DRMA US Equity☆

UNITED

STATES

SECURITIES

AND EXCHANGE COMMISSION

WASHINGTON,

D.C. 20549

FORM

10-K

(Mark

One)

For

the Fiscal Year Ended December 31, 2025

or

Commission

File Number: 001-40739

DERMATA

THERAPEUTICS, INC.

(Exact

Name of Registrant as Specified in Its Charter)

(State or Other Jurisdiction of (I.R.S. Employer

Incorporation or Organization) Identification Number)

(Address of Principal Executive Offices) (Zip Code)

858-800-2543

(Registrant’s

telephone number, including area code)

Securities

registered pursuant to Section 12(b) of the Act:

Title of Each Class: Trading Symbol Name of Each Exchange on which Registered

Common Stock, par value $0.0001 per share DRMA The Nasdaq Capital Market

Securities

registered pursuant to Section 12(g) of the Act: None

Indicate

by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate

by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate

by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange

Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)

has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate

by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule

405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate

by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting

company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller

reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐

Non-accelerated Filer ☒ Smaller reporting company ☒

Emerging growth company ☒

If

an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying

with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate

by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness

of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered

public accounting firm that prepared or issued its audit report. ☐

If

securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant

included in the filing reflect the correction of an error to previously issued statements. ☐

Indicate

by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation

received by any of the registrant’s executive officers during the relevant recovery period pursuant to Section 240.10D-1(b). ☐

Indicate

by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

The

aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant, based on the closing price

of the shares of common stock on the Nasdaq Capital Market on June 30, 2025, was approximately $3.1 million.

As

of March 25, 2026, the number of outstanding shares of the registrant’s common stock, par value $0.0001 per share, was 4,022,143.

DOCUMENTS

INCORPORATED BY REFERENCE

None.

DERMATA

THERAPEUTICS, INC.

ANNUAL

REPORT ON FORM 10-K

FOR

THE FISCAL YEAR ENDED DECEMBER 31, 2025

TABLE

OF CONTENTS

Page

Part I 4

Item 1. Business 4

Item 1A. Risk Factors 26

Item 1B. Unresolved Staff Comments 70

Item 1C. Cybersecurity 70

Item 2. Properties 71

Item 3. Legal Proceedings 71

Item 4. Mine Safety Disclosures 71

Part II

Item 6. [Reserved] 72

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 81

Item 8. Financial Statements and Supplementary Data 81

Item 9A. Controls and Procedures 81

Item 9B. Other Information 82

Item 9C. Disclosure Regarding Foreign Jurisdiction That Prevent Inspections 82

Part III

Item 10. Directors, Executive Officers and Corporate Governance 83

Item 11. Executive Compensation 90

Item 14. Principal Accountant Fees and Services 102

Part IV

Item 15. Exhibits and Financial Statement Schedules 103

CAUTIONARY

NOTE REGARDING FORWARD-LOOKING STATEMENTS

This

annual report on Form 10-K contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities

Litigation Reform Act of 1995 under Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange

Act of 1934, as amended. Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations,

anticipations, assumptions, estimates, intentions and future performance, and involve known and unknown risks, uncertainties and other

factors, which may be beyond our control, and which may cause our actual results, performance or achievements to be materially different

from future results, performance or achievements expressed or implied by such forward-looking statements. All statements other than statements

of historical fact are statements that could be forward-looking statements. You can identify these forward-looking statements through

our use of words such as “may,” “can,” “anticipate,” “assume,” “should,”

“indicate,” “would,” “believe,” “contemplate,” “expect,” “seek,”

“estimate,” “continue,” “plan,” “point to,” “project,” “predict,”

“could,” “intend,” “target,” “potential” and other similar words and expressions of the

future.

There

are a number of important factors that could cause the actual results to differ materially from those expressed in any forward-looking

statement made by us. These factors include, but are not limited to:

● our lack of operating history;

● our ability to internally develop new inventions and intellectual property;

● interpretations of current laws and the passages of future laws;

● acceptance of our business model by investors;

● the accuracy of our estimates regarding expenses and capital requirements; and

● our ability to adequately support organizational and business growth.

The

foregoing does not represent an exhaustive list of matters that may be covered by the forward-looking statements contained herein or

risk factors that we are faced with that may cause our actual results to differ from those anticipated in such forward-looking statements.

Please see “Part I—Item 1A—Risk Factors” for additional risks which could adversely impact our business and financial

performance.

All

forward-looking statements are expressly qualified in their entirety by this cautionary notice. You are cautioned not to place undue

reliance on any forward-looking statements, which speak only as of the date of this report or the date of the document incorporated by

reference into this report. We have no obligation, and expressly disclaim any obligation, to update, revise or correct any of the forward-looking

statements, whether as a result of new information, future events or otherwise. We have expressed our expectations, beliefs and projections

in good faith and believe they have a reasonable basis. However, we cannot assure you that our expectations, beliefs or projections will

result or be achieved or accomplished.

PART

I

ITEM

1. BUSINESS

All

references in this report to “Dermata,” the “Company,” “we,” “us,” or “our”

mean Dermata Therapeutics, Inc. unless stated otherwise or the context otherwise indicates.

Overview

We are a scientific leader in skincare, dedicated

to the development and commercialization of products that address common and underserved skin conditions. Dermata initially was founded

with a focus on researching and developing prescription products subject to the FDA approval process. As part of this focus, we had one

lead asset, referred to as XYNGARI, also known as DMT310, which we had been studying in clinical trials for the treatment of moderate-to-severe

acne. In March 2025, we announced that we achieved statistically significant results from our Phase 3 STAR-1 clinical trial of XYNGARI,

formerly our lead prescription (“Rx”) candidate incorporating our Spongilla lacustris for moderate-to-severe acne.

XYNGARI demonstrated statistically significant results across all three co-primary endpoints at weeks 4, 8, and 12 when compared with

placebo. Following the successful completion of the STAR-1 trial, we conducted a full assessment of the Rx acne landscape and the future

Rx acne development pathway for XYNGARI. In September 2025, after an extensive review of current trends in dermatology, changing consumer

preferences, additional non-clinical and clinical development costs, and go-to market costs for an Rx acne product, management, with support

from our board of directors, determined that a strategic shift to developing and distributing DTC and B2B skincare products, that are

backed by science, would be a better path to commercialization with potentially greater financial upside and faster time to market. We

believe we can leverage our history and knowledge of Rx dermatology to create skincare products that are effective and safe, and available

to consumers without the nuisance of obtaining a prescription. We believe this strategic repositioning will accelerate our path to commercialization,

reduce our regulatory burden, and decrease development expenses, all while enabling us to address broad consumer segments in the skincare

market.

We believe the skincare market, from a cosmetic,

OTC, and Rx perspective, has seen a substantial shift towards consumers first relying upon multifaceted cosmetics and OTC products that

simplify routines. Consumer preferences are changing to favor natural products that do more for their skin. There appears to be a resurgence

of interest in traditional remedies to treat various conditions. We have also seen an increasing trend towards the use of OTC treatments

for common skin diseases such as acne vulgaris (or “acne”), psoriasis vulgaris (or “psoriasis”), and acne rosacea

(or “rosacea”). The causes, symptoms, and treatments for common skin issues, like acne, have over 50 million patients in the

U.S., and are well researched by consumers due to the extensive publicly available information. Thus, we believe consumers are more willing

to conduct and trust their own research and treat these diseases with OTC offerings prior to seeing a dermatologist. Over 70% of patients

with acne first choose to try multiple OTC products to treat their acne before seeing a dermatologist. However, many of the currently

available OTC acne products are mildly effective and have many tolerability issues that result in poor patient compliance. Consumers with

acne that do not get satisfactory results, either due to lack of efficacy or tolerability issues, typically wait about one year before

scheduling a visit with a dermatologist to seek alternative therapies. Additionally, due to the cost-effective pricing of OTC products,

as compared to Rx products, a desire for self-administration, difficulty getting appointments with dermatologists, or insurance coverage

for branded Rx products, many consumers are first relying on OTC products to fill their treatment needs. We believe that if we can provide

consumers with a unique topical acne treatment, we have an opportunity to capture a large segment of acne patients prior to them seeking

Rx products through a physician. While this is a major shift in strategy for our company, we believe pursuing the commercial sale of both

cosmetic and OTC skincare products is the best path forward to meet our mission of providing consumers with efficacious and safe skincare

treatment options.

We view this shift in consumer preferences as

a significant benefit for our strategic repositioning. We have gained substantial clinical knowledge of various dermatology diseases and

skin conditions. We plan to leverage this knowledge to create a whole product line of skincare treatments that consumers can access directly

for each of their skincare needs. While our background is in clinical products, we plan to leverage the unique attributes of our hero

ingredient, Spongilla lacustris, to develop both cosmetic and OTC skincare treatments. We plan to launch our first cosmetic product

in the middle of 2026, with our first OTC acne product to follow shortly thereafter. In the future, we plan to offer additional products

that target specific needs of consumers. For example, for consumers who want to improve the general appearance of their skin we plan to

commercialize a once weekly foundational treatment for skin renewal. Consumers suffering from many common forms of acne, we plan to offer

our OTC topical acne system. The foundational treatment will utilize our Bioneedle, which is 100% Spongilla lacustris powder, to

provide a once weekly skin renewal routine that is simple addition to skincare routines. This kit will contain our Bioneedle which will

be combined with a fluidizing agent for easy application.

Our Bioneedle is derived from a wildly grown freshwater

sponge, Spongilla lacustris or Spongilla, which is processed into a fine, purified powder and packaged with no additives.

Spongilla is a unique freshwater sponge that only grows in commercial quantities in select regions of the world, which gives our

Bioneedle its distinctive organic and mechanical properties. The combination of a proprietary harvesting protocol, developed by our exclusive

supplier, and the post-harvest processing procedures, produce an ingredient that we believe optimizes the mechanical components, which

are silica microstructures also called spicules, as well as the organic components of Spongilla, while eliminating any harmful bacteria

that could be found in many freshwater or marine sponges. Keeping our clinical roots in mind, we plan to offer an acne system that has

been dermatologist tested.

Our weekly Bioneedle treatment, aimed to help

refine the appearance of a consumer’s skin, will be used alongside a daily salicylic acid wipe to help fight the acne lesions. We

believe the unique attributes of our clearing treatment used in tandem with an OTC monograph active ingredient (salicylic acid) could

produce a superior OTC product unlike anything currently on the market. We plan to develop and distribute a variety of cosmetic and OTC

products that are backed by science and are easily accessible by consumers who are more comfortable treating their skin problems independently

with readily available therapies. Our core values will remain unchanged during this strategic shift as we strive to provide consumers

with affordable, safe, and effective treatment options, which can be obtained either through our DTC channels or through healthcare professionals,

without having to get a prescription. We believe consumers are seeking greater flexibility and freedom in treating their skin and we believe

we can offer them a solution.

In addition to the DTC channel for our products,

we believe there is a market for our technology to aid in the intradermal delivery of macromolecules for various aesthetic conditions.

Typically, for facial aesthetics, botulinum toxins are injected into facial muscles to reduce forehead, lateral canthal, and glabella

deep lines. However, this is limited to the use of intradermal delivery of botulinum toxin for a variety of skin diseases and conditions.

Botox is currently the only approved botulinum toxin for the treatment of axillary hyperhidrosis via intradermal injections. While effective,

intradermal injections, including 10-15 per axilla, of Botox can be painful for patients and very time consuming for dermatologists. Therefore,

we believe developing a less painful, less time-consuming topical delivery of botulinum toxin into the dermis for various aesthetic and

medical skin diseases and conditions, would provide physicians with an attractive alternative to intradermal injections of botulinum toxins.

We believe our Bioneedle can increase the number

of intradermal uses for botulinum toxin by leveraging the unique microstructure of our Bioneedle, to create microchannels into the dermis,

enabling improved dermal penetration of botulinum toxins (i.e. Botox). Additionally, we believe our technology can allow for broader coverage

of larger surface areas of the skin, which we believe will provide a better field effect of the botulinum toxin.

We plan to leverage our Bioneedle platform

for broad applicability across dermatologic and aesthetic skin conditions, potentially allowing dermatologists and aestheticians to increase

the use of botulinum toxin. We believe this non-invasive approach could meaningfully expand the therapeutic and aesthetic utility of botulinum

toxin for conditions such as axillary, palmar, and plantar hyperhidrosis, acne, acne scars, rosacea, and improved facial aesthetics (including

improvements in skin luminosity and brightness, reducing pore size and number of pores, reducing fine lines, and reducing skin oiliness

by decreasing sebum production). We plan to continue to explore additional uses for this platform and look forward to getting our technology

in the hands of aestheticians and dermatologists so they may better serve the medical and aesthetic needs of their patients.

The Tome Evolution

When we made the strategic decision to switch

to developing DTC products, we wanted to build a new brand that fully encompassed this new endeavor. We conducted extensive consumer interviews

to learn what today’s skincare consumers think is missing in their skincare routines. We aimed to find the “white space”

in the vast skincare environment by exploring what products and routines consumers currently use and what is missing. Through multiple

interviews across multiple cohorts of consumers, we found that while the industry sees acne care, skincare, and beauty as distinct categories,

many consumers see them all as collective acts of self-care. These consumers who are invested in their skin are not merely looking for

a quick fix but a lasting effect that feels like self-care. Their skin is unique and they are searching for unique products, and we wanted

to build a skincare brand that meets the needs of these consumers. We found that these consumers are highly invested in the products they

put on their skin and are willing to purchase products at a premium price.

With these consumers in mind, we set out to build

a brand that maintained our core values, of being honest, natural, and simple. In a category full of complex ingredients, we believe consumers

want tried-and-true, time-tested products that include natural ingredients that are not manufactured in a lab. Recent trends in skincare

include the use of beef tallow, holy basil, or kaolin clay. However, we feel many of these products lack the clinical rigor to warrant

their long-term inclusion in a true skincare routine. This is why we felt it was the right time to leverage our hero ingredient, Spongilla

lacustris, and its long history of helping people’s skin with the launch of our DTC skincare brand. We believe this approach

will bridge the gap between the powerful, traditional ingredients and the innovation of today; to provide consumers with the science to

back up the products they are using on their skin.

With our newfound focus, we sought a brand name

that would embody our drive to develop skincare products that turned time-honored remedies into proven skincare for our mature adopters.

We wanted consumers to feel like experts in the skincare they are using by being able to learn about the ingredients in the products they

are using rather than just reading a label. We believe our avid skincare users have a true fascination with their skin, and thus, are in

pursuit of knowledge about the best products available. We believe we can immerse our consumers in our products and especially our hero

ingredient, because it truly is one of a kind. Which is why we have branded our new skincare line TomeTM.

Tome in its literal meaning is a large, important,

scholarly book. We wanted a name that told the right story, while being rooted in science and learning. Tome is a name that we believe

will stand out from competitors and forge a deeper connection with consumers and our current and future product offerings. We intend to

launch a line of skincare products with our hero ingredient, Spongilla lacustris. While some cultures have used Spongilla

for various conditions like bruises, arthritis, and some cosmetic conditions, we have studied the entire sponge to learn the true mechanisms

that make it such a unique ingredient. We plan to make a brand that stands for time-tested ingredients combined with next-generation science

to help consumers reveal their best skin and Tome skincare products will stand as its foundation. We are currently finalizing the launch

of our first commercial products, which we expect to be available in the middle of 2026.

Our

Strategy

We

plan on developing and commercializing differentiated OTC and aesthetic skincare products for the treatment of various skin diseases

and conditions, which we believe have significant unmet needs in the skincare market. The key components of this strategy are as follows:

The

dates reflected in the foregoing are estimates only, and there can be no assurances that the events included will be completed on the

anticipated timeline presented, or at all. Further, there can be no assurance that we will be successful in the development or commercialization

of Tome products, or any other products we may develop in the future.

Dermatology

Market Overview

The

skincare market represents a broad and diverse segment of the consumer health and beauty industry, encompassing both OTC products and

cosmetic formulations intended to improve the appearance and condition of the skin. Within the skincare market, we believe there is ample

white space for innovative and differentiated products to obtain valuable market share. The cosmetic and skincare industry has experienced

significant growth in recent years, with global markets estimated to reach $736 billion by 2028. This growth has been driven by a variety

of factors, including increasing demand for natural ingredients, changing consumer attitudes, and the rise of new distribution channels

such as online retail.

The

broader cosmetic skincare market includes products focused on exfoliation, skin renewal, texture improvement, hydration, and overall

skin appearance. This segment is driven by consumer interest in preventative care, visible results, and innovative ingredient systems,

and spans mass, prestige, and professional distribution channels. As a result, differentiation is often driven by formulation innovation,

novel ingredient systems, and clear, compelling product positioning. We believe skincare enthusiasts are still searching for the next

best skincare product that can deliver results.

In

recent years, the cosmetic skincare market has increasingly shifted toward products that emphasize active ingredients,

science-backed formulations, and visible performance benefits, often drawing inspiration from dermatology and therapeutic skincare.

In the cosmetics space, there is great interest in natural components, such as plant extracts, antioxidants, peptides, and

probiotics due to their potential to enhance skin health through various mechanisms. Many of these natural components have been

found to have bioactive compounds including antioxidants, anti-inflammatory, and antimicrobial properties. This trend has

contributed to the growth of so-called “cosmeceutical” products, which occupy a space between traditional cosmetics and

OTC therapeutics by offering enhanced functionality while remaining within cosmetic regulatory frameworks. We believe consumers have

a growing interest in exfoliation, skin renewal, texture refinement, and barrier support, as well as in products that provide an

in-office experience but that can be done at home. We believe these dynamics have supported demand for natural ingredients and

product offerings that can be leveraged across multiple product types and use frequencies, including weekly or periodic treatments

positioned as intensive or corrective steps.

In addition to cosmetic uses, acne remains one of the most significant

and persistent consumer skincare needs, affecting over 50 million adolescents and adults in the US, across a wide range of demographics.

The OTC acne market is characterized by products containing established active ingredients from the OTC monograph, such as salicylic acid,

benzoyl peroxide, and sulfur, and is largely driven by consumer demand for accessible, non-prescription solutions that can be incorporated

into daily or periodic skincare routines. While the OTC acne market operates alongside the Rx acne market, prescription treatments are

generally reserved for moderate to severe acne cases and may involve higher costs, potential side effects, and ongoing medical supervision,

all while offering limited results. As a result, over 70% of patients with acne first choose to try OTC acne products and wait at least

one year before seeing dermatologist. U.S. Google searches for “acne treatment” grew by about 19 percent to 424,000 average

monthly searches in 2025 as compared with 2024. This patient sentiment towards OTC acne products can also be seen in the number of skincare

brands launching new acne products in 2026. We believe this recent dynamic shift in consumer preferences creates opportunities for differentiated

OTC products that deliver meaningful efficacy while offering improved tolerability, convenience, and alignment with consumers aim to amplify

their skincare routine.

Taken

together, we believe these factors underscore the importance of differentiation and scalability in the cosmetic and OTC markets. We believe

that products built around a distinctive hero ingredient, with demonstrated functional benefits, may be well positioned to address consumer

demand for effective, thoughtfully formulated skincare while supporting long-term brand and portfolio development. We believe this convergence

supports demand for multifunctional products and ingredient platforms that can be adapted across both OTC and cosmetic applications,

providing opportunities for brand extension and long-term portfolio development.

Our

Hero Ingredient – Spongilla lacustris

History

of Sponges

Freshwater sponges have an exceptionally deep

evolutionary history that dates back millions of years, placing them among the earliest surviving multicellular life forms on the planet.

While most sponges remained in marine environments, a smaller lineage underwent the rare and challenging transition to freshwater habitats,

likely during periods of dramatic geological and climatic change. This shift required major adaptations, including tolerance to fluctuating

temperatures, variable oxygen levels, and seasonal drying or freezing conditions, largely absent in stable marine settings. One of their

most remarkable innovations was the development of gemmules, highly resistant reproductive structures that allow freshwater sponges to

survive droughts, ice cover, and nutrient scarcity, re-emerging when conditions improve and helping them repopulate each year, making

them a sustainable source.

The therapeutic interest in freshwater sponges

emerged from both traditional medicine and modern biomedical research. In some folk practices, powdered sponge material was used topically

to stimulate circulation in joints and exfoliate the skin, leveraging the microscopic silica spicules that create controlled microchannels

into the skin. Modern studies, similar to the ones we have conducted in axillary hyperhidrosis and facial aesthetics, have expanded on

this concept, showing that these spicules can enhance transdermal delivery of active compounds, like botulinum toxin, by temporarily increasing

skin permeability. Additionally, freshwater sponges produce a range of bioactive molecules—antimicrobial, anti-inflammatory, and

cytotoxic compounds—that help them defend against bacteria and predators in their natural environment.

Spongilla Lacustris Overview

Of the many marine and freshwater sponges

available, Spongilla lacustris (“Spongilla”), as seen in Image 1 below, we believe represents the ideal

intersection of nature, science, and visible results, which is why we chose it as a hero ingredient in our skincare products. This

remarkable freshwater sponge has evolved highly specialized silica microstructures, that naturally exfoliate the skin, open

microchannels and stimulate renewal, helping to improve the texture and tone of skin, all while reducing blemishes in a way that

feels both effective and intentional. Beyond its physical properties, Spongilla also contains many organic compounds that may

help improve multiple facets of various skin conditions. Spongilla also reflects our commitment to thoughtfully sourced,

biologically intelligent ingredients that work in harmony with the skin’s natural processes. Its long history of topical use,

combined with growing scientific backing, reinforces our belief that powerful skincare solutions can be derived from nature when

guided by rigorous research and responsible innovation.

Image 1: Spongilla

lacustris

Spongilla

is a freshwater sponge from the Spongillidea family that grows in freshwater rivers and lakes in commercial quantities in select

regions of the world. It goes dormant during the winter months and regrows each year through the dispersion of gemmules. These gemmules

then grow into growth forms ranging from encrusting, to digitate, to branched, depending on its habitat’s growth conditions. While

it grows in many parts of the northern hemisphere, there are only certain locations where it grows in the quantities and of the quality

to viably support commercial products. One such location is the Volga River, where we have signed an exclusive supply agreement with

one of the larger known suppliers of wild harvested Spongilla raw material for our Tome skincare line, which we believe provides

us with a reliable source of our supply of Spongilla raw material for the foreseeable future. Over the last 23 years, our exclusive

supplier has refined its harvesting methods and procedures and is now capable of supplying a high-quality raw material that meets our

release criteria, year-over-year, for a stable and repeatable natural ingredient. Our supplier has the capacity to harvest and process

large quantities of Spongilla per year, which we believe will support the quantities and of the quality of raw material necessary

to support our future commercial needs. Since entering into the exclusive supply agreement, we have consistently been able to order and

receive quantities of raw material to support our ongoing activities and prepare for the planned commercial launch of our once-weekly

acne kit.

BioneedleTM

For many years Spongilla has been believed

to be effective for various ailments, but only recently have we started to learn what makes it such a unique, multifaceted organism. With

our proprietary harvesting protocols and manufacturing procedures, we are able to take Spongilla lacustric raw material and leverage

the combination of evolution and scientific innovation to create a unique product we like to call, Bioneedle. Bioneedle was created to

unite a biological organism that has been around for millions of years with the latest cutting-edge science in skincare, that we believe

will unleash new possibilities for our consumers. The unique nature of our Bioneedle creates a skincare ingredient that has both mechanical

and chemical components that are naturally occurring parts of our raw material and contribute to our hero ingredient’s mechanisms

of action in the improvement of skin diseases and conditions.

Mechanical Components. The mechanical components

of our Bioneedle technology come from the skeletal structure of the Spongilla, which is made up of millions of inorganic siliceous

spicules that are bound together by organic material, as seen in Image 2 below. These spicules are smooth, rod-like shapes which come

to a point on each end, and when the Spongilla is harvested under our specified protocol, the spicules can average between 200-350

micrometers in length and about 10-15 micrometers in diameter. While there are other species of freshwater and marine sponges, many of

their spicules can be covered in barbs or hooks, as seen in Image 3, which we believe are not ideal for skincare products as they may

end up getting stuck in the skin. Other sponges contain spicules that are blunt on each end or curved, making skin penetration difficult

and thus we believe will not permit the successful delivery of various active compounds.

Image

2: Siliceous Spicules Present in Spongilla

Image

3: Other Sponge Spicules

After wildly harvesting and final processing in the U.S., the form

and size of our spicules make them the ideal shape to penetrate the stratum corneum, the skins barrier, and temporarily create micro-channels

into the dermis without penetrating subcutaneous tissue, where the larger blood vessels are located. These newly created microchannels

temporarily open the skin’s barrier to allow for the targeted delivery of large and small compounds into the dermis where they could

have an effect on various skin conditions. Most topically applied products currently contain penetration enhancers that help force the

active molecule through the stratum corneum and into the dermis, such as Dimethyl Sulfoxide (“DMSO”). However, DMSO is only

able to help smaller molecules penetrate the stratum corneum and is usually unable to aid larger molecules, such as botulinum toxin, in

topical delivery. These penetration enhancers can also cause unwanted side effects such as dry skin or garlic like taste, breath, and

body odor. We believe our Bioneedle is differentiated by enabling the delivery of both small and large molecules through topical application

with less irritation and side effects than other topically applied products.

In addition to creating many microchannels in

the skin, we believe the penetration of the spicules can open closed comedones, allowing oxygen into the anaerobic environment of the

clogged pilosebaceous glands, where C. acnes and other bacteria survive. Lastly, we believe the spicules promote collagen

production within the skin which accelerates the skin’s rejuvenation period, thus bringing refreshed skin to the surface at a quicker

rate than the skin’s normal turnover cycle. Typically, the skin takes between three to four weeks to bring a new layer to the surface,

while we believe our spicules may allow this process to complete in about one week. We believe resurfacing will aid in the time to treat

inflammatory skin diseases and conditions while also enhancing the look and feel of a patient’s skin.

Organic Compounds. Our Bioneedle

also contains multiple organic compounds that we believe may aid in our products’ improvement of multiple dermatology skin diseases

and conditions. We believe part of Spongilla’s natural defense mechanism is the creation of organic material to fight off

natural enemies present in the water in which it grows. This organic material binds its spicules together to form the skeletal structure

of the sponge.

While we believe each of the mechanical and organic

components of our Bioneedle technology may be beneficial in treating various skin conditions, the impact of each mechanism may be greatly

enhanced when combined with the other. The large number spicules contained in each treatment create numerous microchannels through the

stratum corneum, allowing for sufficient penetration and delivery of the organic components into the treatment area to reduce inflammation

and bacteria. We plan to incorporate our Bioneedle technology into multiple OTC and cosmetic products that we can sell direct to consumers

and business to business to provide differentiated foundational products for the broad skincare market.

Tome

Skincare Product Line

Summary. Our product development strategy

is centered on the scalable use of our proprietary Bioneedle as the foundation for any well-rounded skincare routine. We believe its unique

mechanisms of action and its broad ability to be used alone or in combination for a variety of skin conditions and cosmetic applications,

like acne, psoriasis, skin renewal, fine lines, overall skin improvement, dandruff. We plan to initially introduce our once weekly foundational

treatment that we believe should be a part of any skincare routine. This will be targeted towards general skincare enthusiasts seeking

an at home aesthetician product for skin renewal and general skin improvements. We also plan to offer additional products to the foundation

treatment, for those consumers suffering from specific types of skin issues, like acne, psoriasis or dandruff. We believe there are many

consumers that want an effective OTC product without needing to seek out a prescription from a dermatologist. We plan to first launch

the foundational treatment in the middle of 2026 with the launch of the acne treatment shortly thereafter. Then, based on future consumer

research and feedback, we plan to launch additional treatments for additional skincare needs. While the once weekly foundational treatment

represents the first commercial demonstration of our Bioneedle technology, we believe the underlying technology has broader applicability

to be used in both OTC therapeutics and cosmetic skincare categories. We believe that by leveraging a foundational ingredient, like our

Bioneedle, across differentiated formulations and use cases, we can efficiently develop a cohesive portfolio of effective skincare products

while reinforcing our mission to forge a new realm of skincare that is powerful, not punishing. Our team believes this platform approach

provides flexibility for future innovation, supports line extensions over time, and positions us to address a wide range of consumer skin

concerns beyond acne. We call this skintech at home.

Foundational

Treatment – powered by Bioneedle

Our

first commercial product to launch will be our Foundational Treatment, consisting of a once-weekly treatment, designed to renew

a consumer’s skin so it feels fresh each and every week. We plan for the Foundational Treatment to be the base of any

well-rounded skincare routine that blends timeless treatments with potent transformations. Through innovative science and deep research,

we created a novel, foundational treatment that is based in powerful, natural ingredients. We believe the combination of these unique

components in a thoughtfully designed treatment could deliver an aesthetician like experience right at home.

Market Overview. The beauty industry is

undergoing a dynamic change, with consumers demanding transparency and clear ingredient lists. Consumers are searching for multifunctional

products to simplify their routines while valuing brand loyalty and sustainable practices. There has been a clear and significant trend

for natural cosmetics, which some refer to as pure beauty. This does not mean that brands can just claim their products are natural and

expect consumers to believe them. Consumers are taking an active role in determining what they consider “natural”, with one

survey finding that 60% of women are willing to invest in new products that prioritize natural products. In addition to looking for products

with natural ingredients, consumers also want their skincare products to be multifunctional. This new trend has been referred to as “skinminimalism,”

which emphasizes the benefits of simplified skincare routines. Consumers are looking to use less products, so they want the products they

do use to do more by providing multiple benefits. While this typically means products will contain 2, 3, or 4 active ingredients, we believe

we can offer another option with a product that is 100% Spongilla lacustris to address multiple skincare issues.

Our Solution for Skincare. Our

Foundational Treatment powered by Bioneedle, will be a once weekly application to help simplify a consumer’s skincare routine

while providing multiple benefits for their skin. We believe this product can be the foundation for any consumer who is looking for

healthier and clearer skin. Whether they are an avid skincare user or someone that is just looking for an easy fix to their skin

issues, we believe our Foundational Treatment can meet their needs. With consumers now looking for natural products that

perform multiple tasks at the same time, we believe this is the ideal time to be launching our first product with our Bioneedle as

the foundation.

In addition to using 100% natural Spongilla

powder, our Foundational Treatment will only need to be applied once per week to provide the appearance of skin renewal that

consumers desire. Most other products on the market need to be applied daily, sometimes multiple times per day, or consumers must seek

the help of a skincare professional for more invasive peels and laser treatments. Therefore, we see our once weekly application as an

immediate differentiator to currently available product offerings. Whether it is in addition to what they already use for their skincare,

or if they feel it can replace many of the products they currently use. With an easy weekly application, we believe our Foundational

Treatment can become the basis for any good skincare routine.

The

Routine

The Bioneedle. The main part of this

treatment is a powder containing our hero ingredient, Spongilla lacustris. As discussed above, this unique ingredient is

multifaceted and we believe it has the ability to improve the quality of the skin. Our Bioneedle is wildly harvested and powdered to

leverage its unique skin renewal properties. It is a combination of unique spicules and organic compounds that we believe work

together to exfoliate the skin, aid in skin renewal, reduce blemishes, all while improving skin texture and quality. We believe the

Bioneedle is ideal for consumers that need either deep renewal or general skin support due to the combination of precision

mechanical resurfacing with organic, skin-conditioning ingredients to support a clearer complexion without relying on harsh

stripping agents.

The Activator. The second component of

the Foundational Treatment system is an activating solution that is mixed with the Bioneedle powder to form a matrix. This activating

solution contains hydrogen peroxide that helps oxidize the powder and liberate the sponge spicules so they may more freely penetrate the

skin upon application. Hydrogen peroxide was first produced in 1818 and has been used in many applications at varying strengths including

therapeutics, chemical application, biological function, and used as an oxidizing agent.

Clearing Treatment – for acne

While we believe that all consumers can eventually

achieve the clear skin they always wanted with our Foundational Treatment, we know there are some whose skin needs a little

extra help, which is why we plan to offer targeted systems to meet the specific needs of our skincare consumers. The first targeted OTC

system we plan to offer is our Clearing Treatment, which will be focused on the treatment of many common forms of acne. Our Clearing Treatment

is designed to fight acne with salicylic acid, widely recognized for the treatment for acne, and our Bioneedle, selected for its ability

to enhance exfoliation and support improved delivery of actives to the skin. This combination is intended to provide a more comprehensive

and efficient treatment experience than existing acne offerings, while potentially improving the look and feel of the skin. We intend

to launch the Clearing Treatment shortly after the launch of our Foundational Treatment.

Market Overview. Acne is one of the most

common dermatologic diseases and can be a significant health burden. Acne is characterized by areas of scaly red skin, non-inflammatory

blackheads and whiteheads, inflammatory lesions, papules, and pustules and occasionally cysts and scarring that occur on the face, neck,

chest, back, shoulders, and upper arms. It affects approximately 50 million people in the U.S., with an estimated 32.6 million diagnosed

cases in the U.S. in 2023, and about 85% of teenagers in the U.S. experiencing some form of acne. The U.S. acne treatment products reached

approximately $1.7 billion in sales in 2025, which was up five percent from the previous year.

Most consumers experience some form of acne during their teenage years,

but there is an increased frequency reported in adults with almost 20% of adult women and 8% of adult men experiencing some form of acne.

While not life-threatening, acne can cause significant trauma for those suffering from it due to social stigmas, visual manifestation,

substantial risk of permanent facial scarring, lowered self-esteem and social withdrawal, all affecting a patient’s quality of life.

Therefore, we believe early and aggressive treatment with an effective, once weekly, topical product may lessen the overall long-term

impact of this disease and may lead to an increase in a patient’s quality of skin and life.

Due to acne’s negative impact on a patient’s

quality of life and impact on facial aesthetic, consumers suffering from acne tend to be highly motivated to treat their acne and we believe

are willing to pay more out-of-pocket for high-value-add treatments, like our Clearing Treatment. It is our belief that consumers seeking

an easy to use and effective topical product will prefer our OTC acne product, rather than lower priced, less effective OTC products or

having to set up an appointment with a dermatologist, only to be prescribed an inferior product. Furthermore, once commercially available,

we believe that our Clearing Treatment’s unique characteristics may allow us to expand our addressable acne market to include those

consumers who may have first thought to seek a prescription treatment, but now see an effective OTC product, like our Clearing Treatment,

as first line therapy.

The

acne market can be broken into three separate classes based on the severity of the acne:

By leveraging the combination of multiple components

to build our treatment, we believe we can treat all levels of acne, from mild all the way up to severe acne.

Limitations of Current Standard of Care.

While current treatment options may be effective for some consumers, there are many limitations and drawbacks of current OTC and Rx acne

products, which cause poor patient compliance and reduced efficacy. Currently available topical therapies for the treatment of acne must

be applied up to three times a day to allow an accumulation of the active ingredient within the skin to effectively treat the disease.

This requirement to apply once or multiple times per day becomes very onerous and time consuming for consumers, causing many consumers

to fail to comply with the strict application regimen and/or skip multiple treatments. Proper use and application schedules are particularly

important for topical acne products and poor patient adherence may lead to reduced treatment effect and ultimately discontinuation of

treatment by the patient due to the lack of effect.

In addition to the onerous application schedule,

some current acne products, such as retinoids that must be applied multiple times a day, may cause significant stinging, burning, and

peeling after each application. These tolerability issues, which may start occurring after the first application, and the substantial

discomfort they cause, lead many consumers to discontinue the necessary daily application schedule or the use of the product altogether.

It is well known that benzoyl peroxide, or BPO, leads to drying of the skin and that retinoids result in many local skin reactions including

erythema, burning, and peeling, after the first treatment. This has been observed in the combination study of adapalene/BPO, where more

than 20% of the subjects reported moderate or severe erythema and stinging/burning.

Lastly, most topical products have an unavoidable

latency period of 6-8 weeks until consumers have a definite improvement in their acne lesions. This means they may have to endure 30 to

60 applications before observing that their acne is improving (assuming a daily or twice daily regimen), all while dealing with the burning,

stinging, and peeling that may accompany these topical products. We believe today’s consumers become impatient with the lack of

rapid perceived effect of available products thus leading to premature discontinuation of treatment. The lack of rapid treatment effect,

side effects, and onerous application schedules all greatly contribute to patient noncompliance issues and could ultimately lead to treatment

failure for current topical therapies. We believe consumers are more invested in rapid efficacy outcomes and low side effects than costs,

thus we believe consumers will be more willing to pay for a high value acne treatment, like our Clearing Treatment.

Our Solution for Acne. We believe our Clearing

Treatment will offer consumers a differentiated treatment option than what is currently available by delivering powerful results without

harmful side effects. We believe our Clearing Treatment will have an apparent rapid treatment effect, clear acne lesions, and potentially

improve overall skin quality, making our system a fundamental product for any skincare routine. We are in the final stages of the development

and packaging to create a paradigm shift in how consumers can treat their acne. We have designed our Clearing Treatment to remedy the

multiple factors of acne while also attempting to increase patient compliance through ease of use and acceptable tolerability profile.

Once launched, we believe our Clearing Treatment

has the potential to remedy many of the negative characteristics associated with current topical therapies for acne, including cumbersome

treatment regimens, negative side effects (including burning, stinging, itching or dryness, which may occur as early as the first treatment

and continue daily thereafter), and delayed time to effectiveness (which may take up to eight weeks). Our Clearing Treatment system is

designed to have a faster time to treatment than currently available therapies, potentially leading to higher patient compliance. A rapid

visible response may encourage consumers to continue to comply with the application schedule, leading to a continued reduction in their

lesions. We will recommend a 12-week treatment cycle with our Clearing Treatment or once the patient has cleared their acne, we believe

they can transition over to our Foundational Treatment for continued skin maintenance. We believe continued maintenance applications

will be important and encouraged for consumers to maintain acne free skin as part of their ongoing skincare routine.

Our Clearing Treatment will be sold as a 4-week

supply, with the option to subscribe to a refill-based subscription at a discounted price. The Clearing Treatment will contain four weeks

of daily salicylic acid wipes and four weekly Bioneedle treatments that should be applied by the patient as directed. We believe the daily

wipes are a way to help quickly reduce acne lesions in between the weekly Bioneedle treatment applications. We believe this combination

can be the foundation for better skin health due to its multifaceted approach of reshaping a person’s skin, with a weekly renewal

of the skin and a daily acne therapy. We do not believe that consumers have to compromise on their acne treatment and see our Clearing

Treatment as a way to meld ancestral wisdom with scientific innovation to create an entirely new approach to acne.

The Acne Routine

The Bioneedle Treatment. Once per week,

consumers will complete their Bioneedle treatment, as discussed above, to help reset the appearance of their skin. The Bioneedle treatment

will help jumpstart their skin’s natural healthy process, which will be followed by daily salicylic acid wipe applications for their

daily fight against acne lesions. We believe this dual method will help not only treat acne but provide acne consumers with clearer, fresher

looking skin.

The Wipe. As the daily part of their acne

treatment routine, consumers will cleanse their face with the provided wipe. This wipe is infused with 0.5% salicylic acid solution, a

known active ingredient for treating acne. Salicylic acid (“SA”) is part of the U.S. Food and Drug Administration’s

(“FDA”) OTC monograph for the treatment of acne and has been used topically treat various skin diseases for over 2,000 years.

Its origins are traced back to ancient civilizations, where extracts from willow bark were used to treat various skin disorders through

its exfoliation properties. More recently, SA’s peeling properties have been considered a complementary treatment for the management

of acne, since it causes the controlled and safe removal of superficial lesions followed by regeneration of dermal tissue. In addition

to its promotion of cell turnover, SA is also used for its anti-inflammatory activity, helping to relieve facial erythema associated with

acne. With daily cleansing of their skin with the salicylic acid wipe, consumers will not only be removing dirt and harmful oils but also

beginning the removal of their acne lesions.

The upcoming launch of our Foundational

Treatment and eventual launch of our Clearing Treatment is expected to solidify our presence in the skincare market while reinforcing

our broader strategy of developing category-defining skincare products built around unique ingredient systems and novel usage paradigms.

We plan to initially introduce the kit through targeted channels that emphasize education and regimen-based skincare, with the potential

for broader distribution over time. While we cannot ensure commercial success, we believe that the differentiated formulations, simplified

routine, and clear consumer messaging will support strong initial adoption and provide a foundation for future line extensions within

the broader skincare market.

Future Tome Skincare Products

In addition to its skin renewal and acne-focused

benefits, we believe the multifaceted Bioneedle technology offers a versatile platform for broader OTC and cosmetic applications by combining

controlled mechanical resurfacing with enhanced topical performance either alone or in combination with other active ingredients. By creating

transient microchannels and increasing surface turnover, we believe the Bioneedle can support improved skin smoothness, radiance, and

texture refinement while helping optimize the delivery and amplifying the performance of well-established skincare active ingredients.

Our Bioneedle technology may be leveraged across a range of formulations, including brightening and tone-correcting products, anti-aging

and firming regimens, skin rejuvenation protocols, in addition to treating serious skin disease. While we are currently focused on preparing

for the commercial launches of our Foundational Treatment and Clearing Treatment, we continue to research additional skincare

market opportunities. We aim to find the “white space” in the various subsectors where few to no products currently reside

and where our therapies can enter and quickly establish a strong market presence.

One near-term opportunity is a milder Bioneedle

treatment to help with texture for more sensitive skin types. It would be positioned for consumers with sensitive skin seeking smoother,

brighter skin without aggressive procedures. A Bioneedle “polishing” treatment could be paired with brightening and antioxidant

ingredients to help improve dullness, uneven tone, and post-inflammatory discoloration while also visibly refining pores and skin texture.

This concept is well suited for face and body applications, including areas prone to roughness such as the cheeks, jawline, and décolleté,

and can be marketed as a weekly “reset” step in a cosmetic routine. Unlike other at-home texture products that claim to include

spicules, our product will incorporate a mild version of our sponge matrix that may help retexture the user’s skin through a mild

application. The intention of this product would be to fill the void of at-home scrubs and overly intense in-office procedures, like chemical

peels or invasive microneedling devices, which can be painful and costly for consumers. This will be part of our skintech at home where

we believe consumers will feel like they are receiving a luxury therapy, but at a reduced price.

A second highly compelling opportunity is an OTC

topical psoriasis care system designed to help manage the visible symptoms associated with plaque buildup, rough texture, and discomfort.

While the psoriasis category has seen significant innovation in prescription biologics, there are comparatively few differentiated OTC

options that focus on improving scale-related texture and supporting consistent topical performance. A Bioneedle treatment could be positioned