us all of the intellectual property rights covered by the Eil license agreement and the Bala license agreement,
as the case may be.
The license rights are
sublicensable at our option through multiple tiers, in whole or in part. Under such license agreements, we, but not Eil or Bala, as the
case may be, have the right to terminate the applicable license agreement for convenience upon 30 days' written notice. If we or
Eil or Bala, as the case may be, materially breaches the applicable license agreement, and such breach is not cured within 90 days after
the receipt of notice of such breach, then the non-defaulting party may terminate such license agreement. In addition, upon the occurrence
of an event of default under the applicable promissory note, the Eil license agreement or the Bala license agreement shall be terminated.
Eil and Bala are each
wholly-owned by Eilean, Lomond's former parent company, which beneficially owned 53.0% of our common stock upon the closing of the
Merger and the Offering. Dr. Dukes is the Chief Executive Officer and Chairman of Eilean and Dr. Savchuk is the Chief Operating Officer
and President of Eilean and Chief Executive Officer and President of each of Bala and Eil.
141
Participation in the Offering
OrbiMed, Torrey Pines,
Deerfield Partners, L.P., or Deerfield, and American Financial Group purchased 1,443,750, 1,443,750, 2,692,625 and 1,250,000 shares of
our common stock in the Offering, respectively, for aggregate gross purchase prices of $5.9 million, $5.9 million, $10.8 million and $5.0
million, in each case, pursuant to the Subscription Agreement. Upon the consummation of such sales and the Merger, OrbiMed, Torrey Pines,
and Deerfield beneficially owned 9.8%, 9.8%, 9.9%, and 6.3% of our common stock, respectively. Such purchases were made on the same terms
as the shares that were sold to other investors in the Offering and not pursuant to any pre-existing contractual rights or obligations.
Pre-Merger Indemnity
Agreements
As a condition to the
Merger, we entered into the Pre-Merger Indemnity Agreements with each former officer and director of Venetian-1 Acquisition Corp., pursuant
to which we agreed to indemnify such former officers and directors for actions taken by them such individual in their official capacities
relating to the consideration, approval and consummation of the Merger and certain related transactions.
Indemnification Agreements
Lomond entered into separate
indemnification agreements with each of its executive officers and directors. Their indemnification agreements provided that Lomond would
indemnify each of the directors and executive officers against any and all expenses incurred by that director or executive officer because
of their status as one of the directors or executive officers to the fullest extent permitted by Delaware law.
Our amended and restated
certificate of incorporation contains provisions limiting the liability of directors, and our amended and restated bylaws provide that
we will indemnify each of the directors to the fullest extent permitted under Delaware law. Our amended and restated certificate of incorporation
and amended and restated bylaws also provide our board of directors with discretion to indemnify our officers and employees when determined
appropriate by our board of directors.
We have entered, and
intend to continue to enter, into separate indemnification agreements with each of our directors and executive officers. The indemnification
agreements will provide that we will indemnify each of our directors and executive officers against any and all expenses incurred by that
director or executive officer because of their status as one of our directors or executive officers to the fullest extent permitted by
Delaware law, our amended and restated certificate of incorporation and our amended and restated bylaws. In addition, the indemnification
agreements provide that, to the fullest extent permitted by Delaware law, we will advance all expenses incurred by our directors and executive
officers in connection with a legal proceeding involving their status as a director or executive officer.
Policies and Procedures for Related Party
Transactions
We intend to adopt a
formal written policy providing that we are not permitted to enter into any transaction that exceeds the lesser of (i) $120,000 or (ii)
one percent of the average of our total assets at year end for the last two completed fiscal years, and in which any related person has
a direct or indirect material interest without the consent of our audit committee. Our board of directors will have the primary responsibility
for reviewing and approving or disapproving such "related party transactions." In approving or rejecting any such transaction,
our board of directors is to consider the relevant facts and circumstances available and deemed relevant to it, including whether the
transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances
and the extent of the related person's interest in the transaction.
All of the transactions
described in this section were entered into prior to the adoption of this policy. Although we have not had a written policy for the review
and approval of transactions with related persons, our board of directors has historically reviewed and approved any transaction where
a director or officer had a financial interest, including the transactions described above. Prior to approving such a transaction, the
material facts as to the relationship or interest of the relevant related person in the agreement or transaction were disclosed to our
board of directors. Our board of directors took this information into account when evaluating the transaction and in determining whether
such transaction was fair to us and in the best interest of all our stockholders.
142
USE
OF PROCEEDS
We are filing the registration
statement of which this prospectus forms a part to permit holders of the shares of common stock described in the section entitled "
Selling
Stockholders
" to resell such shares. We will not receive any proceeds from the resale of any shares offered by this prospectus
by the selling stockholders.
143
DIVIDEND
POLICY
We have never paid any
cash dividends on our capital stock and do not anticipate paying any cash dividends on our common stock in the foreseeable future. We
intend to retain future earnings to fund ongoing operations and future capital requirements. Any future determination to pay cash dividends
will be at the discretion of our board of directors and will be dependent upon financial condition, results of operations, capital requirements
and such other factors as the board of directors deems relevant.
144
DETERMINATION
OF OFFERING PRICE
The selling stockholders
may only sell their shares of common stock pursuant to this prospectus at a fixed price of $4.00 per share (as may be adjusted for stock
splits, stock dividends, combinations, recapitalizations or similar events) until such time as our common stock is quoted on the OTCQB
or another public trading market for our common stock otherwise develops. At and after such time, the selling stockholders may sell all
or a portion of their shares through public or private transactions at prevailing market prices or at privately negotiated prices. The
fixed price of $4.00 (as may be adjusted for stock splits, stock dividends, combinations, recapitalizations or similar events) at which
the selling stockholders may sell their shares pursuant to this prospectus was determined based upon the purchase price per share of common
stock in the initial closing of the Offering.
We have included a fixed
price at which selling stockholders may sell their shares pursuant to this prospectus prior to the time there is a public market for
our stock in order to comply with the rules of the SEC that require that, if there is no market for the shares being registered, this
registration statement must include a price at which the shares may be sold. Except to the extent that we are involved in an underwritten
secondary offering of common stock, if any, by the selling stockholders, all shares being offered pursuant to this prospectus will be
sold by the selling stockholders without our involvement.
145
MARKET
INFORMATION FOR OUR COMMON STOCK
Our common stock is not
listed on a national securities exchange, an over-the-counter market or any other exchange. Therefore, there is no trading market, active
or otherwise, for our common stock and our common stock may never be included for trading on any stock exchange, automated quotation system
or any over-the-counter market. In connection with this offering, we intend to arrange for a registered broker-dealer to apply to have
the common stock quoted on the OTCQB or another over-the-counter system; however, we cannot assure you that the common stock will become
eligible for trading on the OTCQB or any other over-the-counter system.
As of November 21, 2024,
we have 27,198,214 shares of common stock outstanding held by approximately 28 stockholders of record.
146
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets
forth certain information with respect to the beneficial ownership of our common stock as of November 21, 2024, immediately following
the closing of the Merger and the Offering, by:
●
each of our named executive
officers;
●
each of our directors
●
all of our current directors
and executive officers as a group; and
●
each person, or group of affiliated
persons, who beneficially owned more than 5% of our common stock.
We have determined beneficial
ownership in accordance with the rules of the SEC, and the information is not necessarily indicative of beneficial ownership for any other
purpose. Except as indicated by the footnotes below, we believe, based on information furnished to us, that the persons and entities named
in the table below have sole voting and sole investment power with respect to all shares of common stock that they beneficially owned,
subject to applicable community property laws.
The percentage of shares beneficially owned is computed on the basis
of 27,198,214 shares of common stock outstanding as of November 21, 2024, after giving effect to the Merger and the Offering. Shares of
common stock that a person has the right to acquire within 60 days of November 21, 2024 are deemed outstanding for purposes of computing
the percentage ownership of the person holding such rights, but are not deemed outstanding for purposes of computing the percentage ownership
of any other person, except with respect to the percentage ownership of all directors and executive officers as a group. Unless otherwise
indicated, the address of each beneficial owner in the table below is c/o 8 The Green Ste 8490, Dover, Delaware, 19901.
Name
Shares of
Common
Stock
Beneficially
Owned
Percentage of
Common
Stock
Beneficially
Owned
5% Stockholders
Eilean Therapeutics, LLC
(1)
14,420,383
53.0
%
Deerfield Partners, L.P.
(2)
2,962,625
9.9
Entities affiliated with OrbiMed
(3)(1)
2,677,256
9.8
TPAV, LLC
(4)(1)
2,677,256
9.8
American Financial Group
(5)
1,722,222
6.3
Directors and Named Executive Officers
Iain Dukes, M.A., D.Phil.
(6)(1)
43,680
*
Nikolay Savchuk, Ph.D.
(7)(1)
26,208
*
Carl Gordon, CFA, Ph.D.
(3)(1)
2,677,256
9.8
Eddie Wang Rodriguez
-
-
All directors and executive officers as a group (4 persons)
2,747,144
10.1
*
Less than one percent.
(1)
The board of managers of this
stockholder exercises voting and investment power, and such board consists of four individuals, including Dr. Dukes, Dr. Savchuk, Dr.
Gordon and Mr. Rodriguez. As a result, none of these four individuals has sole or shared voting or investment power over the shares of
our common stock held by this stockholder. Each of OrbiMed, TPAV, LLC, Dr. Dukes and Dr. Savchuk hold membership interests in Eilean
and may be deemed to have an economic interest in the shares of common stock held by Eilean. Each of OrbiMed, TPAV, Dr. Dukes and Dr.
Savchuk disclaims beneficial ownership of these securities and this prospectus shall not be deemed an admission that any one of OrbiMed,
TPAV, Dr. Dukes or Dr. Savchuk is the beneficial owner of such securities for purposes of Section 16 or for any other purpose, except
to the extent of their respective pecuniary interests therein. The principal address for this stockholder is 8 The Green Suite 8183 Dover,
DE 19901.
147
(2)
The general partner of Deerfield
Partners, L.P. is Deerfield Mgmt, L.P. Deerfield Management Company, L.P. is the investment manager of Deerfield Partners, L.P. James
E. Flynn is the sole member of the general partner of each of Deerfield Mgmt, L.P. and Deerfield Management Company, L.P. Each of Mr.
Flynn and the entities listed in this footnote may be deemed to share voting and investment power over the shares held or beneficially
owned by Deerfield Partners, L.P. The address of this stockholder is 345 Park Avenue South, Floor 12, New York, NY 10010.
(3)
Consists of (i) 1,521,888 shares
of our common stock held directly by OrbiMed Private Investments VII, LP, or OPI VII, (ii) 925,635 shares of our common stock held directly
by OrbiMed Private Investments VIII, LP, or OPI VIII, and (iii) 114,733 shares of our common stock held directly by OrbiMed Private Investments
IX, LP, or OPI IX. OrbiMed Capital GP VII LLC, or GP VII, is the general partner of OPI VII. OrbiMed Capital GP VIII LLC, or GP VIII,
is the general partner of OPI VIII. OrbiMed Capital GP IX LLC, or GP IX, is the general partner of OPI IX. OrbiMed Advisors LLC, or OrbiMed
Advisors, is the managing member of GP VII, GP VIII, and GP IX. By virtue of such relationships, (i) OrbiMed Advisors and GP VII may
be deemed to have voting power and investment power over the securities held by OPI VII; (ii) OrbiMed Advisors and GP VIII may be deemed
to have voting power and investment power over the securities held by OPI VIII; and (iii) OrbiMed Advisors and GP IX may be deemed to
have voting power and investment power over the securities held by OPI IX. OrbiMed Advisors exercises voting and investment power through
a management committee comprising Dr. Gordon, Sven H. Borho, and W. Carter Neild, each of whom disclaims beneficial ownership of the
shares held by OPI VII, OPI VIII and OPI IX. Dr. Gordon is a member of our board of directors. The address for each of the entities and
individuals identified in this footnote is c/o OrbiMed Advisors LLC, 601 Lexington Avenue 54th Floor, New York, NY 10022.
(4)
Nikolay Savchuk is the sole
manager on the Board of Managers of TPAV, LLC and a member of our board of directors and our Chief Operating Officer and President. Dr.
Savchuk disclaims beneficial ownership of the securities held by TPAV, LLC except to the extent of his pecuniary interest therein. The
address for TPAV, LLC is 12730 High Bluff Drive, Suite 100, San Diego, CA 92130.
(5)
Consists of shares of common
stock held directly by Great American. Great American is a wholly-owned subsidiary of American Financial Group, Inc., or AFG, which may
be deemed to have beneficial ownership over the shares held by Great American. The principal business address for each of the entities
identified in this footnote is 301 East Fourth Street, Cincinnati, Ohio 45202. Not included in this total are 436,111 shares of common
stock beneficially owned by S. Craig Lindner, who serves as Co-CFO and a director of AFG, and 411,111 shares of common stock beneficially
owned by John B. Berding, who serves as President and a director of AFG.
(6)
Consists of 43,630 shares of
our common stock issuable upon exercise of outstanding stock options held by Dr. Dukes, which are exercisable within 60 days of November
21, 2024.
(7)
Consists of 26,208 shares of
our common stock issuable upon exercise of outstanding stock options held by Dr. Savchuk, which are exercisable within 60 days of November
21, 2024. Does not include 2,677,256 shares held by TPAV, LLC.
148
SELLING
STOCKHOLDERS
This prospectus covers
the resale by the selling stockholders identified below of 27,473,624 shares of common stock. The selling stockholders acquired our securities
in connection with the Merger and the Offering, or were pre-Merger stockholders of our predecessor, Venetian-1 Acquisition Corp. The registration
of the common stock of the selling stockholders through this prospectus constitutes a secondary offering and is not an offering by or
on behalf of the Company. We will not receive any proceeds from the resale of the common stock by the selling stockholders.
Except as disclosed in
the footnotes below, none of the selling stockholders has been an officer or director of ours or any of our predecessors or affiliates
within the past three years. Except as disclosed in the footnotes below, no selling stockholder had a material relationship with the company
or any of its affiliates within the last three years.
The following table and
the accompanying footnotes are based in part on information supplied to us by the selling stockholders. The table and footnotes assume
that the selling stockholders will sell all of the shares listed. However, because the selling stockholders may sell all or some of their
shares under this prospectus from time to time, or in another permitted manner, we cannot assure you as to the actual number of shares
that will be sold by the selling stockholders or that will be held by the selling stockholders after completion of any sales. We do not
know how long the selling stockholders will hold the shares before selling them.
The inclusion of any
shares in this table does not constitute an admission of beneficial ownership by the persons named below. Unless otherwise indicated,
based on the information supplied to us by or on behalf of the selling stockholders, no selling stockholder is a broker-dealer or an affiliate
of a broker-dealer.
Name
    of Selling Stockholders
(1)
Shares
    Owned Before the Offering
Shares
    Being Offered
(2)(3)
Shares
    Owned After the Offering(%)
(2)(3)
Barrett DiPaolo
3,125
3,125
(4)
*
Christine F. Linder Trust
25,000
25,000
*
Clara A. Linder Trust
25,000
25,000
*
Corinne E. Linder Trust
25,000
25,000
*
Craig and Frances Linder Center
    of Hope
25,000
25,000
*
CVI Investments, Inc.
750,000
750,000
*
Deerfield Partners, L.P.
2,692,625
2,692,625
*
Denman Street, LLC
75,000
75,000
*
Eilean Therapeutics LLC
14,420,383
14,420,383
(5)
*
Frances and Craig Linder Foundation
62,500
62,500
*
Frances R. Linder Living Trust
161,111
161,111
*
Gerald J. Berding
6,250
6,250
*
Great American Insurance Company
1,722,222
1,722,222
*
Ian Jacobs
175,000
175,000
(6)
*
John and Susan Berding Family
    Foundation
75,000
75,000
*
John B. Berding Irrevocable
    Children's Trust
111,111
111,111
*
Joseph Berding
10,000
10,000
*
Mark Tompkins
1,187,500
1,187,500
(7)
*
OrbiMed Private Investments
    IX, LP
229,733
229,733
(8)
*
OrbiMed Private Investments
    VII, LP
1,521,888
1,521,888
(8)
*
OrbiMed Private Investments
    VIII, LP
925,635
925,635
(8)
*
Paul J. Bambach
12,500
12,500
*
Raymond James & Associates,
    Inc.
--
137,705
(9)
*
S. Craig Linder Exempt Trust
25,000
25,000
*
S. Craig Linder Qualified
    Annuity Trust
62,500
62,500
*
SCL Dynasty Trust
25,000
25,000
*
Sichenzia Ross Ference Carmel
    LLP
9,375
9,375
(10)
*
Susan M. Berding
150,000
150,000
*
Thomas Berding
7,500
7,500
*
TPAV, LLC
2,677,256
2,677,256
(11)
*
Wedbush & Co., LLC
--
137,705
(12)
*
TOTAL
27,198,214
27,473,624
*
Less than 1%
(1)
See "
Security Ownership
of Certain Beneficial Owners and Management
" for additional information about shares held by these entities.
149
(2)
Applicable percentage ownership
is based on 27,198,214 shares of our common stock outstanding as of November 21, 2024.
(3)
Assumes the sale of all shares
offered in this prospectus.
(4)
Barrett DiPaolo is a Partner at Sichenzia Ross Ference Carmel
LLP and served as counsel to Venetian-1 Acquisition Corp., our predecessor.
(5)
Eilean Therapeutics, LLC is
Lomond's former parent company. The board of managers of Eilean Therapeutics, LLC consists of four individuals, including Dr. Dukes,
Dr. Savchuk, Dr. Gordon and Mr. Rodriguez. Each of OrbiMed, TPAV, LLC, Dr. Dukes and Dr. Savchuk hold membership interests in Eilean
and may be deemed to have an economic interest in the shares of common stock held by Eilean. Eil and Bala, each the licensor under the
Eli license agreement and the Bala license agreement, respectively, are each wholly-owned by Eilean Therapeutics, LLC.
(6)
Ian Jacobs is a former President,
Chief Executive Officer, Chief Financial Officer, Secretary and director of Venetian-1 Acquisition Corp., our predecessor.
(7)
Mark Tompkins is a former director
of Venetian-1 Acquisition Corp., our predecessor.
(8)
OrbiMed Private Investments
VII, LP, OrbiMed Private Investments VIII, LP, OrbiMed Private Investments IX, LP, each of which are affiliates of OrbiMed. Dr. Gordon
is one of our directors and is a member of OrbiMed.
(9)
Includes 137,705 shares of
common stock issuable upon exercise of warrants held by selling stockholder.
(10)
Sichenzia Ross Ference Carmel LLP
served as counsel to Venetian-1 Acquisition Corp., our predecessor.
(11)
Dr. Savchuk is the sole manager
on the Board of Managers of TPAV, LLC, a member of our board of directors and our Chief Operating Officer and President.
(12)
Includes 137,705 shares of
common stock issuable upon exercise of warrants held by selling stockholder.
150
PLAN
OF DISTRIBUTION
The selling stockholders,
which as used herein includes donees, pledgees, transferees or other successors-in-interest selling shares of common stock or interests
in shares of common stock received after the date of this prospectus from a selling stockholder as a gift, pledge, partnership distribution
or other transfer, may, from time to time, sell, transfer or otherwise dispose of any or all of their shares of common stock or interests
in shares of common stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions.
At and after such time, the selling stockholders may sell all or a portion of their shares through public or private transactions at fixed
prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying prices determined
at the time of sale, or at negotiated prices.
The selling stockholders
may use any one or more of the following methods when disposing of shares or interests therein:
●
purchases by a broker-dealer
as principal and resale by such broker-dealer for its own account pursuant to this prospectus;
●
ordinary brokerage transactions
and transactions in which the broker-dealer solicits purchasers;
●
block trades in which the broker-dealer
so engaged will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the
transaction;
●
an over-the-counter distribution
in accordance with the rules of the applicable exchange;
●
through trading plans entered
into by a selling stockholder pursuant to Rule 10b5-1 under the Exchange Act that are in place at the time of an offering pursuant to
this prospectus and any applicable prospectus supplement hereto that provide for periodic sales of their securities on the basis of parameters
described in such trading plans;
●
short sales;
●
distribution to employees,
members, limited partners or stockholders of the selling stockholders;
●
through the writing or settlement
of options or other hedging transactions, whether through an options exchange or otherwise;
●
by pledge to secured debts
and other obligations;
●
delayed delivery arrangements;
●
to or through underwriters
or agents;
●
in "at the market"
offerings, as defined in Rule 415 under the Securities Act, at negotiated prices, at prices prevailing at the time of sale or at prices
related to such prevailing market prices, including sales made directly on a national securities exchange or sales made through a market
maker other than on an exchange or other similar offerings through sales agents;
●
in privately negotiated transactions;
●
in options transactions; and
●
through a combination of any
of the above methods of sale, as described below, or any other method permitted pursuant to applicable law.
151
The selling stockholders
may, from time to time, pledge or grant a security interest in some or all of the shares of common stock owned by them and, if they default
in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common stock, from time
to time, under this prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities
Act amending the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders
under this prospectus. The selling stockholders also may transfer the shares of common stock in other circumstances, in which case the
transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.
There can be no assurance that the selling stockholders
will sell all or any of the securities offered by this prospectus. In addition, the selling stockholders may also sell securities under
Rule 144 under the Securities Act, if available, or in other transactions exempt from registration, rather than under this prospectus.
The selling stockholders have the sole and absolute discretion not to accept any purchase offer or make any sale of securities if they
deem the purchase price to be unsatisfactory at any particular time.
In connection with the
sale of our common stock or interests therein, the selling stockholders may enter into hedging transactions with broker-dealers or other
financial institutions, which may in turn engage in short sales of the common stock in the course of hedging the positions they assume.
The selling stockholders may also sell shares of our common stock short and deliver these securities to close out their short positions,
or loan or pledge the common stock to broker-dealers that in turn may sell these securities. The selling stockholders may also enter into
options or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities
which require the delivery to such broker-dealer or other financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).
The aggregate proceeds
to the selling stockholders from the sale of the common stock offered by them will be the purchase price of the common stock less discounts
or commissions, if any. Each of the selling stockholders reserves the right to accept and, together with their agents from time to time,
to reject, in whole or in part, any proposed purchase of common stock to be made directly or through agents. We will not receive any of
the proceeds from any sales of common stock by the selling stockholders.
The selling stockholders
and any underwriters, broker-dealers or agents that are involved in selling the common stock or interests therein may be deemed to be
"underwriters" within the meaning of Section 2(a)(11) of the Securities Act. In such event, any commissions received by such
broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act. Each selling stockholder in the Offering has informed us that it does not have any agreement or understanding,
directly or indirectly, with any person to distribute the common stock. If a selling stockholder is deemed to be an "underwriter"
within the meaning of the Securities Act, it will be subject to the prospectus delivery requirements of the Securities Act.
To the extent required,
the shares of our common stock to be sold, the names of the selling stockholders, the respective purchase prices and public offering prices,
the names of any agents, dealer or underwriter, any applicable commissions or discounts with respect to a particular offer will be set
forth in an accompanying prospectus supplement or, if appropriate, a post-effective amendment to this registration statement that includes
this prospectus.
In order to comply with
the securities laws of some states, if applicable, the common stock may be sold in these jurisdictions only through registered or licensed
brokers or dealers. In addition, in some states the common stock may not be sold unless it has been registered or qualified for sale or
an exemption from registration or qualification requirements is available and is complied with.
152
We have advised the selling
stockholders that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of shares in the market and to
the activities of the selling stockholders and their affiliates. In addition, we will make copies of this prospectus (as it may be supplemented
or amended from time to time) available to the selling stockholders for the purpose of satisfying the prospectus delivery requirements
of the Securities Act. The selling stockholders may indemnify any broker-dealer that participates in transactions involving the sale of
the shares against certain liabilities, including liabilities arising under the Securities Act.
We have agreed to indemnify
the selling stockholders against certain liabilities, including liabilities under the Securities Act and state securities laws, relating
to the registration of the shares offered by this prospectus.
Agents, broker-dealers
and underwriters may be entitled to indemnification by us and the selling stockholders against certain civil liabilities, including liabilities
under the Securities Act, or to contribution with respect to payments which the agents, broker-dealers or underwriters may be required
to make in respect thereof.
We have agreed with the
selling stockholders to keep this registration statement of which this prospectus constitutes a part effective until the earlier of five
years from the date it is declared effective by the SEC and the date on which all of the shares of common stock required to be registered
by us have been sold or otherwise transferred other than to assignees pursuant to the Registration Rights Agreement. See the section of
this prospectus captioned "
Shares Eligible for Future Sale — Registration Rights
."
Certain of our stockholders have entered
into lock-up agreements. See the section of this prospectus captioned "
Shares Eligible for Future Sale —Lock-Up
Agreements
."
153
DESCRIPTION
OF CAPITAL STOCK
The following description
summarizes the material terms of our capital stock. Because it is only a summary, it does not contain all the information that may be
important to you. For a complete description, you should refer to our amended and restated certificate of incorporation and our amended
and restated bylaws, which are included as exhibits hereto, and to the applicable provisions of Delaware law.
We have authorized capital
stock consisting of 300,000,000 shares of common stock and 10,000,000 shares of preferred stock. Except as otherwise provided in the certificate
of designation of any series of preferred stock we may issue, the number of authorized shares of common stock or preferred stock may from
time to time be increased or decreased (but not below the number of shares of such class outstanding) by the affirmative vote of the holders
of a majority in voting power of the outstanding shares of our capital stock.
As of the date of this
prospectus, we had 27,198,214 shares of common stock issued and outstanding, and no shares of preferred stock issued and outstanding.
Unless stated otherwise, the following discussion summarizes the terms and provisions of our amended and restated certificate of incorporation
and our restated bylaws.
Common Stock
Dividend Rights
Subject to preferences
that may apply to any shares of preferred stock outstanding at the time, the holders of our common stock are entitled to receive dividends
out of funds legally available if our board of directors, in its discretion, determines to issue dividends and then only at the times
and in the amounts that our board of directors may determine.
Voting Rights
Holders of our common
stock are entitled to one vote for each share of common stock held on all matters submitted to a vote of stockholders. We have not provided
for cumulative voting for the election of directors in our amended and restated certificate of incorporation. Accordingly, holders of
a majority of the shares of our common stock will be able to elect all of our directors. Our amended and restated certificate of incorporation
establishes a classified board of directors, to be divided into three classes with staggered three-year terms. Only one class of directors
will be elected at each annual meeting of our stockholders, with the other classes continuing for the remainder of their respective three-year
terms.
No Preemptive or Similar
Rights
Our common stock is not
entitled to preemptive rights, and is not subject to redemption or sinking fund provisions.
Right to Receive Liquidation
Distributions
Upon our liquidation,
dissolution, or winding-up, the assets legally available for distribution to our stockholders would be distributable ratably among the
holders of our common stock and any preferred stock outstanding at that time, subject to prior satisfaction of all outstanding debt and
liabilities and the preferential rights of and the payment of liquidation preferences, if any, on any outstanding shares of redeemable
convertible preferred stock.
Preferred Stock
We are authorized, subject
to limitations prescribed by Delaware law, to issue preferred stock in one or more series, to establish from time to time the number of
shares to be included in each series, and to fix the designation, powers, preferences, and rights of the shares of each series and any
of its qualifications, limitations, or restrictions, in each case without further vote or action by our stockholders. Our board of directors
can also increase or decrease the number of shares of any series of preferred stock, but not below the number of shares of that series
then outstanding, without any further vote or action by our stockholders. Our board of directors may authorize the issuance of preferred
stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of our common stock.
The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could,
among other things, have the effect of delaying, deferring, or preventing a change in our control and might adversely affect the market
price of our common stock and the voting and other rights of the holders of our common stock. We have no current plan to issue any shares
of preferred stock.
154
Stock Options
As of the date of this
prospectus, we had outstanding stock options to purchase an aggregate of 4,329,617 shares of our common stock, with an exercise price
of $1.30 per share, which were issued under the Lomond Plan that was assumed in connection with the Merger.
Warrants
As of the date hereof,
the Placement Agent Warrants consist of two warrants and entitle their holders to purchase an aggregate of 275,410 shares of common stock,
with a term of four years and an exercise price of $4.00 per share (as may be adjusted for stock splits, stock dividends, combinations,
recapitalizations or similar events).
The Placement Agent Warrants
contain customary provisions for adjustment in the event of stock splits, subdivision or combination, mergers and similar events.
See the section titled
"
Description of the Merger, the Offering, and Related Transactions—Registration Rights Agreement
" for a description
of the registration rights granted to (among others) the holders of the Placement Agent Warrants, which description is incorporated herein
by reference.
This summary descriptions
of the warrants described above is qualified in their entirety by reference to the form of such warrants filed as an exhibit to this prospectus.
Anti-Takeover Provisions
The provisions of the
DGCL, our amended and restated certificate of incorporation, and our amended and restated bylaws could have the effect of delaying, deferring,
or discouraging another person from acquiring control of our Company. These provisions, which are summarized below, are expected to discourage
certain types of coercive takeover practices and inadequate takeover bids and encourage persons seeking to acquire control of our Company
to first negotiate with our board of directors. We believe that the benefits of increased protection of our potential ability to negotiate
with an unfriendly or unsolicited acquirer outweigh the disadvantages of discouraging a proposal to acquire us because negotiation of
these proposals could result in an improvement of their terms.
Section 203 of the
DGCL
We are governed by the
provisions of Section 203 of the Delaware General Corporation Law regulating corporate takeovers. This section prevents some Delaware
corporations from engaging, under some circumstances, in a business combination, which includes a merger or sale of at least 10% of the
corporation's assets with any interested stockholder, meaning a stockholder who, together with affiliates and associates, owns or,
within three years prior to the determination of interested stockholder status, did own 15% or more of the corporation's outstanding
voting stock, unless:
●
the transaction is approved
by the board of directors prior to the time that the interested stockholder became an interested stockholder;
●
upon closing of the transaction
that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock
of the corporation outstanding at the time the transaction began, excluding for purposes of determining the voting stock outstanding
those shares owned (i) by persons who are directors and also officers and (ii) employee stock plans in which employee participants
do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer;
or
●
subsequent to such time that
the stockholder became an interested stockholder the business combination is approved by the board of directors and authorized at an
annual or special meeting of stockholders by at least two-thirds of the outstanding voting stock which is not owned by the
interested stockholder.
155
A Delaware corporation
may "opt out" of these provisions with an express provision in its original certificate of incorporation or an express provision
in its certificate of incorporation or amended and restated bylaws resulting from a stockholders' amendment approved by at least
a majority of the outstanding voting shares. We have not opted out of these provisions. As a result, mergers or other takeover or change
in control attempts of us may be discouraged or prevented.
Amended and Restated Certificate of Incorporation
and Amended and Restated Bylaw Provisions
Our amended and restated
certificate of incorporation and our amended and restated bylaws include a number of provisions that may have the effect of deterring
hostile takeovers or delaying or preventing changes in control of our management team, including the following:
●
Board Vacancies
.
Our amended and restated certificate of incorporation and amended and restated bylaws authorize our board of directors to fill vacant
directorships, including newly-created seats. In addition, the number of directors constituting our board of directors is set only by
resolution adopted by a majority vote of our entire board of directors. These provisions prevent a stockholder from increasing the size
of our board of directors and gaining control of our board of directors by filling the resulting vacancies with its own nominees.
●
Classified Board
.
Our amended and restated certificate of incorporation and amended and restated bylaws provide that our board of directors will be classified
into three classes of directors, each of which will hold office for a three-year term. In addition, directors may only be removed from
the board of directors for cause and only by the approval of 66 2/3% of our then-outstanding shares of our common stock. A third party
may be discouraged from making a tender offer or otherwise attempting to obtain control of us as it is more difficult and time consuming
for stockholders to replace a majority of the directors on a classified board of directors.
●
Stockholder Action; Special
Meetings of Stockholders
. Our amended and restated certificate of incorporation provides that stockholders are not able to take
action by written consent, and are only able to take action at annual or special meetings of our stockholders. Stockholders are not permitted
to cumulate their votes for the election of directors. Our amended and restated bylaws further provides that special meetings of our
stockholders may be called only by a majority vote of our entire board of directors, the chairman of our board of directors or our chief
executive officer.
●
Advance Notice Requirements
for Stockholder Proposals and Director Nominations
. Our amended and restated bylaws provide advance notice procedures for stockholders
seeking to bring business before our annual meeting of stockholders, or to nominate candidates for election as directors at any meeting
of stockholders. Our amended and restated bylaws also specify certain requirements regarding the form and content of a stockholder's
notice. These provisions may preclude our stockholders from bringing matters before our annual meeting of stockholders or from making
nominations for directors at our meetings of stockholders.
●
Issuance of Undesignated
Preferred Stock
. Our board of directors has, the authority, without further action by the holders of common stock, to issue up
to 10,000,000 shares of undesignated preferred stock with rights and preferences, including voting rights, designated from time to time
by the board of directors. The existence of authorized but unissued shares of preferred stock will enable our board of directors to render
more difficult or discourage an attempt to obtain control of us by means of a merger, tender offer, proxy contest or otherwise.
156
Choice of Forum
Our amended and restated
certificate of incorporation provides that unless we consent in writing to the selection of an alternative forum, the Court of Chancery
of the State of Delaware (or, in the event the Chancery Court does not have jurisdiction, the federal district court for the District
of Delaware or other state courts of the State of Delaware) is the sole and exclusive forum for any derivative action or proceeding brought
on our behalf; any action asserting a breach of fiduciary duty owed by any of our directors, officers or other employee to us or our stockholders;
any action asserting a claim against us arising pursuant to the Delaware General Corporation Law, our amended and restated certificate
of incorporation or our amended and restated bylaws; any action asserting a claim against us that is governed by the internal affairs
doctrine; or  any action as to which the DGCL confers jurisdiction on the Court of Chancery, except for any action asserted to enforce
any liability or duty created by the Securities Exchange Act of 1934, as amended, or, in each case, rules and regulations promulgated
thereunder, for which there is exclusive federal jurisdiction. Our amended and restated certificate of incorporation also provides that
the U.S. federal district courts is the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities
Act. Some companies that adopted a similar federal district court forum selection provision were subject to a suit in the Chancery Court
of Delaware by stockholders who asserted that the provision is not enforceable. While the Delaware Supreme Court held that such federal
district court forum selection provision was in fact valid, there can be no assurance that federal courts or other state courts will follow
the holding of the Delaware Supreme Court or determine that our federal district court forum selection provision should be enforced in
a particular case. These choice of forum provisions do not apply to actions brought to enforce a duty or liability created by the Exchange
Act. We intend for the choice of forum provision regarding claims arising under the Securities Act to apply despite the fact that Section
22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all actions brought to enforce any duty or
liability created by the Securities Act or the rules and regulations thereunder. There is uncertainty as to whether a court would enforce
such provision with respect to claims under the Securities Act. Our exclusive forum provision does not relieve us of our duties to comply
with the federal securities laws and the rules and regulations thereunder, and our stockholders will not be deemed to have waived our
compliance with these laws, rules and regulations.
These exclusive forum
provisions may limit the ability of our stockholders to bring a claim in a judicial forum that such stockholders find favorable for disputes
with us or our directors, officers or employees, which may discourage such lawsuits against us and our directors, officers and employees.
Alternatively, if a court were to find such provisions contained in our certificate of incorporation to be inapplicable or unenforceable
in an action, we may incur additional costs associated with resolving such action in other jurisdictions, we may incur additional costs
associated with resolving such action in other jurisdictions, which could materially adversely affect our business, financial condition
and operating results.
Transfer Agent and
Registrar
The transfer agent and
registrar for our common stock is VStock Transfer, LLC. The transfer agent's address is 18 Lafayette Place, Woodmere, New York 11598,
and its telephone number is 212-828-8436.
Stock Quotation
OUR COMMON STOCK IS CURRENTLY
NOT LISTED ON A NATIONAL SECURITIES EXCHANGE OR ANY OTHER EXCHANGE, OR QUOTED ON AN OVER-THE-COUNTER MARKET. WE INTEND TO CAUSE OUR COMMON
STOCK TO BE QUOTED ON THE OTC MARKETS QB TIER AS SOON AS PRACTICABLE FOLLOWING THE EFFECTIVENESS OF THE REGISTRATION STATEMENT. HOWEVER,
WE CANNOT ASSURE YOU THAT WE WILL BE ABLE TO DO SO AND, EVEN IF WE DO SO, THERE CAN BE NO ASSURANCE THAT OUR COMMON STOCK WILL CONTINUE
TO BE QUOTED ON THE OTC MARKETS OR QUOTED OR LISTED ON ANY OTHER MARKET OR EXCHANGE, OR THAT AN ACTIVE TRADING MARKET FOR OUR COMMON STOCK
WILL DEVELOP OR CONTINUE.
157
SHARES
ELIGIBLE FOR FUTURE SALE
Prior to the Merger,
there was no public market for our common stock. Future sales of our common stock, including shares issued upon the exercise of options
or warrants that we may issue, in the public market after the Merger, or the perception that those sales may occur, could cause the prevailing
price for our common stock to fall or impair our ability to raise equity capital in the future. As described below, only a limited number
of shares of our common stock will be available for sale in the public market for a period of several months after consummation of the
Merger due to contractual and legal restrictions on resale described below. Future sales of our common stock in the public market either
before (to the extent permitted) or after restrictions lapse, or the perception that those sales may occur, could adversely affect the
prevailing price of our common stock at such time and our ability to raise equity capital at a time and price we deem appropriate.
Upon the closing of
the Offering, we had 27,198,214 shares of common stock outstanding, of which our directors and executive officers beneficially own an
aggregate of 5,424,400 shares. Of those outstanding shares, no shares of common stock are freely tradable, without restriction, as of
the date of this prospectus. No shares issued in connection with the Merger or the Offering can be publicly sold under Rule 144 under
the Securities Act until 12 months after the date of filing of our closing 8-K on the Merger.
In addition, we are subject
to a market stand-off provision described, and our directors and officers are subject to lock-up agreements, which are respectively described
in further detail in the sections of this prospectus "
Description of the Merger, the Offering, and Related Transactions —The
Subscription Agreement—Restrictions on Certain Equity Sales and Certain Governance Changes
" and "
Description
of the Merger, the Offering, and Related Transactions—Lock-Up Agreements
".
Sale of Restricted
Shares
All of the 27,198,214
shares of common stock outstanding upon completion of the Offering and the Merger are "restricted securities" as such term
is defined in Rule 144. These restricted securities were issued and sold by us, or will be issued and sold by us, in private transactions
and are eligible for public sale only if registered under the Securities Act or if they qualify for an exemption from registration under
the Securities Act, including the exemptions provided by Rule 144 or Rule 701, which rules are summarized below.
Rule 144
A person who has beneficially
owned restricted shares of our common stock for at least six months would be entitled to sell their securities provided that (i) such
person is not deemed to have been one of our affiliates at the time of, or at any time during the three months preceding, a sale and (ii)
we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale and have filed all required
reports under Section 13 or 15(d) of the Exchange Act during the 12 months (or such shorter period as we were required to file reports)
preceding the sale. Persons who have beneficially owned restricted shares of our common stock for at least six months but who are our
affiliates at the time of, or any time during the three months preceding, a sale, would be subject to additional restrictions, by which
such person would be entitled to sell within any three-month period a number of securities that does not exceed 1% of the then outstanding
shares of the same class which, immediately after the Merger and the Offering, equaled approximately 271,982 shares of our common stock.
Sales by our affiliates
under Rule 144 are also subject to certain requirements relating to manner of sale, notice and the availability of current public information
about us.
In addition, Rule 144
is not available for the resale of securities initially issued by shell companies (other than business combination related shell companies)
or issuers that have been at any time previously a shell company. However, Rule 144 also includes an important exception to this prohibition
if the following conditions are met:
●
the issuer of the securities
that was formerly a shell company has ceased to be a shell company;
●
the issuer of the securities
is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;
158
●
the issuer of the securities
has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter
period that the issuer was required to file such reports and materials), other than Form 8-K reports; and
●
at least one year has elapsed
from the time that the issuer filed current Form 10 type information with the SEC.
Prior to the Merger,
we were a shell company, and the closing 8-K on the Merger included Form 10 type information. As a result, Rule 144 will remain unavailable
for our securityholders for at least twelve months following the filing of the closing 8-K on the Merger.
Rule 701
In general, under Rule 701
as currently in effect, any of our employees, directors, officers, consultants or advisors who acquired options to purchase common stock
from Lomond in connection with a written compensatory stock or option plan or other written agreement, in compliance with Rule 701
under the Securities Act, before the effective date of the Merger (to the extent such common stock is not subject to a lock-up agreement)
is entitled to rely on Rule 701 to resell shares underlying such options beginning 90 days after the Merger if they comply with
Rule 144, including Rule 144(i), but without complying with the holding period requirements contained in Rule 144. Accordingly,
subject to Rule 144(i) and any applicable lock-up agreements, beginning 90 days after the Merger, under Rule 701 persons who
are not our "affiliates," as defined in Rule 144, may resell those shares without complying with the minimum holding
period or public information requirements of Rule 144, and persons who are our "affiliates" may resell those shares without
compliance with Rule 144's minimum holding period requirements, subject to any applicable lock-up agreements.
Registration Rights
In connection with the
Merger and the Offering, we entered into the Registration Rights Agreement pursuant to which we agreed to file the Registration Statement
covering the reoffer and resale of up to 27,198,214 shares of our common stock. For a description of the Registration Rights Agreement
that we entered into in connection with the Merger and the Offering, see "
Description of the Merger, the Offering, and Related
Transactions—Registration Rights Agreement
" above. All descriptions of the Registration Rights Agreement herein are qualified
in their entirety by reference to the text thereof filed as Exhibit 10.6 hereto and incorporated herein by reference.
Lock-Up Agreements
As a condition to the
closing of the Offering pursuant to the Subscription Agreement, our directors and officers entered into the Lock-Up Agreements. Pursuant
to such Lock-Up Agreements, our directors and officers each agreed that, subject to certain exceptions, they will not, for a period commencing
on the closing date of the Merger and ending on the earlier of: (i) 60 days after the common stock is listed on a National Securities
Exchange (as defined in the Registration Rights Agreement) and (ii) the later of (A) 18 months after the final closing of the Offering
and (B) 60 days after the first day on which both the common stock is traded on an Approved OTC Market (as defined in the Registration
Rights Agreement) and a registration statement with respect to the resale of all of the Shares and Other Shares (as defined in the Subscription
Agreement) has been declared effective by the SEC, exchange, dispose of, or enter into any swap, hedge or similar arrangement regarding,
any shares of common stock or securities convertible into or exercisable or exchangeable for shares of common stock in each case held
immediately following the closing of the private placement offering or thereafter acquired by any means (including, for the avoidance
of doubt, through the receipt of equity incentive awards from us), and whether held beneficially or of record, but excluding (i) any shares
of common stock purchased such persons or their affiliates in the private placement offering, and (ii) any shares of common stock received
by such persons or their affiliates upon the conversion of the SAFEs. The Lock-Up Agreements contain customary transfer exceptions.
Equity Plans
We intend to file with
the SEC a registration statement on Form S-8 under the Securities Act covering the shares of common stock that are outstanding or reserved
for issuance under the Lomond Plan and the 2024 Plan. Such registration statement is expected to be filed and become effective as soon
as practicable after the consummation of the Merger (but no less than 60 days thereafter pursuant to SEC rules that apply to former shell
companies). Accordingly, shares registered under such registration statement will be available for sale in the open market following
its effective date, subject to vesting restrictions, Rule 144 volume limitations and lock-up agreements, if applicable. For a more
complete discussion of our stock plans, see the section titled "
Executive Compensation—Equity Plans
."
159
LEGAL
MATTERS
The validity of the shares
of our common stock being offered by this prospectus will be passed upon for us by Snell & Wilmer L.L.P., San Diego, California.
EXPERTS
The balance sheets of
Lomond Therapeutics, Inc. as of December 31, 2023 and 2022, and the related statements of operations, redeemable convertible preferred
stock and stockholders' deficit, and cash flows for each of the years then ended, have been audited by EisnerAmper LLP, independent
registered public accounting firm, as stated in their report which is included in this registration statement. Such financial statements
have been included in this registration statement in reliance on the report of such firm given upon their authority as experts in accounting
and auditing.
The financial statements of Venetian-1 Acquisition Corp. as of December 31, 2023 and 2022 and for the years ended December 31, 2023 and
2022 included in this prospectus of Lomond Therapeutics Holdings, Inc., which is referred to and made a part of this Prospectus and Registration
Statement, have been audited by Grassi & Co., CPAs, P.C., independent registered public accounting firm, as set forth in their report
appearing elsewhere herein (which contains an explanatory paragraph relating to substantial doubt about the ability of Venetian-1 Acquisition
Corp. to continue as a going concern as described in Note 6 to the financial statements), and are included in reliance upon such report
given on the authority of such firm as experts in accounting and auditing.
WHERE
YOU CAN FIND MORE INFORMATION
We have filed with the
SEC this registration statement on Form S-1 under the Securities Act with respect to the shares of common stock being offered by this
prospectus. This prospectus, which constitutes a part of this registration statement, does not contain all of the information in this
registration statement and its exhibits. For further information with respect to us and the common stock offered by this prospectus, you
should refer to this registration statement and the exhibits filed as part of this document. Statements contained in this prospectus as
to the contents of any contract or any other document referred to are not necessarily complete, and in each instance, we refer you to
the copy of the contract or other document filed as an exhibit to this registration statement. Each of these statements is qualified in
all respects by this reference.
We are subject to the
informational requirements of the Exchange Act and file annual, quarterly and current reports, proxy statements and other information
with the SEC. You can read our SEC filings, including this registration statement, over the Internet on the SEC's website at
http://www.sec.gov
.
You may also request a copy of these filings, at no cost, by writing or telephoning us at: Lomond Therapeutics Holdings, Inc., 8 The Green
Suite 8183, Dover, Delaware 19901, (212) 739-6400.
160
INDEX TO FINANCIAL
STATEMENTS
Lomond Therapeutics,
Inc.
Audited Financial Statements for the Years
Ended December 31, 2023 and 2022
Page
Report of Independent Registered Public Accounting Firm
F-3
Financial Statements Balance Sheets as of December 31, 2023 and 2022
F-4
Statements of Operations for the years ended December 31, 2023 and 2022
F-5
Statements of Redeemable Convertible Preferred Stock and Stockholders' Deficit for the years ended December 31, 2023 and 2022
F-6
Statements of Cash Flows for the years ended December 31, 2023 and 2022
F-7
Notes to Financial Statements
F-8
Unaudited Condensed Financial Statements for
the Nine Months Ended September 30, 2024 and 2023
Page
Financial
    Statements
Condensed
    Balance Sheets as of September 30, 2024 (unaudited) and December 31, 2023
F-27
Condensed
    Statements of Operations for the three and nine months ended September 30, 2024 and 2023 (unaudited)
F-28
Condensed
    Statements of Redeemable Convertible Preferred Stock and Stockholders' Deficit for the three and nine months ended September
    30, 2024 and 2023 (unaudited)
F-29
Condensed
    Statements of Cash Flows for the nine months ended September 30, 2024 and 2023 (unaudited)
F-30
Notes
    to Financial Statements (unaudited)
F-31
Lomond Therapeutics,
Inc. and Venetian-1 Acquisition Corp.
Unaudited Combined Pro
Forma Financial Statements for the Year Ended December 31, 2023 and the Nine Months Ended September 30, 2024
Page
Unaudited Pro Forma Combined Financial Information
F-45
Balance Sheet as of September 30, 2024
F-47
Statement of Operations for the Nine Months Ended September 30, 2024
F-48
Statement of Operations for the Year Ended December 31, 2023
F-49
Notes to Unaudited Pro Forma Financial Statements
F-50
Venetian-1 Acquisition
Corp.
Audited Financial Statements for the Years
Ended December 31, 2023 and 2022
Page
Report of Independent Registered Public Accounting Firm
F-53
Balance Sheets as of December 31, 2023 and 2022
F-54
Statements of Operations for the Years Ended December 31, 2023 and 2022
F-55
Statements of Changes in Stockholders' Deficit for the Years Ended December 31, 2023 and
    2022
F-56
Statements of Cash Flows for the Years Ended December 31, 2023 and 2022
F-57
Notes to Financial Statements
F-58
Unaudited Condensed Financial
Statements for the Three and Nine Months Ended September 2024 and 2023
Page
Condensed Balance Sheets
F-61
Condensed Statements of Operations
F-62
Condensed Statement of Changes in Stockholders' Deficit
F-63
Condensed Statement of Cash Flows
F-64
Notes to Condensed Financial Statements
F-65
F-
1
Lomond Therapeutics, Inc.
Financial Statements
As of and for the years ended December 31, 2023
and 2022
F-
2
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
To the Board of Directors and Stockholders of
Lomond Therapeutics, Inc.
Opinion on the Financial Statements
We have audited the accompanying balance sheets
of Lomond Therapeutics, Inc. (the "Company") as of December 31, 2023 and 2022, and the related statements of operations, redeemable
convertible preferred stock and stockholders' deficit, and cash flows for each of the years then ended, and the related notes (collectively
referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects,
the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each
of the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our
audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB")
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the
standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement,
whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining,
on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that our audits provide a reasonable basis for our opinion.
/s/ EisnerAmper LLP
We have served as the Company's auditor
since 2024.
EISNERAMPER LLP
Philadelphia, Pennsylvania
November 7, 2024
F-
3
Lomond Therapeutics, Inc.
Balance Sheets
As of December 31, 2023 and 2022
As of December 31,
2023
2022
Assets
Current assets:
Cash
$
800,728
$
507,437
Total assets
$
800,728
$
507,437
Liabilities, Redeemable Convertible Preferred Stock, and Stockholders' Deficit
Current liabilities:
Accrued expenses and other current liabilities - related party
$
856,144
$
919,281
Total current liabilities
856,144
919,281
Notes payable - related party
-
3,840,000
Total liabilities
856,144
4,759,281
Commitments and contingencies (Note 4)
Redeemable convertible preferred stock: $0.0001 par value; 13,661,416 shares authorized, issued, and outstanding. Aggregate liquidation preference: $5,500,001
5,466,925
5,466,925
Stockholders' Deficit
Common stock: $0.0001 par value; 19,000,000 shares authorized; and 758,967 shares issued and outstanding
76
76
Additional paid-in capital
16,203,254
2,065,542
Accumulated deficit
(21,725,671
)
(11,784,387
)
Total stockholders' deficit
(5,522,341
)
(9,718,769
)
Total liabilities, redeemable convertible preferred stock, and stockholders' deficit
$
800,728
$
507,437
The accompanying notes are an integral part of
these financial statements.
F-
4
Lomond Therapeutics, Inc.
Statements of Operations
For the years ended December 31, 2023 and 2022
Years Ended December 31,
2023
2022
Operating expenses:
Research and development - related party
$
9,729,437
$
4,164,438
General and administrative
20,642
75,982
Total operating expenses
9,750,079
4,240,420
Loss from operations
(9,750,079
)
(4,240,420
)
Other income (expense):
Interest expense - related party
(191,205
)
(114,879
)
Total other expense, net
(191,205
)
(114,879
)
Net loss
$
(9,941,284
)
$
(4,355,299
)
Net loss per share attributable to common stockholders, basic and diluted
$
(13.10
)
$
(5.74
)
Weighted-average shares of common stock outstanding, basic and diluted
758,967
758,967
The accompanying notes are an integral part of
these financial statements.
F-
5
Lomond Therapeutics, Inc.
Statements of Redeemable Convertible Preferred Stock and Stockholders' Deficit
For the years ended December 31, 2023 and 2022
Redeemable
Convertible
Preferred
Common
Stock
Additional
Paid-In
Accumulated
Total
Stockholders'
Shares
Amount
Shares
Amount
Capital
Deficit
Deficit
Balance at January 1, 2022
13,661,416
$
5,466,925
758,967
$
76
$
54,930
$
(7,429,088
)
$
(7,374,082
)
Cash contribution from parent
-
-
-
-
1,996,000
-
1,996,000
Stock-based compensation
-
-
-
-
29,165
-
29,165
Reimbursement of equity issuance cost to parent
-
-
-
-
(14,553
)
-
(14,553
)
Net loss
-
-
-
-
-
(4,355,299
)
(4,355,299
)
Balance at December 31, 2022
13,661,416
$
5,466,925
758,967
$
76
$
2,065,542
$
(11,784,387
)
$
(9,718,769
)
Cash contribution from parent
-
-
-
-
8,711,966
-
8,711,966
Assumption of promissory notes and related accrued interest by parent
-
-
-
-
5,426,120
-
5,426,120
Stock-based compensation
-
-
-
-
5,428
-
5,428
Reimbursement of equity issuance cost to parent
-
-
-
-
(5,802
)
-
(5,802
)
Net loss
-
-
-
-
-
(9,941,284
)
(9,941,284
)
Balance at December 31, 2023
13,661,416
$
5,466,925
758,967
$
76
$
16,203,254
$
(21,725,671
)
$
(5,522,341
)
The accompanying notes are an integral part of
these financial statements.
F-
6
Lomond Therapeutics, Inc.
Statements of Cash Flows
For the years ended December 31, 2023 and 2022
For the Year Ended
December 31,
2023
2022
Cash flows from operating activities:
Net loss
$
(9,941,284
)
$
(4,355,299
)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation
5,428
29,165
Changes in operating assets and liabilities:
Accrued expenses and other current liabilities - related party
1,522,983
2,809,281
Net cash used in operating activities
(8,412,873
)
(1,516,853
)
Cash flows from financing activities:
Proceeds from capital contribution by parent
8,711,966
1,996,000
Reimbursement of equity issuance cost to parent
(5,802
)
(14,553
)
Net cash provided by financing activities
8,706,164
1,981,447
Net increase in cash
293,291
464,594
Cash, beginning of year
507,437
42,843
Cash, end of year
$
800,728
$
507,437
Supplemental non-cash financing activities:
Issuance of promissory notes to settle accrued expenses
$
1,280,036
$
3,840,000
Assumption of promissory notes and related accrued interest by parent
$
5,426,120
$
-
The accompanying notes are an integral part of
these financial statements.
F-
7
Lomond Therapeutics, Inc.
Notes to the Financial Statements
As of and for the years ended December 31, 2023 and 2022
1
Organization and Description
of Business
Lomond Therapeutics, Inc. (the "Company")
is a biopharmaceutical company involved in the discovery and development of small molecule inhibitors that target escape mutations in
hematologic cancers. The Company was incorporated on January 22, 2020, pursuant to the laws of the State of Delaware. On July 1, 2022,
shareholders of the Company contributed and transferred all outstanding common stock, stock options, and redeemable convertible preferred
stock of the Company to Eilean Therapeutics, LLC ("Eilean", or the "Parent") in exchange for common unit ownership
in Eilean (the "Eilean transaction"). After the Eilean transaction, Eilean became the sole shareholder of the Company.
Liquidity
Since inception, the Company has been
primarily performing research and development activities, establishing and maintaining its intellectual property, and raising capital
to support and expand its operations. The Company has funded its operations primarily through the sale of its series seed redeemable convertible
preferred stock and contributions from it's Parent. The Company does not yet have a product that has been approved by the FDA, has
not generated any product sales revenues and has not yet achieved profitable operations, nor has it ever generated positive cash flows
from operations. There is no assurance that profitable operations, if achieved, could be sustained on a continuing basis. Further, the
Company's future operations are dependent on the success of the Company's efforts to raise additional capital, its research
and commercialization efforts, regulatory approval, and, ultimately, the market acceptance of the Company's products.
In accordance with Accounting Standards
Codification ("ASC") 205-40, Going Concern, the Company has evaluated whether there are conditions and events, considered
in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern within one year after
the date that the condensed consolidated financial statements are issued. As of December 31, 2023, the Company had cash of $0.8 million.
In August and October 2024, the Company issued Simple Agreement for Future Equity ("SAFE instruments") resulting in net proceeds
of $11.0 million. In November 2024, the Company completed a merger with Venetian-1 Acquisition Corp ("Venetian") (the "Merger").
Upon closing, the Company completed a private placement offering (the "Offering") resulting in net proceeds of approximately
$29.0 million, net of placement agent fees and estimated offering expenses payable by the Company. See Note 10 for further discussion.
Additionally, the Company had an accumulated
deficit of $21.7 million at December 31, 2023, and during the year ended December 31, 2023, the Company incurred a net loss of $9.9 million.
The Company expects to continue to generate operating losses for the foreseeable future. The Company believes that its cash and cash equivalents
of $0.8 million as of December 31, 2023, together with the aggregate net proceeds of approximately $40.0 million from the Offering and
issuance of SAFE instruments, will be sufficient to fund its operating expenses for at least the next 12 months from issuance of these
financial statements.
F-
8
Lomond Therapeutics, Inc.
Notes to the Financial Statements
As of and for the years ended December 31, 2023 and 2022
In addition, to finance its future
operations, the Company will likely seek additional funding through public financings or government programs and will seek funding or
development program cost-sharing through collaboration agreements or licenses with larger pharmaceutical or biotechnology companies. If
the Company does not obtain additional funding or development program cost-sharing, or exceeds its current spending forecasts, the Company
has the ability and would be forced to delay, reduce or eliminate certain clinical trials or research and development programs, reduce
or eliminate discretionary operating expenses, and delay company and pipeline expansion, any of which could adversely affect its business
prospects. The inability to obtain funding, as and when needed, could have a material adverse effect on the Company's financial
condition and ability to pursue its business strategies.
The Company's financial statements
have been prepared on the basis of the Company continuing as a going concern, which assumes the continuity of operations, the realization
of assets and the settlement of liabilities and commitments as they come due in the normal course of business.
2
Significant accounting policies
and basis of presentation
Basis
of presentation
The financial statements have been
prepared in accordance with United States generally accepted accounting principles ("U.S. GAAP") and include the Company's
accounts.
Use of estimates
The preparation of the financial statements
in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expense
during the reporting periods. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and
other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could differ from those
estimates. The most significant estimates relate to the accrual of research and development expenses, and valuation of stock option awards
for share-based compensation.
Cash
Cash is comprised of cash deposits
held with financial institutions.
Concentrations and risks and uncertainties
Concentration of credit risk
Financial instruments that potentially
subject the Company to significant concentrations of credit risk consist primarily of cash. Substantially all of the Company's cash
deposits are maintained at one financial institution domiciled in the United States. Amounts on deposit with this financial institution
may, from time to time, exceed the federally insured limit. The Company is exposed to credit risk in the event of default by the financial
institution holding its cash to the extent recorded in the balance sheet. The Company has not experienced any losses on its deposits.
F-
9
Lomond Therapeutics, Inc.
Notes to the Financial Statements
As of and for the years ended December 31, 2023 and 2022
Business risks
The Company's future results
of operations involve a number of other risks and uncertainties. Factors that could affect the Company's future operating results
and cause actual results to vary materially from expectations include, but are not limited to, uncertainty of results of clinical trials
and reaching milestones, uncertainty of regulatory approval of the Company's current and potential future product candidates, uncertainty
of market acceptance of the Company's product candidates, competition from substitute products and larger companies, securing and
protecting proprietary technology, strategic relationships and dependence on key individuals or sole-source suppliers.
The Company's product candidates
require approvals from the U.S. Food and Drug Administration and comparable foreign regulatory agencies prior to commercial sales in their
respective jurisdictions. There can be no assurance that any product candidates will receive the necessary approvals. If the Company was
denied approval, approval was delayed, or the Company was unable to maintain approval for any product candidate, it could have a materially
adverse impact on the Company.
Research and development costs
Research and development costs consist
primarily of cost of subcontractors and materials used for research and development activities, including preclinical studies, clinical
trials, materials and supplies, and professional services. The costs of services performed by others in connection with the research and
development activities of the Company, including research and development conducted by others on behalf of the Company, is included in
research and development costs and expensed as the contracted work is performed. The Company accrues for costs incurred as the services
are being provided by monitoring the status of the project and the invoices received from its external service providers. Where contingent
milestone payments are due to third parties under research and development arrangements, the milestone payment obligations are expensed
when the milestone results are probable to be achieved.
Income taxes
The Company accounts for income taxes
under the asset and liability method. Under this method, deferred tax assets and liabilities are determined based on differences between
financial reporting and tax bases of assets and liabilities and are measured using enacted tax rates and laws that are expected to be
in effect when the differences are expected to be recovered or settled. Realization of deferred tax assets is dependent upon future taxable
income. A valuation allowance is recognized if it is more likely than not that some portion or all of a deferred tax asset will not be
realized based on the weight of available evidence, including expected future earnings. As of December 31, 2023 and 2022, management believes
it is more likely than not that no benefits will be derived from the Company's deferred tax assets.
The Company recognizes an uncertain
tax position in its financial statements when it concludes that a tax position is more likely than not to be sustained upon examination
based solely on its technical merits. Only after a tax position passes the first step of recognition will measurement be required. Under
the measurement step, the tax benefit is measured as the largest amount of benefit that is more likely than not to be realized upon effective
settlement. This is determined on a cumulative probability basis. The full impact of any change in recognition or measurement is reflected
in the period in which such change occurs. As of December 31, 2023 and 2022, the Company has not recorded any uncertain tax positions.
F-
10
Lomond Therapeutics, Inc.
Notes to the Financial Statements
As of and for the years ended December 31, 2023 and 2022
The tax years from 2021 and forward
are subject to examination by federal tax and state tax authorities. In addition, tax years with net operating loss carryforwards are
subject to examination, three years following the year they are utilized. The Company has not been informed by any tax authorities for
any jurisdiction that any of its tax years is under examination.
The Company elected to record any interest
or penalties related to income taxes as part of its income tax expense. There were no interest or penalties related to income taxes for
the years ended December 31, 2023 or 2022.
Redeemable convertible preferred stock
The Company records shares of its redeemable
convertible preferred stock at their respective fair values on the dates of issuance, net of issuance costs. The Company classifies its
preferred stock outside of total stockholders' deficit because, in the event of certain "liquidation events" (including
a merger, acquisition or sale of all or substantially all of the Company's assets) that are not solely within the control of the
Company, the shares would become redeemable at the option of the holders. The Company did not adjust the carrying values of the preferred
stock to the deemed liquidation values of the shares since a liquidation event was not probable at any of the reporting dates. Subsequent
adjustments to increase or decrease the carrying values to the liquidation values will be made only if and when it becomes probable that
such liquidation event will occur.
Share-based compensation
The Company measures its share-based
awards, including grants issued by the Company or Eilean to the Company's employees and non-employees, based on their grantdate
fair value. The Company's share-based awards currently include common units in its parent, Eilean. The Company records compensation
expense for these service-based awards beginning on the grant date over the requisite service period in which the awards are expected
to vest on a straight-line basis, subject to a minimum expense amount based on the awards that have vested to date. The common stock issued
to option holders upon the exercise of option awards are authorized and previously unissued common stock of Eilean. Forfeitures are recognized
as they occur.
The grant date fair value of employee
and non-employee awards are determined using the Black-Scholes option pricing model, which includes inputs such as the fair value of the
Company's common stock, expected term, risk-free rate, expected stock price volatility over the expected term, and expected dividend
yield. For all options granted, the Company calculated the expected term based on the simplified method. The Company has no publicly available
stock information and therefore, the Company used the historical volatility of the stock price of similar publicly traded peer companies.
The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time
of the grant. The Company does not anticipate that dividends will be distributed in the near future.
The absence of an active market for
the Company's common stock requires the Company's Board of Directors to determine the fair value of its common stock for purposes
of granting options. The Company obtains third-party valuations to assist the Board of Directors in determining the fair value of the
Company's common stock.
F-
11
Lomond Therapeutics, Inc.
Notes to the Financial Statements
As of and for the years ended December 31, 2023 and 2022
Net loss per share attributable
to common stockholders
Net loss per share attributable to
common stockholders is computed using the two-class method required for participating securities based upon their respective rights to
receive dividends as if all income for the period has been distributed.
The Company's participating securities
include the Company's redeemable convertible preferred stock. The holders of redeemable convertible preferred stock do not have
a contractual obligation to share in losses of the Company, and, therefore, during periods of loss there is no allocation required under
the two-class method.
Basic net loss per share attributable
to common stockholders is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding during
the period.
Diluted net loss per share is computed
by giving effect to all potentially dilutive securities outstanding for the period using the treasury stock method or the if-converted
method based on the nature of such securities. For periods in which the Company reports net losses, diluted net loss per share attributable
to common stockholders is the same as basic net loss per share attributable to common stockholders, because potentially dilutive shares
of common stock are not assumed to have been issued if their effect is anti-dilutive.
As of December 31, 2023 and 2022, 13,661,416
potential shares of common stock from the Company's redeemable convertible preferred stock were excluded from the computation of
diluted net loss per share attributable to common stockholders, because including them would have had an anti-dilutive effect.
Segments
Operating segments are defined as components
of an entity for which separate financial information is available and regularly reviewed by the Chief Operating Decision Maker ("CODM")
in deciding how to allocate resources to such individual segment and in assessing performance. The Company's CODM is its President.
To date, the Company operates and manages its business as one operating and reportable segment. All the Company's assets are located
in the United States.
Forward stock split
On September 20, 2024, the Company
filed a Certificate of Amendment to its Certificate of Incorporation, as amended, with the Secretary of State of the State of Delaware,
which effected a 3.794838-for-1 forward stock split (the "stock split") of the Company's issued and outstanding shares
of common stock and series seed redeemable convertible preferred stock. As a result of the stock split, (i) every share of common stock
issued and outstanding was converted into 3.794838 shares of common stock, and (ii) every share of redeemable convertible preferred stock
issued and outstanding was converted into 3.794838 shares of redeemable convertible preferred stock. The stock split affected all stockholders
uniformly and did not alter any stockholder's percentage interest in the Company's equity. No fractional shares were issued
in connection with the stock split. Stockholders who would otherwise be entitled to a fractional share of common stock were instead entitled
to receive a proportional cash payment. The Restated Certificate of Incorporation authorizes the Company to issue 32,661,416 shares of
capital stock on a post-stock split adjusted basis, inclusive of 19,000,000 shares of common stock, and 13,661,416 shares of series seed
redeemable convertible preferred stock. All common share and per share amounts presented in the financial statements and accompanying
notes have been retroactively adjusted to reflect the stock split.
F-
12
Lomond Therapeutics, Inc.
Notes to the Financial Statements
As of and for the years ended December 31, 2023 and 2022
Recently adopted accounting pronouncements
In August 2020, the Financial Accounting
Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2020-06, Debt—Debt with Conversion
and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40). This standard
simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20
that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host
convertible debt or preferred stock. The Company adopted this standard as of January 1, 2022, which did not have material impact on its
financial statements.
Recently issued accounting pronouncements
In December 2023, the FASB issued ASU
2023-09, Income Taxes: Improvements to Income Tax Disclosures, which requires enhanced annual disclosures regarding the rate reconciliation
and income taxes paid information. This standard is effective for fiscal years beginning after December 15, 2024, and may be adopted on
a prospective or retrospective basis, with early adoption permitted. The Company is currently evaluating the impact of this standard on
its financial statements and related disclosures.
3
Other financial statement information
Accrued expenses and other current
liabilities – related party
Accrued expenses and other current
liabilities – related party consisted of the following:
As of December 31,
2023
2022
Accrued research and development
$
856,144
$
748,438
Accrued interest on promissory notes
-
114,879
Other accrued liabilities
-
55,964
Total accrued expenses and other current liabilities
$
856,144
$
919,281
F-
13
Lomond Therapeutics, Inc.
Notes to the Financial Statements
As of and for the years ended December 31, 2023 and 2022
4
Commitment and contingencies
Guarantees and Indemnification
In the normal course of business, the
Company enters into agreements that contain a variety of representations and provide for general indemnification. The Company's
exposure under these agreements is unknown because it involves claims that may be made against the Company in the future. The Company
has entered into indemnification agreements with certain directors and officers that require the Company, among other things, to indemnify
them against certain liabilities that may arise by reason of the status or service as directors or officers. To date, the Company has
not paid any claims or been required to defend any action related to its indemnification obligations. As of December 31, 2023, the Company
does not have any material indemnification claims that were probable or reasonably possible and consequently has not recorded related
liabilities.
Contingencies
From time to time, the Company may
become involved in legal proceedings arising in the ordinary course of business. The Company is not currently a party to any material
legal proceedings.
5
Redeemable convertible preferred stock
In March 2020, the Company issued an
aggregate of 5,216,179 shares of its series seed redeemable convertible preferred stock ("preferred stock") at a purchase
price of $0.402594 per share in exchange for cash proceeds of $2.1 million.
Pursuant to the terms of the original
and amended Series Seed Preferred Stock Purchase Agreement (the "Agreement"), the Company was obligated to sell additional
shares of its preferred stock to the same investors at a cash purchase price of $0.402594 per share. In 2021, the Company issued an aggregate
of 8,445,237 shares of its preferred stock at a purchase price of $0.402594 per share in exchange for cash proceeds $3.4 million.
Redeemable convertible preferred stock
consisted of the following:
As
of December 31, 2023 and 2022
Series
Shares authorized
Shares issued
and outstanding
Aggregate
liquidation preferrence
Carrying value
Series Seed
13,661,416
13,661,416
$
5,500,001
$
5,466,925
13,661,416
13,661,416
$
5,500,001
$
5,466,925
F-
14
Lomond Therapeutics, Inc.
Notes to the Financial Statements
As of and for the years ended December 31, 2023 and 2022
The following are the key terms of
the preferred stock:
Dividends
The holders of shares of preferred
stock are entitled to receive dividends, out of any assets legally available, prior and in preference to any declaration or payment of
any dividend on the common stock, payable only if and when declared. Such dividends are non-cumulative.
After payment of any such dividends
on the preferred stock, any additional dividends or distributions shall be distributed among all holders of common stock and preferred
stock in proportion to the number of shares of common stock that would be held by each such holder if all shares of preferred stock were
converted to common stock at the then effective conversion rate. No dividends have been declared to date.
Optional Conversion
Each share of preferred stock is convertible
at the option of the holder at any time after the issuance date of such share into such number of shares of common stock as is determined
by dividing the applicable original issue price by the applicable conversion price for such series. The initial conversion price per share
for each series of preferred stock shall be the original issue price of $0.402594 per share. Adjustments to the conversion price, if any,
occur if additional shares of common stock have been issued at a price less than the respective preferred stock.
Automatic Conversion
Each share of preferred stock will
automatically convert into shares of common stock at the conversion rate at the time in effect for such series of preferred stock immediately
upon either of (1) the closing of the Company's sale of its common stock in an initial public offering pursuant to a registration
statement on Form S-1 that results in at least $30.0 million of gross proceeds; or (2) the date, or the occurrence of an event, specified
by vote or written consent or agreement of the holders of a majority of the then outstanding shares of preferred stock (voting together
as a single class and not as separate series, and on an as-converted basis).
Liquidation Preference
In the event of any voluntary or involuntary
liquidation, dissolution, or winding up of the Company, the holders of the preferred stock are entitled to receive out of the proceeds
or assets of the Company available for distribution to its stockholders, prior and in preference to any distribution of the proceeds to
the holders of common stock, a liquidation preference in the amount per share equal to the sum of the original issue price of $0.402594
per share, plus any declared but unpaid dividends on such share.
If the assets of the Company are insufficient
to pay the holders of the preferred stock the full amount, the holders of the preferred stock will share ratably in any distribution of
the assets available for distribution.
If preferential amounts are paid in
full, the remaining assets of the Company are distributed among the holders of the preferred stock and common stock pro rata based on
the number of shares held by each shareholder.
F-
15
Lomond Therapeutics, Inc.
Notes to the Financial Statements
As of and for the years ended December 31, 2023 and 2022
Voting rights
Each share of preferred stock has a
number of votes equal to the number of shares of common stock into which it is convertible. Except as provided in the Company's
amended or restated articles of incorporation, the holders of preferred stock and the holders of common stock vote together as one single
class.
The holders of preferred stock are
entitled to elect two directors of the Company. The holders of preferred stock and common stock (voting together as a single class and
on an as converted basis) are entitled to elect the two remaining directors.
Redemption
The preferred stock is not currently
redeemable; however, it is redeemable at the option of the holders in the event of certain "liquidation events" (including
a merger, acquisition or sale of all or substantially all of the Company's assets) that are not solely within the control of the
Company.
6
Stockholders' deficit
The voting, dividend, and liquidation
rights of the holders of the Company's common stock are subject to and qualified by the rights, powers, and preferences of the holders
of the preferred stock set forth above. Each share of common stock entitles the holder to one vote, together with the holders of the preferred
stock, on all matters submitted to the stockholders for a vote. The holders of common stock are entitled to receive dividends, if any,
as declared by the Company's board of directors, subject to the preferential dividend rights of redeemable convertible preferred
stock. As of December 31, 2023 and 2022, the Company's certificate of incorporation, as amended and restated, authorized the Company
to issue 19,000,000 shares of common stock with a par value of $0.0001 per share. There are 758,967 shares of common stock issued and
outstanding. The Company currently has 13,661,416 shares of common stock reserved for issuance upon the conversion of its outstanding
redeemable convertible preferred stock.
Capital Contributions
During the year ended December 31,
2023, the Company received capital contributions of $14.1 million from Eilean. Capital contributions received consisted of cash contributions
of $8.7 million to support working capital requirements and the assumption by Eilean of the Company's outstanding principal and
accrued interest of related party promissory notes of $5.4 million (see Note 8).
During the year ended December 31,
2022, the Company received capital contributions of $2.0 million from Eilean to support the Company's working capital requirements.
F-
16
Lomond Therapeutics, Inc.
Notes to the Financial Statements
As of and for the years ended December 31, 2023 and 2022
7
Income taxes
There is no provision for income taxes
for the years ended December 31, 2023 or 2022 because the Company has historically incurred operating losses and maintains a full valuation
allowance against its deferred tax assets. The tax effects of temporary differences that gave rise to significant portions of the deferred
tax assets and liabilities were as follows:
December 31,
2023
2022
Deferred tax assets:
Capitalized research and development expenditures
$
3,253,225
$
1,044,678
Net operating loss carryforwards
2,183,803
1,622,234
Research and development tax credits
1,253,836
621,422
Share-based compensation
24,969
23,456
Accruals and other
13,548
14,243
Total deferred tax assets
6,729,381
3,326,034
Less: valuation allowance
(6,729,381
)
(3,326,034
)
Deferred tax asset, net of valuation allowance
$
-
$
-
Based upon the historical and anticipated
future losses, management has determined that the deferred tax assets do not meet the more likely than not threshold for realizability.
Accordingly, a full valuation allowance has been recorded against the Company's net deferred tax assets as of December 31, 2023
and December 31, 2022. The valuation allowance increased by $3.4 million and $3.3 million during the years ended December 31, 2023, and
2022, respectively. The valuation allowance balance for the year ended December 31, 2023 is $6.7 million.
A reconciliation of the federal income tax rate to the Company's
effective tax rate is as follows:
For the Year Ended
December 31,
2023
2022
Rate Reconciliation
Federal tax benefit at statutory rate
21.0
%
21.0
%
State tax, net of federal benefit
6.9
6.9
Research and development credits
6.4
6.2
Change in valuation allowance
(34.3
)
(34.1
)
Effective tax rate
0.0
%
0.0
%
At December 31, 2023, the Company has
federal and state net operating loss ("NOL") carryforwards of approximately $9.6 million and $2.6 million, respectively,
which may be available to offset future taxable income. At December 31, 2023, the Company has research and development tax credits of
approximately $1.3 million. The federal and state net operating loss carryforwards have no expiration. The research and development tax
credit will begin to expire in 2040.
F-
17
Lomond Therapeutics, Inc.
Notes to the Financial Statements
As of and for the years ended December 31, 2023 and 2022
Net operating loss and tax credit carryforwards
are subject to review and possible adjustment by the Internal Revenue Service (the "IRS") and may become subject to an annual
limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three-year period in
excess of 50% as defined under Sections 382 and 383 in the Internal Revenue Code, which could limit the amount of tax attributes that
can be utilized annually to offset future taxable income or tax liabilities. The amount of the annual limitation is determined based on
the Company's value immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in
future years. The Company has not yet conducted a study to determine if any such limitation exists.
The Tax Cuts and Jobs Act ("TCJA")
resulted in significant changes to the treatment of R&D expenditures under Section 174. For tax years beginning after December 31,
2021, taxpayers are required to capitalize and amortize all R&D expenditures that are paid or incurred in connection with their trade
or business. Specifically, costs for U.S.-based R&D activities must be amortized over five years and costs for foreign R&D activities
must be amortized over 15 years, both using a midyear convention. During the year ended December 31, 2023, the Company capitalized $9.7
million of R&D expenses.
8
Related Party Transactions
Research and development arrangements
with related parties
In March 2020, the Company entered
into a Master Research and Development Agreement with ChemDiv, Inc. ("ChemDiv"), pursuant to which ChemDiv provides services
related to preclinical drug discovery to the Company. Dr. Nikolay Savchuk, President and Chief Executive Officer of the Company, is a
stockholder of ChemDiv and a member of its board of directors. During the years ended December 31, 2023 and 2022, $5.8 million and $3.9
million, respectively, was expensed as research and development cost in the statements of operations related to ChemDiv services. As of
December 31, 2023 and 2022, the Company recorded $0.9 million and $0.5 million, respectively, as accrued expense relating to ChemDiv services
in the balance sheets.
In January 2023, the Company entered
into an agreement with Eilean Therapeutics AU Pty Ltd ("Eilean AU"), a subsidiary of Eilean, which provided the Company rights
to intellectual property under development by Eilean AU. During the year ended December 31, 2023, the Company paid Eilean AU $3.0 million
for the intellectual property rights. Because the intellectual property rights from Eilean AU have no alternative future use, the payment
was recorded immediately through research and development expenses in the Company's statements of operations for the year ended
December 31, 2023.
Administrative arrangements with
related parties
In March 2020, the Company entered
into an Administrative Services Agreement with Eil Therapeutics, Inc. ("Eil"), a subsidiary of Eilean. Pursuant to such administrative
services agreement, Eil agreed to provide the Company, directly or indirectly through its contractors, administrative support services
and access to staff's management experience and knowledge. Such services included general management and operations, including financial
and accounting services, insurance program marketing and administration and various tax-related services. Dr. Nikolay Savchuk, President
and Chief Executive Officer of the Company, is also President and Chief Executive Officer of Eil. During the years ended December 31,
2023 and 2022, $1.0 million and $0.2 million, respectively was expensed as research and development cost. Amounts expensed as general
and administrative cost during the years ended December 31, 2023 and 2022 were de minimis. As of December 31, 2022, the Company recorded
$0.3 million as accrued expense relating to Eil services in the balance sheet.
F-
18
Lomond Therapeutics, Inc.
Notes to the Financial Statements
As of and for the years ended December 31, 2023 and 2022
Related party notes payable
In May and June 2022, the Company borrowed
an aggregate principal amount of $3.9 million under two promissory note agreements with Dinas Therapeutics, Inc. ("Dinas")
for research and development invoices paid by Dinas on behalf of the Company. Dr. Nikolay Savchuk, President and Chief Executive Officer
of the Company, is the Chief Executive Officer of Dinas. The notes were due on the earlier of (i) written demand by Dinas, (ii) the second
anniversary of the note issuances. The notes accrued interest per annum at a rate equal to 5.00%, to be paid at maturity.
In January and December 2023, the Company
borrowed an aggregate principal amount of $1.3 million under two promissory note agreements with Eil, for payment of services performed
on behalf of the Company. The notes were due no later than the second anniversary of the note issuances. The notes accrued interest per
annum at a rate of 2.5%, to be paid at maturity.
In December 2023, Eilean assumed the
promissory notes outstanding with Dinas and Eil and related accrued interest, which was accounted for as a contribution from parent of
$5.4 million, as further described in Note 6.
9
Share-based compensation
During the year ended December 31,
2020, the Company issued 539,796 option awards to non-employee consultants for services to be performed for the Company. Option awards
granted generally vest based on a specific vesting schedule as agreed upon by the optionee and the Company and generally expire 10 years
after the grant date.
In connection with the Eilean transaction,
the existing option awards granted by the Company were cancelled and replaced with common units (the "units") in Eilean. The
units granted generally vest (i) on the date of grant, or (ii) 50% on the date of grant, with the remaining 50% vesting over 24 months
in equal monthly installments as services are provided.
The replacement of the option awards
with units was evaluated as a modification. The fair value of the option awards was in excess of the grant date fair value of the units.
As such, there was no incremental compensation costs related to the units to be recorded. The Company recognized $25,000 at the grant
date of the units related to the portion of the units that became fully vested at such time.
Total share-based compensation of $5,428
and $29,165 is included in the Company's statements of operations as general and administrative expenses for the years ended December
31, 2023 and 2022, respectively. As of December 31, 2023, there was $3,510 of total unrecognized share-based compensation costs related
to the Company's common unit interest awards which is expected to be recognized over a weighted-average period of approximately
0.58 years. There were no awards granted during the year ended December 31, 2023.
F-
19
Lomond Therapeutics, Inc.
Notes to the Financial Statements
As of and for the years ended December 31, 2023 and 2022
The estimated fair value of option
awards were estimated as of July 1, 2022 immediately prior to the replacement with units in Eilean using a Black-Scholes option pricing
model, based on the following assumptions:
Assumptions used to estimate fair value of option grants:
Risk-free interest rate
2.90%
Expected term (in years)
4.0 - 4.3 years
Expected volatility
99.5% - 99.7%
Expected dividend yield
0%
The estimated grant date fair value
of the units in Eilean was estimated as of July 1, 2022 using a Black-Scholes option pricing model, based on the following assumptions:
Assumptions used to estimate fair value of profits interest grants:
Risk-free interest rate
2.85%
Expected term (in years)
2.50 years
Expected volatility
79.80%
Expected dividend yield
0%
A summary of unit award activity in Eilean is presented
below:
Number of
awards
Weighted
average
grant date
fair value
Outstanding at January 1, 2023
223,800
$
0.17
Granted
-
-
Forfeited or expired
-
-
Outstanding at December 31, 2023
223,800
0.17
Exercisable at December 31, 2023
202,042
$
0.17
10
Subsequent events
The Company evaluated the potential
impact of subsequent events on the financial statements through November 7, 2024, the date the financial statements were available to
be issued.
Issuance of SAFE Instruments
In August and October 2024, the Company
issued SAFE instruments to TPAV, LLC ("TPAV"), a party related through Nikolay Savchuk, the President and Chief Executive
Officer of the Company, and entities affiliated with OrbiMed, a party related through Carl Gordon, a Director of the Company, and third-party
investors resulting in net proceeds of $11.0 million. The SAFE instruments provide investors the right to certain shares of the Company's
capital stock.
If there is a qualified equity financing
before the termination of the SAFE instruments, the SAFEs will automatically convert into the number of shares of capital stock equal
to the purchase amount divided by the conversion price.
F-
20
Lomond Therapeutics, Inc.
Notes to the Financial Statements
As of and for the years ended December 31, 2023 and 2022
If there is a non-qualified equity
financing before the termination of the SAFE instruments, the majority-in-interest investors may elect to convert the purchase amounts
of all then-outstanding SAFE instruments with the same post-money valuation cap into the number of shares of capital stock equal to the
purchase amount divided by the conversion price.
If there is a merger, reverse merger,
acquisition and/or other business combination involving the Company and a publicly traded company or other similar entity that is a "blank
check" company under applicable U.S. securities laws before the termination of the SAFE instruments, the SAFE instruments will automatically
convert into the number of shares of common stock of the issuer entity in the same manner as a qualified equity financing, and as though
the SAFE instrument was issued to the investor by the issuer.
If there is a liquidity event before
the termination of the SAFE instruments, the investor will be automatically entitled to receive a portion of the proceeds due and payable
to the investor equal to the greater of (i) a cash payment equal to the purchase amount, or (ii) the amount payable on the number of shares
of common stock equal to the conversion amount, or actual shares of common stock equal to the purchase amount divided by the liquidity
price, subject to adjustment in certain events. A liquidity event means a change in control, direct, listing, or an initial public offering
of the Company's common stock.
In the event of a voluntary or involuntary
dissolution event of the Company before the expiration or termination of the SAFE instruments, the investors will receive a cash payment
equal to their purchase amount.
Agreements with Eil and Bala
In October 2024, the Company entered
into license agreements with both of Eil (the "Eil License Agreement") and Bala Therapeutics, Inc. ("Bala", the
"Bala License Agreement"). Pursuant to the Eil License Agreement and Bala License Agreement, the Company obtained exclusive,
perpetual, worldwide licensing rights for the development and future ownership of (i) a BCL-2, inhibitor for the treatment of AML and
CLL from Eil, and (ii) an early-stage menin inhibitor for the treatment of AML from Bala.
The Eil License Agreement and Bala
License Agreement became effective in October 2024 when the Company issued promissory notes to Eil and Bala, respectively. The principal
amount of the promissory notes with Eil and Bala are $1.7 million and $1.2 million, respectively. Each such promissory note bears interest
at a rate of 7% per annum, compounded annually, and matures on October 17, 2026. Each such promissory note may be prepaid without penalty.
In addition, the two promissory notes each provide for customary events of default.
F-
21
Lomond Therapeutics, Inc.
Notes to the Financial Statements
As of and for the years ended December 31, 2023 and 2022
Upon the payment in full of the applicable
promissory note, Eil and Bala have each agreed to transfer to the Company all of the intellectual property rights covered by the license
agreements, as the case may be.
The license rights are sublicensable
at the option of the Company. Under such license agreements, Lomond, but not Eil or Bala, as the case may be, have the right to terminate
the applicable license agreement for convenience upon 30 days' written notice. If Lomond, or Eil or Bala, as the case may be, materially
breaches the applicable license agreement, and such breach is not cured within 90 days after the receipt of notice of such breach, then
the non-defaulting party may terminate such license agreement. In addition, upon the occurrence of an event of default under the applicable
promissory note, the license agreement shall be terminated.
Eil and Bala are each wholly-owned
by Eilean, Lomond's parent company.
Adoption of 2024 Stock Plan and
Grant of Options
On September 20, 2024, the Board of
Directors of Lomond (the "Board") approved the adoption of the Lomond Therapeutics, Inc. 2024 Stock Plan (the "2024
Plan"). The purpose of the 2024 Plan is to attract, incentivize and retain employees, outside directors and consultants through
the grant of awards. The 2024 Plan provides for the direct award or sale of shares, the grant of options to purchase shares and the grant
of restricted stock units to acquire shares. The maximum number of shares which may be issued under the 2024 Plan were 4,329,617. Options
granted under the 2024 Plan may be ISOs intended to qualify under Code Section 422 or NSOs which are not intended to so qualify.
Immediately following the adoption
of the 2024 Plan, the Board approved the grant of 4,329,617 options to purchase Lomond common stock to employees, outside directors and
consultants, at an exercise price of $1.30 per share. The option shares will become eligible to vest based on, and subject to, the Company's
completion of a merger, consolidation or share exchange with a special purpose acquisition company or other similar entity in which the
common stock (or similar securities) of the surviving parent entity is listed on a nation securities exchange on or prior to December
31, 2024 (the "Milestone") and the optionee's continuous service through the achievement of the Milestone. Any option
shares that become eligible to vest based on achievement of the milestone (the "Eligible Shares") shall vest and become exercisable
in a series of 48 successive equal monthly installments.
Entry into a Material Definitive
Agreement
On November 1, 2024, the Company, Venetian,
and its wholly-owned subsidiary, Lomond Acquisition Corp. ("Acquisition Corp."), entered into an Agreement and Plan of Merger
and Reorganization (the "Merger Agreement"). Pursuant to the terms of the Merger Agreement, on November 1, 2024 (the "Closing
Date"), Acquisition Corp. merged with and into Lomond, with Lomond continuing as the surviving corporation and a wholly-owned subsidiary
of Venetian (the "Merger"). In connection with the Merger, Venetian intends to change its corporate name from "Venetian-1
Acquisition Corp" to "Lomond Therapeutics Holdings, Inc."
Pursuant to the terms of the Merger
Agreement, at the time the certificate of merger reflecting the Merger was filed with the Secretary of State of Delaware (the "Effective
Time"), each share of Legacy Lomond's capital stock issued and outstanding immediately prior to the closing of the Merger
was cancelled and converted into the right to receive one share of Venetian common stock (the "Exchange Ratio"), with the
maximum number of shares of Venetian common stock issuable to the former holder of Lomond's capital stock equal to 14,420,383. In
addition, pursuant to the Merger Agreement, immediately prior to the Effective Time, an aggregate of 3,625,000 shares of the 5,000,000
then-outstanding shares of Venetian common stock owned by Venetian stockholders prior to the Merger were forfeited and cancelled (the
"Stock Forfeiture").
F-
22
Lomond Therapeutics, Inc.
Notes to the Financial Statements
As of and for the years ended December 31, 2023 and 2022
In addition, pursuant to the Merger
Agreement, at the Effective Time, options to purchase an aggregate of 4,329,617 shares of Lomond common stock at an exercise price of
$1.30 per share issued and outstanding immediately prior to the closing of the Merger under Lomond's 2024 Equity Incentive Plan
(the "Legacy Lomond Plan") were assumed and converted into options to purchase 4,329,617 shares of Lomond Therapeutics Holdings,
Inc. common stock at an exercise price of $1.30 per share.
The Merger Agreement contained customary
representations and warranties and pre- and post-closing covenants of each party and customary closing conditions. The Merger will be
treated as a recapitalization and reverse acquisition for Venetian for financial reporting purposes. Lomond will be considered the acquirer
for accounting purposes, and Venetian's historical financial statements before the Merger will be replaced with the historical financial
statements of Lomond before the Merger in future filings with the United States Securities and Exchange Commission (the "SEC").
The Merger is intended to be treated as a tax-free reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended.
Immediately following the Effective
Time of the Merger, Lomond Therapeutics Holdings, Inc. held a closing for a private placement offering (the "Offering") pursuant
to which 8,241,375 shares of common stock were issued and sold at a purchase price of $4.00 per share for aggregate gross proceeds of
approximately $32.9 million before deducting placement agent fees and expenses of the Offering.
In connection with the Offering and
subject to the closing of the Offering, Lomond Therapeutics Holdings, Inc. agreed to pay the placement agents, Raymond James & Associates,
Inc. ("Raymond James"), and Wedbush & Co., LLC ("Wedbush" and with Raymond James, the "Lead Placement
Agents") and Aegis Capital Corp. ("Aegis" and together with Raymond James and Wedbush, the "Placement Agents"),
each a U.S. registered broker-dealer, a cash placement fee and issue Placement Agent Warrants to the Placement Agent as follows. The Lead
Placement Agents will be paid a cash placement fee equal to the sum of (x) 4% of the gross proceeds raised from OrbiMed Advisors LLC ("OrbiMed")
and Torrey Pines Investment LLC and/or their respective affiliates and/or certain other investors (collectively "Insider Investors"),
(y) 6% of the gross proceeds raised from certain other investors introduced by Legacy Lomond or its affiliates ("Lomond Investors")
and (z) 8% of the gross proceeds raised from all other Purchasers resulting from the efforts of the Lead Placement Agents (other than
Co-Agent Investors (as defined below), the "Lead Placement Agent Investors"). Aegis will be paid a cash placement fee equal
to 8% of the gross proceeds raised from Purchasers resulting from the efforts of Aegis (the "Co-Agent Investors"). Further,
Lomond Therapeutics Holdings, Inc. agreed to issue Placement Agent Warrants to the Placement Agents covering a number of shares of its
common stock equal to 8% of the number of shares of Common Stock sold in the Offering to the Lead Placement Agent Investors and Co-Agent
Investors, as applicable, with a term of four years and an exercise price of $4.00 per share.
F-
23
Lomond Therapeutics, Inc.
Notes to the Financial Statements
As of and for the years ended December 31, 2023 and 2022
As a result of the foregoing, in connection
with the closing of the Offering, Lomond Therapeutics Holdings, Inc. paid the Placement Agents an aggregate cash commission of $2.5 million
and issued Placement Agent Warrants to purchase an aggregate of 275,410 shares of Lomond Therapeutics Holdings, Inc. Common Stock. Lomond
Therapeutics Holdings, Inc. has also reimbursed or will reimburse the Placement Agents for approximately $0.1 million of expenses incurred
in connection with the Offering.
Consulting Agreement with Dr. Dukes
In November 2024, the Company entered
into a consulting agreement with Dr. Iain Dukes, to commence upon closing of the Merger. Pursuant to the terms of Dr. Dukes' consulting
agreement, Dr. Dukes will serve as Chief Executive Officer and Chairman of Lomond Therapeutics Holdings, Inc., is eligible to receive
consulting fees at an annual rate of $400,000, and is eligible to receive an annual incentive payment equal to up to 50% of such annual
consulting fees, subject to the achievement of applicable performance metrics as determined by the Company's board of directors.
Dr. Dukes' consulting agreement contains customary invention assignment and confidentiality provisions.
Consulting Agreement with Dr. Savchuk
In November 2024, the Company entered
into a consulting agreement with Dr. Nikolay Savchuk, to commence upon closing of the Merger. Pursuant to the terms of Dr. Savchuk's
consulting agreement, Dr. Savchuk will serve as Chief Operating Officer and President of Lomond Therapeutics Holdings, Inc., is eligible
to receive consulting fees at an annual rate of $400,000, and is eligible to receive an annual incentive payment equal to up to 50% of
such annual consulting fees, subject to the achievement of applicable performance metrics as determined by the Company's board of
directors. Dr. Savchuk's consulting agreement contains customary invention assignment and confidentiality provisions.
F-
24
Lomond Operating Co.
(Formerly Known as Lomond Therapeutics,
Inc.)
Financial Statements
For the nine months ended September 30, 2024 and
2023
F-
25
TABLE OF
CONTENTS
Financial Statements
Condensed Balance Sheets as of September 30, 2024 (unaudited) and December 31, 2023
F-27
Condensed Statements of Operations for the three and nine months ended September 30, 2024 and 2023 (unaudited)
F-28
Condensed Statements of Redeemable Convertible Preferred Stock and Stockholders' Deficit for the three and nine months ended September 30, 2024 and 2023 (unaudited)
F-29
Condensed Statements of Cash Flows for the nine months ended September 30, 2024 and 2023 (unaudited)
F-30
Notes to Financial Statements (unaudited)
F-31
F-
26
Lomond Operating Co.
(Formerly Known as
Lomond Therapeutics, Inc.)
Condensed Balance Sheets
As of September 30, 2024 and
December 31, 2023
September 30,
2024
(unaudited)
December 31,
2023
Assets
Current assets:
Cash
$
3,617,664
$
800,728
Total current assets
3,617,664
800,728
Deferred financing costs
694,352
-
Total assets
$
4,312,016
$
800,728
Liabilities, Redeemable Convertible Preferred Stock, and Stockholders' Deficit
Current liabilities:
Accrued expenses and other current liabilities
$
1,250,929
$
856,144
Total current liabilities
1,250,929
856,144
SAFE liability
8,424,479
-
Total liabilities
9,675,408
856,144
Commitments and contingencies (Note 5)
Redeemable convertible preferred stock: $0.0001 par value; 13,661,416 shares authorized, issued, and outstanding. Aggregate liquidation preference: $5,500,001
5,466,925
5,466,925
Stockholders' Deficit
Common stock: $0.0001 par value; 19,000,000 shares authorized; and 758,967 shares issued and
    outstanding
76
76
Related party notes receivable
(4,004,603
)
-
Additional paid-in capital
23,656,420
16,203,254
Accumulated deficit
(30,482,210
)
(21,725,671
)
Total stockholders' deficit
(10,830,317
)
(5,522,341
)
Total liabilities, redeemable convertible preferred stock, and stockholders' deficit
$
4,312,016
$
800,728
The accompanying notes are an integral part of these (unaudited) financial
statements.
F-
27
Lomond Operating Co. (Formerly Known as Lomond Therapeutics,
Inc.)
Condensed Statements of Operations
For the three and nine months ended September 30, 2024 and 2023
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
Operating expenses:
Research and development - related party
$
4,000,000
$
1,861,756
$
7,000,000
$
5,639,607
General and administrative
616,091
2,459
836,663
14,729
Total operating expenses
4,616,091
1,864,215
7,836,663
5,654,336
Loss from operations
(4,616,091
)
(1,864,215
)
(7,836,663
)
(5,654,336
)
Other income (expense):
Change in fair value of SAFE liability
(924,479
)
-
(924,479
)
-
Interest expense - related party
-
(51,760
)
-
(152,948
)
Total other expense, net
(924,479
)
(51,760
)
(924,479
)
(152,948
)
Net Loss
$
(5,540,570
)
$
(1,915,975
)
$
(8,761,142
)
$
(5,807,284
)
Net loss per share attributable to common stockholders, basic and diluted
$
(7.30
)
$
(2.52
)
$
(11.54
)
$
(7.65
)
Weighted-average shares of common stock outstanding, basic and diluted
758,967
758,967
758,967
758,967
The accompanying notes are an integral part of these (unaudited) financial
statements.
F-
28
Lomond Operating Co. (Formerly Known as Lomond Therapeutics,
Inc.)
Condensed Statements of Redeemable Convertible Preferred Stock
and Stockholders' Deficit
For the three and nine months ended September 30, 2024 and 2023
(unaudited)
Three Month Periods Ended September 30, 2024 and 2023
Redeemable Convertible
Related Party
Additional
Preferred Stock
Common Stock
Note
Paid-in
Accumulated
Shares
Amount
Shares
Amount
Receivable
Capital
Deficit
Total
Balance at June 30, 2024
13,661,416
$
5,466,925
758,967
$
76
$
-
$
19,655,968
$
(24,946,243
)
$
(5,290,199
)
Cash contribution from parent
-
-
-
-
-
4,000,000
-
4,000,000
Issuance of note receivable to Parent and related accrued interest
-
-
-
-
(4,004,603
)
-
4,603
(4,000,000
)
Stock-based compensation
-
-
-
-
-
452
-
452
Net loss
-
-
-
-
-
-
(5,540,570
)
(5,540,570
)
Balance at September 30, 2024
13,661,416
$
5,466,925
758,967
$
76
$
(4,004,603
)
$
23,656,420
$
(30,482,210
)
$
(10,830,317
)
Balance at June 30, 2023
13,661,416
$
5,466,925
758,967
$
76
$
-
$
3,808,256
$
(15,675,696
)
$
(11,867,364
)
Stock-based compensation
-
-
-
-
-
1,357
-
1,357
Net loss
-
-
-
-
-
-
(1,915,975
)
(1,915,975
)
Balance at September 30, 2023
13,661,416
$
5,466,925
758,967
$
76
$
-
$
3,809,613
$
(17,591,671
)
$
(13,781,982
)
Nine Month Periods Ended September 30, 2024 and 2023
Redeemable Convertible
Related Party
Additional
Preferred Stock
Common Stock
Promissory
Paid-in
Accumulated
Shares
Amount
Shares
Amount
Note
Capital
Deficit
Total
Balance at December 31, 2023
13,661,416
$
5,466,925
758,967
$
76
$
-
$
16,203,254
$
(21,725,671
)
$
(5,522,341
)
Cash contribution from parent
-
-
-
-
-
7,450,000
-
7,450,000
Issuance of note receivable to Parent and related accrued interest
-
-
-
-
(4,004,603
)
-
4,603
(4,000,000
)
Stock-based compensation
-
-
-
-
-
3,166
-
3,166
Net loss
-
-
-
-
-
-
(8,761,142
)
(8,761,142
)
Balance at September 30, 2024
13,661,416
$
5,466,925
758,967
$
76
$
(4,004,603
)
$
23,656,420
$
(30,482,210
)
$
(10,830,317
)
Balance at December 31, 2022
13,661,416
$
5,466,925
758,967
$
76
$
-
$
2,065,542
$
(11,784,387
)
$
(9,718,769
)
Cash contribution from parent
-
-
-
-
-
1,740,000
-
1,740,000
Stock-based compensation
-
-
-
-
-
4,071
-
4,071
Net loss
-
-
-
-
-
-
(5,807,284
)
(5,807,284
)
Balance at September 30, 2023
13,661,416
$
5,466,925
758,967
$
76
$
-
$
3,809,613
$
(17,591,671
)
$
(13,781,982
)
The accompanying notes are an integral part of these (unaudited) financial
statements.
F-
29
Lomond Operating Co. (Formerly Known as Lomond Therapeutics,
Inc.)
Condensed Statements of Cash Flows
For the nine months ended September 30, 2024 and 2023
(unaudited)
Nine months ended
September 30,
2024
2023
Cash flows from operating activities:
Net loss
$
(8,761,142
)
$
(5,807,284
)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation
3,166
4,071
Change in fair value of SAFE liability
924,479
-
Changes in operating assets and liabilities:
Accrued expenses and other current liabilities
(299,567
)
3,651,261
Net cash used in operating activities
(8,133,064
)
(2,151,952
)
Cash flows from financing activities:
Proceeds from capital contribution by parent
7,450,000
1,740,000
Proceeds from issuance of SAFE instrument
7,500,000
-
Cash provided to parent in exchange for promissory note
(4,000,000
)
-
Net cash provided by financing activities
10,950,000
1,740,000
Net increase (decrease) in cash
2,816,936
(411,952
)
Cash, beginning of year
800,728
507,437
Cash, end of period
$
3,617,664
$
95,485
Supplemental non-cash financing activities:
Deferred financing costs in accrued expenses and other current liabilities
$
694,352
$
-
Issuance of promissory notes to settle accrued expenses
$
-
$
304,403
Interest receivable on promissory note issued to parent
$
4,603
$
-
The accompanying notes are an integral part of these (unaudited) financial
statements.
F-
30
Lomond Operating Co.
(Formerly Known as Lomond Therapeutics,
Inc.)
Notes to the Condensed Financial Statements
For the nine months ended September 30, 2024 and 2023
(unaudited)
1
Organization and Description of Business
Lomond Operating Co. (the "Company")
is a privately-held biopharmaceutical company involved in the discovery and development of small molecule inhibitors that target escape
mutations in hematologic cancers. The Company was incorporated on January 22, 2020 as Lomond Therapeutics, Inc., pursuant to
the laws of the State of Delaware. On July 1, 2022, shareholders of the Company contributed and transferred all outstanding common stock,
stock options, and redeemable convertible preferred stock of the Company to Eilean Therapeutics, LLC ("Eilean", or the "Parent")
in exchange for common unit ownership in Eilean (the "Eilean transaction"). After the Eilean transaction, Eilean became the
sole shareholder of the Company. The Company subsequently changed its name to Lomond Operating Co. on November 1, 2024.
Liquidity
Since inception, the Company has been primarily
performing research and development activities, establishing and maintaining its intellectual property, and raising capital to support
and expand its operations. The Company has funded its operations primarily through the sale of its redeemable convertible
preferred stock and contributions from it's Parent. The Company does not yet have a product that has been approved by the FDA, has
not generated any product sales revenues and has not yet achieved profitable operations, nor has it ever generated positive cash flows
from operations. There is no assurance that profitable operations, if achieved, could be sustained on a continuing basis. Further, the
Company's future operations are dependent on the success of the Company's efforts to raise additional capital, its research
and commercialization efforts, regulatory approval, and, ultimately, the market acceptance of the Company's products.
In accordance with Accounting Standards Codification
("ASC") 205-40, Going Concern, the Company has evaluated whether there are conditions and events, considered in the aggregate,
that raise substantial doubt about the Company's ability to continue as a going concern within one year after the date that the
condensed consolidated financial statements are issued. As of September 30, 2024, the Company had cash of $3.6 million. In November 2024,
the Company completed a merger with Venetian-1 Acquisition Corp ("Venetian") (the "Merger"). Upon closing, the
Company completed a private placement offering (the "Offering") resulting in net proceeds of approximately $29.0 million,
net of placement agent fees and estimated offering expenses payable by the Company. See Note 11 for further discussion.
Additionally, the Company had an accumulated deficit
of $30.5 million at September 30, 2024, and during the three and nine months ended September 30, 2024, the Company incurred a net loss
of $5.5 and $8.8 million, respectively. The Company expects to continue to generate operating losses for the foreseeable future. The Company
believes that its cash of $3.6 million as of September 30, 2024, together with the aggregate net proceeds of approximately $29.0 million
from the Offering, will be sufficient to fund its operating expenses for at least the next 12 months from issuance of these financial
statements.
In addition, to finance its future operations,
the Company will likely seek additional funding through public financings or government programs and will seek funding or development
program cost-sharing through collaboration agreements or licenses with larger pharmaceutical or biotechnology companies. If the Company
does not obtain additional funding or development program cost-sharing, or exceeds its current spending forecasts, the Company has the
ability and would be forced to delay, reduce or eliminate certain clinical trials or research and development programs, reduce or eliminate
discretionary operating expenses, and delay company and pipeline expansion, any of which could adversely affect its business prospects.
The inability to obtain funding, as and when needed, could have a material adverse effect on the Company's financial condition and
ability to pursue its business strategies.
F-
31
Lomond Operating Co. (Formerly Known as Lomond Therapeutics,
Inc.)
Notes to the Condensed Financial Statements
For the nine months ended September 30, 2024 and 2023
(unaudited)
2
Significant accounting policies and basis of presentation
Basis
of presentation
The accompanying interim condensed financial statements
have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP")
for interim financial statements and pursuant to the rules of the Securities and Exchange Commission ("SEC"). Accordingly,
certain information and footnotes required by U.S. GAAP for complete financial statements have been omitted. It is the opinion of management
that all adjustments considered necessary for a fair presentation have been included, and that all such adjustments are of a normal recurring
nature. The results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of the results
to be expected for the full year or any other period. The unaudited condensed financial statements should be read in conjunction with
the financial statements and related notes for the year ended December 31, 2023.
Use of estimates
The preparation of the financial statements in
conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expense
during the reporting periods. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and
other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could differ from those
estimates. The most significant estimates relate to the accrual of research and development expenses, valuation of stock option awards
for share-based compensation and valuation of the simple agreement for future equity liability.
Cash
Cash is comprised of cash deposits held with financial
institutions.
Concentrations and risks and uncertainties
Concentration of credit risk
Financial instruments that potentially subject
the Company to significant concentrations of credit risk consist primarily of cash. Substantially all of the Company's cash deposits
are maintained at one financial institution domiciled in the United States. Amounts on deposit with this financial institution may, from
time to time, exceed the federally insured limit. The Company is exposed to credit risk in the event of default by the financial institution
holding its cash to the extent recorded in the balance sheet. The Company has not experienced any losses on its deposits.
Business risks
The Company's future results of operations
involve a number of other risks and uncertainties. Factors that could affect the Company's future operating results and cause actual
results to vary materially from expectations include, but are not limited to, uncertainty of results of clinical trials and reaching milestones,
uncertainty of regulatory approval of the Company's current and potential future product candidates, uncertainty of market acceptance
of the Company's product candidates, competition from substitute products and larger companies, securing and protecting proprietary
technology, strategic relationships and dependence on key individuals or sole-source suppliers.
The Company's product candidates require
approvals from the U.S. Food and Drug Administration and comparable foreign regulatory agencies prior to commercial sales in their respective
jurisdictions. There can be no assurance that any product candidates will receive the necessary approvals. If the Company was denied approval,
approval was delayed, or the Company was unable to maintain approval for any product candidate, it could have a materially adverse impact
on the Company.
Fair Value Measurements
Fair value is defined as the exchange price to
sell an asset or transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly
transaction between market participants at the measurement date. Fair value should be based on the assumptions market participants would
use when pricing the asset or liability. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset
or liability as of the measurement date.
F-
32
Lomond Operating Co. (Formerly Known as Lomond Therapeutics,
Inc.)
Notes to the Condensed Financial Statements
For the nine months ended September 30, 2024 and 2023
(unaudited)
Fair value measurements are classified and disclosed
in one of the following three categories:
Level 1: Quoted unadjusted
prices for identical instruments in active markets.
Level 2: Quoted prices for similar
instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations
in which all observable inputs and significant value drivers are observable in active markets
Level 3: Model derived valuations in
which one of more significant inputs or significant value drivers are unobservable, including assumptions developed by the Company
There were no transfers between
Levels 1, 2, or 3, of such instruments during the three and nine months ended September 30, 2024. The carrying amounts of the
Company's accrued expenses and other current liabilities approximate their fair values due to their short-term nature. See
Note 4 for further information.
Deferred financing costs
The Company capitalized costs during the third
quarter of 2024 that were directly associated with the Merger and Offering in November 2024. These costs were recorded against the gross
proceeds upon closing of the Merger and Offering in November 2024. See Note 11 for further information. Ongoing costs that are not directly
associated with the Merger or the Offering are expensed as incurred.
Research and development costs
Research and development costs consist primarily
of cost of related-party subcontractors and materials used for research and development activities, including preclinical studies, clinical
trials, materials and supplies, and professional services. The costs of services performed by related-parties in connection with the research
and development activities of the Company, including research and development conducted by related-parties on behalf of the Company, is
included in research and development costs and expensed as the contracted work is performed. The Company accrues for costs incurred as
the services are being provided by monitoring the status of the project and the invoices received from its external service providers.
Where contingent milestone payments are due to third parties under research and development arrangements, the milestone payment obligations
are expensed when the milestone results are probable to be achieved.
Income taxes
The Company accounts for income taxes under the
asset and liability method. Under this method, deferred tax assets and liabilities are determined based on differences between financial
reporting and tax bases of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect
when the differences are expected to be recovered or settled. Realization of deferred tax assets is dependent upon future taxable income.
A valuation allowance is recognized if it is more likely than not that some portion or all of a deferred tax asset will not be realized
based on the weight of available evidence, including expected future earnings. As of September 30, 2024 and December 31, 2023, management
believes it is more likely than not that no benefits will be derived from the Company's deferred tax assets.
The Company recognizes an uncertain tax position
in its financial statements when it concludes that a tax position is more likely than not to be sustained upon examination based solely
on its technical merits. Only after a tax position passes the first step of recognition will measurement be required. Under the measurement
step, the tax benefit is measured as the largest amount of benefit that is more likely than not to be realized upon effective settlement.
This is determined on a cumulative probability basis. The full impact of any change in recognition or measurement is reflected in the
period in which such change occurs. As of September 30, 2024 and December 31, 2023, the Company has not recorded any uncertain tax positions.
There were no interest or penalties related to income taxes for the three and nine months ended September 30, 2024 or 2023.
F-
33
Lomond Operating Co. (Formerly Known as Lomond Therapeutics,
Inc.)
Notes to the Condensed Financial Statements
For the nine months ended September 30, 2024 and 2023
(unaudited)
The tax years from 2021 and forward are open to
examination by federal tax and state tax authorities. In addition, tax years with net operating loss carryforwards are subject to examination,
three years following the year they are utilized. The Company has not been informed by any tax authorities for any jurisdiction that any
of its tax years is under examination.
Simple agreement for future equity ("SAFE") liability
The SAFE instruments issued in August 2024
have the potential for cash settlement upon the occurrence of certain "liquidity events" (including a change of control, direct
listing, or initial public offering) and "dissolution events" (including voluntary termination of operations, a general assignment
for the benefit of the Company's creditors, or any other liquidation, dissolution or winding up of the Company (excluding a liquidity
event), whether voluntary or involuntary). The instrument, at the election of the holder, can also be settled in shares of the Company's
Capital Stock, which are contingently redeemable upon a liquidation event that may obligate the Company to transfer assets at some point
in the future. The SAFE instrument was determined to be liability classified on issuance and recorded at estimated fair value. The SAFE
instrument is subject to remeasurement at each reporting date with changes in estimated fair value recognized in other income (expense)
in the statements of operations until settlement or termination in cash or shares.
Redeemable convertible preferred stock
The Company records shares of its redeemable convertible
preferred stock at their respective fair values on the dates of issuance, net of issuance costs. The Company classifies its preferred
stock outside of total stockholders' deficit because, in the event of certain "liquidation events" (including a merger,
acquisition or sale of all or substantially all of the Company's assets) that are not solely within the control of the Company,
the shares would become redeemable at the option of the holders. The Company did not adjust the carrying values of the preferred stock
to the deemed liquidation values of the shares since a liquidation event was not probable at any of the reporting dates. Subsequent adjustments
to increase or decrease the carrying values to the liquidation values will be made only if and when it becomes probable that such liquidation
event will occur.
Share-based compensation
The Company measures its share-based awards, including
grants issued by the Company or Eilean to the Company's employees and non-employees, based on their grant date fair value. The Company's
share-based awards currently include common units in its parent, Eilean. The Company records compensation expense for these service-based
awards beginning on the grant date over the requisite service period in which the awards are expected to vest on a straight-line basis,
subject to a minimum expense amount based on the awards that have vested to date. The common stock issued to option holders upon the exercise
of option awards are authorized and previously unissued common stock of Eilean. Forfeitures are recognized as they occur.
The grant date fair value of employee and non-employee
awards are determined using the Black-Scholes option pricing model, which includes inputs such as the fair value of the Company's
common stock, expected term, risk-free rate, expected stock price volatility over the expected term, and expected dividend yield. For
all options granted, the Company calculated the expected term based on the simplified method. The Company has no publicly available stock
information and therefore, the Company used the historical volatility of the stock price of similar publicly traded peer companies. The
risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of
the grant. The Company does not anticipate that dividends will be distributed in the near future.
The absence of an active market for the Company's
common stock requires the Company's Board of Directors to determine the fair value of its common stock for purposes of granting
options. The Company obtains third-party valuations to assist the Board of Directors in determining the fair value of the Company's
common stock.
Net loss per share attributable to common stockholders
Net loss per share attributable to common stockholders
is computed using the two-class method required for participating securities based upon their respective rights to receive dividends as
if all income for the period has been distributed.
F-
34
Lomond Operating Co. (Formerly Known as Lomond Therapeutics,
Inc.)
Notes to the Condensed Financial Statements
For the nine months ended September 30, 2024 and 2023
(unaudited)
The Company's participating securities include
the Company's redeemable convertible preferred stock. The holders of redeemable convertible preferred stock do not have a contractual
obligation to share in losses of the Company, and, therefore, during periods of loss there is no allocation required under the two-class
method.
Basic net loss per share attributable to common
stockholders is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period.
Diluted net loss per share is computed by giving
effect to all potentially dilutive securities outstanding for the period using the treasury stock method or the if-converted method based
on the nature of such securities. For periods in which the Company reports net losses, diluted net loss per share attributable to common
stockholders is the same as basic net loss per share attributable to common stockholders, because potentially dilutive shares of common
stock are not assumed to have been issued if their effect is anti-dilutive.
As of September 30, 2024 13,661,416 potential
shares of common stock from the Company's redeemable convertible preferred stock, 4,329,617 potential shares of Common stock from
the Company's option awards, and potential shares from SAFE instruments issuable to investors were excluded from the computation
of diluted net loss per share attributable to common stockholders, because including them would have had an anti-dilutive effect. As of
September 30, 2023, 13,661,416 potential shares of common stock from the Company's redeemable convertible preferred stock were excluded
from the computation of diluted net loss per share attributable to common stockholders, because including them would have had an anti-dilutive
effect.
Segments
Operating segments are defined as components of
an entity for which separate financial information is available and regularly reviewed by the Chief Operating Decision Maker ("CODM")
in deciding how to allocate resources to such individual segment and in assessing performance. The Company's CODM is its President
and Chief Executive Officer. To date, the Company operates and manages its business as one operating and reportable segment. All of the
Company's assets are located in the United States.
Forward stock split
On September 20, 2024, the Company filed a Certificate
of Amendment to its Certificate of Incorporation, as amended, with the Secretary of State of the State of Delaware, which effected a 3.8-for-1
forward stock split (the "stock split") of the Company's issued and outstanding shares of common stock and redeemable convertible preferred stock. As a result of the stock split, (i) every share of common stock issued and outstanding was converted
into 3.8 shares of common stock, and (ii) every share of redeemable convertible preferred stock issued and outstanding was converted into
3.8 shares of redeemable convertible preferred stock. The stock split affected all stockholders uniformly and did not alter any stockholder's
percentage interest in the Company's equity. No fractional shares were issued in connection with the stock split. Stockholders who
would otherwise be entitled to a fractional share of common stock were instead entitled to receive a proportional cash payment. The Restated
Certificate of Incorporation authorizes the Company to issue 32,661,416 shares of capital stock on a post-stock split adjusted basis,
inclusive of 19,000,000 shares of common stock, and 13,661,416 shares of series seed redeemable convertible preferred stock. All common
share and per share amounts presented in the financial statements and accompanying notes have been retroactively adjusted to reflect the
stock split.
F-
35
Lomond Operating Co. (Formerly Known as Lomond Therapeutics,
Inc.)
Notes to the Condensed Financial Statements
For the nine months ended September 30, 2024 and 2023
(unaudited)
Recently issued accounting pronouncements
In November 2023, the Financing Accounting Standards
Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280): Improvements
to Reportable Segment Disclosures. ASU 2023-07 will improve reportable segment disclosure requirements, primarily through enhanced disclosures
about significant segment expenses on an interim and annual basis. The ASU is effective for fiscal years beginning after December 15,
2023, and interim periods after December 15, 2024, with early adoption permitted. The adoption of this standard is not expected to have
a material impact on the Company's condensed financial statements at adoption date.
In November 2024, the FASB issued ASU 2024-03,
Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement
Expenses, which is intended to provide more detailed information about specified categories of expenses (purchases of inventory, employee
compensation, depreciation and amortization) included in certain expense captions presented on the consolidated statement of operations.
This new standard is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after
December 15, 2027. Early adoption is permitted. The amendments may be applied either (1) prospectively to financial statements issued
for periods after the effective date of this ASU or (2) retrospectively to all prior periods presented in the consolidated financial statements.
The Company is currently assessing the impact this standard will have on the condensed financial statements and footnote disclosures.
In December 2023, the FASB issued ASU 2023-09,
Income Taxes: Improvements to Income Tax Disclosures, which requires enhanced annual disclosures regarding the rate reconciliation and
income taxes paid information. This standard is effective for fiscal years beginning after December 15, 2024, and may be adopted on a
prospective or retrospective basis, with early adoption permitted. The Company is currently evaluating the impact of this standard on
its financial statements and related disclosures.
3
Other financial statement information
Accrued expenses and other current liabilities
consisted of the following:
As
    of
September 30,
December 31,
2024
2023
Accrued research
    and development - related party
$
-
$
856,144
Accrued legal expenses
694,352
-
Accrued accounting and audit
    expenses
205,900
-
Accrued
    other expenses - related party
350,677
-
$
1,250,929
$
856,144
4
Fair value measurements
The SAFE liability is a Level 3 financial instrument measured at fair
value on a recurring basis.
The following table provides a summary of changes in the estimate fair
value of the SAFE liability:
Three months ended
September 30,
2024
Nine Months Ended
September 30,
2024
Issuance of SAFE instrument
$
7,500,000
$
7,500,000
Change in fair value
924,479
924,479
Balance at September 30, 2024
$
8,424,479
$
8,424,479
F-
36
Lomond Operating Co. (Formerly Known as Lomond Therapeutics,
Inc.)
Notes to the Condensed Financial Statements
For the nine months ended September 30, 2024 and 2023
(unaudited)
The
fair value of the SAFE liability was estimated using a Probability-Weighted Expected Return Method ("PWERM") using the following
inputs:
August 27,
2024
(issuance date)
September 30,
2024
Fair value of underlying equity
$1.30 - $3.35
$1.37 - $3.45
Volatility
103.0% - 124.5%
96.0% - 119.0%
Discount rate
9.4%
8.0%
Expected term (in years)
0.50 - 2.97
0.50 - 2.87
Probability of equity financing
20.0%
10.0%
Probability of Alternative Public Offering transaction
30.0%
66.7%
Probability of liquidity event
49.0%
22.3%
Probability of dissolution
1.0%
1.0%
5
Commitments and contingencies
Guarantees and Indemnification
In the normal course of business, the Company
enters into agreements that contain a variety of representations and provide for general indemnification. The Company's exposure
under these agreements is unknown because it involves claims that may be made against the Company in the future. The Company has entered
into indemnification agreements with certain directors and officers that require the Company, among other things, to indemnify them against
certain liabilities that may arise by reason of the status or service as directors or officers. To date, the Company has not paid any
claims or been required to defend any action related to its indemnification obligations. As of September 30, 2024, the Company does not
have any material indemnification claims that were probable or reasonably possible and consequently has not recorded related liabilities.
Contingencies
From time to time, the Company may become involved
in legal proceedings arising in the ordinary course of business. The Company is not currently a party to any material legal proceedings.
6
SAFE instruments
During
the three and nine months ended September 30, 2024, the Company issued SAFE instruments to TPAV, LLC ("TPAV"), a party related
through Nikolay Savchuk, the President and Chief Executive Officer of the Company, entities affiliated with OrbiMed, a party related through
Carl Gordon, Director of the Company, and third-party investors resulting in net proceeds of $7.5 million. The terms of the SAFEs required
that they automatically convert into capital stock upon a qualified equity financing prior to the termination of the SAFE. The SAFEs will
automatically convert into the number of shares of capital stock equal to the purchase amount divided by the conversion price, which means
either: (1) the SAFE price or (2) discount price (lowest price per standard share of capital stock sold in the equity financing multiplied
by the discount rate), whichever results in a greater number of shares of capital stock.
If
there is a liquidity event before the termination of the SAFEs, the SAFEs will be automatically entitled (subject to the liquidation priority)
to receive a portion of the proceeds, due and payable to each investor immediately prior to the liquidity event equal to the greater of
(1) the purchase amount or (2) the amount payable on the number of shares of Common Stock equal to the Purchase Amount divided by the
Liquidity price (the price per share equal to the Post-Money Valuation Cap divided by the Liquidity Capitalization). If any of the Company's
security holders are given a choice as to the form and amount of proceeds to be received in a liquidity event, each investor will be given
the same choice. The SAFEs were settled subsequent to September 30, 2024. Refer to Note 4 and Note 11 for further information.
F-
37
Lomond Operating Co. (Formerly Known as Lomond Therapeutics,
Inc.)
Notes to the Condensed Financial Statements
For the nine months ended September 30, 2024 and 2023
(unaudited)
7
Redeemable convertible preferred stock
In March 2020, the Company issued an aggregate
of 5,216,179 shares of its redeemable convertible preferred stock ("preferred stock") at a purchase price of $0.402594 per
share in exchange for cash proceeds of $2.1 million.
Pursuant to the terms of the original and amended
Series Seed Preferred Stock Purchase Agreement (the "Agreement"), the Company was obligated to sell additional shares of its
preferred stock to the same investors at a cash purchase price of $0.402594 per share. In 2021, the Company issued an aggregate of 8,445,237
shares of its preferred stock at a purchase price of $0.402594 per share in exchange for cash proceeds $3.4 million.
Redeemable convertible preferred stock consisted
of the following:
As of September 30, 2024 and December 31, 2023
Series
Shares
authorized
Shares
issued
and outstanding
Aggregate
liquidation
preferrence
Carrying
value
Series Seed
13,661,416
13,661,416
$
5,500,001
$
5,466,925
13,661,416
13,661,416
$
5,500,001
$
5,466,925
The following are the key terms of the preferred stock:
Dividends
The holders of shares of preferred stock are entitled
to receive dividends, out of any assets legally available, prior and in preference to any declaration or payment of any dividend on the
common stock, payable only if and when declared. Such dividends are non-cumulative.
After payment of any such dividends on the preferred
stock, any additional dividends or distributions shall be distributed among all holders of common stock and preferred stock in proportion
to the number of shares of common stock that would be held by each such holder if all shares of preferred stock were converted to common
stock at the then effective conversion rate. No dividends have been declared to date.
Optional Conversion
Each share of preferred stock is convertible at
the option of the holder at any time after the issuance date of such share into such number of shares of common stock as is determined
by dividing the applicable original issue price by the applicable conversion price for such series. The initial conversion price per share
for each series of preferred stock shall be the original issue price of $0.402594 per share. Adjustments to the conversion price, if any,
occur if additional shares of common stock have been issued at a price less than the respective preferred stock.
Automatic Conversion
Each share of preferred stock will automatically
convert into shares of common stock at the conversion rate at the time in effect for such series of preferred stock immediately upon either
of (1) the closing of the Company's sale of its common stock in an initial public offering pursuant to a registration statement
on Form S-1 that results in at least $30.0 million of gross proceeds; or (2) the date, or the occurrence of an event, specified by vote
or written consent or agreement of the holders of a majority of the then outstanding shares of preferred stock (voting together as a single
class and not as separate series, and on an as-converted basis).
F-
38
Lomond Operating Co. (Formerly Known as Lomond Therapeutics,
Inc.)
Notes to the Condensed Financial Statements
For the nine months ended September 30, 2024 and 2023
(unaudited)
Liquidation Preference
In the event of any voluntary or involuntary liquidation,
dissolution, or winding up of the Company, the holders of the preferred stock are entitled to receive out of the proceeds or assets of
the Company available for distribution to its stockholders, prior and in preference to any distribution of the proceeds to the holders
of common stock, a liquidation preference in the amount per share equal to the sum of the original issue price of $0.402594 per share,
plus any declared but unpaid dividends on such share.
If the assets of the Company are insufficient
to pay the holders of the preferred stock the full amount, the holders of the preferred stock will share ratably in any distribution of
the assets available for distribution.
If preferential amounts are paid in full, the
remaining assets of the Company are distributed among the holders of the preferred stock and common stock pro rata based on the number
of shares held by each shareholder.
Voting rights
Each share of preferred stock has a number of
votes equal to the number of shares of common stock into which it is convertible. Except as provided in the Company's amended or
restated articles of incorporation, the holders of preferred stock and the holders of common stock vote together as one single class.
The holders of preferred stock are entitled to
elect two directors of the Company. The holders of preferred stock and common stock (voting together as a single class and on an as converted
basis) are entitled to elect the two remaining directors.
Redemption
The preferred stock is not currently redeemable;
however, it is redeemable at the option of the holders in the event of certain "liquidation events" (including a merger, acquisition
or sale of all or substantially all of the Company's assets) that are not solely within the control of the Company.
8
Stockholders' deficit
The voting, dividend, and liquidation rights of
the holders of the Company's common stock are subject to and qualified by the rights, powers, and preferences of the holders of
the preferred stock set forth above. Each share of common stock entitles the holder to one vote, together with the holders of the preferred
stock, on all matters submitted to the stockholders for a vote. The holders of common stock are entitled to receive dividends, if any,
as declared by the Company's board of directors, subject to the preferential dividend rights of redeemable convertible preferred
stock. As of September 30, 2024 and December 31, 2023, the Company's certificate of incorporation, as amended and restated, authorized
the Company to issue 19,000,000 shares of common stock with a par value of $0.0001 per share. There were 758,967 shares of common stock
issued and outstanding during all periods presented. The Company currently has 13,661,416 shares of common stock reserved for issuance
upon the conversion of its outstanding redeemable convertible preferred stock and 4,329,617 shares of common stock reserved for issuance
upon the exercise of stock options outstanding.
Capital Contributions
During the three and nine months ended September
30, 2024, the Company received cash capital contributions of $4.0 million and $7.5 million, respectively, from Eilean to support working
capital requirements. During the nine months ended September 30, 2023, the Company received cash capital contributions of $1.7 million
from Eilean to support working capital requirements.
F-
39
Lomond Operating Co. (Formerly Known as Lomond Therapeutics,
Inc.)
Notes to the Condensed Financial Statements
For the nine months ended September 30, 2024 and 2023
(unaudited)
Promissory note receivable from parent
In September 2024, the Company entered into a
promissory note with Eilean, which allows Eilean to borrow an aggregate principal amount of up to $7.5 million from the Company. The note
accrues simple interest on the outstanding principal balance at a rate of 6% per annum. The outstanding principal and related accrued
interest is due in full no later than September 30, 2027. As of September 30, 2024, Eilean has borrowed $4.0 million under the promissory
note. The balance outstanding on this note receivable is included in stockholders' deficit on the accompanying condensed balance
sheet.
9
Related Party Transactions
Research and development arrangements with
related parties
In March 2020, the Company entered into a Master
Research and Development Agreement with ChemDiv, Inc. ("ChemDiv"), pursuant to which ChemDiv provides services related to
preclinical drug discovery to the Company. Dr. Nikolay Savchuk, President and Chief Executive Officer of the Company, is a stockholder
of ChemDiv and a member of its board of directors. During the three and nine months ended September 30, 2023, $1.7 million and $4.9 million,
respectively, was expensed as research and development cost in the statement of operations related to ChemDiv services. As of December
31, 2023, the Company recorded $0.9 million as accrued expense relating to ChemDiv services in the balance sheet.
In January 2023, the Company entered into an agreement
with Eilean Therapeutics AU Pty Ltd ("Eilean AU"), a subsidiary of Eilean, which provided the Company rights to intellectual
property under development by Eilean AU. During the three and nine months ended September 30, 2024, the Company paid Eilean AU $4.0 million
and $7.0 million, respectively, for the intellectual property rights. Because the intellectual property rights from Eilean AU have no
alternative future use, the payments were recorded immediately through research and development expense in the Company's condensed
statements of operations for the three and nine months ended September 30, 2024.
Administrative arrangements with related parties
In March 2020, the Company entered into an Administrative
Services Agreement with Eil Therapeutics, Inc ("Eil"), a subsidiary of Eilean. Pursuant to such administrative services agreement,
Eil agreed to provide the Company, directly or indirectly through its contractors, administrative support services and access to staff's
management experience and knowledge. Such services included general management and operations, including financial and accounting services,
insurance program marketing and administration and various tax-related services. Dr. Nikolay Savchuk, President and Chief Executive Officer
of the Company, is also President and Chief Executive Officer of Eil. During the three and nine months ended September 30, 2023, $0.2
million and $0.7 million, respectively, was expensed as research and development cost. Amounts expensed as general and administrative
cost during the three and nine months ended September 30, 2024 and 2023 were de minimis.
During 2024, the Company received administrative
support services from Abet Solutions ("Abet"), a party related through Dr. Nikolay Savchuk, President and Chief Executive
Officer of the Company. During the three and nine months ended September 30, 2024, $0.2 million was expensed as general and administrative
cost in the statement of operations related to Abet services received by the Company. As of September 30, 2024, the Company recorded $0.2
million as accrued expense relating to Abet services in the balance sheet.
Related party notes payable
In May and June 2022, the Company borrowed an
aggregate principal amount of $3.9 million under two promissory note agreements with Dinas Therapeutics, Inc. ("Dinas") for
research and development invoices paid by Dinas on behalf of the Company. Dr. Nikolay Savchuk, President and Chief Executive Officer of
the Company, is the Chief Executive Officer of Dinas. The notes were due on the earlier of (i) written demand by Dinas, (ii) the second
anniversary of the note issuances. The notes accrued interest per annum at a rate equal to 5.00%, to be paid at maturity.
F-
40
Lomond Operating Co. (Formerly Known as Lomond Therapeutics,
Inc.)
Notes to the Condensed Financial Statements
For the nine months ended September 30, 2024 and 2023
(unaudited)
In January 2023, the Company borrowed an aggregate
principal amount of $0.3 million under a promissory note agreement with Eil, for payment of services performed on behalf of the Company.
The note was due no later than the second anniversary of the note issuances. The notes accrued interest per annum at a rate of 2.5%, to
be paid at maturity.
For the three and nine months ended September
30, 2023, $0.1 million and $0.2 million, respectively, was expensed as interest cost related to the promissory notes with Dinas and Eil.
In December 2023, Eilean assumed the promissory notes outstanding with Dinas and Eil and related accrued interest, which was accounted
for as a contribution from parent.
10
Share-based compensation
During the year ended December 31, 2020, the Company
issued 539,796 option awards to non-employee consultants for services to be performed for the Company. Option awards granted generally
vest based on a specific vesting schedule as agreed upon by the optionee and the Company and generally expire 10 years after the grant
date.
In connection with the Eilean transaction, the
existing option awards granted by the Company were cancelled and replaced with common units (the "units") in Eilean. The units
granted generally vest (i) on the date of grant, or (ii) 50% on the date of grant, with the remaining 50% vesting over 24 months in equal
monthly installments as services are provided.
The replacement of the option awards with units
was evaluated as a modification. The fair value of the option awards was in excess of the grant date fair value of the units. As such,
there was no incremental compensation costs related to the units to be recorded. The Company recognized $25,000 at the grant date of the
units related to the portion of the units that became fully vested at such time.
The Company recorded share-based compensation
expense in the following expense categories in its accompanying unaudited interim condensed statements of operations:
Three months ended
September 30,
Nine months ended
September 30,
2024
2023
2024
2023
General and Administrative
$
452
$
1,357
$
3,166
$
4,071
$
452
$
1,357
$
3,166
$
4,071
Adoption of 2024 Stock Plan and Grant of Options
On September 20, 2024, the Board of Directors
of Lomond (the "Board") approved the adoption of the Lomond Operating Co. 2024 Stock Plan (the "2024 Plan"). The
purpose of the 2024 Plan is to attract, incentivize and retain employees, outside directors and consultants through the grant of awards.
The 2024 Plan provides for the direct award or sale of shares, the grant of options to purchase shares and the grant of restricted stock
units to acquire shares. The maximum number of shares which may be issued under the 2024 Plan were 4,329,617.
Immediately following the adoption of the 2024
Plan, the Board approved the grant of 4,329,617 options to purchase Lomond common stock to employees, outside directors and consultants,
at an exercise price of $1.30 per share. The option shares will become eligible to vest based on, and subject to, the Company's
completion of a merger, consolidation or share exchange with a special purpose acquisition company or other similar entity in which the
common stock (or similar securities) of the surviving parent entity is listed on a national securities exchange on or prior to December
31, 2024 (the "Milestone") and the optionee's continuous service through the achievement of the Milestone. Any option
shares that become eligible to vest based on achievement of the milestone (the "Eligible Shares") shall vest and become exercisable
in a series of 48 successive equal monthly installments.
F-
41
Lomond Operating Co. (Formerly Known as Lomond Therapeutics,
Inc.)
Notes to the Condensed Financial Statements
For the nine months ended September 30, 2024 and 2023
(unaudited)
As of September 30, 2024, there was $4.6 million
of total unrecognized share-based compensation costs related to the Company's option awards granted under the 2024 Plan. The Milestone
for vesting to commence was not achieved as of September 30, 2024. The Milestone was achieved upon closing of the Merger, and therefore,
vesting commenced on November 1, 2024, the date of closing. Refer to Note 11 for further information.
The fair value of options granted under the 2024
plan was estimated on September 20, 2024, the date of grant, using the Black-Scholes option pricing model, with the following assumptions:
Risk-free interest rate
3.5
%
Expected term (in years)
6.1
Expected volatility
103.6
%
Expected dividend yield
0.0
%
11
Subsequent events
The
Company evaluated the potential impact of subsequent events on the financial statements through November 22, 2024, the date the financial
statements were available to be issued.
Issuance of SAFE Instruments
In October 2024, the Company issued SAFE instruments
to TPAV, LLC ("TPAV"), a party related through Nikolay Savchuk, the President and Chief Executive Officer of the Company,
and entities affiliated with OrbiMed, a party related through Carl Gordon, Director of the Company, after converting a $3.5 million capital
contribution made in May 2024 by Eilean. The SAFE instruments provide investors the right to certain shares of the Company's capital
stock. The terms of the SAFEs provided for automatic or discretionary conversion upon the occurrence of certain events.
Agreements with Eil and Bala
In October 2024, the Company entered into license
agreements with both of Eil (the "Eil License Agreement") and Bala Therapeutics, Inc. ("Bala", the "Bala
License Agreement"). Pursuant to the Eil License Agreement and Bala License Agreement, the Company obtained exclusive, perpetual,
worldwide licensing rights for the development and future ownership of (i) a BCL-2, inhibitor for the treatment of AML and CLL from Eil,
and (ii) an early-stage menin inhibitor for the treatment of AML from Bala.
The Eil License Agreement and Bala License Agreement
became effective in October 2024 when the Company issued promissory notes to Eil and Bala, respectively. The principal amount of the promissory
notes with Eil and Bala are $1.7 million and $1.2 million, respectively. Each such promissory note bears interest at a rate of 7% per
annum, compounded annually, and matures on October 17, 2026. Each such promissory note may be repaid without penalty. In addition, the
two promissory notes each provide for customary events of default.
Upon the payment in full of the applicable promissory
note, Eil and Bala have each agreed to transfer to the Company all of the intellectual property rights covered by the license agreements,
as the case may be.
The license rights are sublicensable at the option
of the Company. Under such license agreements, Lomond, but not Eil or Bala, as the case may be, have the right to terminate the applicable
license agreement for convenience upon 30 days' written notice. If Lomond, or Eil or Bala, as the case may be, materially breaches
the applicable license agreement, and such breach is not cured within 90 days after the receipt of notice of such breach, then the non-defaulting
party may terminate such license agreement. In addition, upon the occurrence of an event of default under the applicable promissory note,
the license agreement shall be terminated.
Eil and Bala are each wholly-owned by Eilean,
Lomond's parent company.
F-
42
Lomond Operating Co. (Formerly Known as Lomond Therapeutics,
Inc.)
Notes to the Condensed Financial Statements
For the nine months ended September 30, 2024 and 2023
(unaudited)
Entry into a Material Definitive Agreement
On November 1, 2024, the Company, Venetian, and
its wholly-owned subsidiary, Lomond Acquisition Corp. ("Acquisition Corp."), entered into an Agreement and Plan of Merger
and Reorganization (the "Merger Agreement"), and a Subscription Agreement (the "Subscription Agreement"). Pursuant
to the terms of the Merger Agreement, on November 1, 2024 (the "Closing Date"), Acquisition Corp. merged with and into Lomond,
with Lomond continuing as the surviving corporation and a wholly-owned subsidiary of Venetian (the "Merger"). In connection
with the Merger, Venetian intends to change its corporate name from "Venetian-1 Acquisition Corp" to "Lomond Therapeutics
Holdings, Inc."
Pursuant to the terms of the Merger Agreement,
at the time the certificate of merger reflecting the Merger was filed with the Secretary of State of Delaware (the "Effective Time"),
each share of Legacy Lomond's capital stock issued and outstanding immediately prior to the closing of the Merger was cancelled
and converted into the right to receive one share of Venetian common stock (the "Exchange Ratio"), with the maximum number
of shares of Venetian common stock issuable to the former holder of Lomond's capital stock equal to 14,420,383. In addition, pursuant
to the Merger Agreement, immediately prior to the Effective Time, an aggregate of 3,625,000 shares of the 5,000,000 then-outstanding shares
of Venetian common stock owned by Venetian stockholders prior to the Merger were forfeited and cancelled (the "Stock Forfeiture").
In addition, pursuant to the Merger Agreement,
at the Effective Time, options to purchase an aggregate of 4,329,617 shares of Lomond common stock at an exercise price of $1.30 per share
issued and outstanding immediately prior to the closing of the Merger under Lomond's 2024 Equity Incentive Plan (the "Legacy
Lomond Plan") were assumed and converted into options to purchase 4,329,617 shares of Lomond Therapeutics Holdings, Inc. common
stock at an exercise price of $1.30 per share.
The Merger Agreement contained customary representations
and warranties and pre- and post-closing covenants of each party and customary closing conditions. The Merger will be treated as a recapitalization
and reverse acquisition for Venetian for financial reporting purposes. Lomond will be considered the acquirer for accounting purposes,
and Venetian's historical financial statements before the Merger will be replaced with the historical financial statements of Lomond
before the Merger in future filings with the United States Securities and Exchange Commission (the "SEC"). The Merger is intended
to be treated as a tax-free reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended.
Immediately following the Effective Time of the
Merger, Lomond Therapeutics Holdings, Inc. held a closing for a private placement offering (the "Offering") pursuant to which
8,241,375 shares of common stock were issued and sold at a purchase price of $4.00 per share for aggregate gross proceeds of approximately
$32.9 million before deducting placement agent fees and expenses of the Offering. Pursuant to the Subscription Agreement, Lomond Therapeutics
Holdings, Inc., may hold one or more subsequent closings prior to November 30, 2024, to sell up to an additional 4,021,1125 shares at
the Offering Price.
In connection with the Offering and subject to
the closing of the Offering, Lomond Therapeutics Holdings, Inc. agreed to pay the placement agents a cash placement fee and issue Placement
Agent Warrants to the Placement Agent. As a result of the foregoing, in connection with the closing of the Offering, Lomond Therapeutics
Holdings, Inc. paid the Placement Agents an aggregate cash commission of $2.5 million and issued Placement Agent Warrants to purchase
an aggregate of 275,410 shares of Lomond Therapeutics Holdings, Inc. Common Stock. Lomond Therapeutics Holdings, Inc. has also reimbursed
or will reimburse the Placement Agents for approximately $0.1 million of expenses incurred in connection with the Offering.
F-
43
Lomond Operating Co. (Formerly Known as Lomond Therapeutics,
Inc.)
Notes to the Condensed Financial Statements
For the nine months ended September 30, 2024 and 2023
(unaudited)
Consulting Agreement with Dr. Dukes
In November 2024, the Company entered into a consulting
agreement with Dr. Iain Dukes, to commence upon closing of the Merger. Pursuant to the terms of Dr. Dukes' consulting agreement,
Dr. Dukes will serve as Chief Executive Officer and Chairman of Lomond Therapeutics Holdings, Inc., is eligible to receive consulting
fees at an annual rate of $400,000, and is eligible to receive an annual incentive payment equal to up to 50% of such annual consulting
fees, subject to the achievement of applicable performance metrics as determined by the Company's board of directors. Dr. Dukes'
consulting agreement contains customary invention assignment and confidentiality provisions.
Consulting Agreement with Dr. Savchuk
In November 2024, the Company entered into a consulting
agreement with Dr. Nikolay Savchuk, to commence upon closing of the Merger. Pursuant to the terms of Dr. Savchuk's consulting agreement,
Dr. Savchuk will serve as Chief Operating Officer and President of Lomond Therapeutics Holdings, Inc., is eligible to receive consulting
fees at an annual rate of $400,000, and is eligible to receive an annual incentive payment equal to up to 50% of such annual consulting
fees, subject to the achievement of applicable performance metrics as determined by the Company's board of directors. Dr. Savchuk's
consulting agreement contains customary invention assignment and confidentiality provisions.
Services Agreement with Related Party
In October 2024, Lomond Therapeutics Holdings,
Inc. entered into an administrative services & co-employment agreement, or services agreement, with Abet Solutions. Pursuant to such
use of services agreement, Abet Solutions agreed to provide to the Company, directly or indirectly through its contractors, administrative
support services and access to staff's management experience and knowledge. Such services included general management and operations,
including financial and accounting services, insurance program marketing and administration and various tax-related services. Dr. Savchuk,
President and Chief Operating Officer of Lomond Therapeutics Holdings, Inc., has a material direct interest in Abet Solutions.
F-
44
Unaudited Pro Forma Condensed Combined Financial
Statements
On November 1, 2024, Venetian-1 Acquisition Corp
("Venetian"), Lomond Acquisition Corp. ("Acquisition Corp."), and Lomond Therapeutics Inc. ("Legacy Lomond")
entered into the Merger Agreement, pursuant to which, among other things, and subject to the satisfaction or waiver of the conditions
set forth therein, Acquisition Corp. will merge with and into Legacy Lomond at the Effective Time (the "Merger"), with Legacy
Lomond continuing after the Merger as the surviving corporation and a wholly-owned subsidiary of Venetian. In connection with the Merger,
Venetian changed its corporate name from "Venetian-1 Acquisition Corp." to "Lomond Therapeutics Holdings, Inc."
("Lomond"). Following the consummation of the Merger, Legacy Lomond changed its name to "Lomond Operating Co."
At the Effective Time, each outstanding share
of Legacy Lomond common stock will be converted into the right to receive a number of shares of Venetian common stock based upon the Exchange
Ratio calculated as set forth in the Merger Agreement. Each excluded share will automatically be cancelled and will cease to exist, and
no consideration will be delivered in exchange therefor. In addition, (i) each Legacy Lomond option granted under Legacy Lomond's
2024 Stock Plan (the "Legacy Lomond Plan"), whether vested or unvested, that is outstanding immediately prior to the Effective
Time will be assumed by Venetian and converted into an option to purchase shares of Venetian common stock, on the same terms and conditions
as were applicable to such Legacy Lomond options immediately prior to the Effective Time, with the number of underlying shares and exercise
price adjusted to give effect to the Exchange Ratio.
Immediately following the Effective Time, former
Legacy Lomond stockholders are expected to own approximately 91.29% of the outstanding shares of Venetian common stock, and stockholders
of Venetian as of immediately prior to the Effective Time are expected to own approximately 8.71% of the outstanding shares of Venetian
common stock. Under certain circumstances further described in the Merger Agreement and elsewhere in this report, these ownership percentages
may be adjusted upward or downward.
The merger will be accounted for as a reverse
recapitalization of Venetian by Legacy Lomond under U.S. GAAP for purposes of these unaudited pro forma condensed combined financial
information, similar to the issuance of equity for the net assets of Venetian, which upon closing of the Merger are assumed to be primarily
cash. Legacy Lomond will be determined to be the accounting acquirer in the Merger for financial reporting purposes based upon several
factors, including: (i) former Legacy Lomond securityholders are expected to own approximately 91.29% of the Venetian Common Stock
outstanding immediately following the Effective Time (excluding the current private investment in public equity), (ii) Legacy Lomond
is entitled to designate all of the initial members of the board of directors of the combined company, and (iii) Legacy Lomond's
current senior management will hold all positions in the senior management of the combined company.
As
a result of Lomond being treated as the accounting acquirer for financial reporting purposes, if the Merger is consummated, among other
things, the historical financial statements of Legacy Lomond will become the historical consolidated financial statements of the combined
company.
The unaudited pro forma condensed combined financial
information was prepared in accordance with Article 11 of Regulation S-X.  The unaudited pro forma condensed combined balance sheet
data assumes that the Merger took place on January 1, 2023 and combines the Legacy Lomond and Venetian historical balance sheets at September
30, 2024. The unaudited pro forma condensed combined statements of operations data assumes that the Merger took place as of January 1,
2023 and combines the historical results of Legacy Lomond and Venetian for the nine months ended September 30, 2024 and the year ended
December 31, 2023. The historical financial statements of Legacy Lomond and Venetian, which are incorporated by reference into or included
elsewhere in this report, have been adjusted to give pro forma effect to events that are (i) directly attributable to the merger,
(ii) factually supportable, and (iii) with respect to the statements of operations, expected to have a continuing impact on
the combined results. The unaudited pro forma condensed combined financial information, including the notes thereto, should be read in
conjunction with the
separate historical
audited financial statements of Legacy Lomond and
Venetian for the years ended December 31, 2023 and December 31, 2022 and the unaudited interim statements of Legacy Lomond and Venetian
for the nine months ended September 30, 2024, which are incorporated by reference or included elsewhere in this report.
F-
45
In the unaudited
pro forma combined condensed financial statements, the Merger has been accounted for as a reverse recapitalization under U.S. GAAP because
the assets of Venetian at the Effective Date are expected to be primarily cash.
The unaudited pro forma condensed combined financial
statements are based on the assumptions and adjustments that are described in the accompanying notes. The actual amounts recorded as of
the completion of the merger may differ materially from the information presented in these unaudited pro forma condensed combined financial
statements as a result of the amount of cash used by Venetian's operations between the signing of the Merger Agreement and the closing
of the Merger; the timing of the closing of the Merger; and other changes in Venetian's assets and liabilities that occur prior
to the completion of the Merger.
In addition, the unaudited pro forma condensed
combined financial statements do not give effect to the potential impact of current financial conditions, regulatory matters, operating
efficiencies or other savings or expenses that may be associated with the Merger. The actual results reported in periods following the
Merger may differ significantly from those reflected in the unaudited pro forma condensed combined financial information presented herein
for a number of reasons, including, but not limited to, differences in the assumptions used to prepare this unaudited pro forma condensed
combined financial information. Furthermore, accounting rules require evaluation of certain assumptions, estimates, or determination of
financial statement classifications. While this unaudited pro forma condensed combined financial information assumes no material differences,
the account policies of Venetian may materially vary from those of Legacy Lomond. Following consummation of the Merger, management will
conduct a final review of Venetian's accounting policies in order to determine if differences in accounting policies require adjustment
or reclassification of Venetian's results of operations or reclassification of assets or liabilities to conform to Lomond's
accounting policies and classifications. As a result of this review, management may identify differences that, when conformed, could have
a material impact on these unaudited pro forma condensed combined financial statements.
Accordingly, the unaudited pro forma condensed
combined financial statements have been prepared for illustrative purposes only are not necessarily indicative of the combined financial
position or results of operations in future periods or the results that actually would have been realized had Legacy Lomond and Venetian
been a combined company during the specified period and may not be useful in predicting the future consolidated results of operations
or financial position.
F-
46
Unaudited Pro Forma Condensed Combined Balance
Sheet
As of September 30, 2024
Legacy Lomond
Venetian
Transaction Adjustments
Notes
Pro Forma Combined
Assets
Current assets:
Cash and cash equivalents
$
3,617,664
$
2,269
$
28,955,160
A
$
32,575,093
Total current assets
$
3,617,664
$
2,269
$
28,955,160
$
32,575,093
Deferred financing costs
694,352
-
(694,352
)
B
-
Total assets
$
4,312,016
$
2,269
$
28,260,808
$
32,575,093
Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
Accounts payable and accrued expenses
$
1,250,929
$
10,700
$
705,648
C,D
$
1,967,277
Note payable – stockholder
-
127,500
-
127,500
Total current liabilities
1,250,929
138,200
705,648
2,094,777
Note payable in exchange for license
-
-
3,265,908
E
3,265,908
SAFE liability
8,424,479
-
(8,424,479
)
F
-
Total liabilities
138,200
(4,452,924
)
5,360,685
Convertible preferred stock
5,466,925
-
(5,466,925
)
G
-
Stockholders' equity (deficit):
Common stock $0.0001 par value
76
500
2,144
H
2,720
Additional paid-in capital
23,656,420
-
42,707,989
H
66,364,409
Related party notes receivable
(4,004,603
)
-
-
(4,004,603
)
Accumulated deficit
(30,482,210
)
(136,431
)
(4,529,477
)
H
(35,148,118
)
Total stockholders' equity (deficit)
(10,830,317
)
(135,931
)
38,180,657
27,214,409
Total liabilities, convertible preferred stock and stockholders' equity (deficit)
$
4,312,016
$
2,269
$
28,260,808
$
32,575,093
See accompanying notes to the unaudited pro forma
condensed combined financial statements
F-
47
Unaudited Pro Forma Condensed Combined Statements
of Operations
For the Nine Months Ended September 30,
2024
Legacy Lomond
Venetian
Transaction Adjustments
Notes
Pro Forma Combined
Operating expenses:
Research and development – related party
$
7,000,000
$
-
$
-
$
7,000,000
General administrative
836,663
33,715
600,000
C
1,470,378
Loss from operations
(7,836,663
)
(33,715
)
(600,000
)
(8,470,378
)
Non-operating expense:
Change in fair value of SAFE liability
(924,479
)
-
924,479
I
-
Interest expense
-
-
(162,908
)
J
(162,908
)
Net Loss
$
(8,761,142
)
$
(33,715
)
$
161,572
$
(8,633,286
)
Net loss per share, basic and diluted
$
(11.54
)
$
(0.01
)
$
(0.32
)
Weighted average common shares outstanding, basic and diluted
758,967
5,000,000
21,439,247
K
27,198,214
F-
48
Unaudited Pro Forma Condensed Combined Statements
of Operations
For the Year Ended December 31, 2023
Legacy Lomond
Venetian
Transaction Adjustments
Notes
Pro Forma Combined
Operating expenses:
Research and development – related party
$
9,729,437
$
-
$
2,900,000
E
$
12,629,437
General administrative
20,642
47,936
800,000
C
868,578
Loss from operations
(9,750,079
)
(47,936
)
(3,700,000
)
(13,498,015
)
Non-operating expense:
Interest expense
(191,205
)
-
(203,000
)
J
(394,205
)
Net Loss
$
(9,941,284
)
$
(47,936
)
$
(3,903,000
)
$
(13,892,220
)
Net loss per share, basic and diluted
$
(13.10
)
$
(0.01
)
$
(0.51
)
Weighted average common shares outstanding, basic and diluted
758,967
5,000,000
21,439,247
K
27,198,214
See accompanying notes to the unaudited pro forma
condensed combined financial statements
F-
49
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED
FINANCIAL INFORMATION
1. Description of Transactions
Merger Transaction
On November 1, 2024, Venetian, Acquisition Corp.,
and Legacy Lomond entered into the Merger Agreement, pursuant to which, among other things, and subject to the satisfaction or waiver
of the conditions set forth therein, Acquisition Corp. will merge with and into Legacy Lomond at the Effective Time, with Legacy Lomond
continuing after the Merger as the surviving corporation and a wholly-owned subsidiary of Venetian. In connection with the Merger, Venetian
intends to change its corporate name from "Venetian-1 Acquisition Corp" to "Lomond Therapeutics Holdings, Inc."
At the Effective Time, all shares of Legacy Lomond
capital stock outstanding immediately prior to the Effective Time, excluding certain excluded and dissenting shares, will be converted
into the right to receive approximately 14.4 million shares (which is equal to approximately 0.8 million shares of Legacy Lomond common
stock and approximately 13.6 million shares of Legacy Lomond preferred stock) of Venetian common stock in the aggregate, based on an Exchange
Ratio of 1.
In addition, (i) each Legacy Lomond Option granted
under the Legacy Lomond Plan, whether vested or unvested, that is outstanding immediately prior to the Effective Time will be assumed
by Venetian and converted into an option to purchase shares of Venetian common stock, on the same terms and conditions as were applicable
to such Legacy Lomond options immediately prior to the Effective Time with the number of underlying shares and exercise price adjusted
to give effect to the Exchange Ratio.
Immediately following the Effective Time, former
Legacy Lomond stockholders are expected to own approximately 91.29% of the outstanding shares of Venetian common stock, and stockholders
of Venetian as of immediately prior to the Effective Time are expected to own approximately 8.71% of the outstanding shares of Venetian
common stock, in each case, on a fully-diluted basis as calculated in accordance with the Merger Agreement (both percentages exclude the
private placement in public equity investment).
Conversion of Lomond's SAFE liability
Immediately following
the Effective Time, Lomond completed a private placement offering (the "Offering") resulting in net proceeds of approximately
$29.0 million, net of placement agent fees and estimated offering expenses payable by Lomond. At the Effective Time, each of Legacy Lomond's
SAFEs will be assumed by Venetian and be converted into 3.2 million shares of Venetian's common stock at the closing of the Offering.
2. Basis of Presentation
The unaudited pro forma condensed combined financial
statements were prepared in accordance with the regulations of the SEC. The unaudited pro forma condensed combined balance sheet as of
September 30, 2024 is presented as if the Merger had been completed on September 30, 2024. The unaudited pro forma condensed combined
statements of operation for the nine months ended September 30, 2024 and year ended December 31, 2023 assumes that the Merger occurred
on January 1, 2023, and combines the historical results of Legacy Lomond and Venetian.
For accounting purposes, Legacy Lomond will be
considered to be the acquiring company and the Merger will be accounted for as a reverse recapitalization of Venetian by Legacy Lomond
because at the closing of the Merger, the primary pre-combination assets of Venetian will be cash. The exchange ratio at the time of the
execution of the Merger Agreement is 1 share of Venetian common stock for each share of Legacy Lomond capital stock.
F-
50
Under reverse recapitalization accounting, the
assets and liabilities of Venetian will be recorded at their book values due to their short-term nature. No goodwill or intangible assets
are to be recognized
and any excess consideration transferred over the net assets of Venetian following
determination of the actual purchase consideration for Venetian will be reflected as a reduction to additional paid-in capital
.
The historical financial statements of Legacy Lomond and Venetian, which are provided elsewhere in this report, have been adjusted to
give pro forma effect to events that are (i) directly attributable to the Merger, (ii) factually supportable, and (iii) with
respect to the statements of operations, expected to have a continuing impact on the combined results.
To the extent there are significant changes to
the business following completion of the Merger, the assumptions and estimates set forth in the unaudited pro forma condensed combined
financial statements could change significantly. Accordingly, the pro forma adjustments are subject to further adjustments as additional
information becomes available and as additional analyses are conducted following the completion of the Merger. There can be no assurances
that these additional analyses will not result in material changes to the estimates.
3. Pro Forma Adjustments
The pro forma adjustments were based on the preliminary
information available at the time of the preparation of the unaudited pro forma condensed combined financial information. The unaudited
pro forma condensed combined financial information, including the notes thereto, are qualified in their entirety by reference to, and
should be read in conjunction with, the
separate historical
audited financial statements
of Legacy Lomond and Venetian for the years ended December 31, 2023 and December 31, 2022 and the unaudited interim financial statements
as of September 30, 2024 which are included elsewhere in this report.
Unaudited Pro forma Condensed Combined Balance
Sheet Transaction Adjustments
A
Reflects
(i) net proceeds from the Offering, net of offering costs (ii) proceeds from issuance of SAFE instruments, and (iii) payment of total
estimated unpaid transaction costs upon consummation of the Merger.
Lomond
Venetian
Total
Proceeds from issuance of shares of Lomond common stock, net of offering costs
$
30,455,160
$
-
$
30,455,160
Payment of transaction costs
(1,500,000
)
-
(1,500,000
)
Pro forma adjustment
$
28,955,160
$
-
$
28,955,160
B
Reclassification of deferred offering costs in connection with the completion of the PIPE financing and Merger
C
Reflects the accrued executive compensation cost arising from entry into consulting agreements with CEO and COO
D
Represents the elimination of transaction costs and PIPE financing costs in accrued expenses as of September 30, 2024.
E
Reflects the promissory notes issued in exchange for license agreements and accrued interest
F
Conversion of Legacy Lomond's SAFE liability into shares of Venetian common stock.
G
Conversion of Legacy Lomond's convertible preferred stock into shares of Venetian common stock.
F-
51
H
To record the (i) exchange ratio adjustment
    to Lomond's common stock outstanding, (ii) issuance of Lomond common stock net of issuance costs, (iii) conversion of Legacy Lomond's
    convertible preferred stock into shares of Lomond's common stock, (iv) conversion of Legacy Lomond's SAFE instruments into
    shares of Lomond's common stock, (v) issuance of note payable in exchange for license agreement, (vi) elimination of Venetian's
    historical equity carrying value, (vii) issuance of shares of Lomond common stock of the continuing company to Venetian shareholders,
    (viii) payment of transaction costs, (ix) executive compensation cost:
Additional
Common stock
paid-in
Accumulated
Shares
Amount
capital
deficit
Total
Adjustment to shares of Lomond's common stock outstanding in connection with the exchange ratio
758,967
$
(2,845
)
$
2,845
$
-
$
-
Issuance of shares of Lomond's common stock, net of issuance costs
8,241,375
824
30,454,336
-
30,455,160
Issuance of Lomond common stock upon conversion of Legacy Lomond's convertible preferred shares
13,661,416
1,366
5,465,559
-
5,466,925
Issuance of Lomond common stock upon settlement of Legacy Lomond's SAFE instruments
3,161,456
3,161
8,421,318
-
8,424,479
Issuance of note payable in exchange for license agreement
-
-
-
(3,265,908
)
(3,265,908
)
Elimination of Venetian's historical carrying values
-
(500
)
(135,931
)
136,431
-
Issuance of shares of Lomond common stock of the continuing company to Venetian shareholders
1,375,000
138
(138
)
-
-
Payment of transaction costs
-
-
(1,500,000
)
-
(1,500,000
)
Payment of consulting fees for executive compensation
-
-
-
(1,400,000
)
(1,400,000
)
Pro forma adjustment
27,198,214
$
2,144
$
42,707,989
$
(4,529,477
)
$
38,180,657
Unaudited Pro forma Condensed Combined Statement of Operations Transaction
Adjustments
I
The removal of change in fair value of SAFE liability for the nine months ended September 30, 2024
J
The accrued interest on the promissory notes issued in exchange for license agreement for the nine months ended September 30, 2024 and the year ended December 31, 2023.
K
The pro forma combined basic and diluted loss per share have been adjusted to reflect the pro forma net loss for the nine months ended September 30, 2024 and the year ended December 31, 2023. In addition, the number of shares used in calculating the pro forma combined basic and diluted net loss per share has been adjusted to reflect the estimated total number of shares of common stock of the combined company that would be outstanding as of the closing. The following table sets forth the calculation of the pro forma weighted average number of common shares outstanding—basic and diluted.
Nine months
ended
September 30,
2024
Year
ended
December 31,
2023
Elimination of historical Venetian weighted average shares
(5,000,000
)
(5,000,000
)
Conversion of Legacy Lomond's preferred stock into shares of Lomond's common stock
13,661,416
13,661,416
Issuance of Lomond common stock
8,241,375
8,241,375
Conversion of Legacy Lomond's SAFE instruments in shares of Lomond's common stock
3,161,456
3,161,456
Issuance of shares of Lomond common stock of the combined company to Venetian stockholders
1,375,000
1,375,000
21,439,247
21,439,247
F-
52
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
Venetian-1 Acquisition Corp.
Boca Raton, Florida
Opinion on the Financial Statements
We have audited the accompanying balance sheets of
Venetian-1 Acquisition Corp. (the "Company") as of December 31, 2023 and 2022, and the related statements of operations, changes
in stockholders' deficit, and cash flows for the year then ended, and the related notes (collectively referred to as the "financial
statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company
as of December 31, 2023 and 2022, and the results of its operations and its cash flows for the years then ended, in conformity with accounting
principles generally accepted in the United States of America.
Substantial Doubt About the Company's Ability
to Continue as a Going Concern
The accompanying financial statements have been prepared
assuming that the Company will continue as a going concern. As discussed in Note 6 to the financial statements, the Company has incurred
losses from inception, which raises substantial doubt about its ability to continue as a going concern. Management's plans in regard
to these matters are also described in Note 6. The financial statements do not include any adjustments that might result from the outcome
of this uncertainty.
Basis for Opinion
These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our
audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB")
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards
of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform,
an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal
control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal
control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess
the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
/s/ GRASSI & CO., CPAs, P.C.
PCAOB ID # 606
We
have served as the Company's auditors since 2022.
Jericho, New York
April 1, 2024
F-
53
VENETIAN-1 ACQUISITION CORP.
BALANCE SHEETS
December 31,
2023
2022
ASSETS
Current assets
Cash
$
984
$
107
Total current assets
984
107
Total assets
$
984
$
107
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable and accrued expenses
$
10,700
$
9,267
Note payable - stockholder
92,500
45,000
Advances from stockholder
-
120
Total current liabilities
103,200
54,387
Total liabilities
103,200
54,387
Commitments and contingencies
Stockholders' deficit
Preferred stock, $
0.0001
par value;
10,000,000
shares authorized;
none
issued and outstanding
-
-
Common stock, $
0.0001
par value,
50,000,000
shares authorized,
5,000,000
shares issued and outstanding
500
500
Accumulated deficit
(
102,716
)
(
54,780
)
Total stockholders' deficit
(
102,216
)
(
54,280
)
Total liabilities and stockholders' deficit
$
984
$
107
See accompanying notes to financial statements.
F-
54
VENETIAN-1 ACQUISITION CORP.
STATEMENTS OF OPERATIONS
For the Years Ended
December 31,
2023
2022
Revenue
$
-
$
-
General and administrative expenses
47,936
48,869
Loss from operations
(
47,936
)
(
48,869
)
Net loss
$
(
47,936
)
$
(
48,869
)
Weighted average common stock outstanding, basic and diluted
5,000,000
5,000,000
Net loss per share of common stock, basic and diluted
$
(
0.01
)
$
(
0.01
)
See accompanying notes to financial statements.
F-
55
VENETIAN-1 ACQUISITION CORP.
STATEMENTS OF CHANGES IN STOCKHOLDERS'
DEFICIT
For the Years Ended December 31, 2023 and 2022
Total
Common Stock
Accumulated
Stockholders'
Shares
Amount
Deficit
Deficit
Balances – December 31, 2021
5,000,000
$
500
$
(
5,911
)
$
(
5,411
)
Net loss
-
-
(
48,869
)
(
48,869
)
Balances – December 31, 2022
5,000,000
500
(
54,780
)
(
54,280
)
Net loss
-
-
(
47,936
)
(
47,936
)
Balances – December 31, 2023
5,000,000
$
500
$
(
102,716
)
$
(
102,216
)
See accompanying notes to financial statements.
F-
56
VENETIAN-1 ACQUISITION CORP.
STATEMENTS OF CASH FLOWS
For the Years Ended
December 31,
2023
2022
Cash flows from operating activities:
Net loss
$
(
47,936
)
$
(
48,869
)
Adjustments to reconcile net loss to net cash used in operating activities:
Accounts payable and accrued expenses
1,433
3,767
Net cash used in operating activities
(
46,503
)
(
45,102
)
Cash flows from financing activities:
Proceeds from stockholder advances
-
120
Repayments of stockholder advances
(
120
)
-
Proceeds from note payable - stockholder
47,500
35,000
Net cash provided by financing activities
47,380
35,120
Net change in cash
877
(
9,982
)
Cash - beginning of year
107
10,089
Cash - end of year
$
984
$
107
See accompanying notes to financial statements.
F-
57
VENETIAN-1 ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
Note 1.
Nature of Operations
Venetian-1 Acquisition Corp. (the "Company")
was incorporated in the State of Delaware on September 24, 2021. The Company's management has chosen December 31st for its
fiscal year end.
The Company was organized as a vehicle to investigate
and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly traded
corporation. The Company's principal business objective is to achieve long-term growth potential through a combination with a business,
rather than immediate short-term earnings. The Company will not restrict its potential target companies to any specific business, industry,
or geographical location. The analysis of business opportunities will be undertaken by, or under the supervision of, the officer and directors
of the Company.
Note 2.
Basis of Presentation and Summary
of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements have been
prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").
Use of Estimates
The preparation of financial statements in conformity
with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those estimates.
Income Taxes
The Company adopted ASC 740,
"Income
Taxes"
, at its inception. Under ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets, including tax loss and credit carry-forwards, and liabilities are measured using enacted tax rates expected
to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred
tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred income
tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. The components of the deferred
tax assets and liabilities are individually classified as current and non-current based on their characteristics. Deferred tax assets
are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred
tax assets will not be realized.
The Company recognizes accrued interest and penalties
related to unrecognized tax benefits as income tax expense. There were
no
unrecognized tax benefits and no amounts accrued for interest
and penalties as of December 31, 2023 and 2022. The Company is currently not aware of any issues under review that could result in significant
payments, accruals or material deviation from its position.
Net Loss per Common Share
Net loss per share is computed by dividing net loss by the weighted
average number of common shares outstanding for the period. Diluted earnings per share takes into effect any dilutive instruments, except
when doing so would be anti-dilutive. As of December 31, 2023 and 2022, there were
no
dilutive instruments.
F-
58
Emerging Growth Company
The Company is an "emerging growth company,"
as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As
such, the Company is eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other
public companies that are not "emerging growth companies" including, but not limited to, not being required to comply with
the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive
compensation in the Company's periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding
advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. If some investors
find the securities less attractive as a result, there may be a less active trading market for securities and the prices of securities
may be more volatile.
In addition, Section 107 of the JOBS Act also
provides that an "emerging growth company" can take advantage of the extended transition period provided in Section 7(a)(2)(B)
of the Securities Act for complying with new or revised accounting standards (that is, an "emerging growth company" can delay
the adoption of certain accounting standards until those standards would otherwise apply to private companies). The Company intends to
take advantage of the benefits of this extended transition period.
Additionally, the Company is a "smaller
reporting company" as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced
disclosure obligations, including, among other things, providing only two years of audited financial statements.
The Company will remain
a smaller reporting company until the last day of the fiscal year in which (1) the market value of the ordinary shares held by non-affiliates
equals or exceeds $250 million as of the prior June 30, and (2) the annual revenues equaled or exceeded $100 million during such completed
fiscal year or the market value of the ordinary shares held by non-affiliates equals or exceeds $700 million as of the prior June 30.
Recently Issued Accounting Pronouncements
Management does not believe that any recently
issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.
Note 3.
Capital Stock
Preferred Stock
As of December 31, 2023 and 2022, the Company
has
10,000,000
shares of preferred stock, par value of $
0.0001
, authorized and
none
issued or outstanding.
Common Stock
As of December 31, 2023 and 2022, the Company
has
50,000,000
shares of common stock, par value of $
0.0001
, authorized and has issued
5,000,000
shares of its $
0.0001
par value common
stock for $
500
to the founders of the Company.
F-
59
Note 4.
Income Taxes
As of December 31, 2023 and 2022, the Company
has approximately $
21,600
and $
11,500
in gross deferred tax assets resulting from net operating loss carry-forwards of $
102,700
and $
54,800
,
respectively, available to offset future taxable income through 2041 subject to the change in ownership provisions under IRC 382. A valuation
allowance has been recorded to fully offset these deferred tax assets because the Company's management believes future realization
of the related tax benefits is uncertain.
The difference between the tax provision at the
statutory federal income tax rate on December 31, 2023 and 2022, and the tax provisions attributable to loss before income taxes is as
follows:
2023
2022
Statutory federal income taxes
21.0
%
21.0
%
Valuation allowance
(
21.0
)%
(
21.0
)%
Effective income tax rate, net
-
-
%
Note 5.
Commitments and Related Party
Transactions
Office Space
The Company utilizes the office space and equipment of its management
at no cost.
Note Payable - Stockholder
On September 24, 2021, the Company issued a promissory
note (the "Note") to a stockholder of the Company pursuant to which the Company agreed to repay the sum of any and all amounts
advanced to the Company, on or before the date that the Company consummates a business combination with a private company or reverse takeover
transaction or other transaction after which the Company would cease to be a shell company. Interest shall not accrue on the outstanding
principal amount of the note except if an Event of Default (as defined in the note) has occurred. In the event of an Event of Default,
the entire note shall automatically become due and payable (the "Default Date") and starting from five (5) days after the
Default Date, the interest rate on the note shall accrue at the rate of eighteen percent (
18
%) per annum. As of December 31, 2023 and
2022, the amount due under the note payable was $
92,500
and $
45,000
, respectively.
Note 6.
Going Concern
The accompanying financial statements have been
prepared assuming the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of
liabilities in the normal course of business.
The Company has accumulated deficit and total
stockholders' deficit of $
102,716
and $
102,216
, respectively, as of December 31, 2023. Management believes these conditions raise
substantial doubt about the Company's ability to continue as a going concern for the twelve months following the date these financial
statements are issued. Management intends to finance operations over the next twelve months through additional borrowings on the existing
Note.
The accompanying financial statements do not include
any adjustments that might be required should the Company be unable to continue as a going concern.
F-
60
VENETIAN-1
ACQUISITION CORP.
CONDENSED
BALANCE SHEETS
September 30,
December 31,
2024
2023
(Unaudited)
ASSETS
Current assets
Cash
$
2,269
$
984
Total current assets
2,269
984
Total assets
$
2,269
$
984
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable and accrued expenses
10,700
10,700
Note payable - stockholder
127,500
92,500
Total current liabilities
138,200
103,200
Total liabilities
138,200
103,200
Commitments and contingencies
Stockholders' deficit
Preferred stock, $
0.0001
par value;
10,000,000
shares authorized;
none
issued and outstanding
-
-
Common stock, $
0.0001
par value,
50,000,000
shares authorized,
5,000,000
shares issued and outstanding
500
500
Accumulated deficit
(
136,431
)
(
102,716
)
Total stockholders' deficit
(
135,931
)
(
102,216
)
Total liabilities and stockholders' deficit
$
2,269
$
984
See
accompanying notes to condensed financial statements.
F-
61
VENETIAN-1
ACQUISITION CORP.
CONDENSED
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
Revenue
$
-
$
-
$
-
$
-
General and administrative expenses
10,953
10,870
33,715
36,825
Loss from operations
(
10,953
)
(
10,870
)
(
33,715
)
(
36,825
)
Net loss
$
(
10,953
)
$
(
10,870
)
$
(
33,715
)
$
(
36,825
)
Weighted average common stock outstanding, basic and diluted
5,000,000
5,000,000
5,000,000
5,000,000
Net loss per share of common stock, basic and diluted
$
(
0.00
)
$
(
0.00
)
$
(
0.01
)
$
(
0.01
)
See
accompanying notes to condensed financial statements.
F-
62
VENETIAN-1
ACQUISITION CORP.
CONDENSED
STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
(Unaudited)
For
the Three and Nine Months Ended September 30, 2023
Total
Common Stock
Accumulated
Stockholders'
Shares
Amount
Deficit
Deficit
Balances – December 31, 2022
5,000,000
$
500
$
(
54,780
)
$
(
54,280
)
Net loss
-
-
(
13,126
)
(
13,126
)
Balances – March 31, 2023
5,000,000
500
(
67,906
)
(
67,406
)
Net loss
-
-
(
12,829
)
(
12,829
)
Balances – June 30, 2023
5,000,000
500
(
80,735
)
(
80,235
)
Net loss
-
-
(
10,870
)
(
10,870
)
Balances – September 30, 2023
5,000,000
$
500
$
(
91,605
)
$
(
91,105
)
For
the Three and Nine Months Ended September 30, 2024
Total
Common Stock
Accumulated
Stockholders'
Shares
Amount
Deficit
Deficit
Balances – December 31, 2023
5,000,000
$
500
$
(
102,716
)
$
(
102,216
)
Net loss
-
-
(
11,291
)
(
11,291
)
Balances – March 31, 2024
5,000,000
500
(
114,007
)
(
113,507
)
Net loss
-
-
(
11,471
)
(
11,471
)
Balances – June 30, 2024
5,000,000
500
(
125,478
)
(
124,978
)
Net loss
-
-
(
10,953
)
(
10,953
)
Balances – September 30, 2024
5,000,000
$
500
$
(
136,431
)
$
(
135,931
)
See
accompanying notes to condensed financial statements.
F-
63
VENETIAN-1
ACQUISITION CORP.
CONDENSED
STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
September 30,
2024
2023
Cash flows from operating activities:
Net loss
$
(
33,715
)
$
(
36,825
)
Adjustments to reconcile net loss to net cash used in operating activities:
Accounts payable and accrued expenses
-
1,333
Net cash used in operating activities
(
33,715
)
(
35,492
)
Cash flows from financing activities:
Repayments of stockholder advances
-
(
120
)
Proceeds from note payable - stockholder
35,000
37,500
Net cash provided by financing activities
35,000
37,380
Net change in cash
1,285
1,888
Cash - beginning of period
984
107
Cash - end of period
$
2,269
$
1,995
See
accompanying notes to condensed financial statements.
F-
64
VENETIAN-1
ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
September
30, 2024
(Unaudited)
Note
1.
Nature of Operations
Venetian-1
Acquisition Corp. (the "Company") was incorporated in the State of Delaware on
September 24, 2021
. The Company's management
has chosen December 31st for its fiscal year end.
The
Company was organized as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the
perceived advantages of being a publicly traded corporation. The Company's principal business objective is to achieve long-term
growth potential through a combination with a business, rather than immediate short-term earnings. The Company will not restrict its
potential target companies to any specific business, industry, or geographical location. The analysis of business opportunities will
be undertaken by, or under the supervision of, the officer and directors of the Company.
Note
2.
Basis of Presentation and Summary of Significant Accounting Policies
Basis
of Presentation
The
accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United
States of America ("U.S. GAAP") for interim financial information and in accordance with the instructions to Form 10-Q and
Article 8 of Regulation S-X of the Securities and Exchange Commission (the "SEC."). Certain information or footnote disclosures
normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted, pursuant to the rules
and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary
for a compete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying
unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a
fair presentation of the financial position, operating results and cash flows for the periods presented. The interim unaudited condensed
financial statements and notes thereto should be read in conjunction with the audited condensed financial statements and notes thereto
contained in our Annual Report on Form 10-K for the year ended December 31, 2023.
Use
of Estimates
The
preparation of the condensed financial statements in conformity with U.S. GAAP requires the Company's management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
Income
Taxes
The
Company accounts for income taxes under ASC 740, "
Income Taxes",
deferred tax assets and liabilities are recognized
for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities
and their respective tax bases. Deferred tax assets, including tax loss and credit carry-forwards, and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered
or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes
the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities.
The components of the deferred tax assets and liabilities are individually classified as current and non-current based on their characteristics.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion
or all of the deferred tax assets will not be realized.
The
Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were
no
unrecognized
tax benefits and no amounts accrued for interest and penalties as of September 30, 2024 and December 31, 2023. The Company is currently
not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.
F-
65
Net
Loss per Common Share
Net
loss per share is computed by dividing net loss by the weighted average number of common shares outstanding for the period. Diluted earnings
per share takes into effect any dilutive instruments, except when doing so would be anti-dilutive. As of September 30, 2024 and 2023,
there were
no
dilutive instruments.
Emerging
Growth Company
The
Company is an "emerging growth company," as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our
Business Startups Act of 2012, or the JOBS Act. As such, the Company is eligible to take advantage of certain exemptions from various
reporting requirements that are applicable to other public companies that are not "emerging growth companies" including,
but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of
2002, reduced disclosure obligations regarding executive compensation in the Company's periodic reports and proxy statements, and
exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden
parachute payments not previously approved. If some investors find the securities less attractive as a result, there may be a less active
trading market for securities and the prices of securities may be more volatile.
In
addition, Section 107 of the JOBS Act also provides that an "emerging growth company" can take advantage of the extended
transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards (that is,
an "emerging growth company" can delay the adoption of certain accounting standards until those standards would otherwise
apply to private companies). The Company intends to take advantage of the benefits of this extended transition period.
Additionally,
the Company is a "smaller reporting company" as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may
take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial
statements. The Company will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of
the ordinary shares held by non-affiliates equals or exceeds $
250
million as of the prior June 30, and (2) the annual revenues equaled
or exceeded $
100
million during such completed fiscal year or the market value of the ordinary shares held by non-affiliates equals or
exceeds $
700
million as of the prior June 30.
Recently
Issued Accounting Pronouncements
Management
does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect
on the accompanying financial statements.
Note
3.
Capital Stock
Preferred
Stock
As
of September 30, 2024 and December 31, 2023, the Company has
10,000,000
shares of preferred stock, par value of $
0.0001
, authorized and
none
issued or outstanding.
Common
Stock
As
of September 30, 2024 and December 31, 2023, the Company has
50,000,000
shares of common stock, par value of $
0.0001
, authorized and
5,000,000
shares issued and outstanding.
Note
4.
Income Taxes
As
of September 30, 2024, and December 31, 2023, the Company has $
28,700
and $
21,600
, respectively, in gross deferred tax assets resulting
from net operating loss carry-forwards of $
136,400
and $
102,700
, respectively, available to offset future taxable income through 2041
subject to the change in ownership provisions under IRC 382. A valuation allowance has been recorded to fully offset these deferred tax
assets because the Company's management believes future realization of the related tax benefits is uncertain.
F-
66
The
difference between the tax provision at the statutory federal income tax rate on September 30, 2024 and December 31, 2023, and the tax
provisions attributable to loss before income taxes is as follows:
September 30,
2024
December 31, 2023
Statutory federal income taxes
21.0
%
21.0
%
Valuation allowance
(
21.0
)%
(
21.0
)%
Effective income tax rate, net
-
%
-
%
Note
5.
Commitments and Related Party Transactions
Office
Space
The
Company utilizes the office space and equipment of its management at no cost.
Note
Payable - Stockholder
On
September 24, 2021, the Company issued a promissory note (the "Note") to a stockholder of the Company pursuant to which the
Company agreed to repay the sum of any and all amounts advanced to the Company, on or before the date that the Company consummates a
business combination with a private company or reverse takeover transaction or other transaction after which the Company would cease
to be a shell company. Interest shall not accrue on the outstanding principal amount of the note except if an Event of Default (as defined
in the note) has occurred. In the event of an Event of Default, the entire note shall automatically become due and payable (the "Default
Date") and starting from five (5) days after the Default Date, the interest rate on the note shall accrue at the rate of eighteen
percent (
18
%) per annum. As of September 30, 2024 and December 31, 2023, the amount due under the note payable was $
127,500
and $
92,500
,
respectively.
Note
6.
Going Concern
The
accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the recoverability
of assets and the satisfaction of liabilities in the normal course of business.
The
Company has accumulated deficit and total stockholders' deficit of $
136,431
and $
135,931
, respectively as of September 30, 2024.
Management believes these conditions raise substantial doubt about the Company's ability to continue as a going concern for the
twelve months following the date these financial statements are issued. Management intends to finance operations over the next twelve
months through additional borrowings from the existing Note.
The
accompanying financial statements do not include any adjustments that might be required should the Company be unable to continue as a
going concern.
Note
7.
Merger Agreement
On
October 2, 2024, the Company filed with the SEC a Schedule 14F-1 Information Statement relating to an anticipated change in the composition
of its board of directors that is expected to occur in connection with a proposed merger to be completed by and among the Company, a
recently formed wholly-owned subsidiary of the Company ("Merger Sub"), and Lomond Therapeutics, a privately held Delaware
corporation ("Lomond"), pursuant to which Merger Sub would merge with and into Lomond, with Lomond continuing as the surviving
entity (the "Merger") and as the Company's wholly-owned subsidiary, after which the Company would continue the business
of Lomond. The Merger has since occurred occur pursuant to an Agreement and Plan of Merger and Reorganization entered into by and among
the Company, Lomond and Merger Sub (the "Merger Agreement)").
Lomond
is a biopharmaceutical company focused on the discovery and development of multiple product candidates to address hematological malignancies,
including a pan-FLT3/IRAK4 inhibitor for the treatment of acute myeloid leukemia ("AML"), a BCL-2 inhibitor for the treatment
of AML and chronic lymphocytic leukemia, and an early-stage menin inhibitor for the treatment of AML. Lomond is headquartered in Dover,
DE.
Pursuant
to the terms of the Merger Agreement, all outstanding equity interest of Lomond was converted into shares of our Common Stock, such that
the holders of Lomond equity before the Merger now own a majority of the outstanding shares of our Common Stock (before giving effect
to the private placement offering of Common Stock by the Company was consummated simultaneously with the Merger), which resulted in a
change of control of the Company. The private placement financing was completed as a condition to completion of the Merger.
Certain
other information regarding the proposed Merger and proposed changes to the management and share ownership of the Company is set forth
in the Schedule 14F-1.
The
foregoing description of the Merger Agreement and Common Stock private placement and related matters does not purport to be complete
and is qualified in its entirety by the terms of the actual Merger Agreement and of terms and documentation for a private placement.
The Merger Agreement is further described in and filed by the Company with the SEC as an exhibit to a Current Report on Form 8-K. The
consummation of the Common Stock private placement was further described in, and material agreements relating thereto were filed by the
Company with the SEC as exhibits to a Current Report on Form 8-K.
F-
67
PART II
INFORMATION
NOT REQUIRED IN THE PROSPECTUS
Item 13. Other
Expenses of Issuance and Distribution.
The following table sets
forth the estimated fees and expenses payable by us in connection with the offering of the securities being registered.
SEC registration fee
$
16,824.845
Accounting fees and expenses
$
*
Legal fees and expenses
$
*
Printing and miscellaneous expenses
$
*
Total
$
*
*
To be provided in an amendment.
Item 14. Indemnification
of Directors and Officers.
Section 145 of the
Delaware General Corporation Law (DGCL), authorizes a court to award, or a corporation's board of directors to grant, indemnity
to directors and officers under certain circumstances and subject to certain limitations. The terms of Section 145 of the DGCL are
sufficiently broad to permit indemnification under certain circumstances for liabilities, including reimbursement of expenses incurred,
arising under the Securities Act.
As permitted by the DGCL,
the Registrant's amended and amended and restated certificate of incorporation contains provisions that eliminate the personal liability
of its directors for monetary damages for any breach of fiduciary duties as a director, except liability for the following:
●
any breach of the director's duty of loyalty to the Registrant or its stockholders;
●
acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law;
●
under Section 174 of the DGCL (regarding unlawful dividends and stock purchases); or
●
any transaction from which the director derived an improper personal benefit.
The Company has entered
into indemnification agreements with each of its current directors and executive officers to provide these directors and executive officers
additional contractual assurances regarding the scope of the indemnification set forth in the Company's amended and amended and
restated certificate of incorporation and amended and restated bylaws, and to provide additional procedural protections. There is no pending
litigation or proceeding involving a director or executive officer of the Company for which indemnification is sought. The indemnification
provisions in the Company's amended and restated certificate of incorporation, amended and restated bylaws, and the indemnification
agreements entered into between the Company and each of its directors and executive officers may be sufficiently broad to permit indemnification
of the Company's directors and executive officers for liabilities arising under the Securities Act.
The Company currently
carries liability insurance for its directors and officers.
Certain of the Company's
directors are also indemnified by their employers with regard to service on the Company's board of directors.
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1
Item 15. Recent
Sales of Unregistered Securities
The Offering
On November 1, 2024,
in connection with the Offering, we issued an aggregate of 8,241,375 shares of common stock at a price of $4.00 per share for aggregate
gross consideration of approximately $32.9 million to 23 accredited investors. In addition, on November 1, 2024 we issued Placement Agent
Warrants to purchase an aggregate of 275,410 shares of our common stock to our Placement Agents. These transactions were exempt from registration
under Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D promulgated by the SEC thereunder. The shares
of common stock sold in the Offering were sold solely to "accredited investors," as defined in Regulation D under the
Securities Act, and the Offering was conducted on a "reasonable best efforts" basis.
Securities Issued in Connection with the
Merger
On November 1, 2024,
pursuant to the terms of the Merger Agreement, 13,661,416 shares of Lomond's Series Seed preferred stock and 758,967 shares of Lomond's
common stock were exchanged for an aggregate of 14,420,383 shares of our common stock. These transactions were not registered under the
Securities Act, in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act, which exempts
transactions by an issuer not involving any public offering, and Rule 506(b) of Regulation D promulgated by the SEC thereunder.
Lomond had one stockholder, and it had adequate access to information about us. The issuance of such shares was made without any general
solicitation or advertising. None of the securities were sold through an underwriter and, accordingly, there were no underwriting discounts
or commissions involved.
Under Rule 145(a) of
the Securities Act, the Merger is deemed to involve an offer and sale of shares of our common stock to our pre-Merger Stockholders. These
transactions were not registered under the Securities Act, in reliance upon the exemption from registration provided by Section 4(a)(2)
of the Securities Act, which exempts transactions by an issuer not involving any public offering, and Rule 506(b) of Regulation D
promulgated by the SEC thereunder. We had two pre-Merger stockholders, and each had adequate access to information about us. The issuance
of such shares was made without any general solicitation or advertising. None of the securities were sold through an underwriter and,
accordingly, there were no underwriting discounts or commissions involved.
Sales of Unregistered Securities of Lomond
The following paragraphs
set forth information as to all securities Lomond sold from November 1, 2021, through immediately prior to the consummation of the Merger,
which were not registered under the Securities Act. The following description is historical and has not been adjusted to give effect to
the Merger.
In August 2024, Lomond
issued "simple agreements for future equity", or the August SAFEs, for an aggregate purchase price of $7.5 million in a private
financing round. Immediately prior to the consummation of the Offering, the August SAFEs automatically converted into 2,083,332 shares
of common stock.
In October 2024, Lomond
converted a $3.5 million capital contribution made by Eilean Therapeutics, LLC, or Eilean, its former parent company, in May 2024 into
a "simple agreements for future equity," or the Contribution SAFEs, which were immediately distributed to Eilean's members.
Immediately prior to the consummation of the Offering, the Contribution SAFEs automatically converted into 1,078,124 shares of common
stock.
Lomond granted to its
directors, officers, consultants and other service providers stock options to purchase an aggregate of 4,329,617 shares of its common
stock at a per share purchase price of $1.30 per share under the Lomond Stock Plan.
None of the foregoing
transactions involved any underwriters, underwriting discounts or commissions, or any public offering. We believe that the offers, sales,
and issuances of the above securities were exempt from registration under the Securities Act by virtue of Section 4(a)(2) of the Securities
Act or Regulation D promulgated thereunder as transactions by an issuer not involving any public offering, or in reliance on Rule 701
promulgated under Section 3(b) of the Securities Act because the transactions were pursuant to compensatory benefit plans or contracts
relating to compensation as provided under Rule 701. The recipients of the securities in each of these transactions represented their
intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof,
and appropriate legends were placed upon the stock certificates issued in these transactions. All recipients had adequate information
about Lomond or had adequate access, through their relationships with Lomond, to information about Lomond.
II-
2
Sales of Unregistered
Securities of Venetian-1
There were no securities
of Venetian-1 sold from November 1, 2021 through immediately prior to the consummation of the Merger, which were not registered under
the Securities Act.
Item 16. Exhibits
and Financial Statement Schedules
(a)
Exhibits
The exhibit index attached
hereto is incorporated herein by reference.
(b)
Financial Statement Schedules
All schedules have been
omitted because the information required to be set forth in the schedules is either not applicable or is included in our financial statements
or notes to those financial statements.
Item 17. Undertakings.
(a)
The undersigned registrant hereby undertakes:
(1)
To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i)
to include any prospectus required by Section 10(a)(3) of the Securities Act;
(ii)
to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and
(iii)
to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.
(2)
That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3)
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4)
That, for the purpose of determining liability under the Securities Act to any purchaser:
(i)
Each prospectus filed pursuant to Rule 424(b) as part of the registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
(b)
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Act and is, therefore unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
II-
3
EXHIBIT INDEX
Exhibit No.
Description
2.1§
Agreement and Plan of Merger and Reorganization among Venetian-1 Acquisition Corp, Lomond Acquisition Corp. and Lomond Therapeutics, Inc. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).
3.1
Certificate of Merger relating to the merger of Lomond Acquisition Corp. with and into Lomond Therapeutics, Inc., filed with the Secretary of State of the State of Delaware on November 1, 2024 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).
3.2
Amended and restated certificate of incorporation, filed with the Secretary of State of the State of Delaware on November 1, 2024 (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).
3.3
Amended and restated bylaws (incorporated by reference to Exhibit 3.3 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).
4.1
Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).
4.2
Form of Simple Agreement for Future Equity, dated August 27, 2024 (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).
4.3
Form of Simple Agreement for Future Equity, dated October 17, 2024 (incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).
5.1**
Opinion of Snell & Wilmer L.L.P.
10.1†
Administrative Services & Co-Employment Agreement, dated October 18, 2024, by and between Abet Solutions Inc. and Lomond Therapeutics, Inc. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).
10.2+†
Consulting Agreement with Iain Dukes, dated as of November 1, 2024 (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).
10.3+†
Consulting Agreement with Nikolay Savchuk, dated as of November 1, 2024 (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).
10.4
Form of Pre-Merger Indemnification Agreement (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).
10.5§
Subscription Agreement, dated November 1, 2024, by and between the Company and the parties thereto (incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).
10.6§
Registration Rights Agreement, dated November 1, 2024, by and between the Company and the parties thereto (incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).
10.7+
2022 Equity Incentive Plan of Eilean Therapeutics, LLC and form of award agreements thereunder (incorporated by reference to Exhibit 10.7 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).
10.8+
Lomond Therapeutics, Inc. 2024 Stock Plan and form of award agreements thereunder (incorporated by reference to Exhibit 10.8 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).
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4
10.9+
Lomond Therapeutics Holdings, Inc. 2024 Equity Incentive Plan and form of award agreements thereunder (incorporated by reference to Exhibit 10.9 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).
10.10+
Form of Indemnification Agreement (incorporated by reference to Exhibit 10.10 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).
10.11§
License Agreement, dated as of October 17, 2024, by and between Lomond Therapeutics, Inc. and Eil Therapeutics, Inc (incorporated by reference to Exhibit 10.11 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).
10.12§
Promissory Note, dated as of October 17, 2024, by and between Lomond Therapeutics, Inc. and Eil Therapeutics, Inc. (incorporated by reference to Exhibit 10.12 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).
10.13§†
License Agreement, dated as of October 17, 2024, by and between Lomond Therapeutics, Inc. and Bala Therapeutics, Inc. (incorporated by reference to Exhibit 10.13 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).
10.14§
Promissory Note, dated as of October 17, 2024, by and between Lomond Therapeutics, Inc. and Bala Therapeutics, Inc. (incorporated by reference to Exhibit 10.14 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).
10.15
Promissory Note, dated as of May 2, 2022, by and between Lomond Therapeutics, Inc. and Dinas Therapeutics, Inc. (incorporated by reference to Exhibit 10.15 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).
10.16
Promissory Note, dated as of June 21, 2022, by and between Lomond Therapeutics, Inc. and Dinas Therapeutics, Inc. (incorporated by reference to Exhibit 10.16 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).
10.17
Promissory Note, dated as of December 1, 2023, by and between Lomond Therapeutics, Inc. and Eil Therapeutics, Inc. (incorporated by reference to Exhibit 10.17 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).
10.18
Promissory Note, dated as of January 5, 2023, by and between Lomond Therapeutics, Inc. and Eil Therapeutics, Inc. (incorporated by reference to Exhibit 10.18 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).
10.19
Assignment and Consent Agreement, dated as of December 7, 2023, by and among Lomond Therapeutics, Inc., Eilean Therapeutics, LLC. and Eil Therapeutics, Inc. (incorporated by reference to Exhibit 10.19 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).
10.20
Assignment and Consent Agreement, dated as of December 7, 2023, by and among Lomond Therapeutics, Inc., Eilean Therapeutics, LLC. and Dinas Therapeutics, Inc. (incorporated by reference to Exhibit 10.20 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).
10.21
Form of Lock-up Agreement entered into between the Company and the parties thereto. (incorporated by reference to Exhibit 10.21 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).
21.1
Subsidiaries of the registrant. (incorporated by reference to Exhibit 21.1 to the Current Report on Form 8-K filed with the SEC on November 7, 2024).
23.1*
Consent of EisnerAmper LLP, independent registered public accounting firm.
23.2*
Consent of Grassi & Co., CPAs, P.C., independent registered public accounting firm.
23.3
Consent of Snell & Wilmer L.L.P. (included in Exhibit 5.1).
24.1
Power of Attorney (included on the signature page hereto).
101.INS
Inline XBRL Instance Document.
101.SCH
Inline XBRL Taxonomy Extension Schema Document.
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
107*
Calculation of Filing Fee
*
Filed herewith.
**
To be filed by amendment.
+
Indicates a management contract or any compensatory plan, contract or arrangement.
§
Schedules and exhibits to this agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant will furnish copies of any such schedules and exhibits to the U.S. Securities and Exchange Commission upon request.
†
Pursuant to Item 601(b)(10) of Regulation S-K, certain confidential portions of this exhibit have been omitted by means of marking such portions with asterisks as the identified confidential portions are both not material and are the type of information that the registrant treats as private or confidential. The registrant agrees to supplementally furnish an unredacted copy of this exhibit to the SEC upon its request.
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5
SIGNATURES
Pursuant to the requirements
of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Dover, State of Delaware, on the 27
th
day of November, 2024.
Lomond Therapeutics Holdings, Inc.
By:
/s/ Iain Dukes
Iain Dukes
Chief Executive Officer and Chairman
We, the undersigned directors
and officers of the Company, hereby severally constitute and appoint Iain Dukes and Nikolay Savchuk as our true and lawful attorneys,
with full power to him to sign for us and in our names in the capacities indicated below, the registration statement on Form S-1 filed
herewith, and any and all pre-effective and post-effective amendments to said registration statement, and any registration statement filed
pursuant to Rule 462(b) under the Securities Act in connection with the registration under the Securities Act of equity securities of
the Company, and to file or cause to be filed the same, with all exhibits thereto and other documents in connection therewith, with the
SEC, granting unto said attorneys, and each of them, full power and authority to do and perform each and every act and thing requisite
and necessary to be done in connection therewith, as fully to all intents and purposes as each of them might or could do in person, and
hereby ratifying and confirming all that said attorneys, and each of them, or their substitute or substitutes, shall do or cause to be
done by virtue of this power of attorney. This power of attorney does not revoke any power of attorney previously granted by the undersigned,
or any of them.
Pursuant to the requirements
of the Securities Act, this Registration Statement has been signed by the following persons in the capacities indicated on the date indicated:
Signature
Title
Date
/s/ Iain Dukes
Chief Executive Officer and Chairman
November 27, 2024
Iain Dukes
(principal executive officer)
/s/ Nikolay Savchuk
President, Chief Operating Officer and Director
November 27, 2024
Nikolay Savchuk
/s/ Carl Gordon
Director
November 27, 2024
Carl Gordon
/s/ Eddie Wang Rodriguez
Director
November 27, 2024
Eddie Wang Rodriguez
II-6