SHPH 10-Q
Shuttle Pharmaceuticals Holdings, Inc. (SHPH)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
| Quarterly Report PURSUANT TO Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For
the quarterly period ended
OR
| Transition Report PURSUANT TO Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the transition period from ______________ to ______________
Commission
File Number
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of | (I.R.S. Employer | |
| incorporation or organization) | Identification Number) |
(Address of principal executive offices) (Zip Code)
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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 | ☐ | |
| ☒ | 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 13(a) of the Exchange Act.
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
The number of shares outstanding of the registrant’s common stock on September 21, 2026 was .
Shuttle Pharmaceuticals Holdings, Inc.
TABLE OF CONTENTS
| 2 |
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
Shuttle Pharmaceuticals Holdings, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
| June 30, 2026 | December 31, 2025 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Investment in United Dogecoin | ||||||||
| Property and equipment, net | ||||||||
| Intangible assets, net | ||||||||
| Deferred financing costs | ||||||||
| Operating lease right-of-use asset | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Contingent consideration liability | ||||||||
| Consideration payable | ||||||||
| Operating lease liability | ||||||||
Due to United Dogecoin | ||||||||
| Total current liabilities | ||||||||
| Derivative liability | ||||||||
| Operating lease liability non-current | ||||||||
| Total Liabilities | ||||||||
| Commitments and contingencies (Note 10) | ||||||||
| Stockholders’ Equity | ||||||||
| Series A Convertible Preferred Stock, $ par value; $ | ||||||||
| Series B-1 Convertible Preferred Stock, $
par value;
shares authorized;
shares issued and outstanding at June 30, 2026 (liquidation preference: $ | ||||||||
| Series B-2 Convertible Preferred Stock, $
par value;
shares authorized;
shares issued and outstanding at June 30, 2026(liquidation preference: $ | ||||||||
| Common stock, $ par value; shares authorized; shares issued and outstanding at June 30, 2026; shares issued and outstanding at December 31, 2025 | ||||||||
| Additional paid in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Equity | ||||||||
| Total Liabilities and Stockholders’ Equity | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 3 |
Shuttle Pharmaceuticals Holdings, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Operating expenses | ||||||||||||||||
| Research and development | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Legal and professional | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Net loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other (expense) income | ||||||||||||||||
| Interest expense - related parties | ( | ) | ( | ) | ||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ||||||||||
| Interest income | ||||||||||||||||
| Change in fair value of derivative liabilities | ||||||||||||||||
| Change in fair value of convertible notes | ||||||||||||||||
| Gain on extinguishment of debt | ||||||||||||||||
| Total other (expense) income | $ | $ | $ | $ | ||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted-average common shares outstanding - basic and diluted | ||||||||||||||||
| Net loss per shares - basic and diluted | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 4 |
Shuttle Pharmaceuticals Holdings, Inc.
Condensed Consolidated Statements of Changes in Stockholders’ Equity
(Unaudited)
For the Six Months Ended June 30, 2026
| Series B-1 | Series B-2 | Additional | Total | |||||||||||||||||||||||||||||||||
| Common Stock | Preferred Stock | Preferred Stock | Paid-In | Accumulated | Stockholders’ | |||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | | |||||||||||||||||||||||||||
| Common stock issued for restricted stock units | — | — | ||||||||||||||||||||||||||||||||||
| Issuance of common stock and pre-funded warrants, net of issuance costs of $ | — | — | ||||||||||||||||||||||||||||||||||
| Exercise of pre-funded warrants | — | — | ||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | |||||||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||||
| Common stock issued for restricted stock units | — | — | ||||||||||||||||||||||||||||||||||
| Issuance of Series B-1 preferred stock and Milestone Pre-Funded Warrants pursuant to Molecule.ai Second Amendment | — | — | ||||||||||||||||||||||||||||||||||
| Prepaid share repurchase pursuant to Molecule.ai Second Amendment | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||
Issuance of Series B-1 and Series B-2
Convertible Preferred Stock and 2026 Pre-Funded Warrants pursuant to the United Dogecoin Merger Agreement and PIPE, net of issuance costs
of $ | — | |||||||||||||||||||||||||||||||||||
| Exercise of pre-funded warrants | — | — | ||||||||||||||||||||||||||||||||||
| Common stock issued for reverse stock split fractional share round up | — | — | ||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Capitalized cost related to United Dogecoin replacement options | — | — | — | |||||||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||
For the Six Months Ended June 30, 2025
| Additional | Total | |||||||||||||||||||
| Common Stock | Paid-In | Accumulated | Stockholders’ | |||||||||||||||||
| Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | ( | ) | $ | | |||||||||||||
| Common stock issued for restricted stock units | ||||||||||||||||||||
| Issuance of common stock and pre-funded warrants, net of issuance costs of $ | ||||||||||||||||||||
| Partial conversion of convertible note at fair value | ||||||||||||||||||||
| Stock-based compensation | — | |||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||
| Balance at March 31, 2025 | ( | ) | ||||||||||||||||||
| Common stock issued for restricted stock units | ||||||||||||||||||||
| Issuance of common stock and pre-funded warrants, net of issuance costs of $ | ||||||||||||||||||||
| Partial conversion of convertible note at fair value | ||||||||||||||||||||
| Exercise of pre-funded warrants | ||||||||||||||||||||
| Common stock issued for reverse stock split fractional share round up | ||||||||||||||||||||
| Reversal of issuance costs in relation to November 2025 offering costs | — | |||||||||||||||||||
| Common stock issued for Molecule.ai Asset Acquisition | — | |||||||||||||||||||
| Stock-based compensation | — | |||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | ( | ) | $ | ||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 5 |
Shuttle Pharmaceuticals Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Change in fair value of derivative liabilities | ( | ) | ( | ) | ||||
| Amortization of debt discount and finance fees | ||||||||
| Financial advisor fee settled with Series B-1 Preferred Stock and Pre-Funded Warrants | ||||||||
| Stock-based compensation | ||||||||
| Interest payments on convertible notes accounted for at fair value | ( | ) | ||||||
| Change in fair value of convertible notes | ( | ) | ||||||
| Gain on extinguishment of debt | ( | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses | ( | ) | ( | ) | ||||
| Due to United Dogecoin | ||||||||
| Accounts payable and accrued expenses | ||||||||
| Accrued interest payable - related parties | ( | ) | ||||||
| Change in operating lease asset and liabilities | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchase of capitalized software | ( | ) | ||||||
| Payment of installment payments related to Molecule.ai Asset Acquisition | ( | ) | ||||||
| Payment of contingent consideration related to Molecule.ai Asset Acquisition | ( | ) | ||||||
| Net cash used in provided by investing activities | ( | ) | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Repayment of note payable-related party | ( | ) | ||||||
| Proceeds from issuance of common stock and pre-funded warrants, net of placement agent costs | ||||||||
| Proceeds from PIPE Financing, net of issuance costs paid | ||||||||
| Payment of other issuance costs for issuance of common stock and equity-classified warrants | ( | ) | ( | ) | ||||
| Proceeds from exercise of pre-funded warrants | ||||||||
| Payment of finance costs | ( | ) | ||||||
| Net cash provided by financing activities | ||||||||
| Net change in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents, beginning of period | ||||||||
| Cash and cash equivalents, end of period | $ | $ | ||||||
| Cash paid for: | ||||||||
| Interest | $ | $ | ||||||
| Income taxes | $ | $ | ||||||
| Supplemental non-cash financing activities: | ||||||||
| Issuance of Series B-1 Convertible Preferred Stock and 2026 Pre-Funded Warrants as a financial advisor fee | $ | |||||||
| May 2026 PIPE proceeds included in Investment in United Dogecoin | $ | $ | ||||||
| Issuance costs in accounts payable and accrued expenses | $ | $ | ||||||
| Issuance of Series B-1 Preferred Stock and pre-funded warrants pursuant to Molecule.ai Second Amendment | $ | $ | ||||||
| Noncash prepayment of share repurchase pursuant to Molecule.ai Second Amendment | $ | $ | ||||||
| Capitalized cost related to United Dogecoin replacement options | $ | $ | ||||||
| Issuance of Series B-1 Convertible Preferred Stock and 2026 Pre-Funded Warrants pursuant to the United Dogecoin Merger Agreement | $ | $ | ||||||
| Conversion of convertible notes accounted for at fair value | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 6 |
Note 1 – Organization and Liquidity
Organization and Line of Business
Shuttle Pharmaceuticals Holdings, Inc. (“we,” “us,” “our,” or the “Company”) was originally formed as Shuttle Pharmaceuticals, LLC in the State of Maryland on December 18, 2012. On August 12, 2016, the Company filed articles of conversion with the State of Maryland to convert from an LLC to a C corporation, at which time the Company changed its name to Shuttle Pharmaceuticals, Inc. (“Shuttle”). In connection with the conversion, the Company issued shares of common stock in exchange for 100% of the outstanding membership interests in Shuttle prior to conversion. On June 4, 2018, Shuttle completed a reverse merger with Shuttle Pharmaceuticals Holdings, Inc. (then known as Shuttle Pharma Acquisition Corp, Inc.), a Delaware corporation, pursuant to which Shuttle, our operating entity, became a wholly-owned subsidiary of the Company. Shuttle Diagnostics, Inc, a subsidiary of the Company, was formed in the State of Maryland on November 14, 2023.
On November 21, 2025, substantially all of the assets of Molecule.ai, a pharmaceutical software company building an artificial intelligence (“AI”) driven platform for molecular discovery and early-stage drug development, were acquired by a wholly owned subsidiary of the Company. By combining modern AI techniques with structured scientific workflows, the Molecule.ai platform (hereafter, “Molecule.ai” or the “platform”) is designed to help researchers explore the chemical space more efficiently, evaluate molecular ideas with greater clarity and make more informed decisions during the earliest stages of drug development. The platform is engineered to accelerate the iteration cycles that characterize modern drug discovery while preserving scientific reproducibility, traceability and operational reliability. The Molecule.ai technology adapts state-of-the-art AI algorithms to create a practical, domain-specific AI infrastructure layer for molecular research and development. The Company will seek to leverage Molecule.ai’s molecular modeling and predictive analytics platform to significantly augment our drug discovery and development business purpose. In tandem with the Molecule.ai asset acquisition, on November 20, 2025, the Company committed to a plan to wind-down the Clinical Trials of Ropidoxuridine.
Molecule.ai is built on three core architectural components: a unified inference engine, an API-first integration layer and a modular model framework. The unified inference engine orchestrates model execution and multi-step reasoning through a deterministic and traceable sequence of operations. Molecule.ai uses an API-first design, which means that all platform capabilities can be accessed programmatically. All predictive and reasoning functions are modular, which allows the platform to expand over time without changing the underlying infrastructure. Molecule.ai currently supports three scientific and computational functions that reflect both its pharmaceutical focus and the structured inference techniques seen in modern agentic LLM systems: (1) molecular property prediction, (2) cross-molecule and cross-property evaluation and (3) prediction reasoning and structured molecular insights. The platform predicts a wide range of molecular properties that are relevant to early-stage discovery and medicinal chemistry and provides inference pipelines for predicting molecular properties. By using transformer-based models, the platform computes predictive outputs on a wide range of therapeutic tasks. The platform evaluates multiple molecules across multiple properties in a unified workflow, helping researchers quickly identify the most-promising candidates, understand trade-offs, and make structured, evidence-based decisions. Molecule.ai also includes a reasoning module that uses LLM-based structured inference to contextualize predictions, explain differences between compounds, perform rule-guided reasoning and produce narrative or structured scientific interpretations with the goal to make complex scientific outputs understandable and actionable for broader research and development audiences.
The broader competitive landscape in the AI ecosystem, especially AI-driven drug discovery, is rapidly advancing toward agentic AI systems and more integrated, end-to-end platforms. To stay at the front of this shift, Molecule.ai is seeking to expand its molecule predictive capabilities, and automated multi-tool workflows. These expansions are designed in accordance with the agentic framework and multi-tool reasoning to further strengthen the platform. A new module will evaluate chemical–protein interaction likelihoods, which will help researchers estimate how molecules may interact with specific biological targets. Molecule.ai is adding biological context reasoning supported by curated genomic and disease-association evidence, which helps tie together chemical ideas with the biological systems they may ultimately affect. The Company intends for the platform to increasingly support insights that connect chemical properties with biological implications, to create a more complete, end-to-end picture for early research teams. Molecule.ai is also developing an autonomous AI agent designed to reduce manual workload and accelerate early research cycles, which would be designed to interpret a discovery objective, plan a series of actions, route each step to the appropriate tools, evaluate preliminary outputs and iterate until a stable result is achieved.
| 7 |
The Molecule.ai platform adheres to strict engineering standards, including reproducibility, traceability, extensibility, scalability and interoperability, which align with modern AI infrastructure expectations for regulated biomedical environments. Molecule.ai aims to become the foundational AI layer for molecular and biological reasoning in pharmaceutical research and development. By integrating property prediction, biological context, multi-step reasoning and agentic automation, the platform seeks to accelerate early discovery while maintaining scientific reliability and operational transparency.
On May 6, 2026, the Company completed its merger by and among the Company, Shuttle Merger Sub, Inc. (a wholly-owned subsidiary organized for the purpose of effecting the merger) and United Dogecoin, Inc. (“United Dogecoin” or “UD”), pursuant to the merger agreement entered into on April 30, 2026. Upon the closing of the merger, Shuttle Merger Sub, Inc. merged with and into United Dogecoin, with United Dogecoin surviving the Merger. As a result of the Merger, United Dogecoin became wholly-owned by the Company (however the Company does not have a controlling interest in United Dogecoin, as discussed further in Note 7).
United Dogecoin was founded as a Dogecoin mining company built on three foundational advantages: scale, preferential access to best-in-class equipment, and an industry leading management team. Its mission was to establish and maintain category leadership in the Dogecoin sector through high-efficiency, low-cost mining operations and strategic coin accumulation, combining operational excellence, consistency and expert execution to build a robust reserve. Since the acquisition, UD has sought to become a start-up digital infrastructure company focused on the development, ownership, and operation of large-scale computing infrastructure supporting blockchain networks, artificial intelligence (“AI”), and high-performance computing (“HPC”) workloads. UD is currently seeking to build an energy-first digital infrastructure platform designed to deploy computing capacity across multiple end markets as demand evolves. UD’s strategy is to identify, acquire, develop, and operate energy infrastructure capable of supporting large-scale computing operations. UD is seeking opportunities where long-term access to reliable, low-cost power can provide a sustainable competitive advantage.
Initially, UD intends to deploy infrastructure supporting Dogecoin mining while designing its facilities to accommodate AI, HPC, cloud computing, and other computational workloads over time. This flexible approach is expected to allow management to allocate computing capacity based on market demand and expected returns. To date, UD has purchased 500 rigs and has initiated a co-location agreement for these units. UD continues to evaluate strategic acquisitions, infrastructure development opportunities, commercial partnerships, and financing transactions intended to expand its digital infrastructure platform.
Liquidity and Going Concern
Our
unaudited condensed consolidated financial statements are prepared on a going concern basis, which contemplates the realization of
assets and the satisfaction of liabilities and commitments in the normal course of business. The Company has incurred losses since
inception and has a net loss of approximately $
In
May 2026, the Company closed a private investment in public equity (“PIPE”) financing consisting of (i) shares of Series
B-2 Convertible Preferred Stock and (ii) Common Warrants to purchase up to
However, the Company’s existing cash resources and the cash received from the equity offerings are not expected to provide sufficient funds to carry out the Company’s operations through the next twelve months.
The ability of the Company to continue as a going concern is dependent upon its ability to continue to successfully raise additional equity or debt financing to fund ongoing operations, commercialize and market the Molecule.ai platform, develop and expand its digital asset infrastructure operations through United Dogecoin, and generate sufficient revenues and cash flows from its business activities. The Company and UD are currently in the final stages of negotiating a data center land deal. Building on this anticipated transaction, management plans to undertake a significant capital raise in the near term, targeting between $120 million and $150 million. This financing will leverage the Company and UD’s existing sector network, investment bankers, and established industry relationships. The successful completion of this financing, however, cannot be guaranteed. These conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the consolidated financial statements are issued.
The accompanying unaudited condensed consolidated financial statements do not include any adjustments to reflect the future effects on the recoverability and classification of assets or the amounts and classification of liabilities if the Company is unable to continue as a going concern.
| 8 |
Note 2 – Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not contain all information and notes required by GAAP for annual financial statements. A complete discussion of the Company’s significant accounting policies is included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all of the adjustments necessary to present the financial position of the Company as of June 30, 2026 and the results of operations and cash flows for the periods presented. The accompanying unaudited condensed consolidated financial statements of the Company have not been audited by the Company’s independent registered public accounting firm, except that the year-end consolidated balance sheet was derived from audited financial statements. The results of operations for the six months ended June 30, 2026 are not necessarily indicative of the operating results for the full fiscal year or any future period.
Reverse Stock Splits
On
June 16, 2025, in order to maintain a minimum closing bid price of $1.00 per share, as required for continued listing on The Nasdaq Capital
Market pursuant to Nasdaq Listing Rule 5550(a)(2), the Company effectuated a
No fractional shares were issued as a result of the Reverse Stock Splits. Stockholders who otherwise would be entitled to receive a fractional share in connection with the Reverse Stock Splits received one full share of the post-Reverse Stock Splits Common Stock in lieu of such fractional share. The Reverse Stock Splits had no effect on the Company’s authorized shares of common stock or preferred stock and the par value remained unchanged at $.
The Reverse Stock Splits reduced the number of shares of Common Stock issuable upon the exercise or vesting of the Company’s outstanding warrants, restricted stock units and convertible preferred stock in proportion to the ratio of the Reverse Stock Splits and caused a proportionate increase in the exercise or conversion prices of such convertible securities, as applicable. All common stock share, option, warrant and per share amounts (except our authorized but unissued shares and previously reserved shares) have been retroactively adjusted in these unaudited condensed consolidated financial statements and related disclosures.
Basis of Consolidation
The unaudited condensed consolidated financial statements have been prepared on a consolidated basis with Shuttle Pharmaceuticals, Inc., Shuttle Diagnostics, Inc., and Molecule.ai., wholly-owned subsidiaries of the Company. All intercompany transactions and balances have been eliminated.
In May 2026, as a result of the merger transaction described in Note 7, United Dogecoin became wholly-owned by the Company. However, the Company does not have a controlling interest in United Dogecoin and, as such, does not consolidate United Dogecoin. See Note 7 for discussion on the accounting for the Company’s non-control investment in United Dogecoin.
Use of Estimates
The preparation of unaudited condensed consolidated financial statements in conformity with 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 unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions. The Company bases its estimates and assumptions on current facts, historical experience, and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. Significant estimates are contained in the accompanying unaudited condensed consolidated financial statements for the valuation of debt, warrants, pre-funded warrants, contingent consideration liabilities, bifurcated derivative liabilities, stock-based compensation awards, and other financial instruments.
| 9 |
Cash and Cash Equivalents
Cash and cash equivalents include cash in bank accounts and money market funds with maturities of less than three months from inception, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value. As of June 30, 2026 and December 31, 2025, cash and cash equivalents consisted of the following:
| June 30, 2026 | December 31, 2025 | |||||||
| Cash | $ | $ | ||||||
| Money market funds | ||||||||
| Total cash and cash equivalents | $ | $ | ||||||
Periodically,
the Company may carry cash balances at financial institutions in excess of the federally insured limit of $
Investment in Equity Securities
The Company accounts for investments in equity securities in accordance with ASC 321, Investments – Equity Securities. For investments that do not have a readily determinable fair value and for which the Company does not exercise significant influence, the investments are carried at cost, less any impairment, adjusted for observable price changes from orderly transactions involving identical or similar investments of the same issuer. The Company evaluates such investments for impairment at each reporting date by performing a qualitative assessment of impairment indicators. If this assessment indicates the investment is impaired, the Company estimates the investment’s fair value and recognizes an impairment loss in earnings equal to the excess of the carrying value over fair value, establishing a new cost basis for the investment.
Fair Value of Financial Instruments
The Company follows accounting guidelines on fair value measurements for financial instruments measured on a recurring basis, as well as for certain assets and liabilities that are initially recorded at their estimated fair values. Fair value is defined as the exit price, or the amount that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The Company uses the following three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs to value its financial instruments:
| ● | Level 1: Observable inputs such as unadjusted quoted prices in active markets for identical instruments. | |
| ● | Level 2: Quoted prices for similar instruments that are directly or indirectly observable in the marketplace. | |
| ● | Level 3: Significant unobservable inputs which are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires a significant judgment or estimation. |
Financial instruments measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires the Company to make judgments and consider factors specific to the asset or liability. The use of different assumptions and/or estimation methodologies may have a material effect on estimated fair values. Accordingly, the fair value estimates disclosed, or initial amounts recorded, may not be indicative of the amount that the Company or holders of the instruments could realize in a current market exchange.
| 10 |
The carrying amounts of the Company’s financial instruments including cash and cash equivalents, prepaid expenses, accounts payable and accrued liabilities approximate fair value due to the short-term maturities of these instruments.
Set out below are the Company’s financial instruments that are required to be remeasured at fair value on a recurring basis and their fair value hierarchy as of June 30, 2026 and December 31, 2025:
| June 30, 2026 | Level 1 | Level 2 | Level 3 | Carrying Value | ||||||||||||
| Liabilities | ||||||||||||||||
| Derivative Liability - Warrants | $ | $ | $ | $ | ||||||||||||
| Total Liabilities | $ | $ | $ | $ | ||||||||||||
| December 31, 2025 | Level 1 | Level 2 | Level 3 | Carrying Value | ||||||||||||
| Liabilities | ||||||||||||||||
| Derivative Liability - Warrants | $ | $ | $ | $ | ||||||||||||
| Total Liabilities | $ | $ | $ | $ | ||||||||||||
See Note 5 and Note 9 for additional disclosures related to the fair value of the Company’s convertible notes and derivative liabilities, respectively.
Derivative Financial Instruments
The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the unaudited condensed consolidated statements of operations.
For our derivative financial instruments classified as a liability, we use a Black-Scholes Model to value the derivative instruments at inception and on subsequent valuation dates. The model requires specification of the current stock price, exercise price, expected term, expected volatility, a risk-free interest rate aligned with the expected term, and expected dividend yield. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the unaudited condensed consolidated balance sheets as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within twelve (12) months of the balance sheet date.
Convertible Notes Payable
The Company accounts for its Convertible Bridge Notes (as defined in Note 5) under the fair value option in accordance with ASC 825, Financial Instruments (“ASC 825”). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable unless a new election date occurs. Additional term or other notes may be issued in subsequent periods where the Company would be able to make a fair value option election upon issuance provided eligibility criteria are met. The Company records the portion of the Convertible Bridge Notes that are issued and outstanding for accounting purposes at fair value with changes in fair value recorded in other income (expense), net in the unaudited condensed consolidated statements of operations, except for the portion of the total change in fair value that results from a change in the instrument-specific credit risk of the Convertible Bridge Notes, which is recorded in other comprehensive income (loss), if applicable. No loss was attributed to changes in credit risk for the periods presented therefore net loss was equal to comprehensive loss. The fair value option election was made to align the accounting for the Convertible Bridge Notes with the Company’s financial reporting objectives and reduce operational effort to account for embedded features that otherwise would require bifurcation as a separate unit of account.
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Pursuant to the fair value option election, direct and incremental debt issuance costs and consideration paid to the lender related to the Convertible Bridge Notes were expensed as incurred and recorded in other income (expense), net in the unaudited condensed consolidated statements of operations.
For convertible notes for which the fair value option is not elected, the Company evaluates the convertible notes for embedded features and bifurcates these features (such as conversion options and redemption options) from their host instruments and accounts for them as free standing derivative financial instruments if certain criteria are met. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.
Convertible Preferred Stock
The Company evaluates its preferred stock instruments pursuant to FASB ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and other applicable accounting guidance to determine whether such instruments should be classified as liabilities, temporary equity, or stockholders’ equity. Preferred stock instruments that are mandatorily redeemable or otherwise constitute an obligation requiring the Company to transfer assets are classified as liabilities. Preferred stock instruments that are redeemable for cash or other assets upon events that are not solely within the Company’s control are evaluated for temporary equity classification.
The Company’s Series B-1 and Series B-2 Convertible Preferred Stock
do not contain redemption features that require liability or temporary equity classification. Accordingly, the Series B-1 Convertible
Preferred Stock and Series B-2 Convertible Preferred Stock are classified within stockholders’ equity. As of June 30, 2026, the Company
had shares of Series B-1 Convertible Preferred Stock and shares of Series B-2 Convertible Preferred Stock issued and outstanding.
The Series B-1 Convertible Preferred Stock and Series B-2 Convertible Preferred Stock each have a stated value and liquidation preference
of $
Warrants
The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480 and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. Finally, the Company determines if the warrants meet the definition of a derivative based on their contractual terms. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.
For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and at each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the unaudited condensed consolidated statements of operations. The Company also evaluates if changes in contractual terms or other considerations would result in the reclassification of outstanding warrants from liabilities to stockholders’ equity (or vice versa).
The Company may also issue or enter into arrangements to issue pre-funded warrants that contain contingent issuance, settlement or exercisability provisions. The Company evaluates these instruments under ASC 480 and ASC 815 to determine whether the instruments should be classified within stockholders’ equity or accounted for as liabilities. For contingent pre-funded warrants determined to be equity-classified, the instruments are recorded within additional paid-in capital at their estimated fair value on the applicable measurement date and are not subsequently remeasured unless modified or required to be reclassified. If contingent pre-funded warrants do not meet the criteria for equity classification, the instruments are recorded as liabilities at fair value and remeasured at each reporting date, with changes in fair value recognized in earnings.
When fair value measurement is required for contingent pre-funded warrants, the Company estimates fair value using a probability-weighted valuation approach that incorporates management’s assessment of the likelihood of satisfying the underlying contractual conditions. Significant assumptions utilized in these valuations may include the Company’s stock price, the expected timing of contingent events, the probability of satisfying specified performance, operational or other contractual conditions, and the likelihood of obtaining any required approvals.
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The Company accounts for stock-based compensation using the provisions of ASC 718, Stock-Based Compensation (“ASC 718”), which requires the recognition of the fair value of stock-based compensation. Stock-based compensation is estimated at the grant-date based on the fair value of the awards. The fair value of restricted stock units (“RSUs”) is based on the quoted price of our common stock on the grant-date. We estimate the grant-date fair value of stock options using the Black-Scholes option-pricing model, which requires certain assumptions that impact the estimation of fair value and related compensation expense. The assumptions used to estimate fair value include the expected volatility of a representative peer group of publicly traded companies, the risk-free interest rate, the expected term of the award, and the expected dividend yield. A description of the key assumptions used in determining the fair value of stock options is provided below:
| ● | Expected term — The expected term of stock options is estimated using the simplified method, which is based on the midpoint between the vesting date and the contractual term of the award, as the Company does not have sufficient historical exercise data to provide a reasonable basis for estimating expected term. | |
| ● | Expected volatility — We estimated expected volatility using a combination of (i) the historical volatility of comparable publicly traded companies’ stock prices and together with Shuttle Pharmaceuticals Holdings Inc.’s available historical trading data and (ii) the implied volatility derived from publicly traded call options of comparable companies over a period equal to the expected term of the awards. | |
| ● | Risk-free interest rate — The risk-free interest rate is the average interest rate consistent with the yield available on a U.S. Treasury note with a term equal to the expected term of an award. | |
| ● | Expected dividend yield — We have not historically paid cash dividends on our common stock and do not expect to do so in the foreseeable future. Accordingly, we use an expected dividend yield of 0%. |
The Company accounts for forfeitures of grants as they occur. Compensation cost for awards is recognized using the straight-line method over the requisite service period
Research and Development Expenses
Research and development expenses are charged to expense as incurred. Research and development expenses include, but are not limited to, product development, clinical and regulatory expenses, payroll and other personnel expenses, which may include portions of the Company’s executives to the extent they are actively involved in the research and development activities, materials, supplies, related subcontract expenses, and consulting costs.
Leases
The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use asset (“ROU”), operating lease liability - current, and operating lease liability - noncurrent on the consolidated balance sheets.
ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the related obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the estimated rate of interest for collateralized borrowing, over a similar term of the lease payments at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that it will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
Impairment of Long-Lived Assets
The Company reviews its long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the asset may not be fully recoverable. Recoverability of assets is measured by a comparison of the carrying amount of an asset to the estimated undiscounted cash flows expected to be generated by the asset. If the carrying amount of the asset exceeds its estimated future cash flows, an impairment charge will be recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. There were no impairments of long-lived assets during the periods presented.
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Property and Equipment
Property and equipment are stated at cost less accumulated depreciation. Expenditures for maintenance and repairs are charged to expense as incurred; additions, renewals and betterments are capitalized. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of property and equipment is provided using the straight-line method for substantially all assets with estimated lives as follows:
| Furniture | ||||
| Computers and equipment | ||||
| Research equipment |
Internal-Use Software
All costs related to the development of internal use software, other than those incurred during the application development stage, are expensed as incurred. Costs incurred during the application development stage are capitalized and amortized over the estimated useful life of the software, which is typically four years. The estimated useful lives of internally developed software are reviewed frequently and adjusted as appropriate to reflect upcoming development activities that may include significant upgrades and/or enhancements to the existing functionality. Capitalized internally developed software costs are amortized on a straight-line basis over their expected economic lives. Amortization of these costs begins once the product is ready for its intended use. The amount of costs capitalized within any period is dependent on the nature of software development activities and projects in each period.
Intangible Assets
Intangible assets can include intangible assets acquired as part of business combinations, asset acquisitions and other business transactions. The Company records intangible assets at cost, net of accumulated amortization and accumulated impairment losses, if any. Cost is measured based on the fair values of cash consideration paid and equity interests issued. The cost of an intangible asset acquired is its acquisition date fair value. Amortization of definite life intangible assets is calculated on a straight-line basis over the estimated useful lives of the assets.
Income Taxes
The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes (“ASC 740”). ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, the Company does not foresee generating taxable income in the near future and utilizing its deferred tax asset, therefore, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company has no material uncertain tax positions for any of the reporting periods presented.
Segment Information
Operating segments are defined as components of an enterprise about which separate and discrete information is available for evaluation by the chief operating decision-maker (“CODM”) in deciding how to allocate resources and assess performance. The Company’s CODM, its chief executive officer, evaluates the Company’s operations and manages its business as a single operating segment. With the exception of the Molecule.ai intangible asset, substantially all of the Company’s long-lived assets are held in the United States. The Molecule.ai intangible asset is recorded on the books of the Company’s Canadian subsidiary. Refer to Note 11 for the Company’s disclosure on its single operating segment.
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Net loss per share of common stock requires presentation of basic and diluted earnings per common share on the face of the unaudited condensed consolidated statements of operations for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic earnings per share computation to diluted earnings per share.
In the accompanying unaudited condensed consolidated financial statements, basic loss per common share is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the year. Certain warrants issued and outstanding include terms and conditions resulting in the treatment as participating securities. Such warrants do not include an obligation for the warrant holders to fund the losses of the Company. Therefore, these warrants are excluded from the calculation of earnings per common share in periods of net loss.
Diluted earnings per share is computed by dividing net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding and potentially dilutive shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through convertible securities, contingent share arrangements, stock options and warrants unless the result would be antidilutive.
The dilutive effect of restricted stock units and other stock-based payment awards subject to vesting and common stock warrants is calculated using the “treasury stock method,” which assumes that the “proceeds” from the exercise of these instruments are used to purchase common shares at the average market price for the period. The dilutive effect of convertible securities is calculated using the “if-converted method.” Under the if-converted method, securities are assumed to be converted at the beginning of the period, and the resulting shares of common stock are included in the denominator of the diluted calculation for the entire period being presented.
Given the nominal exercise price of the Company’s pre-funded warrants, other than the 2026 Pre-Funded Warrants, such pre-funded warrants are included in the calculation of basic and diluted net loss per share as the exercise price per warrant is deemed non-substantive when compared to the fair value of the underlying common shares. The 2026 Pre-Funded Warrants are contingently issuable upon the achievement of specified milestone events, subject to stockholder approval (see Note 8). Contingently issuable shares are considered outstanding common shares and included in basic net loss per share as of the date that all necessary conditions have been satisfied (i.e., when issuance of the shares is no longer contingent on any conditions except the passage of time).
For the six months ended June 30, 2026 and year ended December 31, 2025, the following common stock equivalents were excluded from the computation of diluted net loss per share as the result of the computation was anti-dilutive:
| June 30, 2026 | December 31, 2025 | |||||||
| Warrants (Note 8) | ||||||||
| Restricted stock units (Note 8) | ||||||||
| Anti-dilutive securities | ||||||||
Recently Adopted Accounting Pronouncements
In December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The guidance is effective for the Company’s fiscal years beginning after December 15, 2024. The Company adopted ASU 2023-09, effective December 31, 2025, in these unaudited condensed consolidated financial statements. ASU 2023-09 which only impacted the disclosures and did not otherwise impact the unaudited condensed consolidated financial statements.
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Recently Issued Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (“DISE”), which requires disaggregated disclosure of income statement expenses for public business entities. The ASU does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the notes to the financial statements. ASU 2024-03 is effective for all public business entities for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the potential impact that this standard may have on its unaudited condensed consolidated financial statements and related disclosures.
In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other-Internal-use Software (Subtopic 350-40), which modernizes the accounting framework for internal-use software. The ASU removes all references to prescriptive and sequential software development stages to reflect the current software development methodologies and frameworks. Under the ASU, an entity is required to start capitalizing software development costs when both of the following occur: (i) management has authorized and committed to funding the software project and (ii) it is probable that the project will be completed and the software will be used to perform the function intended. ASU 2025-06 is effective for all entities for fiscal years beginning after December 15, 2027, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the potential impact that this standard may have on its unaudited condensed consolidated financial statements and related disclosures.
There have been no other recent accounting pronouncements, changes in accounting pronouncements or recently adopted accounting guidance that are of significance or potential significance to the Company.
Note 3 – Leases
Operating lease right-of-use assets and liabilities are recognized at the present value of the future lease payments as of the lease commencement date. Operating lease expense is recognized on a straight-line basis over the lease term.
The
Company currently has a lease agreement which allows for the use of a laboratory facility, entered into on February 16, 2023, with base
rent of $
Following
the Company’s discontinuation of its clinical trial for Ropidoxuridine, the Company committed to a plan to pursue a sublease for
its laboratory space. During May 2026, the Company executed a sublease agreement for its laboratory
space, with the subtenant taking occupancy on May 15, 2026. The sublease has a stated term through August 30, 2028 and is coterminous
with the underlying lease. The sublease may terminate earlier if the underlying lease is terminated prior to its contractual expiration
date. During the three and six months ended June 30, 2026, the Company recognized $
As
a result of the previously identified decline in the expected economic benefit of the leased space, the Company recorded total non-cash
impairment charges of $
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The following summarizes the right-of use asset and lease information for the Company’s operating leases:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Operating lease cost | $ | $ | $ | $ | ||||||||||||
| Variable lease cost | ||||||||||||||||
| Sublease income | ( | ) | ( | ) | ||||||||||||
| Total lease cost | $ | $ | $ | $ | ||||||||||||
| Other information: | ||||||||||||||||
| Cash paid for operating cash flows for operating leases | $ | $ | $ | $ | ||||||||||||
| June 30, 2026 | December 31, 2025 | |||||||
| Weighted-average remaining lease term - operating leases (year) | ||||||||
| Weighted-average discount rate - operating leases | % | % | ||||||
Future non-cancelable minimum lease payments under the operating lease liability as of June 30, 2026, are as follows:
| Years ended December 31, | ||||
| 2026 (Excluding the six months ended June 30, 2026) | $ | |||
| 2027 | ||||
| 2028 and thereafter | ||||
| Total future minimum lease payments | ||||
| Less: imputed interest | ( | ) | ||
| Present value of payments | $ | |||
Note 4 – Notes Payable-Related Party
On
October 14, 2024, as part of the senior convertible note offering described in Note 5, the Company entered into a loan with a former
officer of the Company in the amount of $
On
September 4, 2024, the Company issued a $
Note 5 – Convertible Notes and Loan Agreement
Revolving Note Agreement
On
February 27, 2025, the Company entered into a Revolving Loan Agreement with Bowery Consulting Group Inc. (“Bowery”) (the
“Lender”). Pursuant to and under the terms of the Revolving Loan Agreement, the Company issued a revolving note dated February
28, 2025 in the principal amount of up to $
The
Company recognized deferred loan costs of approximately $
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2024 Convertible Bridge Notes
During October 2024, the Company completed a senior convertible note offering in two closings, as further described below.
On
October 14, 2024, the Company issued an aggregate of $
As
part of the same offering, on October 21, 2024, the Company issued an additional $
Immediately prior to their mandatory conversion, the Company remeasured the fair value of the Convertible Bridge Notes based on the number of shares to be issued upon conversion and the fair value of the Company’s common stock immediately prior to conversion. Upon mandatory conversion of the outstanding principal in October 2025, the Company issued shares of common stock. The fair value of the Company’s common stock at October 14, 2025 and October 21, 2025 was $ and $ per share.
The following table summarizes the changes in the carrying value of the Convertible Bridge Notes:
| Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ||||
| Balance - December 31, 2024 | $ | |||
| Conversion of convertible bridge note (at fair value) | ( | ) | ||
| Payments of coupon interest | ( | ) | ||
| Gain on change in fair value | ||||
| Balance - December 31, 2025 | $ | |||
Note 6 – Molecule.ai Asset Acquisition
On
November 20, 2025, the Company, through its wholly-owned subsidiary 1563868 B.C. Ltd, entered into an asset purchase agreement with
1542770 B.C. Ltd (the “Selling Party”) pursuant to which the Company purchased certain assets of the Selling Party,
including, among others, the Selling Party’s AI-driven life sciences platform, all as more specifically set forth in the asset
purchase agreement (the “Molecule.ai APA”). In exchange for the acquired assets, the Company agreed to pay the Selling Parties (i) a cash payment of $
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Concurrently,
the Company executed a consulting agreement pursuant to which the founder of the Selling Party will provide specified consulting services
to enhance, upgrade and develop new features for the AI-driven platform. The term of the consulting agreement is one year, cancellable
at any time by either party with thirty days’ notice. Total consideration under the consulting agreement is approximately $
On
December 23, 2025, the parties executed a First Amendment (the “First Amendment”) to the Molecule.ai APA pursuant
to which a portion of the first installment payment was accelerated. The Company issued shares of common stock for an aggregate
value of approximately $
The Molecule.ai APA contains customary mutual indemnification provisions under which each party agrees to indemnify the other for certain losses arising from breaches of representations, warranties, and covenants and specified pre-/post-closing liabilities, subject to customary limitations such as survival periods, thresholds, and caps.
The total acquisition date purchase consideration as determined by the Company is as follows:
| Consideration * | Dollar Value | |||
| Closing Cash* | $ | |||
| Accelerated portion of the First Installment* | ||||
| Six Month Installment* | ||||
| Twelve Month Installment* | ||||
| Technology Development Milestone 1**** | ||||
| Technology Development Milestone 2** | ||||
| $ | ||||
| * |
| ** |
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The
Company incurred approximately $
The
Company accounted for the transaction as an asset acquisition due to the determination that substantially all of the fair value of the
assets acquired was concentrated in a group of similar identifiable assets. The Company believes the “substantially all”
criterion was met with respect to the acquired intellectual property as it acquired no other assets and assumed no liabilities in the
transaction. Further, the Company concluded that the asset acquired represented a developed technology asset as the assets did not meet
the definition of an in-process research and development asset. Accordingly, the purchase consideration, plus transaction costs, was
allocated to the developed technology asset, with no goodwill recognized. The Company estimates that the developed technology asset has
a useful life of
The carrying value of the developed technology asset is summarized as follows:
| Carrying value as of December 31, 2024 | $ | |||
| Developed technology acquired | ||||
| Amortization expense | ( | ) | ||
| Software in progress | ||||
| Carrying value as of December 31, 2025 | $ | |||
| Amortization expense | ( | ) | ||
| Software in progress | ||||
| Carrying value as of June 30, 2026 | $ |
On May 4, 2026, Shuttle entered into a Second
Amendment (the “Second Amendment”) to the Molecule.ai APA. Pursuant to the terms and conditions of the Second Amendment,
the Company (i) issued
shares of Series B-1 Convertible Preferred Stock to the Selling Party and (ii) paid the Selling Party approximately $
The Company accounted for the Second Amendment as
a troubled debt restructuring involving a combination of partial satisfaction of the payable and modification of its terms. In measuring
the restructuring, the Company considered the cash paid, the $ fair value of the Series B-1 Convertible Preferred Stock, the $
fair value of the 2026 Pre-Funded Warrants transferred or issuable to the Selling Party, and the $ fair value of the common shares
contractually returnable to the Selling Party as components of the integrated settlement. The fair value of the common shares to be returned
reduced the net consideration transferred by the Company. Based on this analysis, the carrying amount of the payable immediately before
the restructuring exceeded the net settlement by $
Because the common shares had not been returned as of June 30, 2026, the Company accounted for its contractual right to receive the shares as a prepaid share repurchase and recorded $ as a reduction of additional paid-in capital. The shares remained legally outstanding at June 30, 2026 but were excluded from the calculation of basic and diluted earnings per share.
Note 7 – United Dogecoin Merger Agreement
On April 30, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Shuttle Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company organized for the purpose of effecting the merger, and United Dogecoin. Upon the closing of the merger on May 6, 2026, Shuttle Merger Sub, Inc. merged with and into United Dogecoin, with United Dogecoin surviving the Merger. As a result of the Merger, United Dogecoin became wholly-owned by the Company.
Merger Consideration
In connection with the Merger Agreement, the Company issued shares of newly designated Series B-1 Convertible Preferred Stock, par value $ per share, to the shareholders of United Dogecoin, in exchange for 100% of their outstanding equity interests. The Series B-1 Convertible Preferred Stock is convertible into shares of the Company’s common stock only following receipt of stockholder approval, subject to the terms of the Series B-1 Convertible Preferred Stock, including applicable conversion limitations and beneficial ownership limitations. Further, the Series B-1 Convertible Preferred Stock is a non-voting security prior to its conversion into the Company’s common stock.
Subject
to receipt of stockholder approval, each share of Series B-1 Convertible Preferred Stock is convertible into shares of the Company’s
common stock, par value $ per share, at an initial conversion price of $
In addition, holders of United Dogecoin common stock may be entitled to receive up to 2026 Pre-Funded Warrants exercisable for an equivalent number of shares of the Company’s common stock. The 2026 Pre-Funded Warrants are issuable in equal installments only upon the receipt of the required stockholder approval and achievement of one or more of the Milestone Events (as defined in Note 8, subject to Note 12).
On August 31, 2026, one of the Milestone Events was amended to reduce the number of Mining Rigs required for issuance of 2026 Pre-Funded Warrants under the Merger Agreement (see Note 12).
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Accounting for the Merger
As the Series B-1 Convertible Preferred Stock is non-voting prior to its conversion, and its conversion is predicated on the receipt of the required stockholder approval, the former shareholders of United Dogecoin do not obtain any voting interests in the Company upon the completion of the Merger, and until such time that the Series B-1 Convertible Preferred Stock converts into the Company’s common stock. Further, the terms of the Merger Agreement provide for contractual restrictions on the ability of the Company or its board of directors to exercise operational authority or control over any of the key operating activities of United Dogecoin, such as access and control of United Dogecoin bank accounts, authority for the approval or disapproval of United Dogecoin expenditures, obligations and other commitments of funds, the authorization of any hiring, termination or compensation decisions and the receipt, use and disbursement of any and all funds or other assets of United Dogecoin, until the required stockholder approval is obtained.
Given the non-voting nature of the Series B-1 Convertible Preferred Stock prior to conversion to the Company’s common stock and the contractual restrictions on the ability of the Company to exercise any operational authority or control over United Dogecoin, the Company concluded that there was no transfer or change of control that occurred upon the closing of the Merger, and such transfer or change of control would be deferred until the receipt of approval by the Company’s stockholders, after which the Series B-1 Preferred Stock would automatically convert to the Company’s common stock and provide the holders of United Dogecoin with a majority interest in the voting stock of the Company. As of June 30, 2026, such stockholder approval had not been obtained. Accordingly, the Company concluded that it did not obtain control of United Dogecoin as of June 30, 2026, and the transaction did not qualify as a completed business combination or acquisition for accounting purposes as of that date.
The
Company also concluded that United Dogecoin was a variable interest entity, but the Company was not the primary beneficiary, therefore they were
not required to consolidate, nor were they required to be accounted for as an equity method investment under ASC 323, Investments—Equity Method and Joint Ventures, due to the lack of ability to
exercise significant influence over United Dogecoin. As a result, the Company has accounted for its interest in United Dogecoin as an
investment in equity securities and initially recorded at cost as of the closing of the Merger. The Company viewed the completion of
the Merger and the PIPE financing as a single, integrated financing transaction. In connection with this transaction, The Company recognized
the Series B-1 Convertible Preferred Stock and 2026 Pre-Funded Warrants at fair value, resulting in an allocation of $
The balance of Investment in United Dogecoin as of June 30, 2026 consists of the following:
| Issuance of Series B-1 Convertible Preferred Stock and Milestone Pre-Funded Warrants in the Merger Agreement | $ | |||
| PIPE proceeds invested to support operations | ||||
| Stock-based compensation related to replacement options | ||||
| Ending investment at June 30, 2026: | $ |
The Company has elected to subsequently measure the investment in United Dogecoin using the measurement alternative for investments in equity securities without readily determinable fair values. As of June 30, 2026, there were no identified revaluation events and no indicators of impairment identified. The Company will continue to evaluate the investment for impairment and will reassess the accounting treatment in future periods upon the occurrence of additional events, including receipt of the required stockholder approval or other changes in facts and circumstances that may result in the Company obtaining control of United Dogecoin.
Financial Advisor Fee
In
connection with the Merger Agreement, the Company issued to E.F. Hutton & Co. shares of Series B-1 Convertible Preferred Stock,
each of which are convertible into shares of the Company’s common stock at an initial conversion price of $
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Due to United Dogecoin
Certain operating expenses of the Company, including legal, professional, and rent expenses, were paid directly by United Dogecoin, which is presented as Due to United Dogecoin on the consolidated balance sheets.
Note 8 – Stockholders’ Equity
Common Stock
During the six months ended June 30, 2026, the Company issued:
| ● | shares of common stock issued for vesting of restricted stock units, | |
| ● | shares of common stock as part of a public offering, | |
| ● | shares of common stock issued for exercise of pre-funded warrants, and | |
| ● | shares of common stock for rounding of reverse stock split fractional shares |
During the six months ended June 30, 2025, the Company issued:
| ● | shares of common stock upon conversion of $ | |
| ● | shares of common stock as part of a public offering, | |
| ● | shares of common stock for vesting of restricted stock units, | |
| ● | shares of common stock as part of a private placement, | |
| ● | shares of common stock for rounding of reverse stock split fractional shares, and | |
| ● | shares of common stock for exercise of pre-funded warrants. |
March 2025 Equity Financing
On
March 12, 2025, the Company entered into an Underwriting Agreement (the “Underwriting Agreement”) with WestPark Capital,
Inc. (“WestPark”) as the sole underwriter, related to a public offering (the “Offering”)
of (i)
shares of common stock of the Company, at a public offering
price of $
per share and (ii) pre-funded warrants to purchase
The
Offering resulted in gross proceeds of approximately $
The
March 2025 Pre-Funded Warrants were exercisable at any time after March 13, 2025, at an exercise price of $
The Company concluded that the March 2025 Pre-Funded Warrants met the requirements to be classified in stockholders’ equity, and have been recorded as additional paid in capital.
As of June 30, 2026, all of the March 2025 Pre-Funded Warrants have been exercised.
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June 2025 Private Placement
On
June 20, 2025, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) in a private
placement, and engaged WestPark as the sole placement agent,
pursuant to which the Company agreed to sell an aggregate of $
The
June 2025 Pre-Funded Warrants are exercisable at any time after issuance on June 24, 2025, at an exercise price of $
In connection with the Securities Purchase Agreement, the Company entered into a registration rights agreement with the investor. Pursuant to the registration rights agreement, the Company agreed to file a registration statement with the Securities and Exchange Commission (the “SEC”) to register for resale the shares of common stock, and the shares issuable upon exercise of the pre-funded warrants issued under the purchase agreement, within 10 days of the closing date, and to have such registration statement declared effective within 90 days of the closing date (or 120 days if the registration statement is reviewed by the SEC). The registration rights agreement provided that the Company would be obligated to pay certain liquidated damages to the investor if the Company failed to file the resale registration statement, or to have such registration statement declared effective by such dates. The Company was prepared to file the registration statement within the deadline required under the registration rights agreement but due to requests by the investor, the Company did not file the registration statement until August 4, 2025, upon receiving the investor’s request to do so. The registration statement was declared effective on August 11, 2025.
The Company concluded that the shares and June 2025 Pre-Funded Warrants met the requirements to be classified in stockholders’ equity, and the proceeds from the issuance of the shares and June 2025 Pre-Funded Warrants have been recorded in additional paid-in capital.
As of June 30, 2026, all pre-funded warrants related to the June 2025 Private Placement have been exercised.
November 2025 Equity Financing
On
November 3, 2025, the Company entered into a securities purchase agreement with Alternative Investment
Capital Inc. (the “Purchaser”, “Investor”, or the “Holder”), pursuant to which the Company agreed
to issue and sell to the Purchaser in a private placement transaction (the “Offering”) pre-funded warrants (the “November
2025 Pre-Funded Warrants”) to purchase up to shares of common stock of the Company for aggregate gross proceeds of approximately
$
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The
November 2025 Pre-Funded Warrants are exercisable at any time after November 4, 2025, at an exercise price of $
The Company concluded that the November 2025 Pre-Funded Warrants met the requirements to be classified in stockholders’ equity, and the proceeds from the issuance of the November 2025 Pre-Funded Warrants have been recorded in additional paid in capital.
As of June 30, 2026, all November 2025 Pre-Funded Warrants have been exercised.
March 2026 Equity Financing
On
March 9, 2026, the Company closed an underwritten public offering of shares of its common stock at a public offering price of
$ per share, resulting in gross proceeds of $
As of June 30, 2026, of the March 2026 Pre-Funded Warrants have been exercised.
May 2026 PIPE Financing
On
April 30, 2026, Shuttle entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with certain accredited
investors party thereto (each, a “Purchaser” and collectively, the “Purchasers”), pursuant to which Shuttle
agreed to issue (i) newly designated Series B-2 convertible preferred stock, par value $ (the “Series B-2 Preferred
Stock”) and (ii) the May 2026 PIPE Warrants (together with the Series B-2 Preferred Stock, the “PIPE Securities”) to
purchase up to 100% of the number of shares of Common Stock underlying the Series B-2 Convertible Preferred Stock as of May 6, 2026, the closing date (the “Closing
Date”),
exercisable for a period of three (3) years at an exercise price of $
Subject
to receipt of stockholder approval, the shares of Series B-2 Convertible Preferred Stock will be automatically convertible (the “B-2
Share Conversion”), at a conversion price of $
Each of the following is a Milestone Event as defined in the Securities Purchase Agreement:
(i) the date upon which the Company or a subsidiary thereof purchased or purchases an aggregate of dogecoin mining rigs (“Mining Rigs”);
(ii) the date upon which the Company or a subsidiary thereof achieves a minimum 90% fleet operational uptime (the “Minimum Uptime”) and maintains the Minimum Uptime for any seven (7) consecutive day period, excluding scheduled maintenance windows for servicing and force majeure events, and provided that such date is on or prior to the sixty (60) calendar day anniversary of the commencement of operational uptime of the Mining Rigs; and
(iii) the date upon which the Company or a subsidiary thereof executes a binding colocation and hosting agreement securing electrical power and related infrastructure services at a rate not exceeding $ per kilowatt-hour, inclusive of all material operating costs.
The Company concluded that the Series B-2 Convertible Preferred Stock is equity-classified and recorded the instrument within stockholders’ equity upon issuance due to the absence of redemption features and because the instrument is expected to be settled through conversion into the Company’s common stock. The Company determined that the May 2026 PIPE Warrants are liability-classified and recorded them at fair value upon issuance because certain exercise price adjustment provisions are based on changes to other outstanding equity-linked instruments rather than solely on the Company’s common stock. As a result, the warrants do not qualify for equity classification. The May 2026 PIPE Warrants will be remeasured at fair value each reporting period, with changes in fair value recognized in earnings. The Company concluded that the contingent 2026 Pre-Funded Warrants represent equity-classified freestanding financial instruments. Accordingly, a portion of the residual PIPE proceeds was allocated to the contingent 2026 Pre-Funded Warrants based on their relative fair value and recorded within additional paid-in capital. Because the 2026 Pre-Funded Warrants are equity-classified, subsequent changes in estimated fair value are not recognized unless a modification or reclassification event occurs.
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On the Closing Date, the PIPE Financing closed with the issuance of approximately $
Warrants
In
connection with the Convertible Bridge Notes in October 2024, the lenders were granted warrants to purchase
In
connection with the October 2024 Convertible Note Financing, the Company issued pre-funded warrants to purchase up to
In
connection with the May 2026 PIPE Financing, the Company issued May 2026 PIPE Warrants to purchase up to
A summary of activity regarding warrants to purchase common stock (excluding pre-funded warrants) for the six months ended June 30, 2026 were as follows:
| Number of | Weighted-Average | Average | ||||||||||
| Warrants | Exercise Price | Life (years) | ||||||||||
| Outstanding, December 31, 2025 | $ | |||||||||||
| Granted | ||||||||||||
| Outstanding, June 30, 2026 | $ | |||||||||||
The warrants had intrinsic value of $ as of June 30, 2026. All of the outstanding warrants are exercisable as of June 30, 2026.
Equity Incentive Plan
The Company’s 2018 Equity Incentive Plan provides for equity incentives to be granted to employees, executive officers, directors and key advisers and consultants. Equity incentive grants may be made in the form of stock options with an exercise price of not less than the fair market value of the underlying shares as determined pursuant to the 2018 Plan, restricted stock awards, other stock-based awards, or any combination of the foregoing. The 2018 Plan is administered by the Company’s compensation committee. In May 2025, the Company increased the shares authorized under the 2018 Plan by shares. As of June 30, 2026, the Company has authorized shares of common stock for issuance under the 2018 Plan. As of June 30, 2026, shares have been granted, net of forfeitures, under the 2018 Equity Incentive Plan, of which shares have vested.
Restricted Stock Units
The Company may grant restricted stock units (“RSU”) under our 2018 Plan. RSUs are bookkeeping entries representing an amount equal to the fair market value of one share of our common stock. Subject to the provisions of the 2018 Plan, the administrator determines the terms and conditions of RSUs, including the vesting criteria and the form and timing of payment. Notwithstanding the foregoing, the administrator, in its sole discretion, may accelerate the time at which any restrictions will lapse or be removed. RSUs granted typically vest annually in one third increments from the date of appointment.
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During
the years ended December 31, 2025 and 2024, pursuant to agreements with directors, officers and consultants, and RSUs with
a value of $
On
February 27, 2025, the Company entered into a Revolving Loan Agreement with Bowery Consulting Group Inc. (“Bowery”) where
the Company may borrow from Bowery an aggregate principal amount of up to $
On August 31, 2025 and September 11, 2025, Steve Richards and Joseph Tung, respectively, resigned from their positions on the Board of Directors. Upon the resignation of the two board members, vesting of RSUs held by each departing board member, for a total of were allowed to accelerate immediately and the remaining unvested RSUs were forfeited. The Company concluded that the acceleration represented a modification of the outstanding unvested RSUs. As a result of the modification, the Company recorded an insignificant amount of stock-based compensation expense.
On
May 8, 2025, the Company and Dr. Anatoly Dritschilo (“Dr. Dritschilo”) executed a Settlement Agreement and General Release
pursuant to which Dr. Dritschilo agreed to resign from his position as the Company’s Chief Scientist Officer and Director of the
Company’s Board of Directors on May 9, 2025. Under the Agreement and as consideration for timely signing, not timely revoking,
and compliance with the promises made therein, the Company agreed to issue RSUs, which vest in two years from issuance date. The
fair value of the Company’s common stock at close of market on May 9, 2025 was $ per share, for an aggregate fair value of
the RSUs of $
On November 21, 2025, Mr. Lorber resigned from his position as Chief Financial Officer. In connection with his resignation, the Company and Mr. Lorber entered into a Separation Agreement and Mutual Release (the “Separation Agreement”). Under the Separation Agreement, specified portions of Mr. Lorber’s RSU awards were modified to accelerate and vest on February 8, 2026, which coincided with (i) the expiration of his obligation to remain available for reasonable consultation/inquiries under the Separation Agreement and (ii) the vesting date of the August 12, 2025 RSU award under its original terms. As a result of the modification, RSUs were forfeited and RSUs remained outstanding through February 8, 2026. The remaining RSUs vested on February 8, 2026 and no RSUs associated with such awards remained outstanding as of June 30, 2026. As a result of the modification, the Company recognized an insignificant incremental stock-based compensation expense during the year ended December 31, 2025.
On May 3, 2026, Oleh Nabyt resigned from the Company’s Board of Directors. In accordance with the terms of the applicable RSU award agreements, all unvested RSUs held by Mr. Nabyt were forfeited upon his resignation.
As of June 30, 2026, there was $ million of unrecognized RSU compensation cost related to non-vested stock-based compensation arrangements which is expected to be recognized over a weighted-average period of years.
| 26 |
| Number of RSU | Weighted-Average Fair Value Per RSU | |||||||
| Outstanding, December 31, 2025 | $ | |||||||
| Forfeited | ( | ) | ||||||
| Vested | ( | ) | ||||||
| Outstanding, June 30, 2026 | $ | |||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Research and development | $ | $ | $ | $ | ||||||||||||
| General and administrative | ( | ) | ||||||||||||||
| $ | ( | ) | $ | $ | $ | |||||||||||
United Dogecoin 2026 Stock Option Plan
On April 29, 2026, the United Dogecoin Board of Directors and its then stockholders approved the United Dogecoin, Inc. 2026 Stock Option Plan (the “UD Plan”) and authorized grants of stock options. Under the UD Plan, a total of shares of common stock were reserved for issuance. Pursuant to the Merger Agreement (see Note 7), all outstanding stock options granted under the UD Plan, totaling , were converted into Shuttle stock options. The stock options generally vest over a two-year period, with 25% of the award vesting every six months.
| Dividend Yield | % | |||
| Expected Life (Years) | Years | |||
| Risk-free rate of interest for expected life | % | |||
| Volatility | % | |||
| Stock Price | $ | |||
| Strike Price | $ |
| Number of Options | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Term | Aggregate Intrinsic Value | |||||||||||||
| Outstanding at December 31, 2025 | ||||||||||||||||
| Granted | ||||||||||||||||
| Outstanding at June 30, 2026 | ||||||||||||||||
| Exercisable at June 30, 2026 | - | |||||||||||||||
The
Company accounts for the cost associated with the options issued to contractors and non-employees of United Dogecoin as stock options
issued to non-employees (of a non-consolidated entity) and as an addition to its cost basis investment in United Dogecoin because
the options were issued pursuant to the preexisting Merger Agreement. During the three and six months ended June 30, 2026, the Company
recognized $
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Note 9 – Derivative Liabilities
Fair Value Assumptions Used in Accounting for Derivative Liabilities
ASC 815 requires the Company to assess the fair market value of derivative liabilities at the end of each reporting period and recognize any change in the fair market value as other income or expense.
In
January 2023, in connection with the issuance of a certain Convertible Note (the “Alto Convertible Note”), the Company
issued warrants (the “Alto Warrants”) to purchase
In
October 2024, in connection with the October 2024 Equity Financing, the Company issued warrants to purchase
In May 2026, in connection with the
PIPE Financing, the Company issued May 2026 PIPE Warrants to purchase
As of June 30, 2026, the Company utilized a Black-Scholes Model to calculate the fair value of the May 2026 PIPE Warrants, the Alto Warrants and the October 2024 Equity Financing Warrants. The key inputs for the Black-Scholes Model as of June 30, 2026, were as follows:
| Stock price on valuation date | $ | * - | ||
| Exercise price per share | $ | -$ | ||
| Term (years) | ||||
| Volatility | ||||
| Risk-free rate | ||||
| Dividend yield | % |
| * |
The following table summarizes the changes in the derivative liabilities:
| Warrants | ||||
| Balance - December 31, 2024 | $ | |||
| Loss on change in fair value | ||||
| Balance - December 31, 2025 | ||||
| Issuance of May 2026 PIPE Warrants | ||||
| Gain on change in fair value | ( | ) | ||
| Balance - June 30, 2026 | $ | |||
Note 10 – Commitments and Contingencies
On November 10, 2021, the Company entered into an engagement agreement (“EA”) with Boustead designating Boustead as its exclusive financial advisor for corporate finance activities and subsequently, on August 29, 2022, the Company entered into an underwriting agreement with Boustead in conjunction with the Company’s IPO. The EA contained an up to three year right of first refusal (“ROFR’) and the Underwriting Agreement, which overrode conflicting terms in the EA, contained a two year ROFR following the September 2, 2022 closing of the Company’s IPO. Further, Boustead also had a ROFR in conjunction with the Company’s terminated rights offering, which provided Boustead with a ROFR through February 7, 2025. Following the Company’s engagement agreement and underwriting agreement with WestPark Capital dated February 10, 2025 and March 13, 2025, respectively, Boustead asserted it has ROFR rights, demanding termination of WestPark’s engagement and claiming entitlement to compensation under the Boustead EA. As of the reporting date, there are no conditions indicating a loss has been incurred, nor does the Company believe a loss is probable and reasonably estimable, therefore no accrual for a potential loss has been recorded.
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On
December 16, 2024, the Company entered into a sponsored research agreement (the “Sponsored Research Agreement”) with the
Regents of the University of California, on behalf of its San Francisco campus (the “UCSF”), pursuant to which UCSF’s
employees will conduct research on a project entitled “Investigation of 18F-fluorodeboronation method for PSMA targeting ligand
radiolabeling and evaluation in prostate cancer models” (the “Research Program”). Under the terms of the Sponsored
Research Agreement, the Company will bear the total cost of $
In
January 2025, the Company entered into a change order to its existing agreement with Theradex Systems, Inc., the Company’s primary
third-party CRO, for purposes of supporting the Company’s clinical trials of Ropidoxuridine. Following the change order, the Company’s
total cost limit increased by $
In
March 2025, the Company entered into a consulting services agreement (the “Consulting Agreement”) with Bowery Consulting
Group Inc. (the “Consultant”). According to the Consulting Agreement, the Consultant will provide consulting services in
connection with the Company’s business, advising on viability of plans for scaling activities, growth and capital raising strategies,
and costs minimization associated with technological platform improvements and marketing spend. On September 8, 2025, the managing partner
of the Consultant was appointed to the Company’s board of Directors. As a result, the Consultant became a related party effective
as of that date. The Company agreed to pay the Consultant $
On
April 3, 2025, the Company, entered into a consulting agreement with the IR Agency. Pursuant to the consulting agreement, IR Agency agreed
to provide certain marketing and advertising services to communicate information about the Company to the financial community, including,
but not limited to, creating personnel profiles, media distribution and building a digital community with respect to the Company. As
consideration for the performance of the services, the Company paid the IR Agency $
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On
September 15, 2025, the Company, entered into another consulting agreement with IR Agency LLC (“IR Agency”) to continue
the services contracted for in April 2025. As consideration for the performance of the services, the Company paid IR Agency
$
On
March 19, 2026, the Company entered into a consulting agreement with the IR Agency. Pursuant to the consulting agreement, IR Agency agreed to provide certain marketing and advertising services to communicate information about the Company
to the financial community, including, but not limited to, creating company profiles, media distribution and building a digital community
with respect to the Company. As consideration for the performance of the services, the Company paid $
The Company may, from time to time, be involved in various legal proceedings relating to claims arising in the ordinary course of its business. Neither the Company nor any of its consolidated subsidiaries is a party to any such legal proceeding the outcome of which, individually or in the aggregate, is expected to have a material adverse effect on the Company’s financial position, results of operations or cash flows.
Note 11 – Business Segment Information
The
Company and its consolidated subsidiaries operate as
The
accounting policies of our reportable segment are the same as those described in the “Summary of Significant Accounting Policies”
for the Company. All costs, research and development expenses, general and administrative expenses, other operating expenses, interest
expense, depreciation, corporate overhead assets (workforce, intellectual property, etc.) are fully allocated to the Company’s
one segment. Significant segment expenses include payroll and costs incurred for the Company’s primary third-party contract research
organization (“CRO”). The contract with the Company’s primary CRO was terminated during the year ended December 31,
2025 following the discontinuation of the clinical trial of Ropidoxuridine (see Note 10). During the three and six months ended June
30, 2026, the Company incurred no third-party CRO expenses, reflecting the termination of the Company’s primary CRO arrangement
following the discontinuation of the Ropidoxuridine clinical trial in 2025. During the three and six months ended June 30, 2025, the
Company incurred third-party CRO expenses of $
During
the three and six months ended June 30, 2026 and 2025, the Company incurred payroll expenses classified in our unaudited condensed consolidated
statements of operations as research and development of $
All other operating expenses in our unaudited condensed consolidated statements of operations are characterized as other segment expenses which, after factoring in other income and expenses, reconcile to net loss for each period. The Company’s reportable segment’s profit or loss, assets, significant expenses and other specified items are consistent with the financial information disclosed in our unaudited condensed consolidated financial statements. See the unaudited condensed consolidated financial statements for the financial information of the Company’s one segment.
Note 12 – Subsequent Events
On August 31, 2026,
On September 9, 2026, the Company had its Special Meeting of Stockholders (the “Special Meeting”), at which the Company’s stockholders approved (a) the issuance of the Company’s shares of Common Stock and 2026 Pre-Funded Warrants in connection with the transactions contemplated by the Merger Agreement and the Second Amendment, including shares issuable upon conversion of shares of Series B-1 Convertible Preferred Stock and upon the exercise of the 2026 Pre-Funded Warrants, (b) the issuance of the Company’s shares of Common Stock and 2026 Pre-Funded Warrants in connection with the transactions contemplated by the Securities Purchase Agreement, including shares issuable upon conversion of shares of Series B-2 Preferred Stock, upon exercise of common stock purchase warrants and upon exercise of the 2026 Pre-Funded Warrants, (c) an amendment to the Company’s 2018 Equity Incentive Plan to increase the number of shares of Common Stock authorized for issuance thereunder to and (d) an amendment to the Company’s Certificate of Incorporation to change the name of the Company to United Compute Inc.
As a result of the Special Meeting, as of September
14, 2026, the Company issued (a) an aggregate of
shares of Common Stock upon the conversion of the Series B-1 Preferred Stock, (b) an aggregate of
shares of Common Stock upon the conversion of the Series B-2 Preferred Stock, (c) an aggregate of approximately
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (the “MD&A”) should be read in conjunction with our unaudited financial statements and the related notes thereto included elsewhere in this Quarterly Report and our financial statement and related notes contained in our annual report on From 10-K for the fiscal year ended December 31, 2025. The MD&A contains forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations, and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words “believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,” “expect,” and the like, and/or future-tense or conditional constructions (“will,” “may,” “could,” “should,” etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements in this report. Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors including, but not limited to, those noted under “Risk Factors” in this report and in our annual report on Form 10-K for the fiscal year ended December 31, 2025.
We do not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this report, except as required by U.S. federal securities laws.
Overview
On November 21, 2025, we acquired substantially all of the assets of Molecule.ai, a pharmaceutical software company building an artificial intelligence driven platform for molecular discovery and early-stage drug development, were acquired by a wholly owned subsidiary of ours. By combining modern AI techniques with structured scientific workflows, the Molecule.ai platform helps researchers explore the chemical space more efficiently, evaluate molecular ideas with greater clarity and make more informed decisions during the earliest stages of drug development. The platform is engineered to accelerate the iteration cycles that characterize modern drug discovery while preserving scientific reproducibility, traceability and operational reliability. Molecule.ai adapts state-of-the-art AI algorithms to create a practical, domain-specific AI infrastructure layer for molecular research and development. We will seek to leverage Molecule.ai’s molecular modeling and predictive analytics platform to significantly augment our drug discovery and development business purpose. In tandem with the Molecule.ai asset acquisition, on November 20, 2025, we committed to a plan to wind-down the Clinical Trials of Ropidoxuridine.
On March 9, 2026, we completed an underwritten public offering consisting of 223,880 shares of common stock and 476,120 pre-funded warrants, resulting in gross proceeds of approximately $3.5 million and net proceeds of approximately $3.2 million after underwriting discounts, commissions and estimated offering expenses. We used a portion of the proceeds to support marketing efforts and intend to use the remaining proceeds for working capital and general corporate purposes.
On May 6, 2026, we completed a PIPE Financing consisting of 1,910 shares of Series B-2 Convertible Preferred Stock and common stock purchase warrants exercisable for up to 927,185 shares of our common stock. The PIPE Financing generated gross proceeds of approximately $9.6 million and net proceeds of approximately $8.4 million after deducting placement agent fees, legal costs and other transaction costs. Subject to stockholder approval and the achievement of specified milestone events, investors may become entitled to receive pre-funded warrants exercisable for up to approximately 3,148,619 shares of our common stock. We are using the proceeds primarily to support digital asset and AI infrastructure initiatives through our United Dogecoin, Inc. subsidiary, with the remainder available for working capital and general corporate purposes.
Also on May 6, 2026, we completed the concurrent merger by and among the Company, Shuttle Merger Sub, Inc. and United Dogecoin, pursuant to the merger agreement entered into on April 30, 2026. Upon the closing of the merger, Shuttle Merger Sub, Inc. merged with and into United Dogecoin, with United Dogecoin surviving the Merger. As a result of the merger, United Dogecoin became a direct wholly-owned subsidiary of the Company (however, we do not have a controlling interest in United Dogecoin, as discussed further in Note 7 to the accompanying consolidated financial statements).
United Dogecoin was founded as a Dogecoin mining company built on three foundational advantages: scale, preferential access to best-in-class equipment, and an industry leading management team. Its mission was to establish and maintain category leadership in the Dogecoin sector through high-efficiency, low-cost mining operations and strategic coin accumulation, combining operational excellence, consistency and expert execution to build a robust reserve. Since the acquisition, UD has sought to become a start-up digital infrastructure company focused on the development, ownership, and operation of large-scale computing infrastructure supporting blockchain networks, AI, and high-performance computing (“HPC”) workloads. Our United Dogecoin subsidiary is currently seeking to build an energy-first digital infrastructure platform designed to deploy computing capacity across multiple end markets as demand evolves, with a strategy to identify, acquire, develop, and operate energy infrastructure capable of supporting large-scale computing operations. It is seeking opportunities where long-term access to reliable, low-cost power can provide a sustainable competitive advantage.
Initially, United Dogecoin intends to deploy infrastructure supporting Dogecoin mining while designing its facilities to accommodate AI, HPC, cloud computing, and other computational workloads over time. This flexible approach is expected to allow management to allocate computing capacity based on market demand and expected returns. To date, United Dogecoin has purchased 500 rigs and has initiated a co-location agreement for these units. United Dogecoin continues to evaluate strategic acquisitions, infrastructure development opportunities, commercial partnerships, and financing transactions intended to expand its digital infrastructure platform.
Nasdaq Listing Compliance
On December 31, 2024, we received a letter from the Staff of the Nasdaq Stock Market stating that for the 30 consecutive business day period between November 15, 2024 to December 30, 2024 our common stock had failed to maintain a minimum closing bid price of $1.00 per share, as required for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2). Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), we had a period of 180 calendar days, or until June 30, 2025, to regain compliance with the Minimum Bid Price Requirement.
Following our March 2025 $5.75 million equity financing, on March 14, 2025, Nasdaq acknowledged that we had regained compliance with the Listing Rule 5550(b)(1) but indicated that if we failed to evidence compliance upon filing the March 31, 2025 Form 10-Q, we may have been subject to delisting. We evidenced compliance through maintaining a minimum closing bid price of our common stock of $1.00 per share or greater from June 16, 2025 to July 1, 2025. Accordingly, we regained compliance with the Minimum Bid Price Requirement.
On June 16, 2025, in order to maintain the Minimum Bid Price Requirement, we effectuated a 1-for-25 reverse stock split of our issued and outstanding common stock, rounding up to account for any fractional shares. The reverse stock split had no effect on our authorized shares of common stock or preferred stock and the par value remained unchanged at $0.00001, respectively. All common stock share, option, warrant and per share amounts (except our authorized but unissued shares and previously reserved shares) have been retroactively adjusted in these consolidated financial statements and related disclosures.
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On July 2, 2025, we received notification from Nasdaq acknowledging that we maintained the requisite minimum closing bid price of our common stock of $1.00 per share or greater. Accordingly, we regained compliance with Listing Rule 5550(a)(2), and the matter was closed.
We reported stockholders’ equity of $1,394,161 in our Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2025, and, as a result, were not in compliance with Nasdaq Listing Rule 5550(b)(1), which requires companies listed on Nasdaq to maintain a minimum of $2,500,000 in stockholders’ equity for continued listing (the “Stockholders’ Equity Requirement”). We believe as of November 17, 2025, we regained compliance with the Stockholders’ Equity Requirement based upon our private placement consummated on November 4, 2025, pursuant to which we raised aggregate gross proceeds of approximately $2.5 million, before deducting placement agent fees and offering expenses payable by us.
For the year ended December 31, 2025, we reported stockholders’ equity of $2,254,446, and, as a result, were not in compliance with the Stockholders’ Equity Requirement. As of March 31, 2026, we regained compliance with the Stockholders’ Equity Requirement based upon our underwritten public offering of 223,880 shares of common stock at a public offering price of $5.00 per share, resulting in gross proceeds of $3,500,000 and net proceeds of approximately $3,100,000 after deducting underwriting discounts, commissions, and estimated offering expenses of $396,000. The offering included 476,120 pre-funded warrants at a price of $5.00 per warrant, each exercisable for one share of common stock at a nominal exercise price of $0.001 per share.
On June 11, 2026, we effectuated a 1-for-10 reverse stock split of our issued and outstanding common stock, rounding up to account for any fractional shares. The reverse stock split had no effect on our authorized shares of common stock or preferred stock and the par value remained unchanged at $0.00001, respectively. All common stock share, option, warrant and per share amounts (except our authorized but unissued shares and previously reserved shares) have been retroactively adjusted in these consolidated financial statements and related disclosures.
Results of Operations
Comparison of the three months ended June 30, 2026 and 2025
The following table summarizes the results of our operations:
| Three Months Ended June 30, | ||||||||||||||||
| 2026 | 2025 | Change | % | |||||||||||||
| Revenue | $ | — | $ | — | $ | — | — | |||||||||
| Operating expenses | ||||||||||||||||
| Research and development | 55,661 | 1,025,547 | (969,886 | ) | (95 | )% | ||||||||||
| General and administrative | 1,984,907 | 2,346,323 | (361,416 | ) | (15 | )% | ||||||||||
| Legal and professional | 1,908,967 | 538,536 | 1,370,431 | 254 | % | |||||||||||
| Total operating expenses | 3,949,535 | 3,910,406 | 39,129 | 1 | % | |||||||||||
| Net loss from operations | (3,949,535 | ) | (3,910,406 | ) | (39,129 | ) | -1 | % | ||||||||
| Other income (expense): | ||||||||||||||||
| Interest expense - related parties | — | (2,614 | ) | 2,614 | (100 | )% | ||||||||||
| Interest expense | — | (19,129 | ) | 19,129 | (100 | )% | ||||||||||
| Interest income | 90 | 81 | 9 | 11 | % | |||||||||||
| Change in fair value of derivative liabilities | 48,785 | 11,673 | 37,112 | 318 | % | |||||||||||
| Change in fair value of convertible notes | — | 213,930 | (213,930 | ) | 100 | % | ||||||||||
| Gain on extinguishment of debt | 755,121 | — | 755,121 | 100 | % | |||||||||||
| Total other income (expense) | 803,996 | 203,941 | 600,055 | 294 | % | |||||||||||
| Net loss | $ | (3,145,539 | ) | $ | (3,706,465 | ) | $ | 560,926 | -15 | % | ||||||
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Research and Development. Total research and development (“R&D”) expense was $0.1 million for the three months ended June 30, 2026, as compared to $1.0 million to the three months ended June 30, 2025. The decrease in total R&D expense of $1.0 million, or 95%, is primarily related to a $0.7 million decrease in subcontractor expenses and $0.3 million decrease in R&D compensation related expenses. Subcontractor expense made up 70% of total R&D expenses in the three months ended June 30, 2026 and 71% of total R&D expenses during the three months ended June 30, 2025. R&D compensation related expenses were an insignificant amount in the three months ended June 30, 2026 as compared to $0.3 million in the three months ended June 30, 2025. The decrease is largely attributable to the lower employee headcount year over year and retirement of our CSO.
General and Administrative Expenses. General and administrative expenses in the three months ended June 30, 2026 decreased by $0.3 million, or 15%, from $2.3 million in the three months ended June 30, 2025 to $2.0 million in the three months ended June 30, 2026. The decrease in general and administrative expenses was primarily due to a $1.0 million decrease in advertising costs associated with investor relations, reflecting a one-time engagement fee paid to an investor relations agency during the three months ended June 30, 2025 that did not recur in the current-year period. The decrease was partially offset by a $0.7 million increase in amortization expense for developed technology, associated with the Molecule.ai intangible asset acquired in November 2025, which had no comparable amortization expense during the three months ended June 30, 2025.
Legal and Professional Expenses. During the three months ended June 30, 2026, legal and professional expenses increased by $1.4 million or 254% compared to the same period in 2025. The increase in legal and professional fees was primarily attributable to legal, accounting, valuation and regulatory compliance activities related to the merger with United Dogecoin during the three months ended June 30, 2026.
Other Income (Expense). During the three months ended June 30, 2026, other income increased by $0.8 million or 294% compared to other expense of the same period in 2025. The increase was primarily driven by a $0.8 million increase in gain on extinguishment of debt, partially offset by a $0.2 million decrease in change in fair value of convertible notes.
Comparison of the six months ended June 30, 2026 and 2025
| Six Months Ended June 30, | ||||||||||||||||
| 2026 | 2025 | Change | % | |||||||||||||
| Revenue | $ | — | $ | — | $ | — | — | |||||||||
| Operating expenses | ||||||||||||||||
| Research and development | 322,901 | 2,599,475 | (2,276,574 | ) | (88 | )% | ||||||||||
| General and administrative | 3,145,463 | 2,943,209 | 202,254 | 7 | % | |||||||||||
| Legal and professional | 2,697,993 | 1,318,963 | 1,379,030 | 105 | % | |||||||||||
| Total operating expenses | 6,166,357 | 6,861,647 | (695,290 | ) | (10 | )% | ||||||||||
| Net loss from operations | (6,166,357 | ) | (6,861,647 | ) | 695,290 | (10 | )% | |||||||||
| Other income (expense): | ||||||||||||||||
| Interest expense - related parties | — | (8,009 | ) | 8,009 | (100 | )% | ||||||||||
| Interest expense | (12,122 | ) | (25,664 | ) | 13,542 | (53 | )% | |||||||||
| Interest income | 299 | 81 | 218 | 269 | % | |||||||||||
| Change in fair value of derivative liabilities | 125,049 | 14,316 | 110,733 | 773 | % | |||||||||||
| Change in fair value of convertible notes | — | 121,451 | (121,451 | ) | (100 | )% | ||||||||||
| Gain on extinguishment of debt | 755,121 | — | 755,121 | N/A | ||||||||||||
| Total other income (expense) | 868,347 | 102,175 | 766,172 | 750 | % | |||||||||||
| Net loss | $ | (5,298,010 | ) | $ | (6,759,472 | ) | $ | 1,461,462 | 22 | % | ||||||
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Research and Development. Total R&D expense was $0.3 million for the six months ended June 30, 2026, as compared to $2.6 million to the six months ended June 30, 2025. The decrease in total R&D expense of $2.3 million or 88%, is primarily related to a $1.5 million decrease in subcontractor expenses and $0.8 million decrease in R&D compensation related. Subcontractor expense made up 42.14% of total R&D expenses in the six months ended June 30, 2026 and 63% of total R&D expenses during the six months ended June 30, 2025. R&D compensation related expenses were an insignificant amount in the six months ended June 30, 2026 as compared to $0.9 million in the six months ended June 30, 2025. For the six months ended June 30, 2026, R&D compensation related expenses were 20% as a percent of total R&D expense, representing a decrease from the 34% of total R&D incurred in the six months ended June 30, 2025. The decrease is largely attributable to the lower employee headcount year over year and retirement of our CSO.
General and Administrative Expenses. General and administrative expenses in the six months ended June 30, 2026 increased by $0.2 million, or 7%, from 2.9 million in the six months ended June 30, 2025 to $3.1 million in the six months ended June 30, 2026. The increase in general and administrative expenses was primarily due to costs associated with investor relations of $0.5 million and amortization expense for developed technology of $1.3 million for the six months ended June 30, 2026.
Legal and Professional Expenses. During the six months ended June 30, 2026, legal and professional expenses increased by $1.4 million or 105% compared to the same period in 2025. The increase in legal and professional fees was primarily attributable to legal, accounting, valuation and regulatory compliance activities in connection with the Company’s May 2026 PIPE Financing, the United Dogecoin acquisition, and the Second Amendment to our Molecule.ai APA, during the six months ended June 30, 2026.
Other Income (Expense). During the six months ended June 30, 2026, other income increased by $0.8 million or 750% compared to other expense of the same period in 2025. The increase was primarily driven by a $0.8 million increase in gain on extinguishment of debt and a $0.1 million increase in change in fair value of derivative liabilities, partially offset by a $0.1 million decrease in change in fair value of convertible notes.
Liquidity and Capital Resources
Our unaudited condensed consolidated financial statements are prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. We have incurred losses since inception and had a net loss of $5.3 million and no revenues generated during the six months ended June 30, 2026 and working capital deficit of approximately $3.1 million as of June 30, 2026. We do not expect to generate positive cash flows from operating activities in the near future.
In January 2025, we entered into a change order to the existing agreement with Theradex Systems, Inc., our primary third-party CRO, for purposes of supporting our clinical trials of Ropidoxuridine. As disclosed in our SEC Form 8-K filings on October 21, 2025 and November 21, 2025, the Company received a letter from Theradex Systems, Inc., providing written notice of termination of the master agreement, dated November 1, 2018 (the “Master Agreement”), between us and Theradex, and all work orders thereunder, and demanding immediate payment of all outstanding amounts owed thereunder in the aggregate amount of $1.1 million. Pursuant to the notice of termination, on November 20, 2025, we entered into a release and settlement agreement (the “Settlement Agreement”) with Theradex, pursuant to which we will pay a partial payment of $300,000 to Theradex as full and final payment of any and all claims relating to the debt or obligation previously owed by us to Theradex, totaling approximately $557,000 (the “Outstanding Liabilities”) and in consideration of such payment, each party will release, acquit and discharge each other from all claims arising from the Outstanding Liabilities and Theradex will properly wind down operations in a manner compliant with the Food and Drug Administration. After the payments pursuant to the Settlement Agreement, we will still owe amounts, under five separate research site agreements between the Company and various hospitals, as disclosed in the Settlement Agreement. As part of the Company’s wind down of its Clinical Trials, the Company has incurred expenses that qualify as exit and disposal costs under U.S. GAAP. These include right of use asset impairment charges, accelerated expense recognition of share-based payments, and contract termination costs. Costs associated with the wind down of the Clinical Trials are recorded within research and development expenses in the consolidated financial statements of operations.
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In March 2025, we entered into a consulting services agreement (the “Bowery Consulting Agreement”) with Bowery Consulting Group Inc. (the “Consultant”). According to the Bowery Consulting Agreement, the Consultant will provide consulting services in connection with our business, advising on viability of plans for scaling activities, growth and capital raising strategies and cost minimization associated with technological platform improvements and marketing spend. We agreed to pay the Consultant $0.3 million for their services, which we are not obligated to pay until we regain full Nasdaq listing requirement. We received notice from Nasdaq on July 2, 2025 that we had regained compliance with the listing requirement and have since paid the fee.
On April 3, 2025, the Company entered into a consulting agreement with the IR Agency LLC (the “IR Agency”). Pursuant to the consulting agreement, IR Agency agreed to provide certain marketing and advertising services to communicate information about the Company to the financial community, including, but not limited to, creating company profiles, media distribution and building a digital community with respect to the Company. As consideration for the performance of the Services, the Company paid IR Agency $2.0 million on April 5, 2025. The term of the consulting agreement was three months starting on April 3, 2025. For the year ended December 31, 2025, the Company incurred $2.0 million of costs under the consulting agreement.
On September 15, 2025, the Company entered into another consulting agreement with the IR Agency. Pursuant to the consulting agreement, IR Agency agreed to provide marketing and advertising services to communicate information about the Company to the financial community, including, but not limited to, creating company profiles, media distribution and building a digital community with respect to the Company. As consideration for the performance of the Services, the Company paid IR Agency $1.5 million. The term of the consulting agreement will be two months. For the year ended December 31, 2025, the Company incurred $1.5 million of costs under the consulting agreement.
In October 2025, the October 2024 Convertible Bridge Notes mandatorily converted into 11,761 shares of common stock due to reaching maturity. The Convertible Bridge Notes converted at a share price of $63.8, which is the conversion price with a 15% discount per the Convertible Bridge Notes’ terms. See Note 5 for more information.
On November 20, 2025, the Company entered into an asset purchase agreement to acquire Molecule.ai. The total purchase consideration was $10,117,304. For the year ended December 31, 2025, the Company made a $3,000,000 cash payment and issued 32,050 shares of common stock with a fair value of $564,073. As of December 31, 2025, the Company had contingent consideration payable and consideration payable of $2,000,000 and $4,435,927, respectively, related to the Molecule.ai acquisition. See Footnote 6 to the unaudited condensed consolidated financial statements included earlier in this Quarterly Report on Form 10-Q.
On March 19, 2026, the Company entered into a consulting agreement with IR Agency LLC. Pursuant to the consulting agreement, IR Agency agreed to provide certain marketing and advertising services to communicate information about the Company to the financial community, including, but not limited to, creating company profiles, media distribution and building a digital community with respect to the Company. As consideration for the performance of the services, the Company paid $1.3 million to IR Agency. The term of the consulting agreement was three months starting on March 19, 2026. For the six months ended June 30, 2026, the Company incurred $1.3 million of costs under the consulting agreement.
Our ability to continue as a going concern is dependent upon our ability to successfully raise additional equity or debt financing to fund ongoing operations, commercialize and further develop the Molecule.ai platform, develop and expand United Dogecoin’s digital asset infrastructure operations and other business strategies, and generate sufficient revenues and cash flows from our business activities. The Company and UD are currently negotiating a data center land deal and exploring other acquisition opportunities. Building on this anticipated transaction, management plans to undertake a significant capital raise in the near term, targeting between $120 million and $150 million. This financing will leverage the Company and UD’s existing sector network, investment bankers, and established industry relationships. The successful completion of the acquisition or any other acquisition, or such financing, however, cannot be guaranteed. These conditions raise substantial doubt about our ability to continue as a going concern within one year after the date that the consolidated financial statements contained in this report are issued.
Recent Financings
On March 9, 2026, the Company closed an underwritten public offering of 223,880 shares of our common stock at a public offering price of $5.00 per share, resulting in gross proceeds of $3.5 million and net proceeds of approximately $3.2 million after deducting underwriting discounts, commissions, and estimated offering expenses of $0.3 million. The offering included 476,120 pre-funded warrants at a price of $5.00 per warrant, each exercisable for one share of common stock at a nominal exercise price of $0.001 per share. The Company used $1.25 million of the net proceeds from this offering for marketing efforts and the remainder will be used for working capital and general corporate purposes.
In May 2026, the Company closed the PIPE Financing consisting of (i) 1,910 shares of Series B-2 Preferred Stock and (ii) common stock purchase warrants exercisable for up to 927,185 shares of the Company’s common stock at an exercise price of $10.30 per share. In addition, subject to stockholder approval and the achievement of specified milestone events, investors may receive the 2026 Pre-Funded Warrants exercisable for up to approximately 3,148,619 shares of the Company’s common stock. The PIPE Financing resulted in gross proceeds of $9.6 million and net proceeds of approximately $8.4 million after deducting placement agent fees, legal costs, and other transaction costs of approximately $1.2 million. The Company is using the proceeds for digital asset and AI infrastructure initiatives through our United Dogecoin, Inc. subsidiary and the remainder for working capital and general corporate purposes.
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Balance Sheet Data
| June 30, 2026 | December 31, 2025 | Change | % | |||||||||||||
| Current assets | $ | 396,353 | $ | 502,911 | $ | (106,558) | (21 | )% | ||||||||
| Current liabilities | 3,480,761 | 7,966,891 | (4,486,130 | ) | (56 | )% | ||||||||||
| Working capital (deficit) | $ | (3,084,408 | ) | $ | (7,463,980 | ) | $ | 4,379,572 | (59 | )% | ||||||
As of June 30, 2026, total current assets were $0.4 million and total current liabilities were $3.5 million, resulting in a working capital deficit of $3.1 million. As of December 31, 2025, total current assets were $0.5 million and total current liabilities were $8.0 million, resulting in a working capital deficit of $7.5 million. The Company’s current assets as of June 30, 2026 are comprised of $0.1 million of cash and cash equivalents and $0.3 million of prepaid expenses and other current assets. The decrease in current liabilities from December 31, 2025 was primarily due to the extinguishment of the $4.4 million consideration payable pursuant to the Molecule.ai Second Amendment and the Company’s remittance of $1.8 million in contingent milestone payments following the achievement of the Technology Development Milestones under the Molecule.ai Asset Acquisition, partially offset by a $1.3 million increase in accounts payable and accrued expenses and the recognition of a $0.4 million payable due to United Dogecoin.
Cash Flows
| Six Months Ended June 30, | ||||||||||||||||
| 2026 | 2025 | Change | % | |||||||||||||
| Cash used in operating activities | (2,984,949 | ) | (5,881,979 | ) | 2,897,030 | -49 | % | |||||||||
| Cash used in investing activities | (5,468,642 | ) | — | (5,468,642 | ) | 100 | % | |||||||||
| Cash provided by financing activities | 8,209,824 | 8,779,507 | (569,683 | ) | -6 | % | ||||||||||
| Cash and cash equivalents on hand | 90,238 | 4,817,672 | (4,727,434 | ) | -98 | % | ||||||||||
Cash Flows from Operating Activities
Our cash flows from operating activities are greatly influenced by our use of cash for operating expenses and working capital requirements (including marketing expenses) to support the business. We have historically experienced negative cash flows from operating activities as we invested in research and development activities. The cash used in operating activities resulted primarily from our net losses adjusted for non-cash charges, which are generally attributable to stock-based compensation, changes in fair value of our derivative liabilities, changes in fair value of our convertible notes, and amortization of debt discounts and finance fees, as well as changes in components of operating assets and liabilities, which are generally attributable to increased expenses and timing of vendor payments.
During the six months ended June 30, 2026, net cash used in operating activities of $3.0 million was primarily due to our net loss of $5.3 million, and change in fair value of derivative liabilities of $0.1 million, partially offset by depreciation and amortization of $1.3 million, and net change in operating assets and liabilities of $1.0 million.
During the six months ended June 30, 2025, net cash used in operating activities of $5.9 million was primarily due to our net loss of $6.8 million, change in fair value of convertible notes of $0.1 million, and interest payments on convertible notes accounted for at fair value of $0.1 million, partially offset by stock-based compensation of $0.6 million and the net change in operating assets and liabilities of $0.5 million.
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Cash Flows from Investing Activities
During the six months ended June 30, 2026, net cash used in investing activities of 5.5 million was primarily attributable to $0.1 million of capitalized software purchases to support the Company’s operations, $3.6 million of installment payments related to the Molecule.ai asset acquisition, and $1.8 million of cash outflows for contingent consideration associated with the Molecule.ai asset acquisition.
During the six months ended June 30, 2025, the Company did not have investing activities.
Cash Flows from Financing Activities
For the six months ended June 30, 2026, cash flows provided by financing activities of $8.2 million was primarily attributable to $3.2 million of net proceeds from the issuance of common stock and pre-funded warrants in the Company’s March 2026 equity financing, net of placement agent costs, and $5.0 million of proceeds from the Company’s May 2026 PIPE Financing, net of issuance costs paid.
For the six months ended June 30, 2025, cash flows from financing activities was primarily comprised of proceeds of $5.4 million, from the sale of common stock and pre-funded warrants as part of the March 2025 equity financing, net of placement agent costs of $0.3 million, proceeds of $4.1 million, from the sale of common stock and pre-funded warrants as part of the June 2025 equity financing, net of placement agent costs of $0.2 million, partially offset by $0.5 million payment of other issuance costs for issuance of common stock and equity-classified warrants in the March 2025 and June 2025 equity financings, and $0.1 million of repayment of note payable-related party used to finance our ongoing operations.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
Critical Accounting Policies and Significant Judgments and Estimates
This discussion and analysis of our financial condition and results of operations is based on our unaudited consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. While the significant accounting policies are described in more detail in the notes to the unaudited condensed consolidated financial statements included elsewhere in this report, we believe that the following accounting policies are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.
Our most critical accounting policies and estimates relate to the following:
| ● | Research and Development Expenses | |
| ● | Fair Value of Convertible Notes | |
| ● | Fair Value of Warrant to Purchase Common Stock | |
| ● | Fair Value of Derivative Financial Instruments | |
| ● | Fair Value of Contingent Pre-Funded Warrants | |
| ● | Useful Life of Molecule.ai Intangible Asset |
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Research and Development Expense
Research and development expenses are charged to expense as incurred. Research and development expenses include, but are not limited to, product development, clinical and regulatory expenses, payroll and other personnel expenses, which may include portions of the Company’s executives to the extent they are actively involved in the research and development activities, materials, supplies, related subcontract expenses, and consulting costs. The periods presented include a portion of the Company’s former chief executive officer (prior to his transition to chief scientific officer), former chief operating officer, former vice president regulatory (formerly the chief financial officer) and directors’ compensation, prior to the individuals’ departures from the Company.
Fair Value of Convertible Notes
As permitted under ASC 825, we elected the fair value option to account for our October 2024 Convertible Bridge Notes. In prior periods, the valuation of the October 2024 Convertible Bridge Notes utilized a Monte Carlo simulation model. Monte Carlo simulation models require the use of simulations that are weighted based on projected future stock prices, the volatility of a set of guideline companies and significant unobservable inputs including probabilities assigned to not achieving a successful capital raise and a registration of related securities. Each simulation is based on the range of inputs in a scenario with the mean of the output on each simulation calculated as an average.
The significant inputs and assumptions used to estimate the fair value also include: (i) the expected timing of conversion, (ii) the amount subject to equity conversion, (iii) the sum of the notes’ principal and unpaid accrued interest, (iv) expected volatility, (v) risk-free interest rate, (vi) the discount rate, (vii) volume-weighted-average price (“VWAP”), (viii) illiquidity discounts, and (ix) probabilities assigned.
In the current reporting period, the Company calculated the fair value of the October 2024 Convertible Bridge Notes assuming a mandatory conversion due to the relatively short duration between the balance sheet date and the maturities in October 2025. The fair value was determined by calculating the number of shares into which the October 2024 Convertible Bridge Notes will convert in a mandatory conversion scenario, multiplied by the fair value per share of the Company’s common stock at the balance sheet date.
The October 2024 Convertible Bridge Notes are subject to revaluation at the end of each reporting period, with changes in fair value recognized in the accompanying unaudited condensed consolidated statements of operations, or for changes due to our credit worthiness, if any, as a component of other comprehensive income.
Fair Value of Warrants to Purchase Common Stock
We have issued warrants to investors in our debt and equity offerings. We have also issued warrants to service providers in relation to our financing offerings.
We evaluate all warrants issued to determine the appropriate classification under ASC 480 and ASC 815 (as well as under ASC 718 for warrants issued as share-based payments). In addition to determining classification, we evaluate these instruments to determine if such instruments meet the definition of a derivative.
For warrants that are determined to be equity-classified, we estimate the fair value at issuance and record the amounts to additional paid in capital (potentially on a relative fair value basis if issued in a basket transaction with other financial instruments). Warrants that are equity-classified are not subsequently remeasured unless modified or required to be reclassified as liabilities. For warrants that are determined to be liability-classified, we estimate the fair value at issuance and each subsequent reporting date, with changes in the fair value reported in the unaudited condensed consolidated statements of operations. The classification of all outstanding warrants, including whether such instruments should be recorded as equity, is evaluated at the end of each reporting period.
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For warrants with uncertain or more complex terms (such as variability in the warrant shares or exercise price), we may utilize more complex models to address such provisions, including Monte Carlo simulations or Black-Scholes Models. Monte Carlo simulation models require the use of simulations that are weighted based on projected future stock prices, the volatility of a set of guideline companies and significant unobservable inputs including probabilities assigned. Each simulation is based on the range of inputs in a scenario with the mean of the output on each simulation calculated as an average. Black-Scholes Models require specification of the current stock price, exercise price, expected term, expected volatility, a risk-free interest rate aligned with the expected term, and expected dividend yield.
The use of these valuation models requires the input of highly subjective assumptions. Any change to these inputs could produce significantly higher or lower fair value measurements.
Fair Value of Financial Instruments
We evaluate our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, such as the Acceleration Option in the Alto Warrants (as defined in Note 9 to the financial statements included earlier in this Quarterly Report on Form 10-Q). For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the unaudited condensed consolidated statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities are evaluated at the end of each reporting period.
For our derivative financial instruments classified as a liability, we use a Black-Scholes Model to value the derivative instruments at inception and on subsequent valuation dates. The model requires specification of the current stock price, exercise price, expected term, expected volatility, a risk-free interest rate aligned with the expected term, and expected dividend yield.
Fair Value of Contingent Pre-Funded Warrants
We issue certain equity instruments that contain contingent settlement, vesting, issuance or exercise provisions. The Company evaluates these instruments to determine the appropriate accounting classification under applicable accounting guidance and estimates the fair value of such instruments when required. When such instruments are required to be measured at fair value, the Company estimates the fair value using a probability-weighted approach that incorporates management’s assessment of the likelihood of satisfying the applicable contractual conditions.
Significant assumptions utilized in these valuations may include the Company’s stock price, expected timing of contingent events, the probability of satisfying specified performance or operational conditions, and the likelihood of obtaining any required approvals. The selection of assumptions requires significant management judgment and may materially affect the estimated fair value of the instruments.
Changes in the expected timing or probability of achieving contingent events, changes in the Company’s stock price, or changes in other valuation inputs could result in materially different fair value measurements.
Useful Life of Molecule.ai Intangible Asset
The Company’s identifiable intangible asset consists of the Molecule.ai platform classified as developed technology. The Molecule.ai platform is a definite-lived intangible asset and is amortized on a straight-line basis over its estimated 4-year useful life, which reflects the period over which the asset is expected to generate economic benefits. The Company periodically reviews useful life assumptions and related classifications and updates them when facts and circumstances indicate a change is warranted.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
As a “smaller reporting company,” we are not required to provide the information required by this Item.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures (as defined in Exchange Act Rule 15d-15(e)) are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this report, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including our Co-Chief Executive Officers and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
As of June 30, 2026, our management carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. Such evaluation was carried out under the supervision of one of our Co-Chief Executive Officers and our Chief Financial Officer. Based on this evaluation, management concluded that our disclosure controls and procedures were, and continue to be, ineffective as of June 30, 2026. Based on the foregoing, our management concluded that our internal controls over the following financial reporting areas to be material weaknesses:
| ● | Our written policies and procedures over accounting transaction processing and period end financial close and reporting are limited, which has resulted in ineffective oversight in the establishment of proper monitoring controls over accounting and financial reporting; in addition, we lacked sufficient review and segregation of duties for certain financial transactions, manual journal entries, and critical financial spreadsheets, such that a proper review had not been performed by someone other than preparer, and that process documentation is lacking for review and monitoring controls over accounting and financial reporting. | |
| ● | We identified findings related to overall information technology general controls (“ITGCs”) including issues with super-user access and segregation of duties for systems supporting the Company’s internal control processes and controls. | |
| ● | We identified deficiencies in our entity level controls specifically related to timely communication of material contracts and other communications for consideration in the Company’s accounting and financial reporting processes. | |
| ● | The Company did not maintain personnel with sufficient technical accounting and valuation expertise to identify, evaluate, and appropriately account for complex and non-routine transactions. Although management utilized third-party specialists, controls were not adequately designed or operating effectively to independently assess the reasonableness of the accounting conclusions and valuation analyses provided by those specialists, resulting in a reasonable possibility that material misstatements would not be prevented or detected on a timely basis. |
Management’s Remediation Measures
While the Company has improved its organizational capabilities, the Company’s remediation efforts will continue to take place. Management is committed to maintaining a strong internal control environment. In response to the identified material weaknesses in the overall control environment, management is currently implementing additional measures which include:
| ● | Engaged a third-party consulting firm to assist with the preparation of SEC reporting and other technical accounting matters. | |
| ● | Redesigned and implemented certain management review controls around the proper classification of operating expenses as research and development and general and administrative. | |
| ● | Redesigned and implemented formal communication by the Compensation Committee to and review of approved grants by executive management. | |
| ● | Committed to more formal and disciplined approach to significant actions and decisions made by the Board with the inclusion of the Company’s Chief Financial Officer. |
The Company will continue to review and improve its internal controls over financial reporting to address the underlying causes of the material weaknesses and control deficiencies. Such material weaknesses and control deficiencies will not be fully remediated until the Company has concluded that its internal controls are operating effectively for a sufficient period of time.
Changes in Internal Control over Financial Reporting
Except for the remediation efforts described above, there has been no change in the Company’s internal control over financial reporting during the three months ended June 30, 2026 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. Management will continue to monitor and evaluate the effectiveness of our internal controls and procedures over financial reporting on an ongoing basis and is committed to taking further action and implementing additional improvements as necessary.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
United Dogecoin Inc., an entity wholly owned by the Company, has been sued by a former consultant, One Eyed Jack Enterprises LLC (“OEJE”), in connection with OEJE’s alleged work with United Dogecoin’s acquisition by our company in a case captioned, One Eyed Jack Enterprises LLC v. United Doge Coin Inc., pending in the Supreme Court of the State of New York, New York County, Index No. 653395/2026. OEJE seeks approximately $250,000 and 2.99% of United Dogecoin Inc.’s common stock or the equivalent in convertible preferred stock. United Dogecoin has moved to dismiss the complaint and is awaiting a decision. Based on its initial assessment, United Dogecoin believes the allegations lack merit and intend to defend against them; however, the matter is in the early stages of litigation and United Dogecoin can express no opinion as to the likely outcome of this matter. Other than as described above, we are not party to, and our properties and assets are not the subject of, any material legal proceedings.
Item 1A. Risk Factors.
Included below, as risk factors that relate to United Dogecoin, a wholly owned entity, and operations.
Our United Dogecoin investee is an early-stage company with limited operating history.
The recently acquired United Dogecoin entity is an early-stage company which had no operations or material assets upon its acquisition and currently with a limited operating history. United Dogecoin has not generated revenue to date, only recently acquired its first assets, and no assurance can be made that United Dogecoin will achieve revenues or profitability in the near future, if ever. Accordingly, you should consider United Dogecoin’s business prospects in light of the costs, uncertainties, delays, and difficulties frequently encountered by companies in the early stages of development. Potential investors should carefully consider the risks and uncertainties that a company with limited operating history will face. Without limitation, potential investors should consider that United Dogecoin may be unable to:
| ● | Successfully implement to execute its business plan, or demonstrate that its business plan is sound; | |
| ● | Adjust to changing market conditions within the cryptocurrency market, particularly dogecoin; | |
| ● | Attract and retain an experienced management team; or | |
| ● | Raise sufficient funds to effectuate its business plan. |
In addition, United Dogecoin expects to expand its planned business offerings from crypto mining and acquisition, to more broadly focus on the development, ownership, and operation of large-scale computing infrastructure supporting blockchain networks, artificial intelligence, and high-performance computing workloads. United Dogecoin is seeking to build an energy-first digital infrastructure platform designed to deploy computing capacity across multiple end markets as demand evolves. United Dogecoin can give no assurance that this expansion of its planned business model will be successful.
United Dogecoin has a limited operating history in the cryptocurrency mining space, and is subject to a number of risks and uncertainties which may affect its future viability.
As of the filing date of this Quarterly Report on Form 10-Q, United Dogecoin has yet to initiate any cryptocurrency mining operations. United Dogecoin purchased 500 dogecoin mining equipment rigs, with an expectation to purchase an additional 2,500 when funds permit. Additionally, among the risks and uncertainties applicable to United Dogecoin and its operations are:
| ● | United Dogecoin may not have the capital to fully support its planned acquisition of ElphaPex mining rigs; | |
| ● | United Dogecoin will rely upon a third-party to conduct most of its mining operations and will have limited ability to direct day-to-day mining operations; | |
| ● | There are a finite number of available mining rigs or cryptocurrency computers and United Dogecoin faces intense competition for these rigs/computers; | |
| ● | There is intense competition for computer chips, and supply chain delays or interruptions could impact the accessibility of chips used in mining operations; | |
| ● | Access to stable power supply and data center co-location arrangements, could result in integration delays and impact United Dogecoin’s commencement of mining operations; | |
| ● | Bans from governments such as China, together with pending legislation in Congress and other regulatory initiatives threaten the ability to use cryptocurrencies as a medium of exchange; | |
| ● | United Dogecoin may not be able to liquidate its holdings of dogecoin at its desired price if material declines in market prices occur, which could negatively impact United Dogecoin’s future financial condition; | |
| ● | United Dogecoin does not anticipate hedging the mining rate, market price, or sale of dogecoin; and | |
| ● | Historical performance of dogecoin is not indicative of its future price performance. |
For all of these reasons, as well as competition among similar cryptocurrency (including dogecoin alternative “alt” coins), United Dogecoin’s cryptocurrency mining business may not be successful and you may lose all or some of your investment.
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Failure of critical systems related to United Dogecoin’s operations and/or infrastructure could have a material adverse effect on its business, financial conditions, and results of operations.
The critical systems related to United Dogecoin’s operations and infrastructure are subject to failure. Failure of any of its colocation hosts’ critical systems, including disruptions beyond United Dogecoin’s control, involving systems such as their data centers, equipment or services, routers, switches, power transmission, cooling systems, or network connectivity, could result in disruption, delay, or relocation of United Dogecoin’s operations, impacting United Dogecoin’s business operations, harming its reputation, and/or reducing its revenue (or projected start of revenue-generating operations). The destruction or critical failure of any of the facilities in which United Dogecoin’s mining rigs or other equipment is hosted could result in significant delays for repairs.
Colocation host infrastructure is subject to the following potential disruptions:
| ● | Power loss or interruption; | |
| ● | Equipment failure; | |
| ● | Human error and accidents; | |
| ● | Theft, sabotage, and vandalism, including security breaches; | |
| ● | Maintenance oversight or inadequate servicing; | |
| ● | Network failures, including wired or wireless connections; | |
| ● | Service downtimes due to server maintenance, relocation, or replacement; | |
| ● | Security breaches; | |
| ● | Physical, electronic, and/or cybersecurity breaches; | |
| ● | Animal activity; | |
| ● | Natural disasters and extreme temperatures; | |
| ● | Water damage; | |
| ● | Public health crises, such as pandemics and epidemics; and | |
| ● | Military conflict, terrorism, or other geopolitical events. |
The occurrence of one or more of these events may have a material adverse effect on United Dogecoin’s business, financial condition, and results of its operations. Additionally, critical system failures may expose United Dogecoin to potential legal liability.
United Dogecoin has not yet entered colocation agreements or finalized power supply agreements; however, impacts to such third-parties could materially reduce United Dogecoin’s anticipated 43,200 GH/s hash rate and anticipated revenues. As a result of United Dogecoin’s equipment being stored in a third-party location, United Dogecoin’s ability to prevent, detect, and address certain impacts or system failures may be limited to the on-site capabilities of the third-party facility. Impacts requiring relocation of United Dogecoin’s dogecoin mining rigs could be costly, reduce anticipated revenue, and be limited due to geographical, geopolitical, or financial constraints.
United Dogecoin’s business may be impacted or influenced by geopolitical, social, economic, and other events and circumstances in the world.
United Dogecoin’s business may be impacted or influenced by geopolitical, social, economic, and other events and circumstances in the world. These include natural disasters, public health crises including pandemics and epidemics, geopolitical tensions including sanctions or other government acts, interest rates, inflation, commodity pricing, legislation, regulations, foreign currency fluctuations, tariffs, fluctuations in capital markets, dogecoin popularity, alt coin competition, and other industry and financial trends. For example, colocation agreements require the availability of data centers with reliable access to power and water for operations. In the United States, several states have taken action to limit data center construction. These legislative and regulatory actions, which are largely outside of United Dogecoin’s influence, could adversely impact the availability of colocation facilities, increase demand for the same space, limit alternatives, and adversely affect United Dogecoin’s business, financial condition, and results of operations.
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United Dogecoin faces competition and may not be able to compete against current and future competitors.
Cryptocurrency is a highly competitive and evolving market. At this time, United Dogecoin goal is to capture approximately 1.5% of the world’s dogecoin mining capacity. United Dogecoin anticipates competition to increase and intensify as existing and new competitors refine, improve, and expand their business operations. As United Dogecoin expects to expand in its existing market or enter new markets, it will compete against more companies operating both in the United States and globally, some of which may be more experienced, better resourced, or have greater capital access.
The rising demand for energy, fueled by the expansion of applications like dogecoin mining and other high-powered computing tasks, is increasingly outstripping available supply. Dogecoin mining, in particular, requires highly efficient operations and access to affordable, large-scale energy resources. In addition, high-performance computing workloads need advanced infrastructure with significantly greater capacity than traditional data centers offer. This growing gap is further challenged by ongoing supply chain issues and regulatory hurdles, which have led to longer wait times for essential equipment such as ASIC rigs, GPUs, generators, and transformers. Delays in connecting to the power grid have also created obstacles for expanding digital infrastructure. Within this rapidly changing environment, United Dogecoin finds itself in direct competition with cloud service providers, other digital infrastructure companies, and other cryptocurrency mining operations. The competitive dynamics differ depending on the aspect of our platform:
| ● | Power: United Dogecoin’s primary competition is for sites with reliable, high-capacity power and for colocation facilities that are already equipped with the necessary electrical infrastructure. | |
| ● | Hardware & Mining Rewards: United Dogecoin also competes for specialized mining hardware and for Scrypt-based rewards, which are critical to achieving efficient and profitable dogecoin mining operations. |
United Dogecoin is subject to risk associated with its reliance on electrical power.
United Dogecoin’s operations require significant amounts of electrical power and its business, financial condition, and results of operations may be impact by the unavailability of electricity and price changes in the power market. Market prices for power, capacity, transmission, and other services tied to United Dogecoin’s anticipated colocation hosts are unpredictable and are subject to rapid changes. Electricity can only be stored on a very limited basis and typically is produced for immediate subsequent use. As a result, prices are subject to rapid price swings due to supply and demand, especially in in the day-ahead and spots markets in a deregulated energy grid where United Dogecoin anticipates its colocation hosts to be located. Additional impacts to available electricity and pricing include:
| ● | Changes in generation capacity within the market, including changes in the supply of electricity as a result of the development of new plants, expansion or reduction of existing plants, the continued operations of uneconomic power plants due to state subsidies, or additional or reduced transmission capacity; | |
| ● | Future or planned grid integration with other states’ electrical grids, diversifying transmission and sourcing; | |
| ● | Environmental legislation and regulations; | |
| ● | Electrical supply disruptions, including contracted outages, unintentional plant outages, and transmission outages; | |
| ● | Additions or removals of electrical infrastructure; | |
| ● | Fuel price volatility; | |
| ● | Fuel transportation capacity constraints or inefficiencies; | |
| ● | Development of new fuels, electricity production technologies, new transmission methodologies, and new electrical storage technologies; | |
| ● | Weather conditions, including extreme weather patterns and seasonal changes, which impact both renewable energy production, traditional power generation, and transmission; | |
| ● | Changes in law, including judicial decisions; | |
| ● | Changes in commodity pricing and the supply of commodities, including natural gas, oil, uranium, and coal; | |
| ● | Changes in power usage and demand; | |
| ● | Economic and political conditions; | |
| ● | Supply and demand for energy commodities; | |
| ● | Availability of critical electrical transmission components; | |
| ● | Availability of competitively priced alternative energy sources; | |
| ● | Availability of energy storage systems; and | |
| ● | Changes in capacity prices and capacity markets. |
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Fluctuations in power availability and pricing caused by various factors may affect the profitability of wholesale power generation and the anticipated costs for future operations. It is expected that power will be sourced through power purchase agreements through the ERCOT grid, which has previously experienced widespread outages and significant price volatility. The ERCOT grid poses a range of risks, including equipment failures, accidents, cybersecurity threats, disruptions of information technology systems, labor issues, outdated infrastructure, delivery and transportation challenges, interruptions in fuel supply, and performance shortfalls. These risks could potentially hinder efficient business operations and result in increased costs, expenses, or losses.
Additionally, there is no guarantee that power suppliers will provide service to future colocation partner facilities, or that, once power purchase agreements are established, suppliers will continue to deliver power over any period. Such agreements may be terminated, or colocation hosts may lose access to power under certain circumstances, and replacement power might not be available on commercially reasonable terms—or at all—especially given limited power availability and grid constraints in many markets. If colocation hosts are unable to secure or maintain adequate power arrangements, it could materially and adversely impact anticipated business operations, financial condition, and results. Furthermore, as expansion is considered, competition for locations with affordable power access may be significant.
United Dogecoin may be vulnerable to cybersecurity threats and breaches.
The risks associated with network and data security continue to grow in complexity and sophistication, while incidents such as security breaches, malware infections, ransomware, and hacking attempts remain a significant concern. Even with established protocols and preventive measures, our existing and future computer systems and servers are expected to be susceptible to a variety of cybersecurity threats, including denial-of-service attacks, unauthorized physical or digital access, theft or misuse by employees, and similar disruptions resulting from tampering. Because methods used to compromise security are constantly evolving and often only identified once an attack is underway, United Dogecoin may be unable to quickly recognize a breach, put protective actions in place promptly, or assess whether those actions can be bypassed.
Recent trends in cyber threats involve the use of artificial intelligence (AI) and machine learning, alongside a rise in cyber extortion and ransomware incidents, which feature both higher ransom demands and increasingly sophisticated approaches. Furthermore, the adoption of AI by United Dogecoin, United Dogecoin’s parent or its other subsidiaries, or third parties may introduce new security vulnerabilities. Should someone circumvent these networks or infrastructure securities, they could gain access to proprietary or sensitive information. Addressing these threats or resolving issues caused by cyber incidents may require substantial investment and resources. Any future breaches might expose United Dogecoin to greater risk of legal action, regulatory fines, loss of confidential information, reputational damage, and higher security expenses, all of which could negatively impact our business, financial health, and operational results.
Additionally, United Dogecoin’s cryptocurrency holdings are anticipated to be managed by a third-party qualified custodian rather than being kept in-house. This exposes United Dogecoin to risks related to the custodian’s operational practices, security measures, system reliability, and financial stability. If the custodian experiences a cybersecurity breach, operational failure, insolvency, or other disruption, United Dogecoin may face delays or loss—partial or complete—in accessing its digital assets, which could materially harm its business, financial standing, and operational results. Although the custodian employs cold-storage solutions and other security strategies to protect digital assets, no custodial system is completely immune to cyberattacks, internal errors, human mistakes, or emerging threats.
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United Dogecoin may be subject to many hazards and operational risks that can disrupt our business, some of which may not be insured or fully covered by insurance.
Dogecoin mining operations, once initiated, are expected to face various hazards and operational risks inherent to this business, including:
| ● | general risks associated with business operations; | |
| ● | potential construction flaws or repair issues, as well as other forms of structural or facility damage; | |
| ● | operation of cryptocurrency mining equipment; | |
| ● | possible noncompliance or liabilities related to environmental, health, or safety laws, as well as permit requirements; | |
| ● | damage caused by natural or human-made disasters; and | |
| ● | claims from employees, contractors, or the public arising from exposure to potentially dangerous environments at or near anticipated operations. |
Efforts to mitigate these risks may not always be effective or sufficient. Should any of these hazards or operational risks materialize, they could result in disruption of anticipated operations, legal liability, or litigation. Although it is expected that insurance coverage will be obtained and maintained at levels deemed appropriate, there can be no assurance that such coverage will be adequate or effective in all situations and against all potential hazards or liabilities. Even if insurance applies, there may be significant deductibles or coverage limits. Insurance policies typically carry standard exclusions, such as those for war or nuclear incidents. Any successful claim that is not fully insured could negatively impact the future dogecoin mining business, financial position, and anticipated results. Additionally, with rising insurance costs and evolving insurance markets, there is no guarantee that future coverage will remain available or be offered at rates or terms similar to those currently obtainable. Losses not covered by insurance could have a significant adverse effect on the expected dogecoin mining operations and financial condition.
Most of United Dogecoin’s infrastructure is anticipated to be located on collocated premises and the termination or higher renewal rate of our anticipated colocation contracts could have a material adverse effect on its business, financial conditions, and results of operations.
Since United Dogecoin expects to place its mining equipment in third-party colocation facilities, it faces additional risks should a colocation provider or one of its essential vendors encounter financial difficulties, insolvency, operational disruptions, or business interruptions. If a colocation provider becomes subject to bankruptcy or similar proceedings, issues could arise concerning access to United Dogecoin’s equipment, the prioritization of site operations, continued service provision, or enforcement of contractual rights. Such challenges could result in delayed, restricted, or prolonged inability to access hosted equipment. Even outside of bankruptcy, financial instability at a provider could lead to postponed maintenance, reduced staffing, weakened security measures, diminished operational redundancy, or increased pricing and more stringent contract terms. Any inability of the colocation provider to deliver services at expected performance levels, or any delay or limitation in accessing hosted equipment, could significantly and negatively affect United Dogecoin’s anticipated business activities, financial health, and operational outcomes.
United Dogecoin’s planned infrastructure will primarily rely on collocated premises, and there is no guarantee that colocation providers will consistently comply with contract terms, continue supporting United Dogecoin’s operations, or avoid terminating agreements despite intentions for long-term arrangements and renewal options. When initial contract terms expire, United Dogecoin may need to renegotiate terms with colocation providers. If new rates are less favorable than expected, United Dogecoin would need to adjust revenues to offset any increased costs. Failure to do so could negatively impact anticipated operating income. Furthermore, there is a possibility that contracts may not be renewed at all. The termination or unfavorable modification of these agreements could have a material adverse effect on United Dogecoin’s expected business, financial condition, and operational results.
United Dogecoin is subject to risks associated with an internet-dependent business.
United Dogecoin’s anticipated mining operations will rely on stable internet access at third-party colocation facilities where its equipment is planned to be hosted. Since United Dogecoin does not own or operate these centers or provide internet connectivity directly, it must depend on colocation partners and their network service providers for reliable service. There is no guarantee that these providers will consistently deliver adequate internet connectivity, nor can United Dogecoin be certain that connectivity, once established, will remain uninterrupted or free from disruptions, degradation, or termination. Should any substantial interruption, reduction, or loss of connectivity occur at one or more colocation sites, United Dogecoin may need to limit or halt its mining activities at those locations, potentially resulting in a significant negative impact on United Dogecoin’s expected business, financial condition, and operational outcomes.
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United Dogecoin’s success depends on key personnel whose continued service is not guaranteed.
United Dogecoin’s success is closely tied to the contributions of Ryan Trasolini, who possesses extensive expertise in cryptocurrency, as well as strong industry reputations. He is critical to United Dogecoin’s planned business. If United Dogecoin were to lose Mr. Trasolini, it could significantly hinder its ability to pursue business and operational opportunities, as well as potentially damage United Dogecoin’s relationships with capital markets participants and other industry stakeholders. As competition within our sector intensifies, the risk increases that competitors may seek to recruit Mr. Trasolini. The departure of Mr. Trasolini could deprive us of his expertise and relationships, which may have a substantial negative impact on the United Dogecoin business operations, financial position, and overall results.
The continued growth and performance of United Dogecoin’s business depend on United Dogecoin’s ability to identify, recruit, develop, motivate, and retain top technical talent across all operational areas. The competition for qualified professionals in this industry is fierce, and there is no certainty that United Dogecoin will always be able to attract or retain the talent it needs. If United Dogecoin fails to secure and maintain a strong technical team, its business, financial health, and operating results could be materially and adversely affected.
United Dogecoin does not anticipate directly obtaining or holding material facility-level permits or approvals for its mining operations, as its equipment will be hosted at third-party colocation facilities. Our colocation providers will be responsible for obtaining, maintaining, and complying with permits, licenses, and approvals required to own and operate their data center facilities, including those related to zoning, construction, power usage, and environmental or energy regulation.
While United Dogecoin anticipates that colocation providers will be responsible for meeting all necessary permitting and licensing requirements, United Dogecoin’s future operations could be negatively impacted if these providers fail to secure, uphold, or comply with relevant permits or approvals—or if such authorizations are revoked, altered, delayed, or made subject to stricter regulations due to changes in law, policy, or regulatory interpretation. Any such issues could lead to the suspension, limitation, or discontinuation of activities at one or more sites where United Dogecoin’s equipment is expected to be hosted, potentially resulting in a material adverse effect on United Dogecoin’s prospective business, financial stability, and operational outcomes.
New offerings or business lines may expose United Dogecoin to additional risks.
United Dogecoin is a development stage entity with a limited management team and has only recently commenced operations. As United Dogecoin continues to build its business, ongoing development and anticipated growth are expected to place considerable strain on its management, operational, and financial infrastructure. To remain competitive within the Dogecoin mining sector, United Dogecoin may need to revise its business model or introduce new offerings or business lines periodically. Significant time and resources may be required to develop and market such offerings, and timelines for launching new business lines may not be met. Profitability goals may also prove unattainable. External factors—including regulatory compliance, industry competition, and evolving market demand—can further influence the successful rollout of new offerings. United Dogecoin’s personnel and technology systems may not adapt effectively to these changes, and integration of new business lines into existing operations may be challenging, especially given United Dogecoin’s lack of experience managing such initiatives. Competitive dynamics may prevent United Dogecoin from proceeding as planned or competing successfully. Even if United Dogecoin expands into new jurisdictions or business areas, such expansion may not yield expected profits. Additionally, introducing new offerings or business lines could significantly impact the effectiveness of United Dogecoin’s internal controls. If United Dogecoin does not effectively manage these risks during the development and implementation of new business lines, its business, financial condition, and operating results could be materially and adversely affected. Furthermore, United Dogecoin cannot guarantee that it will successfully identify all emerging trends and growth opportunities within Dogecoin mining or related markets, which may result in missed opportunities and further adverse effects on United Dogecoin’s business, financial condition, and operating results.
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United Dogecoin may not respond adequately to price volatility and fast-evolving technology.
Dogecoin mining and related industries are highly competitive and require advanced technology for effective operations. These sectors are marked by swift technological advancements, regular product launches, improvements, and shifting industry standards. New technologies, methods, or products might emerge that outperform those expected to be utilized by United Dogecoin, and United Dogecoin will need to manage transitions to remain competitive. Although United Dogecoin is investing in hardware and technology for its facilities, it may not succeed—either generally or compared to competitors—in implementing new technology promptly or cost-effectively. System interruptions and failures may occur during such upgrades, and United Dogecoin cannot guarantee that anticipated benefits from new technology will be realized in a timely manner, if at all. As a result, United Dogecoin’s business, financial position, and operational results may be negatively affected.
Should United Dogecoin decide to pursue ownership or development of data center facilities in the future, constructing new data centers, expanding existing ones, or redeveloping facilities could introduce substantial risks to United Dogecoin’s dogecoin-focused business.
To support growth in targeted markets, United Dogecoin may need to expand an existing data center, lease new facilities, or acquire land for development. Global supply chain disruptions and inflation have exacerbated these risks and introduced new challenges. Key risks associated with data center development, expansion, or construction include:
| ● | delays in construction; | |
| ● | constraints related to power and the power grid; | |
| ● | limited availability and delays for data center or power equipment, including generators and switchgear; | |
| ● | unexpected budget fluctuations; | |
| ● | higher costs and delays in securing building materials, raw resources, and data center equipment; | |
| ● | challenges with labor availability, labor disputes, and work stoppages involving contractors, subcontractors, and other third parties; | |
| ● | unexpected environmental challenges and geological issues; | |
| ● | delays in securing permits and approvals from public agencies and utility companies for opening facilities; and | |
| ● | unexpected lack of access to power. |
United Dogecoin may face rising construction costs due to increasing prices for labor and raw materials, supply chain challenges, and heightened demand. Delays, difficulties in finding replacement goods, persistent inflation, and other disruptions could significantly impact costs for current or planned projects. Selecting appropriate sites is critical to United Dogecoin’s expansion, but suitable properties with high-power capacity and fiber connectivity may be scarce. United Dogecoin anticipates ongoing limitations in power availability and grid constraints in many markets, as well as shortages of necessary equipment, which could lead to site selection difficulties, construction delays, or higher expenses.
Currently, United Dogecoin anticipates to operate within the United States and Canada, which could expose United Dogecoin to risks related to international business activities.
As United Dogecoin expands outside the United States to Canada and perhaps other foreign jurisdictions, it may become exposed to various risks typically associated with international operations, such as:
| ● | fluctuations in foreign currency exchange rates; | |
| ● | greater challenges in protecting intellectual property and trade secrets, including increased litigation expenses and uncertain outcomes in jurisdictions abroad; | |
| ● | greater exposure to disruptions affecting international third-party relationships, such as operational challenges, financial instability, insolvency, labor disputes, manufacturing issues, cost fluctuations, insurance concerns, natural disasters, public health crises, or other catastrophic events; | |
| ● | unexpected changes in laws, regulations, or government actions; | |
| ● | challenges in managing, staffing, and growing operations abroad; | |
| ● | social, economic, or political instability; | |
| ● | potential adverse impacts from modifications to tax or tariff regulations; | |
| ● | complications with transfer pricing for cross-border intercompany activities; | |
| ● | greater difficulty in ensuring adherence to United Dogecoin’s policies and the laws of numerous countries, including international environmental, health, and safety standards, and increasingly complex regulations governing global commerce such as import/export controls, sanctions, and trade regulations; and | |
| ● | increased vulnerability to cybersecurity threats in foreign markets that could adversely affect United Dogecoin’s business, financial standing, and results. |
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Should United Dogecoin undertake international operations in the future, it may incur substantial costs and these expenditures may not necessarily yield greater profitability. If United Dogecoin does not effectively manage these risks, its international activities could be negatively impacted, potentially harming its business, financial condition, and operating results.
If United Dogecoin fails to grow its hash rate, it may be unable to compete, and its business, financial condition, and results of operations could suffer.
Generally, a miner’s likelihood of solving a block on blockchain networks that utilize the Scrypt PoW consensus algorithm and earning the associated Dogecoin block reward and transaction fees depends on the miner’s hash rate, which is the amount of computing power dedicated to supporting these networks, compared to the total hash rate of all participating rigs.
As more participants join Scrypt Networks, the total network hash rate may rise, as additional companies deploy more computing resources to compete for block rewards. The introduction of new or more efficient mining equipment by competitors could increase network difficulty and decrease the share of rewards earned by any miner that does not expand its hash rate at a similar rate.
To remain competitive, United Dogecoin would need to continuously acquire and deploy additional mining equipment to replace machines lost to wear-and-tear or damage and to increase its hash rate in step with the growth of the aggregate network hash rate across Scrypt Networks. There is no assurance that United Dogecoin will have sufficient capital, access to equipment, or operational capacity to acquire and deploy new rigs at the scale or pace necessary to maintain or improve the profitability of future mining operations.
Additionally, predicting growth in network hash rate is highly challenging. Typically, increases in hash rate would be expected to correlate with rising Dogecoin prices, but this is not always the case. If hash rate increases without a corresponding rise in Dogecoin prices, United Dogecoin may not recover its investment in hardware and processing power needed to upgrade mining operations, and its results could suffer.
United Dogecoin may be unable to purchase rigs at scale or face delays or difficulty in obtaining new rigs at scale.
The profitability of United Dogecoin’s mining operations using the Scrypt PoW consensus algorithm would depend on whether the costs—including hardware and electricity—remain lower than the price of Dogecoin at the time of sale. As the cost to obtain new rigs increases, so does the cost of producing Dogecoin. Rigs experience wear-and-tear and may also face malfunctions beyond United Dogecoin’s control. Technology advancements may require United Dogecoin to acquire newer miner models to remain competitive. Upgrading and refreshing mining machines requires substantial capital investment, and United Dogecoin may face challenges in doing so promptly, depending on the price and availability of new rigs and access to capital resources.
United Dogecoin has observed periods where new rigs were scarce and delivery schedules delayed. There is no assurance that manufacturers will keep pace with surges in demand for mining equipment or fulfill orders fully and on time. Global supply chain issues or geopolitical matters may also impact manufacturers’ ability to deliver. If suppliers cannot meet demand, United Dogecoin may not be able to purchase rigs in sufficient quantities or on required delivery schedules. Advance deposits may be required, tying up capital for extended periods. If suppliers default, United Dogecoin may need to pursue recourse in international jurisdictions, which could be costly, time-consuming, and uncertain. There is no guarantee United Dogecoin would recover deposits paid, which could adversely affect its business, financial condition, and results of operations.
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United Dogecoin may rely on third-party mining pool service providers for mining revenue payouts that may have a negative impact on its business, financial condition, and results of operations.
United Dogecoin would receive Dogecoin mining rewards through third-party mining pool operators. Mining pools allow rigs to combine processing power, increasing their chances of solving a block and getting paid. United Dogecoin would provide computing power to pools, which use it to operate nodes and validate blocks, then distribute United Dogecoin’s pro-rata share of Dogecoin mined based on contributed computing power.
Under mining pool agreements, United Dogecoin’s daily payout would be calculated based on hash rate contribution during the applicable period, after deducting pool fees. If pool operator systems experience downtime due to cyberattacks, software malfunctions, or similar issues, United Dogecoin’s ability to mine and receive rewards would be negatively affected. United Dogecoin depends on the accuracy of pool operators’ record keeping. If rewards are incorrectly calculated, United Dogecoin may have little recourse other than leaving the pool. Inconsistent or inaccurate rewards could adversely affect United Dogecoin’s business, financial condition, and results of operations.
The further development and acceptance of the Scrypt network and Dogecoin is subject to a variety of factors that are difficult to evaluate. The slowing or stopping of the development or acceptance of digital asset systems may adversely affect United Dogecoin’s business, financial condition, and results of operations.
The use of Dogecoin for transactions is part of a rapidly evolving industry based on cryptographic protocols. The growth of this industry and the use of Dogecoin is highly uncertain, and development or acceptance may slow or stop unpredictably. Other factors affecting development and acceptance include regulatory changes, consumer preferences, limitations on financial institutions, maintenance and development of network protocols, consolidation in mining pools, popularity of alternative methods of transactions, use of networks for smart contracts, general economic conditions, environmental restrictions, increases in transaction costs, and negative consumer sentiment. Any of these factors could negatively impact United Dogecoin’s business, financial condition, and results of operations, as well as the value of Dogecoin mined or held.
The development and acceptance of competing blockchain platforms or technologies may cause consumers to use alternative distributed ledgers or other alternatives.
The emergence of competing blockchain platforms or technologies may cause industry participants and consumers to abandon Scrypt networks. Since United Dogecoin would mine only dogecoin and lytecoin, it could face difficulty adapting to new blockchain alternatives, which could prevent realization of anticipated profits and materially affect its business, financial condition, and results of operations.
United Dogecoin’s operations, investment strategies, and profitability may be adversely affected by competition from other methods of investing in Dogecoin or other digital assets.
United Dogecoin would compete with other companies mining dogecoin, as well as other financial vehicles such as securities, derivatives, or funds linked to digital assets. Market conditions may make it more attractive to invest directly in dogecoin or in other vehicles, which could reduce the market for our shares, and limit liquidity. Regulatory scrutiny of financial vehicles linked to dogecoin could also affect United Dogecoin’s ability to pursue its strategy or operate, materially impacting its business, financial condition, results of operations, and the value of dogecoin mined or held.
The characteristics of Dogecoin have been, and may continue to be, exploited to facilitate illegal activity such as fraud, money laundering, tax evasion, and ransomware scams. Dogecoin exchanges are relatively new and largely unregulated, making them more susceptible to fraud and failure. Such circumstances may reduce the price of dogecoin and adversely affect United Dogecoin’s business, financial condition, and results of operations.
Dogecoin and its exchanges are new and mostly unregulated. Features such as rapid transactions, cross-jurisdictional activity, irreversible transactions, and anonymity make dogecoin susceptible to illegal uses. Many exchanges lack transparency about ownership, management, or compliance. Negative perception or instability among exchanges may reduce confidence in dogecoin, result in higher volatility, and adversely affect United Dogecoin’s business, financial condition, and results of operations.
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While United Dogecoin would maintain policies designed to comply with anti-money laundering and sanctions laws, if it transacts with bad actors using dogecoin for illicit purposes, it may face regulatory proceedings or restrictions. Negative perception and instability in digital asset markets, or the closure of exchanges due to fraud or security breaches, may reduce confidence and increase volatility. If investors view United Dogecoin’s stock as linked to dogecoin holdings, negative sentiment could impact its stock price.
It may be illegal now, or in the future, to acquire, own, hold, sell, or use Dogecoin, participate in blockchains, or utilize similar digital assets in one or more countries.
Currently, digital assets such as dogecoin are lightly regulated in most countries, but some, such as China, have severely restricted their use, including bans on mining and transactions. In certain nations, it is illegal to accept dogecoin for payments or to deposit dogecoin in banks. Such restrictions may limit large-scale use of dogecoin and could materially affect United Dogecoin’s business, financial condition, and results of operations, and the value of dogecoin mined or held.
A failure to properly monitor and upgrade the Scrypt network’s protocol could damage that network and an investment in United Dogecoin’s securities.
Scrypt-based blockchain networks are open-source projects, and contributors are typically not compensated for maintaining or updating protocols. Lack of financial incentives or resources may reduce promptness in addressing issues. If contributors fail to adequately maintain Scrypt-based protocols, United Dogecoin’s business, prospects, operations, and the value of dogecoin mined or held could be materially affected.
There is a possibility of Scrypt mining algorithms transitioning to “proof of stake” validation, which could make United Dogecoin less competitive and adversely affect its business, financial condition, and results of operations.
“Proof of stake” is an alternative validation method for digital asset transactions. If the Scrypt network transitions from “proof of work” to “proof of stake,” mining would require less energy and could render United Dogecoin less competitive. If United Dogecoin’s rigs cannot be modified to accommodate protocol changes, its business, financial condition, and results of operations would be significantly affected.
If a malicious actor or botnet obtains control of a majority of the processing power active on the dogecoin network, the blockchain may be manipulated in a manner that adversely affects an investment in United Dogecoin.
If a malicious actor or botnet gains majority control over processing power on the dogecoin network, it may alter the blockchain by constructing fraudulent blocks or preventing transactions from completing. Such control could enable “double-spending” and block confirmation delays. If the network does not reject fraudulent blocks, reversing changes may not be possible.
If rigs cease operations, processing power on the dogecoin network would decrease, making it more vulnerable to malicious actors obtaining majority control. Mining pools may occasionally exceed the 50% threshold, posing a risk of centralization. Unless the ecosystem ensures greater decentralization, the risk of majority control increases, which could adversely impact United Dogecoin’s business, financial condition, and results of operations.
Weather events and manmade disasters may affect United Dogecoin’s business.
Severe weather events or disasters may cause physical damage, disrupt power, increase electricity costs, or interrupt services at United Dogecoin’s colocation sites or those of vendors. Business continuity plans may not be effective under all circumstances. Prolonged disruption could materially affect United Dogecoin’s business, financial condition, and results of operations.
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Forks or protocol changes in Scrypt-based digital asset networks may adversely affect the value of dogecoin United Dogecoin holds.
Contributors may propose changes to Scrypt-based protocols, including dogecoin, which could result in a “fork.” If modifications are accepted by a substantial plurality but not a majority, parallel competing blockchains may emerge. The value of dogecoin after a fork depends on many factors, including market reaction and network adoption. United Dogecoin may be expected to hold equivalent amounts of old and new assets after a fork, but may not be able to secure or realize the economic benefit of the new asset due to custody, risk, cost, or legal barriers. This could adversely affect the value of dogecoin held and United Dogecoin’s business, financial condition, and results of operations.
United Dogecoin is expected to be highly concentrated in dogecoin, which is highly volatile. Fluctuations in the price of dogecoin have influenced, and are likely to continue to influence, United Dogecoin’s business, financial condition, results of operations, and the market price of our common stock.
United Dogecoin’s investments and treasury strategy are expected to be highly concentrated in dogecoin. Revenue would be generated from Dogecoin rewards earned through mining, and United Dogecoin may acquire additional dogecoin through market purchases. Thus, United Dogecoin’s business, financial condition, and results of operations would be materially exposed to price movements in dogecoin.
Dogecoin has experienced significant price volatility, which has influenced and will likely continue to influence United Dogecoin’s operating results and the market price of our common stock. United Dogecoin would be adversely affected if dogecoin’s market price were to decline substantially due to decreased user and investor confidence, investment and trading activities, negative publicity, changes in consumer preferences, competition from other digital assets, declines in prices of other digital assets, disruptions in exchanges, cyber-attacks, bankruptcy filings, regulatory actions, reductions in mining rewards, scalability limitations, macroeconomic conditions, advances in cryptography, or geopolitical changes.
From time to time, United Dogecoin may enter into certain hedging transactions to mitigate exposure to fluctuations in the market price of dogecoin. Engaging in hedging transactions may expose United Dogecoin to risks associated with such transactions, including counterparty risk.
Hedging against declines in the value of United Dogecoin’s expected dogecoin holdings caused by volatility does not eliminate the possibility of losses if values decline for reasons other than those being hedged. Hedging may also limit gains if dogecoin prices increase.
It may not be possible to hedge against specific price movements if a hedging transaction is unavailable at an acceptable price. United Dogecoin may not be successful in mitigating its exposure to volatility in dogecoin prices through any hedging transactions undertaken.
United Dogecoin would hold dogecoin as a principal component of its treasury and operating strategy and, as a result of merged Scrypt mining, may also receive and hold other digital assets in de minimis amounts from time to time.
United Dogecoin’s digital asset holdings would not be insured and would not be held with a banking institution or a member of the Federal Deposit Insurance Corporation or Securities Investor Protection Corporation. Instead, United Dogecoin would safeguard its material digital asset holdings by utilizing third-party custody solutions. Although custodians employ security measures, neither United Dogecoin nor its custodians can guarantee against loss, damage, or theft. Insurance coverage may be limited or insufficient. Concentrated holdings of Dogecoin increase risks related to security breaches, operational failures, or custody risks. Any loss of digital assets could adversely affect United Dogecoin’s business, financial condition, and results of operations.
United Dogecoin would not directly possess or control private keys for the majority of its Dogecoin holdings, relying on third-party custodians to manage key infrastructure. United Dogecoin depends on the operational integrity and security of custodians to maintain access to its assets.
Any failure or compromise of a custodian’s systems could result in delayed access to, partial loss, or permanent loss of United Dogecoin’s Dogecoin. Transactions are generally irreversible, and any dogecoin that is stolen or incorrectly transferred may be irretrievable. United Dogecoin may have limited means of recovering assets lost due to the actions or failures of custodians or service providers, which could adversely affect its business, financial condition, and results of operations.
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Dogecoin and the blockchain networks on which it operates have been, and may in the future be, subject to security breaches, cyberattacks, or other malicious activity.
Dogecoin and its supporting infrastructure may be vulnerable to cyberattacks, insider misconduct, technical failures, or other security incidents. A successful breach or compromise affecting United Dogecoin, its custodians, or service providers could result in partial or total loss of dogecoin or restrict access, which may not be covered by insurance. Natural disasters or human actions may also disrupt access. Any such loss or restriction could materially affect United Dogecoin’s business, financial condition, and results of operations.
Due to the evolving nature of insolvency law and market practice, digital assets held in custody for customers may be treated as part of a custodian’s bankruptcy estate.
United Dogecoin would maintain substantially all dogecoin in cold-storage custody arrangements with third-party custodians. Although generally expected that assets held in custody would not be treated as part of a custodian’s bankruptcy estate, insolvency law and market practice relating to digital assets remain untested in certain respects.
If, in the event of a bankruptcy or insolvency of a custodian, any dogecoin held on United Dogecoin’s behalf were deemed property of the bankruptcy estate, United Dogecoin could be treated as a general unsecured creditor. This could inhibit access or ownership rights over dogecoin and materially affect United Dogecoin’s business, financial condition, and results of operations.
Transactions executed through OTC counterparties may expose United Dogecoin to operational and counterparty risks.
In connection with treasury management activities, United Dogecoin may execute dogecoin transactions through OTC counterparties and agency-desk execution services. These activities expose United Dogecoin to operational and counterparty risks, including settlement delays, transaction errors, unauthorized transfers, disputes, and counterparty insolvency. Incidents affecting execution counterparties or market infrastructure could impair United Dogecoin’s ability to transact, result in losses, and damage its reputation, adversely affecting business, financial condition, and results of operations.
United Dogecoin may face risks related to liquidity.
Liquidity risk is the risk that United Dogecoin will not be able to meet financial obligations as they come due. United Dogecoin would fund obligations primarily from cash and may sell Dogecoin to fund working capital needs. Liquidity may be adversely affected by declines in Dogecoin prices, increases in operating costs, reduced mining profitability, regulatory developments, or capital market volatility. United Dogecoin may not be able to raise funds in a timely manner, in sufficient amounts, or on acceptable terms. Financing could result in dilution or impose restrictive covenants. If United Dogecoin cannot generate sufficient liquidity, it may need to reduce capital expenditures, curtail growth, or materially alter strategy, affecting its business, financial condition, and results of operations.
Adverse developments to Scrypt-based blockchain networks may impact mining revenue streams.
United Dogecoin’s mining operations would be entirely dependent on the Scrypt algorithm. Adverse developments affecting Scrypt-based networks, including changes to incentives, transaction fee economics, or miner participation, could simultaneously impact all mining revenue streams. Unlike rigs operating across multiple algorithms, United Dogecoin would not be able to reallocate computing power without significant capital or operational disruption. Any sustained deterioration in Scrypt-based mining economics could materially affect United Dogecoin’s business, financial condition, and results of operations.
The pseudonymous nature of blockchain transactions poses a risk that United Dogecoin’s dogecoin may be associated with illicit or sanctioned activities.
U.S. sanctions laws restrict dealings with sanctioned persons and jurisdictions. Due to the pseudonymous nature of dogecoin transactions, there is a risk that the dogecoin that United Dogecoin receives, holds, or transfers could be associated with sanctioned persons or illicit activity. While United Dogecoin may implement policies to mitigate these risks, controls may not be fully effective. Any actual or alleged violation could result in investigations, penalties, reputational harm, and restrictions on United Dogecoin’s ability to transact, materially affecting its business, financial condition, and results of operations.
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There are risks associated with derivative transactions involving dogecoin.
United Dogecoin may engage in derivative transactions on dogecoin for hedging purposes. These transactions expose United Dogecoin to additional risks, including basis risk, liquidity risk, margin and collateral requirements, mark-to-market volatility, model risk, operational risk, and counterparty risk. Hedging strategies may prove ineffective or may limit gains if dogecoin prices rise. In stressed market conditions, hedging instruments may be unavailable or expensive, and United Dogecoin may incur losses on hedges and underlying assets simultaneously. Regulatory treatment of digital asset derivatives continues to evolve, and changes could increase compliance costs for United Dogecoin.
The medium- to long-term value of United Dogecoin’s digital asset holdings may be adversely affected by technological, network, cybersecurity, protocol, and adoption risks inherent in blockchain technologies.
The medium-to-long term valuation of digital assets held in United Dogecoin’s treasury is expected to be influenced by a variety of factors associated with blockchain technologies and network development. These factors include the recency of digital asset introduction, dependence on technological infrastructure, the role played by network participants, and susceptibility to malicious activity. Risks such as early-stage protocol development, loss of access to private keys, reliance on internet connectivity, blockchain forks, scaling challenges, lack of developer incentives, and potential cryptographic vulnerabilities may collectively impact the value and stability of digital assets.
Dogecoin price movements may become increasingly correlated with broader financial markets, and declines in dogecoin could reduce the value of United Dogecoin’s assets.
The returns associated with dogecoin have, at times, diverged from other asset classes. However, there is no assurance that such divergence will persist, and price movements may become increasingly correlated with broader financial markets. It is expected that, should the value of dogecoin decline, the value of United Dogecoin’s assets may experience a corresponding decrease.
Dogecoin’s status as a memecoin may expose United Dogecoin to heightened price volatility, speculative trading, and market manipulation risks.
Dogecoin originated as a memecoin, inspired by internet trends and lacking a stated use case or intrinsic value beyond its role as a digital collector’s item. Memecoins are subject to heightened volatility, often driven by viral online communities. United Dogecoin anticipates that dogecoin’s history as a memecoin may result in unpredictable and extreme price fluctuations, which could materially affect the value of dogecoin holdings and, by extension, the anticipated value of our common stock. Memecoins have historically been associated with market manipulation schemes, including pump and dump and wash trading.
Dogecoin’s unlimited supply may reduce its long-term value and negatively affect United Dogecoin’s treasury strategy and asset accumulation.
Dogecoin’s unlimited supply presents unique risks to its long-term value and the integrity of its network. Continuous daily mining without a supply cap may cause the value of dogecoin to decline absent sustained new demand. This dynamic is expected to impact adoption and network participation, as value incentives diminish. United Dogecoin recognizes that unlimited supply could undermine network integrity and negatively affect treasury asset accumulation strategies.
Evolving regulatory frameworks for digital assets may impose additional compliance burdens, operational constraints, and costs on United Dogecoin.
United Dogecoin anticipates that evolving regulatory interpretations may subject its activities, including treasury execution and related processes, to additional compliance obligations. Although operations have not commenced and United Dogecoin does not currently act as a money transmitter, exchange, or hosted-wallet provider, future regulatory changes could increase compliance costs and operational constraints, thereby affecting business prospects and financial outcomes.
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If dogecoin or other digital assets are deemed securities, United Dogecoin could face reduced liquidity, restricted trading and custody channels, and additional regulatory obligations.
A potential determination by regulatory authorities that dogecoin or other digital assets are classified as securities may have material adverse effects on treasury asset value and common stock. Such a determination could restrict trading, clearing, and custody channels, reduce liquidity, and complicate market conversions. If digital assets held in treasury are deemed securities, United Dogecoin may be subject to additional regulatory frameworks, including the Investment Company Act of 1940, as amended, depending on asset composition.
New digital asset legislation could increase United Dogecoin’s compliance costs, reporting obligations, operational complexity, and restrictions on its business strategy.
Legislative proposals, such as the Digital Asset Market Clarity Act of 2025 (the “CLARITY Act”), are expected to shape the regulatory landscape for digital assets. Should such legislation be enacted, it may classify certain assets as digital commodities and expand oversight by the Commodity Futures Trading Commission. New compliance obligations, reporting requirements, and prohibitions on yield offerings for stablecoin holdings are anticipated to increase operational complexity and costs for United Dogecoin. These developments could materially affect business strategy, liquidity, and market positioning.
Regulatory changes or enforcement actions by U.S. federal or state agencies could restrict United Dogecoin’s digital asset activities and adversely affect its business and value.
Anticipated regulatory scrutiny from U.S. federal and state agencies may alter the value and permissible uses of dogecoin. Agencies are expected to examine digital asset networks for risks related to illicit activities, safety, and soundness. Future regulatory actions may impose new restrictions or requirements, potentially affecting United Dogecoin’s ability to operate and the value of our common stock. Legislative reversals and renewed enforcement campaigns are possible, contributing to uncertainty in the digital asset sector.
Foreign laws, regulations, geopolitical events, and market disruptions could impair global demand for dogecoin and reduce the value of United Dogecoin’s digital asset holdings.
Foreign jurisdictions are expected to continue adopting laws and regulations that affect digital asset networks, trading platforms, and user activities. Conflicts between U.S. and foreign regulations may impede acceptance and growth of dogecoin outside the United States, thereby impacting global demand and treasury value. Events such as telecommunications interruptions, cyber-attacks, civil disturbances, and geopolitical developments may also contribute to volatility and negatively affect digital asset markets.
Uncertain or changing tax treatment of digital assets could adversely affect dogecoin prices, United Dogecoin’s treasury value, and stockholder tax consequences.
The tax treatment of digital assets remains uncertain, particularly for U.S. federal, state, local, and foreign tax purposes. United Dogecoin anticipates that future guidance or changes in tax regulations could have adverse effects on digital asset prices and, consequently, treasury value and our common stock. Developments such as forks, airdrops, and similar occurrences may increase uncertainty regarding tax obligations and asset classification.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
During
the quarter ended June 30, 2026, none of our directors or executive officers
Item 6. Exhibits.
The following exhibits are filed or furnished with this report:
| Exhibit No. | Description of Exhibit | |
| 31.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* | |
| 31.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* | |
| 32.1 | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 ** | |
| 32.2 | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 ** | |
| 101 | Inline XBRL Document Set for the financial statements and accompanying notes in Part I, Item 1, of this Quarterly Report on Form 10-Q. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* Filed herewith.
**Furnished herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| SHUTTLE PHARMACEUTICALS HOLDINGS, INC. | ||
| September 24, 2026 | By: | /s/ Christopher Cooper |
| Christopher Cooper | ||
| Co-Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| September 24, 2026 | By: | /s/ Yuying Liang |
Yuying Liang Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) | ||
| 56 |
Exhibit 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Christopher Cooper, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2026 of Shuttle Pharmaceuticals Holdings, Inc. (the “registrant”);
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: September 24, 2026 | /s/ Christopher Cooper |
| Christopher Cooper | |
| Co-Chief Executive Officer |
Exhibit 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Yuying Liang, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2026 of Shuttle Pharmaceuticals Holdings, Inc. (the “registrant”);
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: September 24, 2026 | /s/ Yuying Liang |
| Yuying Liang | |
| Chief Financial Officer |
Exhibit 32.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Shuttle Pharmaceuticals Holdings, Inc. (the “Company”) on Form 10-Q for the quarterly period ended June 30, 2026, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Christopher Cooper, Interim Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| Date: September 24, 2026 | |
| /s/ Christopher Cooper | |
| Christopher Cooper | |
| Co-Chief Executive Officer |
Exhibit 32.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Shuttle Pharmaceuticals Holdings, Inc. (the “Company”) on Form 10-Q for the quarterly period ended June 30, 2026, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Yuying Liang, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| Date: September 24, 2026 | |
| /s/ Yuying Liang | |
| Yuying Liang | |
| Chief Financial Officer | |
| (Principal Financial and Accounting Officer) |