CELC US Equity☆

ITEM 7. Management’s Discussion and Analysis of Financial

Condition and Results of Operations

You should read the following discussion and analysis

of our financial condition and results of operations together in conjunction with our financial statements and the related notes included

elsewhere in this Annual Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual

Report, including information with respect to our plans and strategy for our business and expected financial results, includes forward-looking

statements that involve risks and uncertainties. You should review the “Risk Factors” discussed in Item 1A of Part I of this

Annual Report.

OVERVIEW

Celcuity is a

clinical-stage biotechnology company focused on the development of targeted therapies for the treatment of multiple solid tumor

indications. The Company’s lead therapeutic candidate is gedatolisib, a potent, well-tolerated, small molecule reversible

inhibitor, administered intravenously, that selectively targets all Class I isoforms of phosphatidylinositol-3-kinase

(“PI3K”) and the two mechanistic targets of rapamycin (“mTOR”) sub-complexes, mTORC1 and mTORC2. Its

mechanism of action and pharmacokinetic properties are differentiated from other currently approved and investigational therapies

that target PI3K or mTOR alone or together. A Phase 3 clinical trial, VIKTORIA-1, evaluating gedatolisib in combination with

fulvestrant with or without palbociclib in patients with HR+/HER2- advanced breast cancer is currently enrolling patients. Site

selection activities are completed and activation activities for a Phase 3 clinical trial, VIKTORIA-2, evaluating gedatolisib in

combination with a CDK4/6 inhibitor and fulvestrant as first-line treatment for patients with endocrine treatment resistant

HR+/HER2- advanced breast cancer has commenced, and the first patient is expected to be dosed in the second quarter of 2025. A Phase

1b/2 clinical trial, CELC-G-201, evaluating gedatolisib in combination with darolutamide in patients with mCRPC, is currently

underway.

In April 2021, we obtained exclusive global development

and commercialization rights to gedatolisib under a license agreement with Pfizer Inc. We believe gedatolisib’s unique mechanism

of action, differentiated chemical structure, favorable pharmacokinetic properties, and intravenous route of administration offer distinct

advantages over currently approved and investigational therapies that target PI3K, AKT, or mTOR alone or together.

Gedatolisib is a pan-class I isoform PI3K inhibitor with low

nanomolar potency for the p110α, p110β, p110γ, and p110δ isoforms and mTORC1 and mTORC2 complexes. Each PI3K isoform

and mTOR complex is known to preferentially affect different signal transduction events that involve tumor cell survival, depending upon

the aberrations associated with the linked pathway. When a therapy only inhibits a single Class I isoform (e.g., alpelisib, a PI3K-α

inhibitor) or only one mTOR kinase complex (e.g., everolimus, an mTORC1 inhibitor), numerous feedforward and feedback loops between the

PI3K isoforms and mTOR complexes cross-activate the uninhibited sub-units. This, in turn, induces compensatory resistance that reduces

the efficacy of isoform specific PI3K or single mTOR kinase complex inhibitors. Inhibiting all four PI3K isoforms and both mTOR complexes,

as gedatolisib does, thus prevents the confounding effect of isoform interaction that may occur with isoform-specific PI3K inhibitors

and the confounding interaction between PI3K isoforms and mTOR.

● Better tolerated by patients than oral PI3K and mTOR drugs.

Gedatolisib is administered intravenously on a four-week cycle

of three weeks-on, one week-off, in contrast to the orally administered pan-PI3K or dual PI3K/mTOR inhibitors that are no longer being

clinically developed. Oral pan-PI3K or PI3K/mTOR inhibitors have repeatably been found to induce significant side effects that were not

well tolerated by patients. This typically leads to a high proportion of patients requiring dose reductions or treatment discontinuation.

The challenging toxicity profile of these drug candidates ultimately played a significant role in the decisions to halt their development,

despite showing promising efficacy. By contrast, gedatolisib stabilizes at lower concentration levels in plasma compared to orally administered

PI3K inhibitors, resulting in less toxicity, while maintaining concentrations sufficient to inhibit PI3K/mTOR signaling.

Isoform-specific PI3K inhibitors administered orally were developed

to reduce toxicities in patients. While the range of toxicities associated with isoform-specific inhibitors is narrower than oral pan-PI3K

or PI3K/mTOR inhibitors, administering them orally on a continuous basis still leads to challenging toxicities. The experience with an

FDA approved oral p110-α specific inhibitor, PIQRAY, illustrates the challenge. In its Phase 3 pivotal trial, PIQRAY was found to

induce a Grade 3 or 4 adverse event (“AE”) related to hyperglycemia in 39% of patients evaluated. In addition, 26% of patients

discontinued alpelisib due to treatment related AEs. By contrast, in the 103-patient dose expansion portion of the Phase 1b clinical trial

with gedatolisib, only 7% of patients experienced Grade 3 or 4 hyperglycemia and less than 9% discontinued treatment.

As of December 31, 2024, 492 patients with solid tumors

have received gedatolisib in eight clinical trials sponsored by Pfizer. Of the 492 patients, 129 were treated with gedatolisib as a single

agent in three clinical trials. The remaining 363 patients received gedatolisib in combination with other anti-cancer agents in five clinical

trials. Additional patients received gedatolisib in combination with other anti-cancer agents in nine investigator sponsored clinical

trials.

A Phase 1b trial (B2151009) evaluating patients with

HR+/HER2- metastatic breast cancer was initiated in 2016 and subsequently enrolled 138 patients. Four patients from this study continue

to receive study treatment, as of December 31, 2024, each of whom have received study treatment for more than five years. The B2151009

clinical trial was an open label, multiple arm Phase 1b clinical trial that evaluated gedatolisib in combination with palbociclib (CDK4/6

inhibitor) and fulvestrant or letrozole in patients with HR+/HER2- advanced breast cancer. Thirty-five patients were enrolled in two dose

escalation arms to evaluate the safety and tolerability and to determine the maximum tolerated dose (“MTD”) of gedatolisib

when used in combination with the standard doses of palbociclib and endocrine therapy (letrozole or fulvestrant). The MTD was determined

to be 180 mg administered intravenously once weekly. A total of 103 patients were subsequently enrolled in one of four expansion arms

(A, B, C, and D).

High objective overall response

rates (“ORR”) were observed in all four expansion arms and were comparable in each arm for PIK3CA wild type (“WT”)

and PIK3CA mutant (“MT”) patients. In patients who received prior hormonal therapy alone or in combination with a CDK4/6 inhibitor

(Arms B, C, and D), the ORR (including unconfirmed partial responses) ranged from 36% to 77%. In patients who were treatment naïve

in the advanced setting (Arm A), the ORR was 85%. Each arm achieved its primary endpoint target, which was reporting higher ORR in the

study arm than the ORR from either the PALOMA-2 study (ORR=55%) that evaluated palbociclib plus letrozole for Arm A or the PALOMA-3 study

(ORR=25%) that evaluated palbociclib plus fulvestrant for Arms B, C, and D. For all patients enrolled in the expansion portion of the

study who had evaluable tumors, the ORR observed was 63%.

Median progression-free survival

(PFS) was 12.9 months for patients who received a prior CDK4/6 inhibitor and were treated in the study with the Phase 3 dosing schedule

(Arm D). For all treatment naïve patients who received gedatolisib combined with palbociclib plus letrozole in Expansion Arm A and

Escalation Arm A (N=41), median PFS was 48.6 months and ORR was 79%. These results compare favorably to published data for current first-line

standard-of-care treatments for patients with HR+/HER2-advanced breast cancer.

Gedatolisib combined with palbociclib and endocrine

therapy demonstrated a favorable safety profile with manageable toxicity. The majority of treatment emergent adverse events were Grade

1 and 2. The most frequently observed adverse events included stomatitis/mucosal inflammation, the majority of which were Grade 1 and

2. The most common Grade 4 AEs were neutropenia and neutrophil count decrease, which were assessed as related to treatment with palbociclib.

No Grade 5 events were reported in this study.

We are currently enrolling patients in a Phase 3,

open-label, randomized clinical trial,VIKTORIA-1, to evaluate the efficacy and safety of two regimens in adults with HR+/HER2- advanced

breast cancer whose disease has progressed after prior CDK4/6 therapy in combination with an aromatase inhibitor: 1) gedatolisib in combination

with palbociclib and fulvestrant; and 2) gedatolisib in combination with fulvestrant. Over two hundred clinical sites in North America,

Europe, Latin America, and Asia-Pacific are participating in the study. The first patient was dosed in this trial in December 2022.

The VIKTORA-1 Phase 3 clinical trial will enable separate

evaluation of subjects according to their PIK3CA status. Subjects who meet eligibility criteria and are PIK3CA WT will be randomly assigned

(1:1:1) to receive a regimen of either gedatolisib, palbociclib, and fulvestrant (Arm A), gedatolisib and fulvestrant (Arm B), or fulvestrant

(Arm C). The WT enrollment target was achieved in the fourth quarter of 2024. Subjects who meet eligibility criteria and are PIK3CA MT

will be randomly assigned (3:3:1) to receive a regimen of either gedatolisib, palbociclib, and fulvestrant (Arm D), alpelisib and fulvestrant

(Arm E), or gedatolisib and fulvestrant (Arm F). Topline data from Arms A, B and C of this clinical trial are expected in Q2 2025.

We received approval from the FDA in mid-2023 to proceed

with the clinical development of gedatolisib in combination with Nubeqa® (darolutamide), an approved androgen receptor inhibitor,

for the treatment of patients with metastatic castration resistant prostate cancer (“mCRPC”). We have since initiated a Phase

1b/2 study, CELC-G-201, that is enrolling patients with mCRPC who progressed after treatment with an androgen receptor inhibitor. The

first patient was dosed in this trial in February 2024.

In the Phase 1b portion of the clinical trial, Celcuity

expects approximately 36 participants will be randomly assigned to receive 600 mg darolutamide combined with either 120 mg gedatolisib

in Arm 1 or 180 mg gedatolisib in Arm 2. An additional 12 participants will then be enrolled in the Phase 2 portion of the study at the

recommended phase 2 dose (“RP2D”) level to enable evaluation of 30 participants treated with the RP2D of gedatolisib.

The primary objectives of the Phase 1b portion of

the trial include assessment of the safety and tolerability of gedatolisib in combination with darolutamide and determination of the recommended

Phase 2 dose of gedatolisib. The primary objective of the Phase 2 portion of the trial is to assess the radiographic progression-free

survival at six months of patients who received the RP2D. Initial preliminary data for the Phase 1b dose escalation portion of the trial

is expected to be available by the end of the second quarter of 2025.

A Phase 3, open-label, randomized clinical trial to

evaluate the efficacy and safety of gedatolisib plus a CDK4/6 inhibitor and fulvestrant as first-line treatment for patients with HR+/HER2-

advanced breast cancer that is endocrine treatment resistant (“VIKTORIA-2”) is currently activating clinical trial sites.

For the CDK4/6 inhibitor, investigators may choose either ribociclib or palbociclib. This multi-center, international trial is expected

to enroll approximately 12–36 evaluable subjects in the safety run-in portion of the study to evaluate the safety of gedatolisib

when combined with ribociclib and fulvestrant. In the Phase 3 portion of the study, approximately 638 subjects will be randomized and

assigned to Cohort 1 (PIK3CA WT) or Cohort 2 (PIK3CA MT) based on their PIK3CA status. Subjects in each cohort will be randomized on

a 1:1 basis to either Arm A (gedatolisib with fulvestrant and ribociclib or palbociclib) or Arm B (fulvestrant and ribociclib or palbociclib).

It is expected that approximately 200 clinical sites across North America, Europe, Latin America, and Asia-Pacific will participate. The first

patient is expected to be dosed in the second quarter of 2025.

Recent Developments

The VIKTORIA-1 Phase 3 clinical trial evaluating

gedatolisib in combination with fulvestrant with and without palbociclib in adults with HR+, HER2- advanced breast cancer who have received

prior treatment with a CDK4/6 inhibitor is 100% enrolled for the PIK3CA wild-type cohort. We expect to provide topline data in

Q2 2025.

The

VIKTORIA-2 Phase 3 open-label randomized study evaluating the efficacy and safety of gedatolisib in combination with fulvestrant plus

a CDK4/6 inhibitor, either ribociclib or palbociclib, in comparison to fulvestrant plus a CDK4/6 inhibitor as a first-line treatment

for patients with HR+/HER2- advanced breast cancer who are endocrine therapy resistant remains on track to enroll its first patient in

Q2 2025.

In

December 2024, Celcuity presented overall survival data from a Phase 1b trial, which evaluated gedatolisib in combination with palbociclib

and either letrozole or fulvestrant, in patients with HR+, HER2- advanced or metastatic breast cancer during a poster session at the

2024 San Antonio Breast Cancer Symposium (SABCS). Median overall survival was 77.3 months among patients with HR+, HER2- advanced breast

cancer who were treatment-naïve in the advanced setting and 33.9 months among patients previously treated with a CDK4/6 inhibitor.

We have not generated any revenue from sales to date,

and we continue to incur significant research and development and other expenses related to our ongoing operations. As a result, we are

not and have never been profitable and have incurred losses in each period since we began operations in 2012. For the years ended December

31, 2024 and 2023, we reported a net loss of approximately $111.8 million and $63.8 million, respectively. As of December 31,

2024, our cash and cash equivalents and short-term investments were approximately $235.1 million, and we had an accumulated deficit of approximately

$271.9 million.

RESULTS OF OPERATIONS

Components of Operating Results

Revenue

To date, we have not generated any revenue. With the

execution of the Pfizer license agreement in April 2021, whereby we acquired exclusive world-wide licensing rights to develop and commercialize

gedatolisib, we initiated a Phase 3 clinical trial, VIKTORIA-1, in 2022 to support potential regulatory approval to market gedatolisib.

In August 2023, we initiated a Phase 1b/2 clinical trial, CELC-G-201, and we have initiated a second Phase 3 clinical trial, VIKTORIA-2,

with dosing of the first patient planned in Q2 2025 to support submission to the FDA seeking approval for this indication for gedatolisib.

If we obtain regulatory approvals to market gedatolisib, we expect to generate revenue from sales of the drug for the treatment of breast

cancer patients.

Research and Development

Since our inception, we have primarily focused on

research and development of gedatolisib, a PI3K/mTOR targeted therapy, and our CELsignia platform and corresponding tests. Research and

development expenses primarily include:

● laboratory supplies;

● consulting fees paid to third parties;

● clinical trial costs;

● validation costs for gedatolisib;

● facilities expenses; and

● legal costs associated with patent applications.

Internal and external research and development costs

are expensed as they are incurred. As we continue development of gedatolisib and manage studies and clinical trials, including the VIKTORIA-1

Phase 3 clinical trial, the CELC-G-201 Phase 1b/2 clinical trial, and the VIKTORIA-2 Phase 3 clinical trial, the proportion of research

and development expenses allocated to external spending will grow at a faster rate than expenses allocated to internal expenses.

General and Administrative

General and administrative expenses consist primarily

of salaries, benefits and stock-based compensation related to our executive, finance and support functions. Other general and administrative

expenses include professional fees for auditing, tax, and legal services associated with being a public company, director and officer

insurance, investor relations and travel expenses for our general and administrative personnel.

Sales and Marketing

Expenses and costs related to the initiation and operation

of our medical and marketing teams, supply chain and distribution network are being incurred in anticipation of the commercialization

of our first drug candidate, gedatolisib. These expenses consist primarily of employee-related expenses,

professional and consulting fees related to these functions and operations, software costs, and the acquisition of data required

to support our market analysis for our drug product. We would expect to begin to incur sales force,

sales support staff and marketing expenses closer to a potential FDA approval date.

Interest Expense

Interest expense is primarily due to a Loan Agreement.

Interest Income

Interest income consists of interest income earned

on our cash, cash equivalents and investment balances.

Results of Operations

Comparison of the Years Ended December 31, 2024 and 2023

Years Ended

December 31, Increase (Decrease)

Statements of Operations Data:

Operating expenses:

Other (expense) income

Income tax benefits - - - -

Research and Development

For the year ended December 31, 2024, our research

and development expenses were approximately $104.2 million, representing an increase of approximately $43.6 million, or 72%, compared

to 2023. Of the $43.6 million increase in research and development expense, $30.7 million was primarily related to costs supporting ongoing

activities for the VIKTORIA-1 and CELC-G-201 trials and the commencement of the VIKTORIA-2 Phase 3 pivotal trial. The remaining $12.9

million was related to increased employee and consulting expenses, of which $0.1 million was in the form of non-cash stock-based compensation.

Conducting a significant amount of research and development

is central to our business model. We plan to increase our research and development expenses for the foreseeable future as we seek to develop

gedatolisib and manage the VIKTORIA-1 Phase 3 clinical trial, the CELC-G-201 Phase 1b/2 clinical trial, and the VIKTORIA-2 Phase 3 clinical

trial.

General and Administrative

For the year ended December 31, 2024, our total general

and administrative expenses were $9.1 million, representing an increase of approximately $3.4 million, or 61%, compared to 2023. Employee

related expenses accounted for $2.6 million of the $3.4 million increase. The remaining $0.8 million of the increase resulted from professional

fees, expanding infrastructure and other administrative expenses.

We anticipate that our general

and administrative expenses will increase in future periods, reflecting both increased costs in connection with the potential future commercialization

of gedatolisib, an expanding infrastructure, and increased professional fees associated with public company regulatory developments and

requirements, and other compliance matters.

Interest Expense

For the year ended December 31, 2024, interest expense

was $10.3 million and represents an increase of $5.0 million compared to 2023. The increase is due primarily to the increased debt balance

in 2024 compared to 2023 due to the incremental $61.7 million funding of Term Loan C in May 2024. The $10.3 million of interest expense

includes $2.7 million of non-cash interest expense.

Interest Income

For the year ended December 31,

2024, interest income was $11.8 million and represents an increase of $4.0 million compared to 2023. The increase was primarily the result

of closing on additional equity and debt financing activities in May 2024, leading to higher cash, cash equivalents and short-term investment

balances.

LIQUIDITY AND CAPITAL RESOURCES

Since our inception, we have incurred losses and cumulative

negative cash flows from operations. Through December 31, 2024, we have funded our operations primarily through private placements and

registered offerings of our equity securities and unsecured convertible notes, and borrowings under loan agreements. From inception through

December 31, 2024, we raised an aggregate of approximately $369.0 million of net proceeds through sales of our securities, and as of December

31, 2024 had $100.0 million of borrowings under loan agreements, not including payable-in-kind interest. In March 2024, an investor exercised

1,739,080 warrants at an exercise price of $8.05, which generated approximately $14 million in cash. In March 2025, an investor exercised 695,650 warrants at an exercise price of $8.05, which generated approximately $5.6 million in cash.

The warrants exercised in March 2024 and 2025 were issued pursuant

to a private placement that closed on December 9, 2022. As of December 31, 2024, our cash and cash equivalents and short-term investments

were approximately $22.5 million and $212.6 million, respectively, and we had an accumulated deficit of approximately $271.9 million.

Open Market Sale AgreementSM. On February

4, 2022, we entered into an Open Market Sale AgreementSM with Jefferies LLC, as agent, pursuant to which we may offer and sell,

from time to time, through Jefferies, shares of our common stock having an aggregate offering price of up to $50.0 million, which amount

was subsequently increased to $125.0 million on December 6, 2024. On October 12, 2022, pursuant to this agreement, the Company sold 500,000

shares of common stock in a single transaction at a price of $10.35 per share generating gross proceeds of $5.2 million ($4.8 million

net of commissions and offering expenses). On December 1, 2023, pursuant to this agreement, the Company sold 1,034,500 shares of common

stock in a single transaction at a price of $14.50 per share, generating gross proceeds of $15.0 million ($14.4 million net of commissions

and offering expenses). In April 2024 and May 2024, pursuant to this agreement, the Company sold 285,714 and 149,700 shares of common

stock, respectively, at an average selling price of $17.55 per share, generating gross proceeds of $7.6 million before deducting commissions

and other offering expenses of $0.3 million. At December 31, 2024, $125.0 million of common stock remains available for sale under the

Jefferies agreement.

Private Placement. On December 9, 2022, we

issued 6,182,574 shares of common stock, 1,120,873 shares of Series A Preferred Stock and warrants exercisable for 6,956,450 shares of

common stock to certain institutional and other accredited investors pursuant to a securities purchase agreement entered into on May 15,

2022. Pursuant to the securities purchase agreement, the closing (funding) of the private placement occurred following dosage of the first

patient in the Company’s Phase 3 study, VIKTORIA-1. Investors purchased shares of common stock and Series A Preferred Stock at a

price of $5.75 per share (on an as converted to common stock basis), with forty percent (40%) warrant coverage (on an as converted to

common stock basis) and customary resale registration rights. The warrants have an exercise price of $8.05 per share. The private placement

generated gross proceeds of approximately $100.0 million before deducting placement agent fees and other offering expenses of $4.3 million.

Pre-funded Warrants.

On October 18, 2023, the Company entered into a securities purchase agreement to sell pre-funded warrants at a price of $8.70 per warrant,

to purchase up to 5,747,787 shares of the Company’s common stock in a private placement. The closing of the private placement occurred

on October 20, 2023, and resulted in gross proceeds of approximately $50.0 million, before deducting offering expenses of approximately

$0.1 million.

Equity Offering. On May 30, 2024, the Company

entered into an underwriting agreement with Leerink Partners LLC, TD Securities (USA) LLC and Stifel, Nicolaus & Company, Incorporated

as representatives of the several underwriters relating to the issuance and sale of 3,871,000 shares of common stock, at a price to the

public of $15.50, generating gross proceeds of approximately $60.0 million. The offering closed on May 31, 2024 and resulted in net proceeds

to the Company of approximately $56.3 million after deducting underwriting discounts and other offering expenses payable by the Company.

The Company intends to use the net proceeds from the offering for working capital and general corporate purposes, which may include research

and development expenditures, clinical trial expenditures, expansion of business development activities and other general corporate purposes.

Loan Agreement. On May 30, 2024, the Company

entered into an Amended and Restated Loan and Security Agreement (the “A&R Loan Agreement”) with Innovatus Life Sciences

Lending Fund I, LP, a Delaware limited partnership (“Innovatus”), as collateral agent, and the Lenders including Innovatus

in its capacity as a Lender and Oxford Finance LLC (“Oxford”), pursuant to which Innovatus and Oxford, as Lenders, have agreed

to make certain term loans (“Term Loans”) to the Company in the aggregate principal amount of up to $180 million. The A&R

Loan Agreement amends and restates, in its entirety, that certain Loan and Security Agreement, dated April 8, 2021, as amended, between

the Company and Innovatus, as collateral agent, and the Lenders named therein (the “Prior Loan Agreement”).

Funding of the first $100 million under the A&R

Loan Agreement occurred on May 30, 2024, including tranche payments of $16.8 million (the “Term A Loan”) and $21.5 million

(the “Term B Loan”) reflecting repayment of the principal amount of loans under the Prior Loan Agreement plus accrued payment-in-kind

interest, in addition to $61.7 million of new borrowings (the “Term C Loan”). The Company will be eligible to draw on a fourth

tranche of $30 million (the “Term D Loan”) and fifth tranche of $50 million (the “Term E Loan”), in each case

upon achievement of certain clinical trial milestones and satisfaction of certain financial covenants determined on a pro forma as-funded

basis. The Lenders may, in their sole discretion upon the Company’s request, make additional term loans to the Company of $45 million

(the “Term F Loan”). Funding of these additional tranches is also subject to other customary conditions and limits on when

the Company can request funding for such tranches. Costs associated with the new borrowings were approximately $2.4 million.

Pursuant to the A&R Loan Agreement, the Company

is entitled to make interest-only payments for thirty-six months, or up to forty-eight months if certain conditions are met. The Term

Loans will mature on May 1, 2029 and will bear interest at a rate equal to the sum of (a) the greater of (i) the Prime Rate (as defined

in the A&R Loan Agreement) or (ii) 7.75%, plus (b) 2.85%, provided that 1.0% of such interest will be payable in-kind by adding an

amount equal to such 1.0% of the outstanding principal amount to the then outstanding principal balance on a monthly basis through May

31, 2027. The A&R Loan Agreement is secured by all assets of the Company. Proceeds will be used for working capital purposes and to

fund the Company’s general business requirements, including the Phase 3 VIKTORIA-2 clinical trial. The A&R Loan Agreement contains

customary representations and warranties and covenants, subject to customary carve-outs, and includes financial covenants related to liquidity

and other financial measures. Innovatus has the right, at its election and until August 9, 2025, to convert up to 20% of the outstanding

principal of the Term A Loan into shares of the Company’s common stock at a price per share of $10.00 (the “Conversion Right”).

Innovatus will continue to have the right to exercise a previously disclosed warrant granted to it under the Prior Loan Agreement to purchase

26,042 shares of common stock at a price per share of $14.40 through April 8, 2031.

The A&R Loan Agreement contains a Final Fee, which

is equal to 4.5% of the initial funding of the agreement and is due on the earliest to occur of (a) the Maturity Date, (b) the acceleration

of any Term Loan, and (c) the prepayment of the Term Loans. There is also a contingent non-utilization fee for both the Term D and Term

E loans. If the Company achieves the Term D Milestone and (i) fails to draw the full amount of the Term D Loan during the Term D Draw

Period and (ii) fails to notify Collateral Agent, at any time before the date that is four weeks after the Company’s achievement

of the Term D Milestone, of the Company’s intent not to draw the full amount of the Term D Loan, a non-utilization fee of $900,000,

with respect to the Term D Loan shall become due and payable on the earliest of (i) the termination of the Term D Draw Period, (ii) the

Maturity Date, (iii) the acceleration of any Term Loan, and (iv) the prepayment in whole of the Term Loans. If the Company achieves the

Term E Milestone and (i) fails to draw the full amount of the Term E Loan during the Term E Draw Period and (ii) fails to notify Collateral

Agent, at any time before the date that is four weeks after the Company’s achievement of the Term E Milestone, of the Company’s

intent not to draw the full amount of the Term E Loan, a non-utilization fee of $1,500,000, with respect to the Term E Loan shall become

due and payable on the earliest of (i) the termination of the Term E Draw Period, (ii) the Maturity Date, (iii) the acceleration of any

Term Loan, and (iv) the prepayment in whole of the Term Loans. After the 18-month anniversary of the Effective Date, the Company shall

have the option to prepay all, but not less than all, of the Term Loans advanced by the Lenders under the A&R Loan Agreement, provided

the Company (i) provides written notice to Collateral Agent of its election to prepay the Term Loans at least seven Business Days prior

to such prepayment, and (ii) pays to Lenders on the date of such prepayment, payable to each Lender in accordance with its respective

Pro Rata Share, an amount equal to the sum of (A) all outstanding principal of the Term Loans plus accrued and unpaid interest thereon

through the prepayment date, (B) the Final Fee, (C) the Prepayment Fee, plus (D) all other outstanding Obligations that are due and payable,

including, without limitation, Lenders’ Expenses and interest at the Default Rate with respect to any past due amounts. At May 30,

2024, the Company recognized the Final Fee of $4.5 million as additional debt principal and a corresponding debt discount to be amortized

over the life of the loan.

In connection with the funding of each of the Term

C Loan, the Term D Loan, the Term E Loan and the Term F Loan, the Company agreed to issue to Innovatus and Oxford warrants to purchase

that number of shares of the Company’s common stock equal to 2.5% of the principal amount of the applicable Term Loan divided by

the exercise price, which shall, with respect to the Term C Loan, be equal to the lower of (i) the volume weighted average closing price

of the Company’s common stock for the five-trading day period ending on the last trading day immediately preceding the execution

of the A&R Loan Agreement or (ii) the closing price on the last trading day immediately preceding the execution of the A&R Loan

Agreement. Accordingly, on May 30, 2024, the Company issued 103,876 warrants with an exercise price of $14.84 per share. The relative

fair value of the warrants was approximately $1.2 million. For the additional Term Loans, the exercise price will be based on the lower

of (i) the exercise price for the Warrants issued pursuant to the Term C Loan or (ii) the volume weighted average closing price of the

Company’s common stock for the five-trading day period ending on the last trading day immediately preceding the applicable Term

Loan funding. The Warrants may be exercised on a cashless basis and are exercisable through the tenth anniversary of the applicable funding

date. The number of shares of common stock for which each Warrant is exercisable and the associated exercise price are subject to certain

proportional adjustments as set forth in such Warrant.

We expect that our research and development and general

and administrative expenses will increase as we continue to develop gedatolisib, manage the VIKTORIA-1 Phase 3 clinical trial, the CELC-G-201

Phase 1b/2 trial, and the VIKTORIA-2 Phase 3 trial, conduct other studies and clinical trials, and pursue other business development activities.

We would also expect to incur sales and marketing expenses as we commercialize gedatolisib. We expect to use cash on hand, together with

the funds to be received under the debt and equity financings described above, to fund our research and development expenses, clinical

trial costs, capital expenditures, working capital, sales and marketing expenses, and general corporate expenses.

Based on our current business plan, we believe that

our current cash, cash equivalents and short-term investments together with available borrowings under the Innovatus Loan Agreement will

provide sufficient cash to finance our clinical development program activities through 2026.

Our expectations as to how long our current capital

resources will be sufficient to fund our operations are based on assumptions that may not be accurate, and we could use our current capital

resources sooner than we currently expect. In addition, we may seek to raise additional capital to finance capital expenditures and operating

expenses over the next several years as we launch our integrated therapeutic and companion diagnostic strategy and expand our infrastructure,

commercial operations and research and development activities, and to take advantage of financing or other opportunities that we believe

to be in the best interests of the Company and our stockholders. Additional capital may be raised through the sale of common or preferred

equity or convertible debt securities, entry into debt facilities or other third-party funding arrangements. The sale of equity and convertible

debt securities may result in dilution to our stockholders and those securities may have rights senior to those of our common shares.

Agreements entered into in connection with such capital raising activities could contain covenants that would restrict our operations

or require us to relinquish certain rights. Additional capital may not be available on reasonable terms, or at all.

Cash Flows

The following table sets forth the primary sources

and uses of cash for the years ended December 31:

December 31,

Net cash (used in) provided by:

Net (decrease) increase in cash and cash equivalents $ (8,147,951 ) $ 6,091,217

Operating Activities

Net cash used in operating activities was approximately

$83.5 million for the year ended December 31, 2024 and consisted primarily of a net loss of approximately $111.8 million, partially

offset by working capital changes of $18.3 million and non-cash expense items of approximately $10.0 million. Non-cash expense items of

approximately $10.0 million primarily consisting of $7.0 million of stock-based compensation expense, net non-cash interest income and

expense of $2.8 million, and depreciation expense of $0.1 million. The approximately $18.3 million of working capital changes was primarily

due to increases in accrued expenses and accounts payable, and a decrease in other current assets.

Net cash used in operating activities

was approximately $53.8 million for the year ended December 31, 2023 and consisted primarily of a net loss of approximately $63.8 million,

partially offset by working capital changes of $3.9 million and non-cash expense items of approximately $6.1 million. Non-cash expense

items of approximately $6.1 million primarily consisted of $4.9 million of stock-based compensation expense, non-cash interest expense

of $2.1 million and depreciation expense of $0.1 million, partially offset by $1.0 million of accrued interest income. The approximately

$3.9 million of working capital changes was primarily due to increases in accounts payable and accrued expenses, offset by an increase

in other current assets.

Investing Activities

Net cash used in investing activities for the year

ended December 31, 2024 was approximately $63.1 million and consisted of approximately $62.8 million of net purchases of short-term investments

in government securities (U.S. Treasury Bills and U.S. government securities) and approximately $0.3 million in purchases of property

and equipment.

Net cash used in investing activities for the year

ended December 31, 2023 was approximately $5.0 million and consisted of approximately $4.9 million of net purchases of short-term investments

in government securities (U.S. Treasury Bills and U.S. government securities) and approximately $0.1 million in purchases of property

and equipment.

Financing Activities

Net cash provided by financing

activities for the year ended December 31, 2024 was approximately $138.4 million and primarily consisted of net proceeds of approximately

$59.2 million from incremental debt financing, $56.3 million from an equity offering and $7.3 million from an at-the market offering.

The remaining $15.6 million consisted of proceeds from the exercise of common stock warrants, the exercise of employee stock options and

employee stock purchases, slightly offset by payments for a secondary registration statement costs.

Net cash provided by financing activities for the

year ended December 31, 2023 was approximately $64.9 million and primarily consisted of net proceeds from a pre-funded warrant offering

and at-the-market offering, collectively totaling $64.4 million. The remaining $0.5 million was the result of proceeds from the exercise

of employee stock options, the exercise of warrants, and proceeds from employee stock purchases, slightly offset by payments for secondary

registration statement and debt issuance costs.

RECENT ACCOUNTING PRONOUNCEMENTS

From time-to-time new accounting pronouncements are

issued by the Financial Accounting Standards Board or other standard setting bodies and adopted by us as of the specified effective date.

Unless otherwise discussed in Note 2 to our financial statements included elsewhere in this Annual Report, we believe that the impact

of recently issued standards that are not yet effective will not have a material impact on our financial position or results of operations

upon adoption.

CRITICAL ACCOUNTING POLICIES AND USE OF ESTIMATES

Our management’s discussion and analysis of

financial condition and results of operations is based on our financial statements, which have been prepared in accordance with accounting

principles generally accepted in the United States, or Generally Accepted Accounted Principles (“U.S. GAAP”). The preparation

of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities

and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses during

the reporting periods. These items are monitored and analyzed by us for changes in facts and circumstances, and material changes in these

estimates could occur in the future. We base our estimates on historical experience and on various other factors that we believe are reasonable

under the circumstances; the results of which form the basis for making judgments about the carrying value of assets and liabilities that

are not readily apparent from other sources. Changes in estimates are reflected in reported results for the period in which they become

known. Actual results may differ materially from these estimates.

Our significant accounting policies are more fully

described in Note 2 to our financial statements included elsewhere in this Annual Report. Of our significant accounting policies, we believe

that the following are the most critical:

Stock-Based Compensation

Our stock-based compensation

consists of common stock options and restricted stock issued to certain employees and non-employees and our Employee Stock Purchase Plan

(“ESPP”). We recognize compensation expense based on an estimated grant date fair value using the Black-Scholes option-pricing

method for equity-based awards and the Monte Carlo simulation model for the performance-based awards. We have elected to account for forfeitures

as they occur.

The inputs for the Black-Scholes valuation model require

management’s significant assumptions. Prior to our IPO, the price per share of common stock was determined by our board based on

recent prices of common stock sold in private offerings. Subsequent to the IPO, the price per share of common stock is determined by using

the closing market price on the Nasdaq Capital Market on the grant date. The risk-free interest rates are based on the rate for U.S. Treasury

securities at the date of grant with maturity dates approximately equal to the expected life at the grant date. The expected life was

based on the simplified method in accordance with SEC Staff Accounting Bulletin Nos. 107 and 110. The expected volatility was estimated

based on historical volatility information of peer companies that are publicly available in combination with our calculated volatility

since being publicly traded.

All assumptions used to calculate the grant date fair

value of non-employee options are generally consistent with the assumptions used for options granted to employees. In the event we terminate

any of our consulting agreements, the unvested options issued in connection with such agreements would also be cancelled.

For grants of restricted stock, we record compensation

expense based on the quoted fair value of the shares on the grant date over the requisite service period. Compensation expense for ESPP

rights is recorded in line with each respective offering period.

Clinical Trial Costs

The Company records prepaid assets or accrued expenses

for prepaid or estimated clinical trial costs conducted by third-party service providers, which includes the conduct of preclinical studies

and clinical trials. These costs can be a significant component of the Company’s research and development expenses. The

Company primarily relies on a compilation of progress reports from third-party service providers, including the respective invoicing,

to record actual expenses, along with determining changes to prepaid assets and accrued liabilities. To date, the Company believes utilization

of third-party reports most accurately reflects expenses incurred. With the ongoing VIKTORIA-1 Phase 3 trial and the CELC-G-201 Phase

1b/2 trial, and the commencement of the VIKTORIA-2 Phase 3 trial site activation and patient enrollment,

the Company’s estimated expenses in future periods and the actual services performed may vary from these estimates, and these

estimates may become more significant. Changes in these estimates that result in material changes to the Company’s prepaid assets

or accrued expenses could materially affect the Company’s results of operations.

ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk

As a smaller reporting company, we are not required

to provide disclosure pursuant to this item.

ITEM 8. Financial Statements and Supplementary Data

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

FIRM

To

the Board of Directors and

Stockholders of Celcuity Inc.

Opinion

on the Financial Statements

We

have audited the accompanying balance sheets of Celcuity Inc. (the Company) as of December 31, 2024 and 2023, and the related statements

of operations, changes in stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31,

2024, 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, 2024 and 2023, and the results of its operations

and its cash flows for each of the years in the two-year period ended December 31, 2024, in conformity with accounting principles generally

accepted in the United States of America.

Basis

for Opinion

These

financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s

financial statements based on our audits. We are a public accounting firm registered with the 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.

Critical

Audit Matters

Critical

audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required

to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements

and (2) involved our especially challenging, subjective, or complex judgments. We determined that there were no critical audit matters.

/s/ Boulay

LLP

We

have served as the Company’s auditor since 2017.

Minneapolis,

Minnesota

March 31, 2025

PCAOB

ID: 542

Celcuity Inc.

Balance Sheets

Assets

Current Assets:

Liabilities and Stockholders’ Equity:

Current Liabilities:

Commitments and Contingencies (Note 9) - -

Stockholders’ Equity:

See accompanying notes to the financial statements

Celcuity Inc.

Statements of Operations

Twelve Months Ended December 31,

Operating expenses:

Other (expense) income

Income tax benefits - -

Net loss per share, basic and diluted $ (2.83 ) $ (2.69 )

See accompanying notes to the financial statements

Celcuity Inc.

Statements of Changes in Stockholders’ Equity

Shares Amount Shares Amount Capital Deficit Total

Common Stock Preferred Stock Additional Paid-In Accumulated

Shares Amount Shares Amount Capital Deficit Total

Issuance costs associated with an ATM offering - - - - (614,205 ) - (614,205 )

Issuance costs associated with an ATM offering - - - - (263,727 ) - (263,727 )

Issuance of common stock warrants, note payable - - - - 1,228,911 - 1,228,911

See accompanying notes to the financial statements

Celcuity Inc.

Statements of Cash Flows

Twelve Months Ended December 31,

Cash flows from operating activities:

Adjustments to reconcile net loss to net cash used for operations:

Amortization of debt issuance costs and discount 1,330,652 241,752

Non-cash operating lease, net (434 ) 4,368

Changes in operating assets and liabilities:

Cash flows from investing activities:

Purchases of property and equipment (249,878 ) (97,644 )

Cash flows from financing activities:

Proceeds from exercise of employee stock options 769,571 388,522

Proceeds from pre-funded warrants, net of offering costs - 49,917,589

Payments for secondary registration statement costs (227,405 ) (45,805 )

Payments for debt issuance costs - (2,716 )

Payments for finance leases - (2,449 )

Cash and cash equivalents:

Supplemental disclosure of cash flow information:

Supplemental disclosures of non-cash investing and financing activities:

Property and equipment included in accounts payable $ 1,417 $ 13,615

Common stock warrants issued with the note payable transaction $ 1,228,911 $ -

See accompanying notes to the financial statements

CELCUITY INC.

NOTES TO FINANCIAL STATEMENTS

1.Organization

Nature of Business

Celcuity Inc., a Delaware corporation (the “Company”) is a

clinical-stage biotechnology company focused on the development of targeted therapies for the treatment of multiple solid tumor indications.

The Company’s lead therapeutic candidate is gedatolisib, a potent, well-tolerated, small molecule reversible inhibitor, administered

intravenously, that selectively targets all Class I isoforms of phosphatidylinositol-3-kinase (“PI3K”) and the two mechanistic

targets of rapamycin (“mTOR”) sub-complexes, mTORC1 and mTORC2. Gedatolisib’s mechanism of action and pharmacokinetic

properties are differentiated from other currently approved and investigational therapies that target PI3K or mTOR alone or together.

A Phase 3 clinical trial, VIKTORIA-1, evaluating gedatolisib in combination with fulvestrant with or without palbociclib in patients with

HR+/HER2- advanced breast cancer is currently enrolling patients. Site selection and activation activities for a Phase 3 clinical trial,

VIKTORIA-2, evaluating gedatolisib in combination with a CDK4/6 inhibitor and fulvestrant as first-line treatment for patients with HR+/HER2-

advanced breast cancer has commenced. The first patient is expected to be dosed in the second quarter of 2025. A Phase 1b/2 clinical trial,

CELC-G-201, evaluating gedatolisib in combination with darolutamide in patients with metastatic castration resistant prostate cancer,

is currently underway. The Company was co-founded in 2012 by Brian F. Sullivan and Dr. Lance G. Laing and is based in Minnesota. The Company

has not generated any revenues to date.

2.Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements

Basis of Presentation

The accompanying financial statements

have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and pursuant

to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Operating results for the year ended December

31, 2024 are not necessarily indicative of results to be expected for any future year.

Accounting Estimates

Management uses estimates and assumptions in preparing these

financial statements in accordance with U.S. GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities,

the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates

and the difference could be material. Significant items subject to such estimates and assumptions include the valuation of stock-based

compensation and prepaid or accrued clinical trial costs.

Cash and Cash Equivalents

The Company maintains its accounts at two financial institutions.

At times throughout the year, the Company’s cash balances may exceed amounts insured by the Federal Deposit Insurance Corporation.

At December 31, 2024 and December 31, 2023, the Company had $22,514,823 and $30,662,774, respectively, in business checking accounts and

money market funds that are considered cash equivalents and not insured by the Federal Deposit Insurance Corporation.

Investments

The Company maintains its investments in U.S. governmental agency

securities and U.S. treasury bills and has classified them as held-to-maturity at the time of purchase. Held-to-maturity purchases are

those securities in which the Company has the ability and intent to hold until maturity. Held-to-maturity securities are recorded at amortized

cost, adjusted for the amortization or accretion of premiums and discounts. Premiums and discounts are amortized or accreted over the

life of the related held-to-maturity security using a straight-line method. The difference between the carrying value, which is based

on cost, and the aggregate fair value of the held-to-maturity securities, was immaterial as of December 31, 2024. At December 31, 2024

and December 31, 2023, the Company had $212,588,960 and $149,919,974, respectively, of short-term investments.

Property and Equipment

Property and equipment are stated at cost. Depreciation is provided

over estimated useful lives using the straight-line method. Maintenance and repairs are expensed as incurred; major improvements and betterments

are capitalized.

Estimated useful lives of property and equipment are as follows for the

major classes of assets:

Schedule of Estimated Useful Lives of Property and Equipment

Estimated

Asset Description Lives

Furniture and Equipment 4-5

Leasehold Improvements 2-3

Long-Lived Assets

Long-lived assets, such as property and equipment, are reviewed for impairment

whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require

a long-lived asset or asset group be tested for possible impairment, the Company first compares undiscounted cash flows expected to be

generated by that asset or asset group to its carrying value. If the carrying value of the long-lived asset or asset group is not recoverable

on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value

is determined through various valuation techniques including discounted cash flow models, quoted market values, and third-party independent

appraisals, as considered necessary.

Deferred Transaction Costs

Deferred transaction costs primarily consist of legal fees that are capitalized

as incurred and will be offset against the proceeds from future equity financing arrangements. The deferred transaction costs will be

reviewed periodically to assess the probability that future securities will be offered. In the event that no future offering will occur,

any deferred transaction costs will be expensed. Total costs incurred, but not accounted for as a reduction in equity, were $235,379 and

$0 as of December 31, 2024 and 2023, respectively.

Debt Issuance Costs

The Company recognizes debt issuance costs as deferred costs, which are

capitalized and amortized over the term of the related debt using the effective interest method. These costs primarily consist of fees,

commissions, legal, and other costs directly attributable to securing debt financing. Debt issuance costs are reported as a direct reduction