Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION

The following discussion and analysis of the results of operations and financial condition of BullFrog AI Holdings, Inc. ("BullFrog" or the "Company") as of and for the years ended December 31, 2025 and 2024 should be read in conjunction with our consolidated financial statements and the notes to those consolidated financial statements that are included elsewhere in this Annual Report on Form 10-K. References in this Management's Discussion and Analysis of Financial Condition and Plan of Operation to "us", "we", "our" and similar terms refer to the Company. This Management's Discussion and Analysis of Financial Condition and Plan of Operation contains statements that are forward-looking. These statements are based on current expectations and assumptions that are subject to risk, uncertainties, and other factors. These statements are often identified by the use of words such as "may," "will," "expect," "believe," "anticipate," "intend," "could," "estimate," or "continue," and similar expressions or variations. Actual results could differ materially because of the factors discussed in "Risk Factors" elsewhere in this Annual Report on Form 10-K, and other factors that we may not know.

OVERVIEW

BullFrog AI Holdings, Inc. was incorporated in the State of Nevada in February 2020. BullFrog AI Holdings, Inc. is the parent company of BullFrog AI, Inc. and BullFrog AI Management, LLC, which were incorporated in Delaware and Maryland, in 2017 and 2021, respectively. Operations are currently conducted through BullFrog AI Holdings, Inc., which began operations in February 2020. We are a company focused specifically on advanced Artificial Intelligence / Machine Learning ("AI/ML") analysis of complex data in the advancement of medicine. Our AI/ML platform (trade name: bfLEAP™) was created from technology originally developed at The Johns Hopkins University Applied Physics Laboratory ("JHU-APL"). Subsequently, we have developed new tools and capabilities composed of an ensemble of machine learning and artificial intelligence models.

In February 2018, we secured an original exclusive, worldwide, royalty-bearing license from JHU-APL for the technology underlying our bfLEAP™ platform. The license covers three (3) issued patents, one (1) new provisional patent application, non-patent rights to proprietary libraries of algorithms and other trade secrets including modifications and improvements. We entered into a license agreement in July 2022 that provides the Company with new intellectual property and also encompasses most of the intellectual property from the February 2018 license. Our objective is to utilize bfLEAP™, our AI/ML platform, with a precision medicine approach toward drug development with biopharmaceutical collaborators, as well as with our own internal clinical development programs. We believe the bfLEAP™ platform is ideally suited for evaluating pre-clinical and clinical trial data generated in translational research and clinical trial settings in order to lead to faster, less expensive drug approvals.

Our aim is to improve the odds of success in each stage of developing medicine, ranging from early pre-clinical through late-stage clinical development. Our ultimate objective is to utilize bfLEAP™ to enable the success of ongoing third-party clinical trials or rescue late-stage failed drugs (i.e., Phase II or Phase III clinical trial failures) for in-house development and divestiture. We will also consider collaborations for earlier stage drugs.

In July 2022, we entered into an exclusive, worldwide, royalty-bearing license from JHU-APL that provides additional intellectual property rights including patents, copyrights, and knowhow for the technology underlying our bfLEAP™ analytical AI/ML platform. In consideration for the new license entered into in July 2022 with JHU-APL, we issued to JHU-APL 39,879 shares of common stock. Under the terms of the new license agreement, JHU-APL will be entitled to eight (8%) percent of net sales for the services provided by the Company to other parties and three (3%) percent for internally developed drug projects in which the JHU-APL license was utilized. The new license also contains tiered sub licensing fees that start at fifty (50%) percent and reduce to twenty-five (25%) percent based on revenues. In May 2023, we entered into Amendment Number 1 of the July 2022 license agreement with JHU-APL pursuant to which we gained access to certain improvements including additional patents and knowhow in exchange for a series of payments totaling $275,000. The first of these payments of $75,000 was paid in July 2023, the second of these payments was paid in June 2025, and the remaining payments of $75,000 and $50,000 are due in years 2026 and 2027, respectively. The amendment also reduced the 2023 minimum annual royalty payment from $80,000 to $60,000. All other financial terms remain the same. As a result of this amendment, the minimum annual payments were $30,000 for 2022 and $60,000 for 2023, and the minimum annual payments will be $300,000 for 2024 and beyond, all of which are creditable against royalties paid by us. As of December 31, 2025, we have accrued $300,000 for the 2025 minimum annual royalty payments and the entire accrued balance remains uninvoiced and unpaid as of the date of this filing.

We intend to continue to evolve and improve bfLEAP™, either in-house or with development partners like JHU-APL. We plan to leverage our proprietary AI/ML platform developed over several years at one of the top innovation institutions in the world, which has already been successfully applied in multiple sectors.

We operate and have staffed our business using funds from our initial public offering and subsequent financings. Since our incorporation, we have entered into various partnerships and relationships, completed our first commercial service contract with a leading rare disease non-profit organization for AI/ML analysis of late-stage clinical data in 2023, and completed our collaboration agreement for clinical trial optimization with a Phase III oncology company focused on novel chemotherapeutic treatments for rare cancers in the third quarter of 2025. We have also acquired the rights to a series of preclinical and early clinical drug assets from universities, as well as a strategic collaboration with a world-renowned research institution to create a HSV1 viral therapeutic platform to engineer immunotherapies for a variety of diseases. We have signed exclusive worldwide license agreements with JHU for a cancer drug that targets glioblastoma (brain cancer), pancreatic cancer, and others. We have also signed an exclusive worldwide license from GWU for another cancer drug that targets hepatocellular carcinoma (liver cancer) and other liver diseases. In addition, we have signed three-year strategic data and commercialization agreements with the Lieber Institute for Brain Development ("LIBD") whom we believe has a repository of the largest collection of postmortem brains in the world, including molecular, clinical, and other data. The objective of this collaboration with LIBD is for the Company to analyze these rich data sets using its proprietary AI/ML tools and models and then go to market with the discoveries with the ultimate goal of securing revenue generating strategic partnership deals with biopharmaceutical companies. We intend to secure the rights to other proprietary data sets and repeat this strategy. Additionally, we intend to gain access to later-stage clinical assets through partnerships or the acquisition of rights to failed therapeutic candidates for drug rescue. In certain circumstances, we intend to conduct late-stage clinical trials in an effort to rescue therapeutic assets that previously failed. In these cases, there will be a requirement for drug supply and regulatory services to conduct clinical trials. The success of our clinical development programs will require finding partners to support the clinical development, adequate availability of raw materials and/or drug product for our R&D and clinical trials, and, in some cases, may also require establishment of third-party arrangements to obtain finished drug product that is manufactured appropriately under good manufacturing practices, and packaged for clinical use or sale. Since we are a company focused on using our AI/ML technology to advance medicines, any clinical development programs will also require, in all cases, partners and the establishment of third-party relationships for execution and completion of clinical trials.

Since completing our initial public offering in February 2023 (the "IPO"), aided by the receipt of the IPO proceeds in addition to the proceeds from our February 2024 and October 2024 offerings and our ongoing At-The-Market Sales Agreement with BTIG, LLC (the "ATM Agreement") and common stock purchase agreement with Lincoln Park Capital Fund, LLC, we have implemented several initiatives including: investor relations and marketing to raise awareness of the Company in the financial and business sectors, research and development, and initiation of preclinical studies with our in-licensed drug programs. The Company is actively engaged in developing and pursuing new intellectual property as it strives to continuously evolve its AI/ML platform.

Internally, we have added incremental staff to accelerate execution and the development of processes and custom scripts for use in performing new drug target discovery and analytical services for customers, while also launching initiatives targeting large public health data sources and seeking access to proprietary health data sources, such as our agreement with the LIBD. We are also continuing to improve our accounting and financial reporting systems and processes to enhance our internal control environment as a public company. Capital from the IPO was also used to retire two notes that were sold to fund the Company through the IPO as well as other debts accrued over time to our staff, employees and consultants, and obligations related to the acquisition of our licensed drug programs.

We have had negative cash flows from operations and operated at a net loss since inception. In the first quarter of 2023, we completed our IPO. In February 2024, we received net proceeds of approximately $5.7 million from an underwritten public offering of common stock and warrants. In October 2024, we received net proceeds of approximately $2.7 million from a registered direct offering of common stock and pre-funded warrants, and concurrent private placement of common stock warrants. Through December 31, 2025, we received approximately $2.6 million of net proceeds from the sale of our common stock pursuant to the ATM Agreement. As of December 31, 2025, the Company has a cash balance of approximately $2.3 million, which includes restricted cash of $0.1 million held by a financial institution as collateral for the Company's corporate credit card program. As of December 31, 2025, the Company's cash and cash equivalents position is not sufficient to fund the Company's planned operations for at least a year beyond the filing date of the consolidated financial statements. These factors raise substantial doubt about the Company's ability to continue as a going concern. The ability to continue as a going concern is dependent upon us utilizing the financing facilities available to us and/or obtaining necessary additional financing and/or revenues to meet our obligations arising from normal business operations when they become due.

Our Strategy

We have a strategy designed to reduce risk and increase the frequency of cash flow. The first part of the strategy is to generate revenues through strategic relationships with biopharma companies. These relationships will be structured as a combination of fees in cash and, in some instances, equity in our partners, or other consideration and intellectual property based on the specific scope of the engagement. The objective of these engagements will be to uncover valuable insights to reduce the risk and increase the speed of the drug development process, which can be achieved through manual or automated integration into the client's workflow or analysis of discrete data sets.

In the future, the second part of our strategy involves acquiring the rights to drugs at various stages of development and using our proprietary AI/ML technology to advance the development of such drugs, with the objective of creating near term value and then exiting and monetizing as quickly as possible, preferably within approximately 30 months.

Results of Operations

For the years ended December 31, 2025 and 2024

Collaboration Revenue and Cost of Collaboration Revenue

In the year ended December 31, 2025, we recognized revenue and cost of revenue of approximately $117,000 and $95,000, respectively, which entirely related to our lone collaboration agreement with Eleison Pharmaceuticals Inc. ("Eleison"), a Phase III oncology company focused on novel chemotherapeutic treatments for rare cancers. We had no active customer agreements in the year ended December 31, 2024 and, therefore, no revenue was recognized.

Operating Expenses

		Year ended December 31,								Net Change
		2025				2024				$				%
Operating expenses:
Research and development		$	1,799,738			$	2,223,265			$	(423,527	)			-19	%
General and administrative			4,816,790				5,013,118				(196,328	)			-4	%
Total operating expenses		$	6,616,528			$	7,236,383			$	(619,855	)			-9	%

Research and Development

Our research and development expenses for the year ended December 31, 2025 decreased compared the year ended December 31, 2024, primarily due to a reduction in personnel costs and the allocation of certain personnel costs from research and development to cost of revenue related to our collaboration with Eleison.

General and Administrative

Our general and administrative expenses for the year ended December 31, 2025 decreased compared to the year ended December 31, 2024, primarily due to reductions in our director and officer insurance policy premium and recruiting fees, partially offset by an increase in noncash stock-based compensation expense.

Other Income (Expense), Net

Interest expense decreased by approximately $12,000 for the year ended December 31, 2025, compared to the same period ended December 31, 2024 due to a decrease in our director and officer insurance policy premium loan. Interest income decreased by approximately $159,000 primarily due to a decrease in our average cash balances.

Liquidity and Capital Resources

Through December 31, 2025, we have an accumulated deficit of approximately $23.3 million and we have funded our operations through the sale of common stock, warrants and debt. We anticipate that our expenses will increase in the future to support our service offerings, clinical and pre-clinical research and development activities associated with strategic partnering and collaborations, as well as acquired product candidates. These increases could include increased costs related to the hiring of additional personnel and fees to outside consultants, lawyers, and accountants, among other expenses.

In February 2024, we completed an underwritten offering of common stock and warrants generating approximately $5.7 million of net proceeds. In October 2024, we completed a registered direct offering of common stock and pre-funded warrants, and concurrent private placement of common stock warrants generating approximately $2.7 million of net proceeds.

In April 2025, we entered into an ATM Agreement with BTIG, LLC, pursuant to which we may offer and sell shares of common stock, from time to time in our sole discretion, at the market price up to an aggregate offering price of $20 million. We are not obligated to sell any shares, and BTIG is not required to sell any specific number or dollar amount of shares of common stock. Accordingly, we will not receive any proceeds from such transaction until shares are actually sold by BTIG. Subject to our request to sell shares, BTIG will use commercially reasonable efforts, consistent with its normal trading and sales practices, to sell shares of common stock on our behalf in accordance with Company instructions. Notwithstanding the foregoing, there can be no assurance that we will be able to sell, when needed, sufficient shares under the ATM Agreement to fund planned operations. In the year ended December 31, 2025, we received approximately $2.6 million of net proceeds from the sale of 1,686,511 shares of our common stock at an average price of approximately $1.59 per share. Subsequent to year end 2025, we received approximately $0.9 million of net proceeds from the sale of 976,204 shares of our common stock at an average price of approximately $0.90 per share. Consequently, as of the date of this filing, approximately $16.4 million of capacity remains available under the ATM Agreement; however, the amount we are permitted to raise in any 12-month period is currently limited based on our public float pursuant to SEC General Instruction I.B.6 of Form S-3. Accordingly, as of the date of this filing, we are limited to additional common stock sales of approximately $1.1 million under the ATM Agreement.

In September 2025, we entered into a purchase agreement with Lincoln Park Capital Fund, LLC ("Lincoln Park"), pursuant to which Lincoln Park committed to purchase up to $10.0 million of our common stock, subject to certain limitations. We have the right, but not the obligation, to sell to Lincoln Park, and Lincoln Park is obligated to purchase up to $10.0 million of our common stock. Such sales of common stock by the Company, if any, will be subject to certain limitations set forth in the purchase agreement, and may occur from time to time, at our sole discretion, over the 36-month period commencing on November 25, 2025, the date that the conditions to Lincoln Park's purchase obligation set forth in the purchase agreement were satisfied. In connection with the purchase agreement, we issued 147,682 shares of common stock valued at approximately $207,000 to Lincoln Park as a fee in advance of any sales pursuant to this facility. No shares were sold under this facility during the year ended December 31, 2025. In January 2026, we received net proceeds of approximately $218,000 from the sale of 270,000 shares of common stock at an average price of approximately $0.81 per share.

As of December 31, 2025, our cash and cash equivalents position is not sufficient to fund our planned operations for at least a year beyond the filing date of the consolidated financial statements. These factors raise substantial doubt about our ability to continue as a going concern. The ability to continue as a going concern is dependent upon us utilizing the financing facilities available to us and/or obtaining necessary additional financing and/or revenues to meet our obligations arising from normal business operations when they become due. Accordingly, we will seek additional capital to continue to execute our strategy as discussed above.

On August 21, 2025, we received a letter from the listing staff of The Nasdaq Stock Market LLC ("Nasdaq") that we were no longer in compliance with the minimum stockholders' equity requirement for continued listing on Nasdaq pursuant to Nasdaq Listing Rule 5550(b)(1) (the "Stockholders' Equity Rule"). The Stockholders' Equity Rule requires companies listed on the Nasdaq Capital Market to maintain stockholders' equity of at least $2,500,000 or to meet alternatives of market value of listed securities or net income from continuing operations, which we do not currently meet. In accordance with Nasdaq rules, we had 45 calendar days, or until October 6, 2025, to submit a plan to regain compliance. After submitting the plan to regain compliance, on October 7, 2025, Nasdaq granted us an extension until February 17, 2026, to comply with Listing Rule 5550(b)(1). On February 19, 2026, we received a further notice from Nasdaq (the "February Letter") notifying us that Nasdaq determined that we had not met the terms of the extension. We thereafter timely requested a hearing before an independent Nasdaq Hearings Panel (the "Panel") which automatically stayed any suspension or delisting action pending the hearing and the expiration of any extension period granted by the Panel following the hearing. At the hearing, we plan to present additional details of our Plan and provide an update on our efforts to regain compliance. We will also request additional time to complete the steps of our Plan and regain compliance with all applicable Nasdaq Listing Rules.

On February 10, 2026, we received a letter from Nasdaq notifying us that, for the last 30 consecutive business days, the closing bid price for our common stock, par value $0.00001 per share (the "Common Stock"), was below $1.00 per share, which is the minimum closing bid price required for continued listing on the Nasdaq Global Market (the "Minimum Bid Price Requirement") pursuant to Nasdaq Listing Rule 5550(a)(2) (the "Bid Price Notice"). The Bid Price Notice had no immediate effect on the listing of our Common Stock and tradeable warrants. As such, our Common Stock will continue to trade on the Nasdaq Capital Market under the symbol "BFRG," and our tradeable warrants will continue to trade on the Nasdaq Capital Market under the symbol "BFRGW." In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we were provided a compliance period of 180 calendar days from the date of the Bid Price Notice, or until August 10, 2026, to regain compliance with the Minimum Bid Price Requirement. If at any time during the 180-calendar day grace period, the closing bid price of our Common Stock is at least $1.00 per share for a minimum of ten consecutive business days (unless the Nasdaq staff exercises its discretion to extend this ten business day period pursuant to Nasdaq Listing Rule 5810(c)(3)(H)), Nasdaq will provide us written confirmation of compliance, and the matter will be closed. If we do not regain compliance during the initial 180-calendar day compliance period, we may be provided a second 180-calendar day period to regain compliance. If we do not regain compliance within the allotted compliance periods, including any extensions that may be granted by Nasdaq, our listed securities will be subject to delisting. We would thereafter have the right to appeal a determination to delist our securities, and our securities would remain listed on the Nasdaq Capital Market until the completion of the appeal process. Notably, at a Special Meeting of Stockholders in October 2025, the Company received stockholder approval to effect a reverse stock split at a ratio of not less than 1-to-2 and not more than 1-to-15, such ratio and timing to be determined in the discretion of the Company's Board of Directors.

Consolidated Cash Flow Data

		Year ended December 31,
		2025				2024				Net Change
Net cash (used in) provided by
Operating activities		$	(5,522,265	)		$	(5,610,249	)		$	87,984
Investing activities			-				-				-
Financing activities			2,374,987				8,421,502				(6,046,515	)
Net (decrease) increase in cash and cash equivalents		$	(3,147,278	)		$	2,811,253			$	(5,958,531	)

Cash Flows Used in Operating Activities

Net cash used in operating activities for the year ended December 31, 2025 decreased by approximately $88,000 compared to the year ended December 31, 2024, primarily due to decreased operating costs in 2025 attributable to a reduction in personnel costs, partially offset by the timing and payment of vendor invoices and associated impact to accounts payable.

Cash Flows Used in Investing Activities

There was no cash used in investing activities during any of the periods presented.

Cash Flows Provided by Financing Activities

Net cash provided by financing activities for the year ended December 31, 2025 decreased, compared to the year ended December 31, 2024, primarily due to proceeds from our offerings and warrant exercises in 2024, partially offset by proceeds from sales of common stock under our ATM Agreement in 2025.

Critical Accounting Policies

In Note 2 of our Audited Financial Statements for the year ended December 31, 2025 found elsewhere in this Annual Report on Form 10-K, we included a discussion of the most critical accounting policies used in the preparation of our financial statements.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements, as such term is defined in Item 303(a)(4) of Regulation S-K.

Financial Operations Overview

Revenue

In February 2025, we entered into a collaboration agreement with Eleison Pharmaceuticals Inc., a Phase III oncology company focused on novel chemotherapeutic treatments for rare cancers, and we recognized revenue of approximately $117,000 pursuant to this agreement. Additionally, in June 2025, we entered into a strategic collaboration agreement with Sygnature Discovery ("Sygnature"), pursuant to which we established a joint marketing arrangement where Sygnature will introduce our BullFrog Data Networks™ platform to Sygnature's global biopharma client base; however, we have not yet recognized any revenue under this collaboration. While we are currently in discussions with other potential partners, there can be no assurance of entering into other business relationships. We did not recognize any revenue in 2024.

Cost of Revenue

Cost of revenue consists primarily of the allocation of personnel costs (e.g. payroll, benefits, and consulting fees) of our employees and third-party consultants directly attributable to the satisfaction of our performance obligations under our revenue arrangements.

Research and Development Costs and Expenses

Research and development costs and expenses include development activities related to our licensed drug candidates and our discovery efforts and collaborations. In addition to fees paid to external service providers, we are also allocating costs for internal personnel working on these activities as well as their efforts to develop our product and service offerings using bfLEAP™. We anticipate that our research and development costs could become significant over time as we execute on our business plan and begin conducting preclinical research and development activities directed at securing development partners and filing an investigational new drug (IND) application for our licensed drug development programs described in this filing, as well as under strategic partnerships and for other drug development programs we may acquire. Research and development expenses are recorded in operating expenses in the period in which they are incurred. Estimates will be used in determining the expense liability of certain costs where services have been performed but not yet invoiced. We will monitor levels of performance under each significant contract for external services through communications with the service providers to reflect the actual amount expended.

General and Administrative Expenses

General and administrative costs and expenses include personnel costs and costs associated with being a public company such as directors and officers insurance, audit and tax provider fees, legal fees, and exchange listing costs. Additionally, our general and administrative costs include expenses for our business development, investor relations and marketing efforts. We anticipate our general and administrative expenses increasing in the future to support our service offerings and clinical and pre-clinical research and development activities associated with strategic partnering and collaborations.

Emerging Growth Company and Smaller Reporting Company Status

We are an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012 ("JOBS Act") and may take advantage of reduced reporting requirements that are otherwise applicable to public companies. Section 107 of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with those standards. We have elected to use the extended transition period to comply with new or revised accounting standards. This may make it difficult to compare our financial results with the financial results of another public company that is either not an emerging growth company or is an emerging growth company that has chosen not to take advantage of the extended transition period exemptions because of the potential differences in accounting standards used.

We are also considered a "smaller reporting company", meaning that the market value of our stock held by non-affiliates plus the aggregate amount of gross proceeds to us as a result of the IPO is less than $700 million and our annual revenue was less than $100 million during the most recently completed fiscal year. We may continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates is less than $250 million or (ii) our annual revenue was less than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.