Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Statement

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes thereto contained elsewhere in this report. The information contained in this Annual Report on Form 10-K is not a complete description of our business or the risks associated with an investment in our common stock. We urge you to carefully review and consider the various disclosures made by us in this report and in our other filings with the Securities and Exchange Commission, or SEC, including the “Risk Factors” section in this report.

In this report we make statements, and from time to time we otherwise make written and oral statements regarding our business and prospects, such as projections of future performance, statements of management’s plans and objectives, forecasts of market trends, and other matters that are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Statements containing the words or phrases “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimates,” “projects,” “believes,” “expects,” “anticipates,” “intends,” “target,” “goal,” “plans,” “objective,” “should” or similar expressions identify forward-looking statements, which may appear in our documents, reports, filings with the SEC, and news releases, and in written or oral presentations made by officers or other representatives to analysts, stockholders, investors, news organizations and others, and in discussions with management and other of our representatives.

Our future results, including results related to forward-looking statements, involve a number of risks and uncertainties, including those risks included in the “Risk Factors” section in this report. No assurance can be given that the results reflected in any forward-looking statements will be achieved. Any forward-looking statement speaks only as of the date on which such statement is made. Our forward-looking statements are based upon assumptions that are sometimes based upon estimates, data, communications and other information from suppliers, government agencies and other sources that may be subject to revision. Except as required by law, we do not undertake any obligation to update or keep current either (i) any forward-looking statement to reflect events or circumstances arising after the date of such statement or (ii) the important factors that could cause our future results to differ materially from historical results or trends, results anticipated or planned by us, or which are reflected from time to time in any forward-looking statement.

General

We were formed in January 2014 as a biopharmaceutical company focused on developing innovative therapies for precision dermatology using engineered proteins and live biotherapeutic products. We are an early-stage clinical biopharmaceutical company and have not commenced commercial operations.

To date, we have capitalized our operations primarily through a series of private placements of our convertible preferred stock and convertible promissory notes and our initial public offering, IPO, of common stock which closed on June 21, 2023. In connection with our IPO, we issued 7,508 shares of our common stock at a public offering price of $999 per share. Concurrent with the close of our IPO, all of our outstanding shares of convertible preferred stock and convertible promissory notes converted into a total of 44,802 shares of our common stock. In February 2024, we completed a follow-on public offering in which we issued and sold 83,404 shares of our common stock at a price to the public of $59.94 per share. On July 25, 2024, we completed a follow-on offering of an aggregate of 1,000,750 shares of our common stock, and Class A warrants to purchase up to 2,001,502 shares of common stock, at a combined public offering price of $9.99 per share and accompanying warrants. On January 16, 2025, we completed a follow-on offering in which we issued and sold 729,381 shares of our common stock at a price of $2.00 per share. The net proceeds received by us from the follow-on offering were $1.2 million, after deducting placement agent's fees and other offering expenses. The shares were offered by us pursuant to a shelf registration statement on Form S-3 filed with the SEC on July 1, 2024, and a final prospectus supplement dated January 15, 2025. On February 5, 2025, we completed a follow-on offering in which we issued 374,696 shares of our common stock at a public offering price of $1.85 per share and warrants to purchase up to 337,232 shares of common stock. The net proceeds received by the Company from the follow-on offering were approximately $561,000 after deducting placement agent's fees and other offering expenses. The shares were offered by us pursuant to a shelf registration statement on Form S-3 filed with the SEC on July 1, 2024, and a final prospectus supplement dated February 4, 2025. The warrants became exercisable on the six-month and one day anniversary of their issuance, and their exercise price is $3.60.

On April 24, 2025, the Company entered into a Purchase Agreement (the "ELOC Purchase Agreement") with Alumni Capital LP (the "Purchaser" or "Alumni Capital"), whereby the Company has the right, but not the obligation, to sell to the Purchaser, and the Purchaser is obligated to purchase, up to an aggregate of $20 million (the "Investment Amount") of shares of the Company’s common stock in a series of purchases (the “ELOC Shares”). The term of the ELOC Purchase Agreement is through December 31, 2026, or the date on which the Purchaser shall have purchased the shares pursuant to the ELOC Purchase Agreement for an aggregate purchase price of the Investment Amount. During the term, the Company may at its election cause the Purchaser to make a series of purchases

of shares, each up to $750,000, or up to $4 million dollars upon consent of the Purchaser. The closing of each purchase pursuant to the ELOC Purchase Agreement will be no later than five business days after the Company provides a notice to for the purchase. The purchase price of the ELOC Shares that the Company elects to sell to the Purchaser pursuant to the ELOC Purchase Agreement will be equal to the lowest daily volume weighted average price of the common stock during the period commencing on the date that the Company delivers a notice requiring the purchase of shares by the Purchaser and ending on the earlier to occur of (i) five (5) business days immediately following such date and (ii) the date on which the Purchaser notifies the Company that it is prepared to proceed with the relevant closing, multiplied by 90%. Upon each purchase, the Purchaser will receive warrants to purchase such number of shares of the Company’s common stock equal to 10% of the number of ELOC Shares purchased in the related purchase (the “ELOC Warrants”). The Exercise Price shall equal 130% of the price per ELOC Share paid upon closing. The exercise of the ELOC Warrant will be subject to stockholder approval and expire five years after issuance. The ELOC Warrants may be exercised via cashless exercise if there is no effective registration statement, or current prospectus available for, the resale of the ELOC Warrant Shares. The ELOC Shares and ELOC Warrants have been registered under the Registration Statements on Form S-1 (File Nos. 333-286809 and 333-292049). The Company could not issue to the Purchaser under the Purchase Agreement shares in an amount greater than 19.99% of the total number of shares of common stock issued and outstanding immediately prior to the execution of the ELOC Purchase Agreement (the “Exchange Cap”), unless the Company obtained stockholder approval to issue shares of common stock in excess of the Exchange Cap. On June 23, 2025, at the Company's annual meeting of stockholders, the stockholders approved the sale and issuance of more than 19.99% of our outstanding shares of our common stock, including shares of common stock underlying warrants, pursuant to the Purchase Agreement entered into with the Purchaser.

On August 26, 2025, the Company entered into a Modification Agreement (the “Modification Agreement”) with Alumni Capital to amend certain terms of the ELOC Purchase Agreement. Pursuant to the Modification Agreement, the Company may at its election, cause Alumni Capital to make a series of purchases of ELOC Shares either at (i) the lowest daily volume weighted average price of the common stock during the period commencing on the date that the Company delivers written notice (the “Purchase Notice”) and ending on the earlier of (a) five (5) business days immediately following the date of a Purchase Notice, and (b) the date on which Alumni Capital notifies the Company that it is prepared to proceed with the closing of the purchase, multiplied by 90% (“Purchase Notice Option 1”) or (ii) the lowest traded price of common stock during the period commencing on the date the Company delivers a Purchase Notice and ending on the earlier of (x) the same business day a Purchase Notice is delivered, and (y) the date on which Alumni Capital notifies the Company that it is prepared to proceed with the closing of the purchase, multiplied by 97% (“Purchase Notice Option 2”). Each Purchase Notice delivered by the Company must specify whether Purchase Notice Option 1 or Purchase Notice Option 2 is selected and the number of ELOC Shares to be purchased. All other terms and conditions of the ELOC Purchase Agreement remain in full force and effect. Refer to Note 7 regarding the terms of the ELOC Warrants issued in conjunction with the ELOC Shares.

On November 24, 2025, the Company entered into a securities purchase agreement (the “November Purchase Agreement”) with a single institutional investor (the “November Purchaser”) pursuant to which the Company agreed to issue and sell to the November Purchaser in a private placement offering priced at a premium to market in accordance with NYSE rules (the “November Offering”) an aggregate of 535,759 shares (the “November Shares”) of common stock of the Company, (ii) pre-funded warrants (the “November Pre-Funded Warrants”) to purchase up to an aggregate of 4,151,741 shares of common stock (the “November Pre-Funded Warrant Shares”) at an exercise price of $0.0001 per November Pre-Funded Warrant, and (iii) common stock purchase warrants (the “November Common Warrants” together with the November Pre-Funded Warrants, the “November Warrants”) to purchase up to an aggregate of 4,687,500 shares of common stock (the “November Common Warrant Shares” together with the November Pre-Funded Warrant Shares, the “November Warrant Shares”) at an exercise price of $0.32 per November Common Warrant. The offering price was $0.32 per share of common stock or November Pre-Funded Warrant and accompanying November Common Warrant (the “November Offering Price”). The November Pre-Funded Warrants were immediately exercisable and do not expire until exercised in full. The November Common Warrants are exercisable upon shareholder approval and will expire on the five-year anniversary of shareholder approval.

The November Share, November Warrants, and November Warrant Shares are being offered in reliance upon the exemption from the registration requirement of the Securities Act, pursuant to Section 4(a)(2) thereof and/or Rule 506(b) of Regulation D promulgated thereunder, and applicable state securities laws. The issuance of the November Common Stock, November Warrants, and November Warrant Shares initially were not registered under the Securities Act and such securities could not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act and any applicable state securities laws. On December 10, 2025, the Company filed a Registration Statement on Form S-1 (File No. 333-292049) registering, among other shares of common stock, the November Shares and the shares underlying the November Pre-Funded Warrants and November Common Warrants, which the SEC declared effective on December 15, 2025.

The gross proceeds from the November Offering before deducting expenses were approximately $1.5 million.

The November Purchase Agreement contains customary representations and warranties of the Company, customary conditions to closing, and termination provisions. Pursuant to the terms of the November Purchase Agreement, for 60 days from the closing of the November Purchase Agreement, subject to certain exceptions, the Company may not issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of common stock or common stock equivalents, or file any registration statement or any amendment or supplement thereto. Additionally, from the date of the November Purchase Agreement until February 26, 2027, upon any issuance by the Company of common stock or common stock equivalents for cash consideration, debt, or a combination of thereof (a “Subsequent Financing”), the Purchaser shall have the right to participate up to an amount of the Subsequent Financing equal to an aggregate of 25% of the Subsequent Financing. The representations and warranties of each party set forth in the November Purchase Agreement have been made solely for the benefit of the other party to the November Purchase Agreement, and such representations and warranties should not be relied on by any other person.

Under the terms of the November Warrants, a holder will not have the right to exercise any portion of the November Warrants if the holder (together with its affiliates) would beneficially own in excess of 4.99% of the number of the Company’s common stock outstanding immediately after giving effect to the exercise, as such percentage of ownership is determined in accordance with the terms of the November Warrants. However, upon notice from the holder to the Company, the holder may increase the beneficial ownership limitation to 9.99% of the number of shares of common stock outstanding immediately after giving effect to the exercise of the November Warrants.

As of February 26, 2026, the Company has sold 9,255,823 shares, and issued 895,579 warrants to Alumni Capital LP under the ELOC Purchase Agreement with an estimated gross proceeds of $6.2 million of which $0.2 million was received subsequent to December 31, 2025.

As of February 26, 2026, we had 16,192,438 shares of our common stock issued and outstanding. Except as otherwise indicated, all share and share price herein give effect to a forward stock split effected on May 17, 2023 at a ratio of 7.1 for one, a reverse stock split effected on July 1, 2024 at a ratio of one for 30 and a reverse stock split effected on August 21, 2025 at a ratio of one for 6.66. As of the date of this filing, our Board is still evaluating the need for a further reverse split and, if needed, the exact split ratio based on our financing alternatives and NYSE American compliance considerations. Our financial statements will not reflect a further reverse stock split until such time as it occurs.

Overview

We are focused on developing innovative therapies for precision dermatology using engineered proteins and topical live biotherapeutic products. We have built a proprietary platform that includes a microbial library comprised of approximately 1,500 unique bacterial strains that can be screened for unique therapeutic characteristics. The platform is augmented by an artificial intelligence and machine learning technology, which can enable the transformation of previously genetically intractable strains. Our initial focus is on the development of genetically engineered strains of Staphylococcus epidermidis, or S. epidermidis, which we consider to be an optimal therapeutic candidate species for engineering of dermatologic therapies. The particular species demonstrates a number of well-described properties in the skin. As of the date of this report, we have identified among our microbial library over 60 distinct bacterial species that we believe are capable of being engineered to create living organisms or engineered proteins with significant therapeutic effect.

We are a pioneer in genetically engineered bacteria for therapeutic use in dermatology. Our goal is to leverage our platforms and internal microbial library bacterial strains to create new therapeutics that are either engineered living organisms or engineered proteins or peptides to treat skin diseases. Our initial focus is on the development of our current programs, including:

•ATR-12, which includes a genetically modified strain of S. epidermidis for treating the orphan disease, Netherton syndrome, a chronic and sometimes fatal disease of the skin estimated to affect approximately one in every 100,000, but its prevalence may be underestimated due to misdiagnosis caused by similarities to other skin diseases. We received Pediatric Rare Disease Designation for ATR-12 by the United States Food and Drug Administration, or FDA, in 2019. In December 2022, we submitted an investigational new drug application, or IND, for a Phase 1b clinical trial of ATR-12 in Netherton syndrome patients, and on January 27, 2023 we received notification from the FDA that the “study may proceed” with respect to the proposed Phase 1b clinical trial. After submitting post-IND manufacturing reports, we have commenced operating activities for our Phase 1b clinical trial in December 2023, and we dosed our first patient in August 2024. We reported initial clinical safety results in the first half of 2025.

•ATR-04, which includes a genetically modified strain of S. epidermidis for treating the papulopustular rash experienced by cancer patients undergoing epidermal growth factor receptor inhibitor, or EGFRi, targeted therapy. In August 2024, we obtained IND clearance from the FDA to commence a Phase 1/2 clinical trial in certain cancer patients undergoing EGFRi

targeted therapy. In September 2024, we obtained Fast Track designation by the FDA in this indication. We dosed the first patient in the Phase 1/2 clinical trial in the third quarter of 2025.

•ATR-01, which includes a genetically modified strain of S. epidermidis that expresses an engineered recombinant human filaggrin protein for treating ichthyosis vulgaris, a chronic, xerotic (abnormally dry), scaly skin disease with an estimated incidence and prevalence of 1 in 250, which suggests a total patient population of 1.3 million in the United States. We are planning to perform lead optimization and IND-enabling studies in 2025 to support a potential IND filing in 2026.

We also have established partnerships with teams from Carnegie Mellon University and the Fred Hutch, two of the premier academic centers in the United States. Our collaboration with the Carnegie Mellon based team also takes advantage of the power of whole genome sequencing. This partnership is mining our proprietary library of bacterial strains for novel, drug like peptides and proteins. The artificial intelligence/machine learning technology developed by this team predicts the molecules made by microbes from their genetic sequences. The system then compares the predictions to the products actually made through tandem mass spectroscopy and/or nuclear magnetic resonance imaging to refine future predictions. The predictions can be compared to publicly available 2D and 3D protein databases to select drug like structures.

We hold an exclusive, worldwide license from Fred Hutch regarding the use of its patented SyngenicDNA Minicircle Plasmid, or SyMPL, technologies for all fields of genetic engineering, including to discover, develop and commercialize engineered microbial therapies and microbial-derived peptides and proteins for skin diseases. We are utilizing our licensed patent rights to build plasmids in order to make genetic transformations that have never been previously achieved. To date, our team has successfully engineered our lead therapeutic candidates without the SyMPL technology. However, we believe that SyMPL will open up the ability to make genetic transformations of an expanded universe of microbial species, and we expect that some or all of our future product candidates will incorporate the SyMPL technology.

Our Strategy

Beyond our three lead product candidates, our goal is to develop a broad portfolio of product candidates focused on expanding the application of our platforms for precision dermatology. We believe that we have established a unique position in advancing the development of biologics for precision dermatology.

We intend to create a broad portfolio of product candidates for precision dermatology through our development of genetically engineered proteins selected from our proprietary microbial library of approximately 1,500 unique bacterial strains. Our strategy is as follows:

•Build a sustainable precision dermatology company. Our goal is to build a leading precision dermatology company with a sustainable pipeline of product candidates. To that end, we are focused on rapidly advancing our current pipeline of live biotherapeutic candidates while actively developing additional product candidates. Each of our current product candidates are proprietary and subject to pending patent applications. We expect that most, if not all, genetically engineered product candidates we develop will be eligible for patent protection.

•Advance our lead programs, ATR-12 and ATR-04, through clinical trials. In 2022, we obtained pre-IND correspondence with the FDA for purposes of discussing our proposed regulatory pathway for the ATR-12 program and obtaining guidance from the FDA on the preclinical plan leading to the filing and acceptance of an IND for ATR-12. In December 2022, we filed an IND for an ATR-12 first-in-human trial in Netherton syndrome patients. On January 27, 2023, we received notification from the FDA that the “study may proceed” with respect to the proposed Phase 1b clinical trial, and in August 2024 we initiated dosing the first patient in the ATR-12 Phase 1b clinical trial. In August 2024, we received IND clearance from the FDA for a first-in-human Phase 1b/2a clinical trial in patients with EGFRi-associated rash, and in September 2024, the FDA granted Fast Track designation for the ATR-04 program. We commenced a Phase 1b trial for our ATR-04 program in certain cancer patients undergoing EGFRi therapy in the fourth quarter of 2024 and initiated dosing the first patient in the ATR-04 Phase 1/2 clinical trial in the third quarter of 2025. We reported initial safety results of the first patients dosed in our Phase 1b clinical trial for our ATR-12 program in Netherton syndrome patients in the first half of 2025.

•Broaden our platform by selectively exploring strategic partnerships that maximize the potential of our precision dermatology programs. We intend to maintain significant rights to all of our core technologies and product candidates. However, we will continue to evaluate partnering opportunities in which a strategic partner could help us to accelerate development of our technologies and product candidates, provide access to synergistic combinations, or provide expertise that could allow us to expand into the treatment of different types of skin diseases. We may also broaden the reach of our platform by selectively in-licensing technologies or product candidates. In addition, we will consider potentially out-licensing certain of our proprietary technologies for indications and industries that we are not ourselves pursuing. We believe our genetic engineering techniques and technologies have applicability outside of the field of medicine, including cosmetics and in the generation of clean fuels and bioremediation.

•Leverage our academic partnerships. We currently have partnerships with investigators at the Fred Hutchinson Cancer Center, Yale University, Duke University, and Carnegie Mellon University. We expect to leverage these partnerships and potentially expand them or form other academic partnerships to bolster our engineering platforms and expand our research and development pipeline.

•Expand on our other potential product candidates. Beyond our three lead product candidates, our goal is to develop a broad portfolio of product candidates focused on expanding the application of our platforms for precision dermatology. We have a proprietary platform for discovering and developing therapeutic products for precision dermatology. Our platform is built around a microbial library comprised of approximately 1,500 unique bacterial strains to allow screening for unique therapeutic characteristics and utilizes a microbial genetic technology that analyzes, predicts and engineers the proteins, peptides and molecules made by skin microbes. Our ability to genetically engineer intractable microbial species is uniquely leveraged by our exclusive license to the SyMPL technology.

Other Events

On October 1, 2025, the Company received a Deficiency Letter from the NYSE American indicating that the Company is not in compliance with the NYSE American continued listing standards set forth in Sections 1003(a)(ii) of the NYSE American Company Guide. Section 1003(a)(ii) of the NYSE American Company Guide requires a listed company’s stockholders’ equity be at least $4.0 million if it has reported losses from continuing operations and/or net losses in three of its four most recent fiscal years. The Deficiency Letter noted that the Company reported stockholders’ deficit of $2.2 million as of June 30, 2025, and losses from continuing operations and/or net losses in three of its four most recent fiscal years ended December 31, 2024.

In order to maintain the Company’s listing on the NYSE American, the NYSE American requested that the Company submit a plan of compliance (the “Plan”) by October 31, 2025 addressing how the Company intends to regain compliance with Section 1003(a)(ii) of the NYSE American Company Guide.

The Company’s management submitted the Plan to the NYSE American by the October 31, 2025 deadline and on December 16, 2025, the Company received notice that the NYSE American had accepted the Company's Plan and granted a plan period through April 1, 2027 (the “Plan Period Deadline”). The Company will be able to continue its listing during the plan period and will be subject to continued periodic review by the NYSE American staff. If the Company does not make progress consistent with the Plan during the plan period or if the Company is not in compliance with the listing standards by the Plan Period Deadline, then the Company will be subject to delisting procedures as set forth in the NYSE American Company Guide.

The Company is committed to achieving compliance with the NYSE American’s requirements. There can be no assurance that the Company will be able to achieve compliance with the NYSE American’s continued listing standards within the required time frame.

Results of Operations

We are an early-stage clinical biopharmaceutical company, formed in January 2014, and have limited operating history. We have not commenced revenue-producing operations, and our core focus is on the research and development of innovative therapies for precision dermatology using engineered proteins and live biotherapeutic products. To date, our operations have consisted of the development of our proprietary microbial library, the identification, characterization and testing of certain bacterial species from our microbial library that we believe are capable of being engineered to provide significant therapeutic effect, the development of our initial product candidates and the commencement of phase 1/2 clinical trials related to our ATR-12, and ATR-04 product candidates.

Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

The following table summarizes our results of operations with respect to the items set forth below for the years ended December 31, 2025 and 2024 together with the percentage change for those items.

Year Ended December 31,

Service revenue - related party

Operating expenses:

Other income (expense):

Service Revenue - Related Party

We generated $0 of service revenue under the Bayer JDA during the year ended December 31, 2025 compared to service revenue of $7,500 under the Bayer JDA for the year ended December 31, 2024. The decrease of $7,500 in service revenue is attributable to a decrease in the amount of reimbursable development costs incurred in 2025. We do not expect any further service revenue at this time.

General and Administrative

General and administrative costs during the year ended December 31, 2025 decreased by $138,605, or 2%, to $6,130,657 from the prior year. The decrease was primarily related to a decrease of $71,000 in legal fees primarily related to the write off of certain patent expenses, a decrease of $327,000 in salaries and benefits primarily due to a decrease in stock option expense as options vest and the absence of a bonus accrual, a decrease of $74,000 in costs primarily attributable to the 2024 payment to the previous investment bank offset by the increase in NYSE listing costs, a decrease in hiring costs of $20,000 primarily related to a compensation consultant, a decrease of $37,000 in insurance expense and a net decrease of approximately $60,000 in other overhead expenses. offset by an increase of $176,000 for the use of business consultants which was primarily attributed to increased hours due to incremental public company compliance initiatives and business development efforts, an increase of $120,000 for public relations expenditures which increased due to additional services and an increase in our base rates, an increase of $51,000 for software and equipment, and an increase of $104,000 in accounting costs primarily related to an increase in fees paid to external auditors and NYSE American.

We expect that our general and administrative expenses will incur a modest increase in the future as a result of personnel costs, and facility operating costs. We also expect an increase in costs associated with being a public company, including costs related to accounting, audit, legal, consulting fees, regulatory and tax-related services associated with maintaining compliance with applicable NYSE American and SEC requirements, additional director and officer insurance costs, and investor and public relations costs.

Research and Development

Research and development expenses include salaries and benefits of all research personnel, payments to contract research organizations, payments to research consultants, and the purchase of lab supplies.

During the years ended December 31, 2025 and 2024 our research and development expenses by category were as follows:

Year Ended December 31,

During the year ended December 31, 2025, research and development expenses increased by $112,630, or 2%, to $4,836,008 from the prior year. The increase was primarily related to an net increase of $178,000 in research and development and clinical trial costs related to our ATR-04 program as the program progresses through its clinical trial, an increase of $351,000 in research and development costs related to our ATR-01 program as the program continues to progress, and an increase in lab supplies of $60,000 offset by a decrease in payroll and benefits of $24,000 due to increased salary from one new hire offset by the absence of a bonus accrual, a decrease of $125,000 in research and development and clinical trial costs related to our ATR-12 program as the program progresses through its clinical trial, a decrease of in $309,000 in consultant expenditures related to our programs prior to entering into their clinical phases, and an overall net decrease of approximately $18,000 in other costs.

We expect our research and development expenses to significantly increase in the future due primarily to our planned clinical trial activity and continued development of product candidates.

Other Income

Our other income consists of interest income, loss on issuance of stock, loss on foreign currency translation, change in the valuation of warrants carried at fair value, loss on issuance of common stock, loss on disposal of property and equipment, and interest expense. During the year ended December 31, 2025, other income decreased by $2,007,065, or 99%, from the prior year. The decrease was primarily related to a decrease of $4,000,000 attributable to the change in the valuation of the warrants, a net decrease of $54,000 in other (expense) income, a decrease of $52,000 of interest income, offset by decrease of $2,200,000 in loss on issuance of stock.

We expect our future other income (expense) to be consistent with prior periods.

Liquidity and Capital Resources

As of December 31, 2025, we had total assets of approximately $5.0 million and working capital of approximately $2.0 million. As of December 31, 2025, our liquidity included approximately $2.1 million of cash and cash equivalents. We believe that our cash on-hand as of the date of this report will not be sufficient to cover our proposed plan of operations over the next twelve months and thereafter. We intend to seek additional funds through various financing sources, including the sale of our equity and debt securities, federal grants, licensing fees for our technology and joint ventures with industry partners. In addition, we will consider alternatives to our current business plan that may enable us to achieve revenue producing operations and meaningful commercial success with a smaller amount of capital. However, there can be no guarantees that such funds will be available on commercially reasonable terms, if at all. If such financing is not available on satisfactory terms, we may be unable to further pursue our business plan and we may be unable to continue operations.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, our common stockholders’ ownership interests will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect rights as a common stockholder. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making acquisitions or capital expenditures or declaring dividends. If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates, or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings or other arrangements when needed, we may be required to delay, limit, reduce or terminate our research, product development or future commercialization efforts, or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

As of the date of this filing, management has determined there is substantial doubt about our ability to continue as a going concern based on our lack of revenue from commercial operations, significant losses, and the need to raise additional capital to support ongoing operations. Our contractual commitments primarily consist of operating and financing leases with contractual undiscounted balances of $428,678, and $10,354, respectively as of December 31, 2025. Refer to Note 12 for more detailed information regarding our lease commitments. Additionally, as we continue to progress our product candidates through clinical trials, we will continue to incur additional costs related to our CRO's. It is common in our industry for the CRO's to require significant up-front cash payments prior to the beginning of such trial phases, and additional cash payments upon the achievement of certain milestones per the contracts' terms.

Cash Flows

The following table shows a summary of our cash flows for the periods indicated:

December 31,

Net cash used in investing activities $ (182,909) $ (379,246)

Operating Activities

During the year ended December 31, 2025, operating activities used $11.2 million of cash primarily driven by our net loss of $10.9 million. During fiscal 2024, operating activities used $10.2 million of cash primarily driven by our net loss of $9.0 million and by non-cash items of $1.2 million.

Investing Activities

During the year ended December 31, 2025, investing activities used $182,909 of cash driven by $161,000 in trademark and deferred patent costs and $24,000 for the purchase of equipment offset by $3,000 in proceeds from the sale of property and equipment.

During fiscal 2024, investing activities used $379,246 of cash driven by $370,000 in trademark and deferred patent costs and $9,000 for the purchase of equipment.

Financing Activities

During the year ended December 31, 2025, financing activities provided $8.9 million in cash primarily driven by proceeds from our January and February 2025 follow-on public offerings, draws on our equity line of credit, and the November Private Placement. During the fiscal 2024, financing activities provided $13.3 million in cash primarily driven by proceeds from our February 2024 follow-on offering.

Critical Accounting Policies and Estimates

During the year ended December 31, 2025, there were material changes to our critical accounting policies previously disclosed in our Form 10-K dated December 31, 2024 and filed with the SEC on February 24, 2025.We no longer consider our revenue recognition, and estimating the fair value of our common stock critical accounting policies as we currently do not have transactions that produce revenue, and since we are a publicly traded company, we no longer need to estimate the fair value of our common stock as the Company's common stock is traded on the NYSE American.

Our management’s discussion and analysis of our financial condition and results of operations are based on our condensed financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these condensed financial statements requires us to make judgments and estimates that affect the reported amounts of assets, liabilities, and expenses and the disclosure of contingent assets and liabilities in our condensed financial statements. We base our estimates on historical experience, known trends and events, and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. On an ongoing basis, we evaluate our judgments and estimates in light of changes in circumstances, facts and experience. The effects of material revisions in estimates, if any, will be reflected in the condensed financial statements prospectively from the date of change in estimates.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk Disclosures

Not applicable.

Item 8. Financial Statements and Supplementary Data

Index to Financial Statements

Page

Statements of Operations for the years ended December 31, 2025 and 2024 F-4

Statements of Cash Flows for the years ended December 31, 2025 and 2024 F-6

Notes to the Financial Statements F-8

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Azitra, Inc.

Branford, CT

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Azitra, Inc. (the “Company”) as of December 31, 2025 and 2024, and the related statements of operations, stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Substantial Doubt Regarding the Company’s Ability to Continue as a Going Concern

The accompanying financial statements have been prepared assuming that Azitra, Inc., will continue as a going concern. As discussed in Note 1 to the financial statements, the Company’s significant operating losses raise substantial doubt regarding the entity’s ability to continue as a going concern. Management’s evaluation of the events and conditions, and management’s plans regarding those matters, are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our opinion is not modified with respect to this matter.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

GRASSI & CO., CPAs, P.C.

We have served as the Company’s auditor since 2022.

Jericho, New York

February 27, 2026

F-1

AZITRA, INC.

BALANCE SHEETS

ASSETS

Current assets:

Deferred offering costs — 4,106

Financing lease right-of-use asset, net 9,041 24,522

Deferred issuance costs — 37,477

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Insurance premium financing liability 198,983 —

Long-term financing lease liability — 10,105

Warrant liability — 381

Commitments and contingencies (Note 12)

F-2

The accompanying notes are an integral part of these financial statements.

AZITRA, INC.

BALANCE SHEETS

Stockholders' equity

F-3

The accompanying notes are an integral part of these financial statements.

AZITRA, INC.

STATEMENTS OF OPERATIONS

For the Years Ended December 31,

Service revenue - related party $ — $ 7,500

Total revenue — 7,500

Operating expenses:

Other income (expense):

Loss on issuance of common stock — (2,132,800)

Net loss per share, basic and diluted $ (2.25) $ (15.70)

Weighted average common stock outstanding, basic and diluted 4,873,552 571,162

F-4

The accompanying notes are an integral part of these financial statements.

AZITRA, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

Shares Amount Shares Amount

Follow-on public offering issuance costs adjustment — — — — (227) — (227)

Offering costs and other miscellaneous adjustments — — — — (37,764) — (37,764)

F-5

The accompanying notes are an integral part of these financial statements.

AZITRA, INC.

STATEMENTS OF CASH FLOWS

For the Years Ended December 31,

Cash flows from operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Loss on lease modification 10,896 —

Change in fair value of warrant liability (381) (4,034,072)

Loss on issuance of common stock — 2,132,800

Loss on disposal of property and equipment 2,069 4,859

Impairment of intangible assets and deferred patent costs — 442,793

Changes in operating assets and liabilities:

Cash flows from investing activities:

Purchases of property and equipment (24,213) (8,569)

Proceeds from sale of property and equipment 3,153 —

Cash flows from financing activities

Payment of deferred offering/issuance costs (286) (37,477)

Principal payments on finance leases (16,061) (14,598)

F-6

The accompanying notes are an integral part of these financial statements.

AZITRA, INC.

STATEMENTS OF CASH FLOWS

Proceeds from private placement, net 1,342,329 —

Proceeds from equity line of credit, net 5,942,307 —

Repayment of insurance premium financing liability (96,577) —

Proceeds from exercise of stock options — 19,100

Supplemental disclosure of non-cash investing and financing information:

Financed insurance premium exchanged for prepaid insurance $ 295,560 $ —

Purchases of fixed assets in accounts payable $ — $ 45,999

F-7

The accompanying notes are an integral part of these financial statements.

AZITRA, INC.

NOTES TO FINANCIAL STATEMENTS

1. Organization and Nature of Operations

Azitra, Inc. (the "Company") was founded on January 2, 2014. We are a synthetic biology company focused on screening and genetically engineering microbes of the skin. The mission is to discover and develop novel therapeutics to create a new paradigm for treating skin disease. The Company’s discovery platform is screened for naturally occurring bacterial cells with beneficial effects. These microbes are then genomically sequenced and engineered to make cellular therapies, recombinant therapeutic proteins, peptides and small molecules for precision treatment of dermatology diseases. On May 17, 2023, the Company changed its name to from “Azitra Inc” to “Azitra, Inc.”

In addition to our corporate headquarters located in Branford, Connecticut, the Company maintains a location in Montreal, Canada for certain research activities. The Company also opened a manufacturing and laboratory space in Groton, Connecticut during 2021.

Stock Splits, Change in Par Value, Increase in Shares Authorized, Initial and Follow-on Public Offerings, and Equity Line of Credit Issuances

In June 2023, the Company completed its initial public offering (IPO) in which it issued and sold 7,508 shares of its common stock at a price to the public of $999.00 per share. The shares began trading on the NYSE American on June 16, 2023 under the symbol “AZTR”. The net proceeds received by the Company from the IPO were $6.0 million, after deducting underwriting discounts, commissions and other offering expenses.

Immediately prior to the effectiveness of the Company’s registration statement, the Company effected a 7.1-for-1 forward stock split (the "Forward Stock Split") of its issued and outstanding shares of common stock. On May 17, 2023, the Company changed the par value of its capital stock from $0.01 to $0.0001. Accordingly, all share and per share amounts for all periods presented in the accompanying audited condensed financial statements and notes thereto have been adjusted retroactively, unless otherwise noted, to reflect the effect of the Forward Stock Split. Refer to Note 6 for additional details relating to the Forward Stock Split.

In February 2024, the Company completed a follow-on public offering (the "February 2024 Offering") in which it issued and sold 83,404 shares of its common stock at a price to the public of $59.94 per share. The net proceeds received by the Company from the follow-on public offering were $4.3 million, after deducting underwriting discounts, commissions and other offering expenses. For further information regarding the February 2024 Offering and related warrant issuance, refer to Notes 6 and 7, respectively.

On July 1, 2024, the Company effected a 30-for-1 reverse stock split of its issued and outstanding shares of common stock (the "2024 Reverse Stock Split") and began trading on a split-adjusted basis the same day. There was no change in par value. Accordingly, all share and per share amounts for all periods presented in the accompanying audited condensed financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect the effect of the 2024 Reverse Stock Split. Refer to Note 6 for additional details relating to the Reverse Stock Split.

In July 2024, the Company completed a follow-on public offering (the "July 2024 Offering") in which it issued and sold 1,000,750 shares of its common stock at a price of $9.99 per share and Class A Warrants exercisable for an aggregate 2,001,502 shares of common stock. The net proceeds received by the Company from the follow-on public offering were $9.1 million, after deducting placement agent's fees and other offering expenses. For further information regarding the July 2024 Offering and related warrant issuance, refer to Notes 6 and 7, respectively.

In January 2025, the Company completed a follow-on offering (the "January 2025 Offering") in which it issued and sold 729,381 shares of its common stock at a price of $2.00 per share. The net proceeds received by the Company from the follow-on offering were $1.2 million, after deducting placement agent's fees and other offering expenses. The shares were offered by the Company pursuant to a shelf registration statement on Form S-3 filed with the SEC on July 1, 2024, and a final prospectus supplement dated January 15, 2025. For further information regarding the January 2025 Offering, refer to Notes 6 and 7 respectively.

In February 2025, the Company completed a follow-on offering (the "February 2025 Offering") in which it issued 374,696 shares of its common stock at a public offering price of $1.85 per share and warrants to purchase up to 337,232 shares of common stock at an exercise price of $3.60. The net proceeds received by the Company from the follow-on offering were $560,976 after deducting placement agent's fees and other offering expenses. The shares were offered by the Company pursuant to a shelf registration statement on Form S-3 filed with the SEC on July 1, 2024, and a final prospectus supplement dated February 6, 2025. For further information regarding the February 2025 Offering and related warrant issuance, refer to Notes 6 and 7, respectively.

F-8

The accompanying notes are an integral part of these financial statements.

AZITRA, INC.

NOTES TO FINANCIAL STATEMENTS

On April 24, 2025, the Company entered into an Equity Line of Credit ("ELOC") with Alumni Capital LP ("Alumni Capital"), whereby the Company has the right, but not the obligation, to sell to Alumni Capital, and Alumni Capital is obligated to purchase, up to an aggregate of $20 million of shares of the Company's common stock in a series of purchases. Upon each purchase, Alumni Capital will receive warrants to purchase shares of the Company's common stock equal to 10% of the number of shares purchased in the related purchase. For further information regarding the ELOC, refer to Notes 6 and 7 respectively.

Under the terms of the ELOC, the Company has issued 9,255,823 shares of common stock, of which 1,300,000 shares were issued subsequent to December 31, 2025, and issued 895,579 warrants, of which 100,000 warrants were issued subsequent to December 31, 2025. The gross proceeds received by the Company under the ELOC were $6.2 million, of which $0.2 million was received subsequent to December 31, 2025. As of February 26, 2026, approximately $13.8 million is available under the ELOC for future share issuances.

In July 2025, the Company amended and restated its Certificate of Incorporation increasing the number of authorized shares of common stock from 100,000,000 to 200,000,000.

On August 21, 2025, the Company effected a 6.66-for-1 reverse stock split of its issued and outstanding shares of common stock (the "2025 Reverse Stock Split") and began trading on a split-adjusted basis the same day. There was no change in par value. Accordingly, all share and per share amounts for all periods presented in the accompanying audited condensed financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect the effect of the 2025 Reverse Stock Split. Refer to Note 6 for additional details relating to the 2024 Reverse Stock Split, and the 2025 Reverse Stock Split (together, the "Reverse Stock Splits").

On November 24, 2025, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with Alumni Capital pursuant to which the Company agreed to issue and sell to Alumni Capital in a private placement offering (the "PIPE Offering") priced at a premium to market in accordance with NYSE rules (the “Offering”) an aggregate of 535,759 shares of common stock of the Company, (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to an aggregate of 4,151,741 shares of Common Stock (the “Pre-Funded Warrants Shares”) at an exercise price of $0.0001 per Pre-Funded Warrant, and (iii) common stock purchase warrants (the “Common Warrants” together with the Pre-Funded Warrants, the “Warrants”) to purchase up to an aggregate of 4,687,500 shares of Common Stock (the “Common Warrant Shares” together with the Pre-Funded Warrant Shares, the “Warrant Shares”) at an exercise price of $0.32 per Common Warrant. The offering price was $0.32 per share of Common Stock or Pre-Funded Warrant and accompanying Common Warrant (the “Offering Price”). The Pre-Funded Warrants are immediately exercisable and do not expire until exercised in full. The Common Warrants are exercisable upon shareholder approval and will expire on the five-year anniversary of shareholder approval. For further information regarding the PIPE Offering, refer to Notes 6 and 7 respectively.

As of February 26, 2026, all Pre-Funded Warrants have been exercised by Alumni Capital.

Other Events

On October 1, 2025, the Company received a deficiency letter (the “Deficiency Letter”) from the NYSE American LLC ("NYSE American") indicating that the Company is not in compliance with the NYSE American continued listing standards set forth in Section 1003(a)(ii) of the NYSE American Company Guide. Section 1003(a)(ii) of the NYSE American Company Guide requires a listed company’s stockholders’ equity be at least $4.0 million if it has reported losses from continuing operations and/or net losses in three of its four most recent fiscal years. The Deficiency Letter noted that the Company reported stockholders’ equity of $2.2 million as of June 30, 2025, and losses from continuing operations and/or net losses in three of its four most recent fiscal years ended December 31, 2024.

The Company’s management submitted the Plan to the NYSE American by the October 31, 2025 deadline which was accepted by the NYSE American on December 16, 2025. If the Company does not make progress consistent with the Plan during the plan period or if the Company is not in compliance with the listing standards by April 1, 2027, then the Company will be subject to delisting procedures as set forth in the NYSE American Company Guide.

The Company is committed to undertaking a transaction or transactions in the future to achieve compliance with the NYSE American’s requirements. There can be no assurance that the Company will be able to achieve compliance with the NYSE American’s continued listing standards within the required time frame.

F-9

The accompanying notes are an integral part of these financial statements.

AZITRA, INC.

NOTES TO FINANCIAL STATEMENTS

Going Concern Matters

The financial statements have been prepared on the going concern basis, which assumes that the Company will continue in operation for the foreseeable future, and which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, management has identified the following conditions and events that created an uncertainty about the ability of the Company to continue as a going concern. As of and for the year ended December 31, 2025, the Company has an accumulated deficit of $68.5 million, a loss from operations of $11.0 million, used $11.2 million to fund operations and had $2.0 million of working capital. These factors among others raise substantial doubt about the Company’s ability to continue as a going concern.

The Company will require a significant amount of additional funds to complete the development of its product and to fund additional losses which the Company expects to incur over the next few years. The Company is still in its pre-commercialization phase and therefore does not yet have product revenue. Management plans to continue to raise funds through equity and/or debt financing to fund operating and working capital needs, however, there can be no assurance that the Company will be successful in securing additional financing, if needed, to meet its operating needs.

These conditions and events create substantial doubt about the ability of the Company to continue as a going concern for twelve months from the date that the financial statements are available to be issued. The financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

2. Summary of Significant Accounting Policies

Basis of Accounting

The financial statements of the Company are prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”). Certain amounts in the condensed financial statements and associated notes may not add up due to rounding.

Reclassification and Revision of Prior Period Financial Statements

Certain prior period amounts and disclosures have been reclassified to conform to the current period's financial presentation.

Use of Estimates

The preparation of the financial statement in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the balance sheet. While management believes the estimates and assumptions used in the preparation of the financial statement are appropriate, actual results could differ from those estimates. The most significant estimates in the Company's financial statements relate to accruals for research and development expenses, valuation of warrants and valuation of equity awards. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgements about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources.

Concentration of Credit Risks and other Risks and Uncertainties

Financial instruments, which potentially subject the Company to significant concentrations of risk, consist principally of cash and cash equivalents. The Company’s cash is deposited with a federally insured U.S. financial institution. The Company has no off-balance sheet concentrations of credit risk, such as foreign currency exchange contracts, option contracts or other hedging arrangements.

The Company is dependent on contract research organizations ("CRO") to conduct, and manage our on-going clinical trials, and contract manufacturing organizations (“CMO”) to supply products for research and development of its product candidates, including preclinical and clinical studies, and for commercialization of its product candidates, if approved. The Company’s development programs could be adversely affected by any significant interruption in either the CRO's or the CMO’s operations or by a significant interruption in the supply of active pharmaceutical ingredients and other components.

Products developed by the Company require approval from the U.S. Food and Drug Administration (“FDA”) or other international regulatory agencies prior to commercial sales. There can be no assurance the Company’s product candidates will receive the necessary approvals. If the Company is denied approvals, approvals are delayed, or the Company is unable to maintain approvals received, such events could have a materially adverse impact on the Company.

F-10

The accompanying notes are an integral part of these financial statements.

AZITRA, INC.

NOTES TO FINANCIAL STATEMENTS

The Company’s activities are subject to significant risks and uncertainties including the risk of failure to secure additional funding to properly execute the Company’s business plan. The Company is subject to risks that are common to companies in the pharmaceutical industry, including, but not limited to, development by the Company or its competitors of new technological innovations, dependence on key personnel, reliance on third party manufacturers, protection of proprietary technology, and compliance with regulatory requirements.

Segment Information

The Company operates and manages its business as one operating segment, which is to discover and develop novel therapeutics to create a new paradigm for treating skin diseases. The Chief Executive Officer, who is the Chief Operating Decision Maker ("CODM"), reviews financial information on an aggregate basis, along with cash balances for purposes of allocating resources and evaluating performance. For additional segment disclosures, see Note 16.

Cash and Cash Equivalents

For purposes of the balance sheets and statements of cash flows, the Company considers all cash on hand, demand deposits and all highly liquid investments with original maturities of three months or less to be cash equivalents.

Property and Equipment

Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives, which range from 3 to 10 years. Expenditures for maintenance and repairs, which do not extend the economic useful life of the related assets, are charged to operations as incurred. Gains or losses on disposal of property and equipment are reflected in the statements of operations in the period of disposal.

Deferred Offering and Deferred Issuance Costs

The Company capitalizes deferred offering costs, which primarily consists of direct, incremental legal, professional, accounting, and other third-party fees relating to the Company’s public offering initiatives associated with the filing of an S-1 Registration Statement. Once the Company completes the public offering, the Company records these amounts against the gross proceeds of these public offerings within the statements of stockholders’ equity.

In July 2024, the Company also filed a Form S-3 Registration Statement and recorded deferred issuance costs as a long-term asset. In September 2025, the Company wrote off the remaining deferred issuance costs of $35,435 as it was uncertain the Company would be able to issue additional shares against the Form S-3 Registration Statement. The write-off resulted in a reduction to additional paid-in capital.

Leases

The Company elected to account for non-lease components as part of the lease component to which they relate. Lease accounting involves significant judgments, including making estimates related to the lease term, lease payments, and discount rate. In accordance with the guidance, the Company recognized ROU assets and lease liabilities for all leases with a term greater than 12 months. Leases are classified as either operating or financing leases based on the economic substance of the agreement.

The Company has 3 operating leases for buildings with a ROU asset and lease liability totaling $1,418,502. The basis, terms and conditions of the leases are determined by the individual agreements. The Company’s option to extend certain leases ranges from 36 – 52 months. All options to extend have been included in the calculation of the ROU asset and lease liability. The leases do not contain residual value guarantees, restrictions, or covenants that could incur additional financial obligations to the Company. There are no subleases, sale-leaseback, or related party transactions.

At December 31, 2025, the Company had operating right-of-use assets with a net value of $404,444 and current and long-term operating lease liabilities of $255,776 and $156,190, respectively.

In 2023, the Company entered into a lease for the use of certain equipment that is classified as a finance lease. The finance lease has a term of 36 months. At December 31, 2025, the Company had financing right-of-use assets with a net value of $9,041 and current and long-term operating lease liabilities of $10,111 and $—, respectively.

F-11

The accompanying notes are an integral part of these financial statements.

AZITRA, INC.

NOTES TO FINANCIAL STATEMENTS

Intangible Assets

Intangible assets consist of trademarks and patents. All costs directly related to the filing and prosecution of patent and trademark applications are capitalized. Patents are amortized over their respective remaining useful lives upon formal approval. Trademarks have an indefinite life.

The Company accounts for other indefinite life intangible assets in accordance ASC Topic 350, Goodwill and Other Intangible Assets (ASC 350). ASC 350 requires that intangible assets that have indefinite lives are required to be tested at least annually for impairment or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Intangible assets that have finite lives will continue to be amortized over their useful lives.

Deferred Patent Costs

Deferred patent costs represent legal and filing expenses incurred related to the submission of patent applications for patents pending approval. These deferred costs will be reclassed to intangible assets and begin to be amortized over their estimated useful lives upon the formal approval of the patent. If the patent is not issued, the costs associated with the patent will be expensed in the year the patent was rejected. Deferred patent costs are reviewed for impairment at each reporting period. The costs associated with any impairment are expensed in the period the deferred patent costs are determined to be impaired. In connection with its review of the financial statements, the Company recorded impairment expenses of $442,793 during the twelve months ended December 31, 2024. The Company did not record impairment expenses during the twelve months ended December 31, 2025.

Impairment of Long-Lived Assets

In accordance with ASC Topic 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets (ASC 360-10), the Company’s policy is to review its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In connection with this review, the Company also reevaluates the periods of depreciation for these assets. The Company recognizes an impairment loss when the sum of the undiscounted expected future cash flows from the use and eventual disposition of the asset is less than its carrying amount. If an asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the asset, which is determined using the present value of the net future operating cash flows generated by the asset.

Accrued Expenses

The Company accrues expenses related to development activities performed by third parties based on an evaluation of services received and efforts expended pursuant to the terms of the contractual arrangements. Payments under some of these contracts depend on research and non-clinical trial milestones. There may be instances in which payments made to the Company’s vendors will exceed the level of services provided and result in a prepayment of expense. In accruing service fees, the Company estimates the period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from the estimate, the Company will adjust the accrual or prepaid expense accordingly. The Company has not experienced any material differences between accrued costs and actual costs incurred since its inception.

Warrant Accounting

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, Distinguishing Liabilities from Equity (“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 common stock, among other conditions for equity classification. 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 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 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 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 statements of operations under Other Income/loss.

F-12

The accompanying notes are an integral part of these financial statements.

AZITRA, INC.

NOTES TO FINANCIAL STATEMENTS

Revenue

The Company follows the five steps to recognize revenue from contracts with customers under ASC 606, Revenue from Contracts with Customers (“ASC 606”), which are:

● Step 1: Identify the contract(s) with a customer

● Step 2: Identify the performance obligations in the contract

● Step 3: Determine the transaction price

● Step 4: Allocate the transaction price to the performance obligations in the contract

● Step 5: Recognize revenue when (or as) a performance obligation is satisfied

The Company generates service revenue through a joint development agreement with a research partner. The Company recognizes revenue related to the research and development aspects of the agreement over time using the input method as work is performed on the contract.

The Company also generates grant revenue, which represents monies received on contracts with various federal agencies and nonprofit research institutions for general research conducted by the Company to further their product development and are therefore considered contributions to the Company. The contracts are generally for periods of one year or more and can be cancelled by either party. The Company concluded that the grant arrangements do not meet the criteria to be treated as a collaborative arrangement under FASB ASC Topic 808 as the Company is the only active participant in the arrangement. The grant arrangements also do not meet the criteria for revenue recognition under Topic 606, as the U.S. Government would not meet the definition of a customer.

Amounts earned under these grant contracts are recorded as a reduction to research and development expense when eligible expenses are incurred and the right to payment is realizable or realized and earned. The Company believes this policy is consistent with Topic 606, to ensure that recognition reflects the transfer of promised goods or services to customers in an amount that reflects the consideration that the Company expects to be entitled to in exchange for those goods or services, even though there is no exchange as defined in Topic 606. Additionally, the Company has determined that the recognition of amounts received as costs are incurred and amounts become realizable is analogous to the concept of transfer of control of a service over time under Topic 606.

Receipts of grant awards in advance, which are payable back to the funding agency if not used in accordance with conditions in the grants related to allowable costs or receipt of funding from research partners related to service revenue arrangements before work is performed on the contract, are classified as contract liabilities in the accompanying balance sheets.

Research and Development

The Company accounts for research and development costs in accordance with Accounting Standards Codification (ASC) subtopic 730-10, Research and Development. Accordingly, research and development costs are expensed as incurred. Research and development costs consist of costs related to labor, materials and supplies, as well as fees paid to consultants, external research fees. Research and development costs incurred were 4,836,008 and 4,723,378 for the years ended December 31, 2025 and 2024, respectively.

At December 31, 2025 and December 31, 2024, the Company had state tax credit receivables of $103,601 and $65,676, respectively for pending refunds related to the selling of research and development tax credits back to the State of Connecticut. At December 31, 2025 and December 31, 2024, the Company had recorded $27,269 and $27,666, respectively, for pending refunds related to Canadian Scientific Research and Experimental Development (SRED) credits. At December 31, 2025 and December 31, 2024, the Company had recorded $9,513 and $8,321, respectively, related to refunds of Canadian Goods and Services Tax (GST) and Quebec Sales Tax (QST). Receipts of refunds are recorded in research and development on the statements of operations.

Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with ASC 718, Compensation-Stock Compensation (ASC 718). ASC 718 requires employee stock options and rights to purchase shares under stock participation plans to be accounted for at fair value. ASC 718 requires that compensation costs related to share-based payment transactions be recognized as operating expenses in the financial statements. Under this method, compensation costs for all awards granted or modified are measured at estimated fair value at date of grant and are included as compensation expense over the vesting period during which an employee provides service in exchange for the award. For awards with a performance condition that affects vesting, the Company recognizes compensation expense when it is determined probable that the performance condition will be achieved. The Company recognized the effect of forfeitures when the forfeitures occur.

F-13

The accompanying notes are an integral part of these financial statements.

AZITRA, INC.

NOTES TO FINANCIAL STATEMENTS

The Company uses a Black-Scholes option pricing model to determine fair value of its stock options. The Black-Scholes model includes various assumptions, including the value of the underlying common stock, the expected life of stock options, the expected volatility and the expected risk-free interest rate. These assumptions reflect the Company’s best estimates, but they involve inherent uncertainties based on market conditions generally outside of the control of the Company. As a result, if other assumptions had been used, stock-based compensation cost could have been materially impacted. Furthermore, if the Company uses different assumptions for future grants, stock-based compensation cost could be materially impacted in future periods.

The Company accounts for equity instruments issued to non-employees in accordance with the provisions of ASC 718 as updated by Accounting Standards Update (ASU) No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting, which expands the scope of ASC 718 to include share-based payment transactions to non-employees.

The following assumptions are used in valuing options issued using the Black-Scholes option pricing model:

Expected Volatility. The expected volatility of the Company’s shares is estimated based on the average volatility of peer companies.

Expected Term. The expected term of options is estimated using the simplified method which is based on the vesting period and contractual term for each grant, or for each vesting-tranche for awards with graded vesting.

Underlying Common Stock Value. The underlying common stock value of the Company’s shares is estimated by a third-party valuation expert up until the Company’s IPO, at which time the Company utilized its trading price on the NYSE American on the date of grant.

Risk-free Interest Rate. The Company bases the risk-free interest rate on the implied yield available on a U.S. Treasury note with terms equal to the expected term of the underlying grant.

Dividend Yield. The Black-Scholes valuation model calls for a single expected dividend yield as an input. The Company has not paid dividends on Common stock in the past nor does it expect to pay dividends on Common stock in the near future. As such, the Company uses a dividend yield percentage of zero.

Insurance Premium Financing Liability

In August 2025, the Company entered into an insurance premium financing agreement for $328,400, with a term of nine months and an annual interest rate of 7.82%. The Company made a down payment of 10% and is required to make monthly principal and interest payments of $33,919 over the term of the agreement, which will mature in June 2026. The insurance premium financing liability was approximately $198,983 and $— as of December 31, 2025 and December 31, 2024, respectively. Related prepaid insurance at December 31, 2025 and December 31, 2024 of $218,933 and $—, respectively, is included in prepaid expenses and other current assets on the accompanying condensed balance sheets.

Income Taxes

The Company uses the liability method of accounting for income taxes, as set forth in ASC 740, Accounting for Income Taxes. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequence of temporary differences between the carrying amounts and the tax basis of assets and liabilities and net operating loss carry forwards, all calculated using presently enacted tax rates.

Management has evaluated the effect of ASC guidance related to uncertain income tax positions and concluded that the Company has no significant financial statement exposure to uncertain income tax positions at December 31, 2025 and 2024. The Company’s income tax returns have not been examined by tax authorities through December 31, 2024.

Certain Risks and Uncertainties

Fair Value Measurements

The Company carries certain liabilities at fair value on a recurring basis. A fair value hierarchy that consists of three levels is used to prioritize the inputs to fair value valuation techniques:

F-14

The accompanying notes are an integral part of these financial statements.

AZITRA, INC.

NOTES TO FINANCIAL STATEMENTS

•Level 1 – Inputs are based upon observable or quoted prices for identical instruments traded in active markets.

•Level 2 – Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•Level 3 – Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques.

In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value.

Financial Instruments

The Company’s financial instruments are primarily comprised of accounts receivable, accounts payable, accrued liabilities, and long-term debt. For accounts receivable, accounts payable and accrued liabilities, the carrying amount approximates fair value due to the short-term maturities of such instruments. The estimated fair value of the Company’s long-term debt approximates carrying value.

Recent Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, Income Statement: Reporting Comprehensive Income— Expense Disaggregation Disclosures, which requires more detailed information about specified categories of expenses (purchases of inventory, employee compensation, depreciation, amortization, and depletion) included in certain expense captions presented on the face of the income statement, as well as disclosures about selling expenses. This ASU is effective for fiscal years beginning after December 15, 2026 and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (2) retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating this guidance to determine the impact it may have on its condensed financial statements disclosures.

In July 2025, the FASB issued ASU 2025-05, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets”, which introduces a practical expedient that allows entities to assume that current conditions at the balance sheet date remain unchanged for the remaining life of the asset when developing reasonable and supportable forecasts. This eliminates the need to incorporate macroeconomic forecasts for short term receivables. The ASU is effective for fiscal years beginning after December 15, 2025 (Fiscal 2027 for the Company), but early adoption is permitted. The Company does not expect the adoption of ASU 2025-05 to have a significant impact on its financial statements for the annual period ending December 31, 2026.

Management does not believe that any other recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, the Company will adopt those that are applicable under the circumstances.

F-15

The accompanying notes are an integral part of these financial statements.

AZITRA, INC.

NOTES TO FINANCIAL STATEMENTS

3. Property and Equipment

Property and equipment consisted of the following at:

Less accumulated depreciation & amortization (633,045) (515,003)

Depreciation and amortization expense was $124,357 and $120,026 for the years ended December 31, 2025 and 2024, respectively.

Fixed assets are reviewed for impairment each reporting period. For the years ended December 31, 2025 and 2024 there was 2,069 and 4,859 of losses on disposal of property and equipment recorded, respectively.

4. Intangible Assets

Intangible assets consisted of the following at:

December 31, 2025:

December 31, 2024:

During the years ended December 31, 2025 and 2024, amortization expense related to intangible assets was $13,712 and $11,163, respectively.

F-16

The accompanying notes are an integral part of these financial statements.

AZITRA, INC.

NOTES TO FINANCIAL STATEMENTS

5. Accrued Expenses

Accrued expenses consisted of the following at:

6. Stockholders’ Equity

On May 17, 2023, the Company effected a 7.1-for-1 Forward Stock Split of its issued and outstanding shares of common stock and a proportional adjustment to the existing conversion ratios for each series of the Company’s preferred stock. The par value of the common stock was adjusted as a result of the Forward Stock Split from $0.01 to $0.0001 and the authorized shares were increased to 100,000,000 shares of common stock in connection with the Forward Stock Split. In lieu of any fractional shares issued as a result of the split the Company paid a cash amount to the holder of such fractional share. The accompanying financial statements and notes to the financial statements give retroactive effect to the Forward Stock Split for all periods presented. Shares of common stock underlying outstanding stock-based awards and other equity instruments were proportionately increased and the respective per share value and exercise prices, if applicable, were proportionately decreased in accordance with the terms of the agreements governing such securities.

On February 16, 2024, the Company completed the February 2024 Offering, consisting of an aggregate of 83,404 shares of its common stock at a public offering price of $59.94 per share. The gross proceeds from the February 2024 Offering, before deducting the placement agent's fees and other offering expenses, were approximately $5 million.

As consideration for ThinkEquity LLC serving as the placement agent for the February 2024 Offering (the "February 2024 Placement Agent"), the Company paid the February 2024 Placement Agent a cash fee of 7.5% of the aggregate gross proceeds of the February 2024 Offering and reimbursed the February 2024 Placement Agent for certain expenses, legal fees for a total of $537,559, and issued February 2024 Placement Agent Warrants to designees to the February 2024 Placement Agent.

On July 1, 2024, the Company effected a 30-for-1 Reverse Stock Split of its issued and outstanding shares of common stock and began trading on a split-adjusted basis the same day. There was no change to the par value of the common stock. In lieu of any fractional shares issued as a result of the split the Company paid a cash amount to the holder of such fractional share. The accompanying financial statements and notes to the financial statements give retroactive effect to the Reverse Stock Split for all periods presented unless otherwise noted. Shares of common stock underlying outstanding stock-based awards and other equity instruments were proportionately decreased and the respective per share value and exercise prices, if applicable, were proportionately increased in accordance with the terms of the agreements governing such securities.

On July 25, 2024, the Company completed the July 2024 Offering, consisting of an aggregate of 1,000,750 shares of its common stock and Class A warrants to purchase 2,001,502 shares of common stock, at a combined public offering price of $9.99. The Class A warrant had an initial exercise price of $9.99 per share, was exercisable immediately upon issuance, and will expire on the fifth anniversary of the original issuance date. However, if on the date that was 30 calendar days immediately following the date of issuance of the Class A Warrants, or August 24, 2024 (the “Reset Date”), the Reset Price, as defined below, was less than the exercise price at such time, the exercise price would be decreased to the Reset Price. “Reset Price” is defined as 100% of the trailing five-day VWAP immediately preceding the Reset Date, provided, that in no event would the Reset Price be less than $2.13 (subject to adjustment for reverse and forward stock splits, recapitalizations and similar transactions), which represented 20% of the most recent closing price for the Common Stock at the time of execution of the placement agent agreement with respect to the offering. The Reset Price of the Class A Warrants as calculated on the Reset Date was $4.69. The number of shares of Common Stock issuable upon exercise of the Class A Warrants has not been proportionately adjusted due to the reset of the exercise price.

In consideration for Maxim Group LLC serving as the placement agent of the July 2024 Offering (the “July 2024 Placement Agent”), the Company paid the July 2024 Placement Agent a cash fee equal to 7% of the aggregate gross proceeds of the July 2024 Offering,

F-17

The accompanying notes are an integral part of these financial statements.

AZITRA, INC.

NOTES TO FINANCIAL STATEMENTS

reimbursed the July 2024 Placement Agent for certain expenses and legal fees for a total of $809,825, and issued Placement Agent Warrants.

The gross proceeds from the July 2024 Offering, before deducting the July 2024 Placement Agent’s fees and other offering expenses, were approximately $10.0 million.

On January 14, 2025, the Company completed the January 2025 Offering in which it issued and sold 729,381 shares of its common stock at a price of $2.00 per share. The net proceeds received by the Company from the January 2025 Offering were $1.2 million, after deducting underwriting discounts, commissions and other offering expenses. The shares were offered by the Company pursuant to a shelf registration statement on Form S-3 filed with the SEC on July 1, 2024, and a final prospectus supplement dated January 15, 2025.

In consideration for Maxim Group LLC serving as the placement agent of the January 2025 Offering (the "January 2025 Placement Agent"), the Company paid the January 2025 Placement Agent a cash fee equal to 7.0% of the aggregate gross proceeds raised in the January 2025 Offering and the reimbursed the January 2025 Placement Agent for certain expenses and legal fees of $60,000. The Company also issued warrants to designees of the January 2025 Placement Agent (the "Placement Agent Warrants").

On February 5, 2025, the Company completed the February 2025 Offering in which it issued 374,696 shares of its common stock at a public offering price of $1.85 per share and warrants to purchase up to 337,232 shares of common stock. The net proceeds received by the Company from the February 2025 Offering were $561,000 after deducting placement agent's fees and other offering expenses. The shares were offered by the Company pursuant to a shelf registration statement on Form S-3 filed with the SEC on July 1, 2024, and a final prospectus supplement dated February 6, 2025.

In consideration for Maxim Group LLC serving as the placement agent of the February 2025 Offering (the "February 2025 Placement Agent"), the Company paid the February 2025 Placement Agent a cash fee equal to 4.0% of the aggregate gross proceeds raised in the February 2025 Offering, reimbursed the February 2025 Placement Agent for certain expenses and legal fees of $35,000, and issued Placement Agent Warrants.

On April 24, 2025, the Company entered into an ELOC with Alumni Capital, whereby the Company has the right, but not the obligation, to sell to Alumni Capital, and Alumni Capital is obligated to purchase, up to an aggregate of $20 million of shares of the Company’s common stock in a series of purchases. The term of the ELOC is through December 31, 2026, or the date on which Alumni Capital shall have purchased the shares pursuant to the ELOC for an aggregate purchase price of $20 million. During the term, the Company may at its election cause Alumni Capital to make a series of purchases of shares, each up to $750,000, or up to $4 million dollars upon consent of Alumni Capital. The closing of each purchase pursuant to the ELOC will be no later than five business days after the Company provides a notice to Alumni Capital. The purchase price of the shares that the Company elects to sell to Alumni Capital pursuant to the ELOC will be equal to the lowest daily volume weighted average price of the Common Stock during the period commencing on the date that the Company delivers a notice requiring the purchase of shares by Alumni Capital and ending on the earlier to occur of (i) five (5) business days immediately following such date and (ii) the date on which Alumni Capital notifies the Company that it is prepared to proceed with the relevant closing, multiplied by 90%.

On August 26, 2025, the Company entered into a Modification Agreement (the “Modification Agreement”) with Alumni Capital to amend certain terms of the Purchase Agreement, dated April 24, 2025, between the Company and Alumni Capital (the “Purchase Agreement”). Pursuant to the Modification Agreement, the Company may at its election, cause Alumni Capital to make a series of purchases of ELOC Shares either at (i) the lowest daily volume weighted average price of the Common Stock during the period commencing on the date that the Company delivers written notice (the “Purchase Notice”) and ending on the earlier of (a) five (5) business days immediately following the date of a Purchase Notice, and (b) the date on which Alumni Capital notifies the Company that it is prepared to proceed with the closing of the purchase, multiplied by 90% (“Purchase Notice Option 1”) or (ii) the lowest traded price of Common Stock during the period commencing on the date the Company delivers a Purchase Notice and ending on the earlier of (x) the same business day a Purchase Notice is delivered, and (y) the date on which Alumni Capital notifies the Company that it is prepared to proceed with the closing of the purchase, multiplied by 97% (“Purchase Notice Option 2”). Each Purchase Notice delivered by the Company must specify whether Purchase Notice Option 1 or Purchase Notice Option 2 is selected and the number of ELOC Shares to be purchased. All other terms and conditions of the Purchase Agreement remain in full force and effect. Refer to Note 7 regarding the terms of the warrants issued in conjunction with the shares.

Under the terms of the ELOC, the Company has issued 9,255,823 shares of common stock, of which 1,300,000 shares were issued subsequent to December 31, 2025 and issued 895,579 warrants, of which 100,000 warrants were issued subsequent to December 31,

F-18

The accompanying notes are an integral part of these financial statements.

AZITRA, INC.

NOTES TO FINANCIAL STATEMENTS

2025. As of the date of this filing, the gross proceeds received by the Company under the ELOC were approximately $6.2 million of which $0.2 million was received subsequent to December 31, 2025.

On November 24, 2025, the Company completed the PIPE Offering of 535,759 shares of common stock of the Company, Pre-Funded Warrants to purchase up to an aggregate of 4,151,741 shares of common at an exercise price of $0.0001 per Pre-Funded Warrant, and Common Warrants to purchase up to an aggregate of 4,687,500 shares of common stock at an exercise price of $0.32 per Common Warrant. The offering price was $0.32 per share of common stock or Pre-Funded Warrant and accompanying Common Warrant Price. The Pre-Funded Warrants are immediately exercisable and do not expire until exercised in full. The Common Warrants are exercisable upon shareholder approval and will expire on the five-year anniversary of shareholder approval.

As of February 26, 2026, all Pre-Funded Warrants have been exercised by Alumni Capital.

In consideration for Maxim Group LLC serving as the placement agent for the PIPE Offering (the "PIPE Placement Agent"), the Company paid a cash fee equal to 7.0% of the aggregate gross proceeds raised in the PIPE Offering, reimbursed the PIPE Placement Agent for certain expenses and legal fees of $50,000, and issued Placement Agent Warrants.

Common Stock

At December 31, 2025 and December 31, 2024, per the Company’s amended and restated Certificate of Incorporation, the Company was authorized to issue 200,000,000 and 100,000,000 shares of $0.0001 par value common stock.

Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders.

The Company currently has 8,223,233 shares of common stock reserved for future issuance for the potential exercise of stock options and warrants outstanding at December 31, 2025. This number is exclusive of the 4,151,741 prefunded warrants.

Except as otherwise indicated, all share and share price amounts in this report gives effect to a forward stock split effected on May 17, 2023 at a ratio of 7.1-for-1, a reverse stock split effected on July 1, 2024 at a ratio of 1-for-30, and a reverse stock split effected on August 21, 2025 at a ratio of 1-for 6.66.

Preferred Stock

At December 31, 2025 and December 31, 2024, per the Company’s amended and restated Certificate of Incorporation, the Company has authorized 10,000,000 shares of $0.0001 par value preferred stock.

Upon the close of the Company’s IPO in June 2023, all of the then outstanding preferred stock converted to common stock, resulting in the issuance of shares of common stock in exchange for outstanding Series A (7,298 shares), Series A-1 (14,839 shares), and Series B Preferred Stock (16,439 shares), respectively. There was no gain or loss upon conversion.

7. Warrants

The Company issued warrants to purchase 238 shares of common stock in 2018 in conjunction with convertible debt financing that have a redemption provision providing the holder the right to have the Company redeem all or any portion of the warrant (or shares it has converted into) at a purchase price equal to the fair market value of the shares as determined by the board of directors or an independent appraiser. As a result of this redemption provision, the warrants have been classified as a liability in the financial statements based on ASC 480. These warrants have an exercise price of $95.90 per share and a term of 10 years. The warrants are marked to market each reporting period. The fair value was $— and $381 at December 31, 2025 and December 31, 2024, respectively.

The Company issued 300 warrants to its underwriters as part of our initial public offering in fiscal 2023. In fiscal 2024, the Company issued an additional 3,336 warrants in February, and 40,030 warrants in July to its underwriters as part of our February, and July Offerings. The underwriter warrants have a term of 5 years.

In connection with the February 2024 Offering, the Company also issued warrants to designees to the February 2024 Placement Agent exercisable for an aggregate of 3,336 shares of Common Stock at an exercise price of $75.92 per share (125% of the $60.74 public offering price) and which expire on February 16, 2029. The warrants were evaluated in accordance with ASC 718and recorded within stockholders' equity.

The Company issued 2,001,502 Class A Warrants to investors who participated in the Company's July 2024 Offering. The Class A Warrants had an initial exercise price of $9.99 per share of Common Stock, however on August 24, 2024 the exercise price was reset to $4.69. See Note 6. The number of shares of Common Stock issuable upon exercise of the Class A Warrants were not proportionately adjusted in connection with the reset of the exercise price.

F-19

The accompanying notes are an integral part of these financial statements.

AZITRA, INC.

NOTES TO FINANCIAL STATEMENTS

The Class A Warrants are exercisable upon issuance and expire five years from the date of issuance. The Class A Warrants contain ownership limitations pursuant to which a holder does not have the right to exercise any portion of their warrants if it would result in the holder (together with its affiliates) beneficially owning more than 4.99% (or, at the election of the holder, 9.99%) of the Company’s outstanding Common Stock. The Class A Warrants are issued pursuant to a Warrant Agent Agreement dated July 25, 2024 (“Warrant Agent Agreement”) between the Company and VStock Transfer LLC, as warrant agent. In August 2024 150 warrants were exercised for proceeds of $704.

In connection with the July 2024 Offering, the Company evaluated the Class A Warrants and determined they met the criteria for liability classification as they met the criteria in ASC 815 - Derivatives and Hedging due to the reset provision. The Class A Warrants had an initial fair value of $12.1 million. The gross proceeds of $10.0 million from the July 2024 follow-on public offering was allocated to the Class A Warrants resulting in a loss on issuance of common stock of approximately $2.1 million recorded in Other income (expenses). Upon the reset of the Class A Warrant exercise price, the Class A Warrants no longer met the criteria for liability classification pursuant to ASC 815; at which time the Company recorded a gain in Other income (expenses) - Change in fair value of Class A warrants of $4.0 million, and reclassified $1.9 million to equity representing the difference between the change in the fair value, and the loss upon issuance of our common stock.

The Class A Warrants were valued utilizing a probability weighted scenario method with a Monte Carlo simulation model and Black-Scholes Model. The significant assumptions in the Monte Carlo simulation model include a stay public assumption of 90%, and a fundamental transaction assumption of 10%. The significant assumptions utilized in estimating the fair value of the Class A Warrants at issuance include (i) a per share price of common stock range of $1.14 - $1.40; (ii) a dividend yield of 0%; (iii) a risk-free rate range of 4.13% - 4.14%; (iv) expected volatility of 119%; (v) projected stock price and volume weighted average price as of the Reset Date of $1.14; (vi) a strike price range of $1.40 - $1.50; and (vii) expected term of 4.92 years.

In connection with the July 2024 Offering, the Company also issued warrants to designees of the July 2024 Placement Agent exercisable for an aggregate of 40,030 shares of common stock. The warrants have substantially the same terms as the Class A Warrants, except that the July 2024 Placement Agent warrants have an exercise price equal to $12.49 per share (125% of the $9.99 public offering price), have an initial exercise date of January 23, 2025 and expire on July 23, 2029. The 2024 Placement Agent warrants were evaluated in accordance with ASC 718and recorded within stockholders' equity.

In connection with the January 2025 Offering, as consideration for Maxim Group LLC serving as the placement agent of the January 2025 Offering, the Company also issued warrants to designees of the January 2025 Placement Agent exercisable for an aggregate of 29,175 shares of common stock, which represent 4.0% of the aggregate number of shares of common stock sold in the offering, at an exercise price per share equal to 125% of the public offering price of $2.50. The warrants are exercisable six months from the date of issuance and expire five years from the commencement of the sales in this offering. The warrants may be exercisable via cashless exercise in certain circumstances. The warrants were evaluated in accordance with ASC 718and recorded within stockholders' equity.

In connection with the February 2025 Offering, the Company issued warrants to purchase up to 337,232 shares of common stock at an exercise price of $3.60. The warrants are exercisable on the six-month and one day anniversary of their issuance, and their exercise price was calculated as the greater of the (1) book value of the common stock or (ii) market value of the common stock as determined by the NYSE American Rules. The warrants were evaluated in accordance with ASC 718 and recorded within stockholders' equity.

In connection with shares issued to Alumni Capital under the terms of the ELOC, Alumni Capital will receive warrants to purchase such number of shares of the Company’s common stock equal to 10% of the number of shares purchased in the related purchase. The Exercise Price shall equal 130% of the price per share paid upon closing. The exercise of the warrant will be subject to stockholder approval and expire five years after issuance. The warrants may be exercised via cashless exercise if there is no effective registration statement, or current prospectus available for, the resale of the warrant shares. The Company has issued 895,579 warrants, of which 100,000 warrants were issued subsequent to December 31, 2025.

In connection with the PIPE Offering, the Company issued Pre-Funded Warrants to purchase up to 4,151,741 shares of common stock at an exercise price of $0.0001, and Common Warrants to purchase up to an aggregate of 4,687,500 shares of common stock at an exercise price of $0.32 per Common Warrant. The Pre-Funded Warrants are immediately exercisable and do not expire until exercised in full. The Common Warrants are exercisable upon shareholder approval and will expire on the five-year anniversary of shareholder approval. As of February 26, 2026, all Pre-Funded Warrants have been exercised by Alumni Capital.

In connection with the PIPE Offering, as consideration for Maxim Group LLC serving as the placement agent, the Company also issued warrants to designees of the PIPE Placement Agent exercisable for an aggregate of 187,500 shares of common stock, which represent 4.0% of the aggregate number of shares of common stock sold in the offering, at an exercise price per share equal to 125% of the public offering price of 0.32. The warrants are exercisable six months from the date of issuance and expire five years from the commencement of the sales in this offering. The warrants may be exercisable via cashless exercise in certain circumstances. The warrants were evaluated in accordance with ASC 718and recorded within stockholders' equity.

F-20

The accompanying notes are an integral part of these financial statements.

AZITRA, INC.

NOTES TO FINANCIAL STATEMENTS

The following table summarizes information about warrants outstanding at December 31, 2025:

Warrants Outstanding Warrant Exercisable

F-21

The accompanying notes are an integral part of these financial statements.

AZITRA, INC.

NOTES TO FINANCIAL STATEMENTS

8. Stock Options

In March 2023, the Company’s Board of Directors and stockholders approved the 2023 Stock Incentive Plan (“2023 Plan”). The 2023 Plan allows the Compensation Committee to grant up to 181,842 shares of Common Stock in the form of incentive and non-statutory stock options, restricted stock awards, restricted stock units, and other stock-based awards to employees, directors, and non-employees. As of December 31, 2025, options to purchase 134,200 shares of common stock had been granted and were outstanding under the 2023 Plan and 47,558 shares of common stock were available for grant under the plan. On October 3, 2024, the Company’s Board of Directors approved amendments to the 2023 Plan that, subject to stockholder approval, would (i) increase the number of shares of Common Stock that may be issued under the 2023 Plan by 171,832 shares and (ii) adopt an evergreen provision to the 2023 Plan providing for an automatic 5% annual increase in the shares of Common Stock available for issuance under the 2023 Plan over the next 10 years.Both amendments were approved by the Company’s stockholders at the Company’s annual stockholder meeting held on November 20, 2024. On January 1, 2026, the shares of Common Stock that may be issued under the 2023 Plan increased by 537,034 shares in accordance with the evergreen provision.

During 2016, the Company established the Azitra Inc. 2016 Stock Incentive Plan ("2016 Plan") which provides for the grant up to 7,460 shares of Common Stock in the form of stock options and restricted shares to the Company’s employees, officers, directors, advisors and consultants. As of December 31, 2025, options to purchase 6,539 shares of common stock had been granted and 1,436 shares of common stock were available for grant under the 2016 Plan.

At December 31, 2025, there was $49,504 of unamortized compensation expense that will be amortized over the remaining vesting period. The Company determined the options qualified as plain vanilla under the provisions of SAB 107 and the simplified method was used to estimate the expected option life.

To determine the estimated fair value of the options granted during 2025, the Company used the Black-Scholes option pricing model with the following assumptions: Underlying common stock value of $.30; Expected term of 6.5 to 10 years; Expected Volatility of 86.7%; to 89.1% Risk Free Interest Rate of 3.86% - 4.12%; and Dividend Yield of —%.

Stock-based compensation expense recognized for options was as follows:

For the Years Ended December 31,

F-22

The accompanying notes are an integral part of these financial statements.

AZITRA, INC.

NOTES TO FINANCIAL STATEMENTS

The following table summarizes information about options outstanding and exercisable at December 31, 2025:

Options Outstanding Options Exercisable

Total stock option activity for the year ended December 31, 2025, is summarized as follows:

Exercised — —

Forfeited (399) —

F-23

The accompanying notes are an integral part of these financial statements.

AZITRA, INC.

NOTES TO FINANCIAL STATEMENTS

9. Fair Value Measurements

The following tables summarize the fair values and levels within the fair value hierarchy in which the fair value measurements fall for assets and liabilities measured on a recurring basis as of:

December 31, 2025

Description Level 1 Level 2 Level 3 Total

Liabilities

Common stock warrants $ — $ — $ — $ —

Total $ — $ — $ — $ —

December 31, 2024

Description Level 1 Level 2 Level 3 Total

Liabilities

Common stock warrants $ — $ — $ 381 $ 381

The following table presents the changes in Level 3 instruments measured on a recurring basis for the period ended December 31, 2025:

Changes in fair value of warrants (35,072)

Changes in fair value of warrants (381)

Balance at December 31, 2025 $ —

At December 31, 2025 and December 31, 2024, the Company estimated the fair value of the warrants using the Black-Scholes option pricing model with the following assumptions:

Underlying common stock value $ 0.27 $ 0.43

Expected term (years) 2.29 3.29

Expected volatility 92 % 172 %

Risk free interest rate 3 % 4 %

Dividend yield — % — %

Fluctuations in the fair value of the Company’s common stock, and the expected volatility are the primary drivers for the change in the common stock warrant liability valuation during each year. As the fair value of the common stock, and expected volatility increases the value to the holder of the instrument generally increases.

10. Net Loss Per Share

The following potential common stock equivalents, presented based on amounts outstanding at each period end, were excluded from the calculation of diluted net loss per share for the periods indicated because including them would have had an anti-dilutive effect. Warrants outstanding are exclusive of prefunded warrants as they are included in the company calculation of both basic and diluted earnings per share.

F-24

The accompanying notes are an integral part of these financial statements.

AZITRA, INC.

NOTES TO FINANCIAL STATEMENTS

December 31,

Options to purchase shares of common stock 139,922 6,247

F-25

The accompanying notes are an integral part of these financial statements.

AZITRA, INC.

NOTES TO FINANCIAL STATEMENTS

11. Income Taxes

The provision for income taxes for the years ending December 31, 2025 and December 31, 2024 consists of:

December 31,

Current

Federal $ — $ —

State — —

Deferred

Federal — —

Foreign — —

State — —

Total deferred — —

Total provision for income taxes $ 8,319 $ 9,031

The Company has adopted ASU 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” on a prospective basis for the year ended December 31, 2025. A reconciliation of income tax computed using the U.S. federal statutory tax rate compared to that reflected in operations, as required by ASU 2023-09, for the years ending December 31, 2025 and December 31, 2024 consists of:

Amount Percent Amount Percent

Warrant fair value adjustment — — % (847,155) 9.51 %

Loss on Issuance of Common Stock — — % 447,888 (5.03) %

State taxes, net of federal benefit — — % (704,887) 7.91 %

Foreign Tax Effects 8,319 (0.06) % — — %

Nontaxable/Nondeductible Items 48,726 (0.44) % — — %

F-26

The accompanying notes are an integral part of these financial statements.

AZITRA, INC.

NOTES TO FINANCIAL STATEMENTS

Deferred income taxes are provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and those for income tax reporting purposes. Deferred income tax assets / (liabilities) as of December 31, 2025 and 2024 are as follows:

December 31,

Deferred tax assets:

Deferred tax liabilities:

Depreciation and amortization — —

Total deferred tax liabilities — —

Net deferred tax assets $ — $ —

The Company has federal net operating loss carryforwards of approximately $52,575,000 and $38,488,000 for the tax years ending December 31, 2025 and 2024, respectively, of which $1,285,000 will expire in tax years 2036 through 2037 and approximately $51,290,000 which does not expire. The Company has state net operating loss carryforwards of approximately $52,526,000 and $38,441,000 for the tax years ending December 31, 2025 and 2024, respectively, which will expire in tax years 2036 through 2045.

The Company has federal research tax credits of approximately $2,151,000 and $1,884,000 for the tax years ending December 31, 2025 and 2024, respectively, which expire in tax years 2039 through 2043. The Company has state research tax credits of approximately $706,000 and $582,000 for the tax years ending December 31, 2025 and 2024, respectively, of which $569,000 will expire in tax year 2036 through 2040 and the remainder can be carried forward indefinitely. The Company has Canadian research tax credits of approximately $352,000 and $288,000 for the tax years ending December 31, 2025 and 2024, respectively, which expire in tax years 2039 through 2045.

The U.S. Internal Revenue Code Section 382 imposes an annual limit on the ability of a corporation that undergoes a greater than 50% ownership change to use its net operating loss carry forwards to reduce its tax liability. If in the future the Company undergoes an ownership change exceeding the 50% limitation threshold imposed by Section 382, the Company’s net operating loss carryforwards may be significantly limited as to the amount of use in a particular year. In addition, all or a portion of the Company’s net operating loss carryforwards incurred before 2018, may expire unutilized.

The realization of deferred tax assets is dependent upon the Company’s ability to generate future taxable income during the periods in which the temporary differences become deductible. Based on the Company’s recent earnings history and projected future U.S. earnings, management believes that it is more likely than not that its federal and state deferred tax assets will not be fully realized in the foreseeable future. As a result of this assessment, management believes that a full valuation allowance against its net federal and state deferred tax assets is required.

The Company applies the provisions of ASC 740-10 to account for uncertain tax positions. ASC 740-10 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740-10, the Company may recognize the tax benefit from an uncertain tax position

F-27

The accompanying notes are an integral part of these financial statements.

AZITRA, INC.

NOTES TO FINANCIAL STATEMENTS

only if it is more likely that not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The Company has determined that it has no significant uncertain tax positions requiring recognition and measurement under ASC 740-10.

The Company is subject to U.S. federal income tax, Connecticut state income tax and Canada branch tax. The Company has not been audited by the IRS, state, or foreign tax authorities in connection with income taxes. The Company’s tax years remain open to examination for all federal and state tax matters until its net operating loss carryforwards are utilized and the applicable statute of limitations have expired. The Company’s tax years remain open to examination for all federal and state tax matters until its net operating loss carryforwards are utilized and the applicable statute of limitations have expired.

As a result of the Company adopting ASU 2023-09, the table below is presented to provide cash income taxes paid (net of refunds received) for the year ended December 31, 2025.

Federal Taxes $ —

State Taxes —

Foreign Taxes:

The Company will recognize interest and penalties related to unrecognized tax benefits, if applicable, as a component of income tax expense.

F-28

The accompanying notes are an integral part of these financial statements.

AZITRA, INC.

NOTES TO FINANCIAL STATEMENTS

12. Commitments and Contingencies

Legal

The Company is subject to legal proceedings or claims which arise in the ordinary course of its business. Although occasional adverse decisions or settlements may occur, the Company believes that the final disposition of such matters should not have a material adverse effect on its financial position, results of operations or liquidity.

License Agreement

Effective January 26, 2022, the Company entered into an Exclusive License Agreement (the License Agreement) with an unrelated third party. Under the License Agreement, the Company is granted an exclusive license for certain patents and a non-exclusive license for certain know-how. The License Agreement continues until the later of the expiration of the last to expire licensed patent or ten years after the first commercial sale of the first licensed therapeutic or non-therapeutic product. The Company may terminate the License Agreement at any time by providing at least 30 days written notice to the third party. The License Agreement is also terminated upon breach of a material obligation under the agreement or bankruptcy. Upon any termination of the License Agreement, neither party is relieved of obligations incurred prior to the termination.

During the years ended December 31, 2025 and 2024, the Company did not capitalize any payments made under this license.

Operating Leases

The Company leases office and lab space in Branford, CT, Groton, CT, and Montreal, Quebec. The Company’s leases expire at various dates through May 31, 2027. Most leases are for a fixed term and for a fixed amount.

During 2019, the Company entered into a new lease agreement for office and laboratory space in Montreal, Quebec. The Montreal lease required monthly payments of $6,906, CAD which increases approximately 4% in each of the following years. The Montreal lease was increased to $8,130 CAD in 2021 upon leasing additional space. The Montreal lease was initially for a one-year term, renewable annually. The Montreal lease also requires the Company to pay additional common area maintenance.

During 2020, the Company entered into a new lease agreement for the Company’s primary office and laboratory space in Branford, CT. The Branford lease requires monthly payments of $13,033 for the first year of the lease, which increases approximately 2% in each of the following years. The Branford lease also requires the Company to pay a pro-rata share of common area maintenance.

During May 2021, the Company entered into a new lease for office and laboratory space in Groton, CT. The Groton lease required monthly payments of $4,234, which was increased to $6,824 in September 2021 upon leasing additional space. In August 2024, the Company reassessed its needs and released certain lab space resulting in a decrease to the monthly payment to $5,216. The Groton lease is initially for a one-year term, renewable annually for up to three additional years.

Future minimum payments under non-cancelable operating leases with initial or remaining terms in excess of one year during each of the next five years follow:

Total future undiscounted lease payments 428,678

Present value of minimum lease payments $ 411,966

Rent expense for all operating leases was $323,182 and $338,865 for the for the years ended December 31, 2025 and 2024, respectively. The weighted average lease term for all operating leases is 1.6 years. The weighted average discount rate for all operating leases is 4.84%.

F-29

The accompanying notes are an integral part of these financial statements.

AZITRA, INC.

NOTES TO FINANCIAL STATEMENTS

Finance Leases

During 2023, the Company entered into an agreement with Hewlett Packard to lease equipment. The lease requires monthly payments of $1,478, including tax. The lease is for a 3 year term with option of purchase or extension at term end. The remaining lease term is 0.6 years and the discount rate is 9.60%.

The following is a schedule showing the future minimum lease payments under finance leases by years and the present value of the minimum payments as of December 31, 2025.

Total future undiscounted lease payments 10,354

Less interest (243)

Present value of minimum lease payments $ 10,111

Lease expense for the finance lease was $15,480 and $15,480 for the for the years ended December 31, 2025 and 2024, respectively. Interest expense for the finance lease was $1,676 and $3,129 for the for the years ended December 31, 2025 and 2024, respectively.

13. Retirement Plan

Effective January 1, 2019, the Company sponsors a 401(k) plan that covers substantially all employees. In order to be eligible to participate, an employee must complete two consecutive months of service and work a minimum of two hundred fifty hours or work 1,000 hours in their first year of service. Employees may make pre-tax deferrals upon meeting the Plan eligibility requirements. Effective January 1, 2020, the Plan was transitioned to a safe harbor plan in which highly compensated employees are not eligible for matching contributions and non-highly compensated employees earn 100% match on first 3% contributed and 50% on the next 2% contributed. Total employer matching contributions were $15,770 and $22,264 for the years ended December 31, 2025 and 2024, respectively.

14. Concentration of Credit Risk

Financial instruments that potentially subject the Company to credit risk consist principally of cash.

The cash balance identified in the balance sheet is held in an account with a financial institution and insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. At times, cash maintained on deposit may be in excess of FDIC limits.

15. Related Parties

There was no related party revenue for the years ended December 31, 2025 and 2024, respectively. There were no accounts receivable due from the related party at December 31, 2025 and December 31, 2024, respectively.

In July 2024, Bayer was no longer considered a related party as their holdings in the Company no longer exceeded 5% of the total outstanding common stock, and the amounts disclosed above are accordingly presented while they were considered a related party.

16. Segment Information

The Company operates and manages its business as a single reportable segment, which is to discover and develop novel therapeutics to create a new paradigm for treating skin diseases. The Chief Executive Officer, who is the Chief Operating Decision Maker ("CODM"), manages and evaluates the Company's performance on a total Company basis of net loss and assessing how to allocate resources based on the Company cash position as reported in the Company's balance sheet and statement of operations. The Company's significant expenses are consistent with the expense categories presented in the statement of operations.

As of December 31, 2025, all of the Company's fixed assets were maintained in the United States and Canada on an original costs basis of $893,238 and $288,397, respectively.

F-30

The accompanying notes are an integral part of these financial statements.

17. Subsequent Events

The Company has evaluated events subsequent to the balance sheet date through February 27, 2026, the date these financial statements are issued.

As noted in Note 6, Alumni Capital has exercised all of its outstanding prefunded warrants.

On January 1, 2026, the shares of Common Stock that may be issued under the 2023 Plan increased by 537,034 shares in accordance with the evergreen provision.

Subsequent to December 31, 2025, the Company issued an additional 1,300,000 common shares under the terms of the ELOC for an estimated gross proceeds of $168,400, and 100,000 warrants on our common shares.

F-31

The accompanying notes are an integral part of these financial statements.

AZITRA, INC.

NOTES TO FINANCIAL STATEMENTS

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Not applicable

Item 9A. Controls and Procedures

(a)Evaluation of Disclosure Controls and Procedures.

Our management, with the participation of our chief executive officer and chief financial officer evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) of the Exchange Act) as of December 31, 2025. In the course of that evaluation, we identified a material weakness as it relates to a lack of adequate segregation of accounting functions. We intend to increase staffing within our accounting infrastructure sufficient to facilitate proper segregation of accounting functions and to enable appropriate review of our internally prepared financial statements. Based upon the foregoing, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were not effective as of December 31, 2025.

(b)Changes in internal control over financial reporting.

There were no changes to our internal control over financial reporting, as defined in Rule 13a-15(f) under the Exchange Act that occurred during the year ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

(c)Management’s report on internal controls over financial reporting.

Our management is responsible for establishing and maintaining adequate internal controls over financial reporting, as defined under Rule 13a-15(f) under the Exchange Act. Our management has assessed the effectiveness of our internal controls over financial reporting as of December 31, 2025 based on the framework established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework) (“COSO”). Our internal control system was designed to provide reasonable assurance to our management and board of directors regarding the preparation and fair presentation of published financial statements. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2025, and based on that evaluation, management concluded that our internal control over financial reporting were not effective as of December 31, 2025 due to a material weakness relating to a lack of segregation of accounting functions.

Item 9B. Other Information

During the Company’s fiscal quarter ended December 31, 2025, no director or officer, as defined in Rule 1a-1(f), adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” each as defined in Item 408 of Regulation S-K

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

Executive Officers and Directors

The following table sets forth the names, ages and positions of our current executive officers and directors. All directors hold office until the next annual meeting of stockholders or until their successors have been elected and qualified. All current directors were elected at our annual meeting of stockholders on June 23, 2025.

Name Age Position

Francisco D. Salva 56 President, Chief Executive Officer and Director

Norman Staskey 56 Chief Financial Officer

Travis Whitfill 36 Chief Operating Officer and Director

Barbara Ryan 66 Independent Director

John Schroer 60 Independent Director

Information about our Executive Officers and Directors

Francisco D. Salva has served as our president and chief executive officer and a member of our Board since April 2021. Mr. Salva has over 15 years of experience in senior leadership roles in the biotechnology and pharmaceutical industries. Mr. Salva served as president and chief executive officer of Complexa, Inc., an inflammation and fibrosis focused biopharmaceutical company, from May 2018 to August 2020. From February 2011 to November 2016, Mr. Salva served as a co-founder and vice president of operations of Acerta Pharma B.V., Inc, a cancer and autoimmune focused biopharmaceutical company. Mr. Salva serves as a director of Vincerx Pharma, Inc. (Nasdaq: VINC). Prior to his operating roles, Mr. Salva served in various senior positions in the venture capital and investment banking industries focusing on healthcare, biotechnology and pharmaceuticals companies. Mr. Salva received a B.A. from Brown University and an MSc in economics and philosophy from the London School of Economics. We believe that Mr. Salva’s experience as a senior executive, venture capitalist and investment banker in the biotech and pharmaceutical industries qualifies him to serve on our Board.

Norman Staskey has served as our chief financial officer since October 2022. Since May 15, 2021, Mr. Staskey has also served as a senior director of Danforth Advisors, a national consulting firm providing financial, accounting and reporting services to the life science industry. From September 2014 to May 2021, Mr. Staskey was employed by EY (formally Ernst & Young), most recently as a managing director in EY’s Financial Accounting and Advisory services practice.

Travis Whitfill is a co-founder of Azitra and has served on our Board since inception. Dr. Whitfill has served in various roles at Azitra, including chief scientific officer from January 2014 to September 2019 and director of advanced technology since September 2019, and as chief operating officer since June 2023. Dr. Whitfill served as a partner at Bios Equity Partners, LP, a biotechnology-focused venture capital firm, from October 2015 to June 2023 and a senior analyst at Bios Research from September 2014 to June 2023. He has also served as an associate research scientist and assistant professor adjunct at Yale University from July 2016 to March 2022 and since March 2022, respectively, with appointments in the Departments of Pediatrics and Emergency Medicine. Dr. Whitfill has served on the board of directors of IN8Bio, Inc. (Nasdaq: INAB) since March 2018, 410 Medical from September 2017 to July 2019 and SIRPant Immunotherapeutics from September 2021 to June 2023. Dr. Whitfill has led numerous grant-funded projects, holds several patents and has co-authored over 60 publications. Dr. Whitfill received a B.S. from Dallas Baptist University, an MPH from Yale University and an MPhil from University College London. We believe that Mr. Whitfill’s strong background in entrepreneurship and in the biotech and healthcare industries qualifies him to serve on our Board.

Barbara Ryan has served as a member of our Board since June 2023. Ms. Ryan founded Barbara Ryan Advisors, a capital markets and communications firm, in 2012 following a more than 30-year career on Wall Street as a sell-side research analyst covering the U.S. pharmaceutical industry. Ms. Ryan has deep experience in equity and debt financings, M&A, valuation, SEC reporting, financial analysis and corporate strategy across a broad range of life sciences companies. Ms. Ryan worked on several of the industry’s largest M&A transactions, including Shire’s defense versus a hostile takeover attempt by Abbvie, Shire’s takeover of Baxalta, Allergan’s defense against Valeant and Perrigo’s defense versus Mylan. Ms. Ryan served as an executive team member and on the disclosure committee for Radius Health from January 2014 to December 2017. Previously, Ms. Ryan was a managing director at Deutsche Bank/Alex Brown and head of the company’s pharmaceutical research team for 19 years and began her research career covering the pharmaceutical industry at Bear Stearns in 1982. Ms. Ryan currently serves as a director on the board of MiNK Therapeutics, Inc. (Nasdaq: INKT), where she chairs the audit committee, INVO Bioscience, Inc, (Nasdaq: INVO), Invidior, PLC (LON:INDV) and The Red Door Community (formerly Gilda’s Club NYC), a non-profit organization. Ms. Ryan is the founder of Fabulous Pharma Females, a non-profit whose mission is to advance women in the biopharma industry, is a member of the editorial advisory board of Pharmaceutical Executive Magazine, a faculty member of the GLG Institute and a member of the Prix Galien

executive advisory board. We believe that Ms. Ryan is qualified to serve as a member of our Board because of her experience and knowledge of corporate finance, mergers and acquisitions, corporate governance, as well as other operational, financial and accounting matters gained as a past and present executive officer and/or director of other public and private companies.

John Schroer has served as a member of our Board since June 2023. Mr. Schroer has served as chief financial officer of Alumis, Inc., a publicly traded biotechnology company developing precision immunology therapies, since March 2022. Mr. Schroer was chief financial officer of Arsenal Biosciences, Inc., a privately held biotechnology company developing programmable cell therapy for solid tumors, from February 2021 to February 2022. Mr. Schroer was chief financial officer of Translate Bio, Inc., a biotechnology company developing mRNA therapeutics and vaccines acquired by Sanofi in September 2021 for $3.2 billion, from May 2018 to December 2020. Previously, Mr. Schroer was Sector Head – Global Health Care for Allianz Global Investors, an international asset management firm, from January 2014 to May 2018. Mr. Schroer received his B.S. and M.B.A from the University of Wisconsin – Madison. We believe that Mr. Schroer’s strong background holding leadership positions in the biotechnology industry and almost 30 years of investing in the life sciences sector qualifies him to serve on our Board.

Family Relationships

There are no family relationships among any of our executive officers or directors.

Corporate Governance

Audit Committee

Our audit committee consists of John Schroer, and Barbara Ryan, with Mr. Schroer serving as chairperson. Our Board has determined that each member meets the independence requirements of the Sarbanes-Oxley Act, Rule 10A-3 under the Exchange Act and the applicable listing standards of the NYSE American. In addition, our Board has determined that Mr. Schroer qualifies as an audit committee financial expert within the meaning of SEC regulations and meets the financial sophistication requirements of the NYSE American listing rules. Each member of our audit committee can read and understand fundamental financial statements in accordance with the SEC and NYSE American audit committee requirements. In arriving at this determination, the Board has examined each audit committee member’s scope of experience and the nature of their prior and/or current employment. Both our independent registered public accounting firm and management periodically meet with our Audit Committee.

Process for Stockholders to Send Communications to our Board of Directors

Because we have always maintained open channels of communication with our stockholders, we do not have a formal policy that provides a process for stockholders to send communications to our Board. However, if a stockholder would like to send a communication to our Board, please address the letter to the attention of our corporate secretary, Travis Whitfill, at 21 Business Park Drive, Suite 6, Branford, CT, 06405 and it will be distributed to each director.

Section 16(A) Beneficial Ownership Reporting Compliance

Rules adopted by the SEC under Section 16(a) of the Exchange Act require our officers and directors, and persons who own more than 10% of the issued and outstanding shares of our equity securities, to file reports of their ownership, and changes in ownership, of such securities with the SEC on Forms 3, 4 or 5, as appropriate. Such persons are required by the regulations of the SEC to furnish us with copies of all forms they file pursuant to Section 16(a).

Based solely upon a review of Forms 3, 4 and 5 and amendments thereto furnished to us during our most recent fiscal year, and any written representations provided to us, we believe that all of the officers, directors, and owners of more than 10% of the outstanding shares of our common stock complied with Section 16(a) of the Exchange Act for the year ended December 31, 2025.

Code of Ethics

AZTR US Equity

AZTR · 10-K · period ended 2025-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 7A. Quantitative and Qualitative Disclosures About Market Risk Disclosures

Item 8. Financial Statements and Supplementary Data

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9A. Controls and Procedures

Item 9B. Other Information

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Item 10. Directors, Executive Officers and Corporate Governance

AZTR US Equity☆

AZTR · 10-K · period ended 2025-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 7A. Quantitative and Qualitative Disclosures About Market Risk Disclosures

Item 8. Financial Statements and Supplementary Data

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9A. Controls and Procedures

Item 9B. Other Information

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Item 10. Directors, Executive Officers and Corporate Governance

AZTR US Equity