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Bone Biologics Corp

Bone Biologics CorpBBLG決算レポート

Nasdaq · ヘルスケア · 整形外科、義肢及び外科用器具と用品

Bone Biologics Corp is a clinical-stage biotechnology firm focused on developing orthobiologic products to boost bone regeneration and healing for orthopedic surgery patients, including spinal fusion recipients. It mainly operates in the U.S. healthcare market, targeting orthopedic care and regenerative medicine segments.

What changed in Bone Biologics Corp's 10-K — 2022 vs 2023

Top changes in Bone Biologics Corp's 2023 10-K

284 paragraphs added · 302 removed · 200 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

48 edited+17 added−4 removed52 unchanged
The steps required before a biological device may be marketed in the U.S. include: 10 ● Laboratory and non-clinical tests for safety and small scale manufacturing of the agent; ● The submission to the FDA of an IDE which must become effective before human clinical trials can commence; ● Clinical trials to characterize the efficacy and safety of the product in the intended patient population; ● The submission of a PMA to the FDA; and ● FDA approval of the NDA or PMA prior to any commercial sale or shipment of the product.
The steps required before a biological device may be marketed in the U.S. include: ● Laboratory and non-clinical tests for safety and small scale manufacturing of the agent; ● The submission to the FDA of an IDE which must become effective before human clinical trials can commence; ● Clinical trials to characterize the efficacy and safety of the product in the intended patient population; ● The submission of a PMA to the FDA; and ● FDA approval of the NDA or PMA prior to any commercial sale or shipment of the product.
Our platform technology has application in delivering improved outcomes in the surgical specialties of spinal, orthopedic, general orthopedic, plastic reconstruction, neurosurgery, interventional radiology, and sports medicine. Lead product development and clinical studies are targeted on spinal fusion surgery, one of the larger segments in the orthopedic market. We are a development stage entity.
We believe our platform technology has application in delivering improved outcomes in the surgical specialties of spinal, orthopedic, general orthopedic, plastic reconstruction, neurosurgery, interventional radiology, and sports medicine. Lead product development and clinical studies are targeted on spinal fusion surgery, one of the larger segments in the orthopedic market. We are a development stage entity.
Currently there is a comprehensive database of more than 80 research publications and abstracts of preclinical studies with NELL-1 of which more than 45 are peer-reviewed publications. 6 We completed a preclinical study, which shows our rhNELL-1 growth factor effectively promotes bone formation in a phylogenetically advanced spine model.
Currently there is a comprehensive database of more than 80 research publications and abstracts of preclinical studies with NELL-1 of which more than 45 are peer-reviewed publications. We completed a preclinical study, which shows our rhNELL-1 growth factor effectively promotes bone formation in a phylogenetically advanced spine model.
The NELL-1/DBM Fusion Device will be comprised of a single dose vial of NELL-1 recombinant protein freeze dried onto DBM. A vial of NELL-1/DBM will be sold in a convenience kit with a diluent and a syringe of 510(k) cleared demineralized bone (“DBM Putty”) produced by MTF.
The NELL-1/DBM Fusion Device, NB1, will be comprised of a single dose vial of NELL-1 recombinant protein freeze dried onto DBM. A vial of NELL-1/DBM will be sold in a convenience kit with a diluent and a syringe of 510(k) cleared demineralized bone (“DBM Putty”) produced by MTF.
A delivery device will allow the surgeon to mix the reconstituted NELL-1 with the appropriate quantity of DBM Putty just prior to implantation. The NELL-1/DBM Fusion Device is intended for use in lumbar spinal fusion and may have a variety of other spine and orthopedic applications.
A delivery device will allow the surgeon to mix the reconstituted NELL-1 with the appropriate quantity of DBM Putty just prior to implantation. The NELL-1/DBM Fusion Device, NB1, is intended for use in lumbar spinal fusion and may have a variety of other spine and orthopedic applications.
We intend to use the pilot clinical study data from Australia to enable our larger U.S. pivotal clinical study, prior to an FDA PMA submission Clinical trials involve the administration of the investigational product to healthy volunteers or to patients under the supervision of a qualified investigator.
We intend to use the pilot clinical study data from Australia to enable our larger U.S. pivotal clinical study, prior to submission of a PMA to the FDA. Clinical trials involve the administration of the investigational product to healthy volunteers or to patients under the supervision of a qualified investigator.
Prior to marketing in the United States, any combination product developed by us must undergo rigorous preclinical (animal) and clinical (human) testing and an extensive regulatory approval process implemented by the FDA under the Food, Drug and Cosmetic Act.
Prior to marketing in the United States, any combination product developed by us must undergo rigorous preclinical (animal) and clinical (human) testing and an extensive regulatory approval process implemented by the FDA under the Federal Food, Drug, and Cosmetic Act.
If the benefit is worth the risk, the FDA begins negotiating with the company about the content of an acceptable package insert and associated Risk Evaluation and Mitigation Strategies (“REMS”), if required.
If the benefit is worth the risk, the FDA begins negotiating with the company about the content of an acceptable package insert and associated Risk Evaluation and Mitigation Strategies, if required.
Products We have developed a stand-alone platform technology through significant laboratory and small and large animal research over more than ten years to generate the current applications across broad fields of use. The platform technology is our recombinant human protein, known as NELL-1, a proprietary skeletal specific growth factor which is a bone void filler.
Product Candidates We have developed a stand-alone platform technology through significant laboratory and small and large animal research over more than ten years to generate the current applications across broad fields of use. The platform technology is our recombinant human protein, known as NELL-1, a proprietary skeletal specific growth factor which is a bone void filler.
In addition to obtaining FDA approval for each product, each manufacturing establishment must be registered with, and approved by, the FDA. Moreover, manufacturing establishments are subject to biennial inspections by the FDA and must comply with the FDA’s current Good Manufacturing Practice “cGMP” for products, drugs and devices.
In addition to obtaining FDA approval for each product, each manufacturing establishment must be registered with, and approved by, the FDA. Moreover, manufacturing establishments are subject to biennial inspections by the FDA and must comply with the FDA’s current Good Manufacturing Practice “ cGMP ” for products, drugs and devices.
UCLA TDG Exclusive License Agreement Effective April 9, 2019, we entered into an Amended and Restated Exclusive License Agreement dated as of March 21, 2019 and amended through three sets of amendments (as so amended the “Amended License Agreement”) with the UCLA TDG.
UCLA TDG Exclusive License Agreement Effective April 9, 2019, we entered into an Amended and Restated Exclusive License Agreement dated as of March 21, 2019, which was subsequently amended through three sets of amendments (as so amended the “Amended License Agreement”) with the UCLA TDG.
Based upon extensive discussions with regulatory experts and a specific communication from the FDA in response to a submission of our plan under the Amended License Agreement between UCLA TDG and the Company, we believe the NELL-1/DBM Fusion Device will be regulated as a Class III medical device and will therefore require submission and approval of a pre-market approval (“PMA”).
Based upon extensive discussions with regulatory experts and a specific communication from the FDA in response to a submission of our plan under the Amended License Agreement between UCLA TDG and the Company, we believe the NELL-1/DBM Fusion Device will be regulated as a Class III medical device and that will therefore require submission and approval of a PMA.
While the majority of fractures heal without the need for osteosynthetic products, bone substitutes are used in complicated breaks where the bone does not mend naturally. Management believes that NELL-1 technology is expected to perform as well as other growth factors in this market. Osteoporosis .
While the majority of fractures heal without the need for osteosynthetic products, bone substitutes are used in complicated breaks where the bone does not mend naturally. Globally an $8 billion market opportunity, management believes that NELL-1 technology is expected to perform as well as other growth factors in this market. Osteoporosis .
Leveraging the resources of investors and strategic partners, we have successfully surpassed four critical milestones: ● Demonstrating a successful small laboratory scale pilot run for the manufacturing of the recombinant NELL-1 protein in Chinese hamster ovary cells; ● Validation of protein dosing and efficacy in established large animal sheep models pilot study; ● Completed pivotal animal study; and ● Filed for a clinical trial outside the United States. 5 Our lead product is expected to be purified NELL-1 mixed with 510(k) cleared DBM Demineralized Bone Putty recommended for use in conjunction with applicable hardware consistent with the indication.
Leveraging the resources of investors and strategic partners, we have successfully surpassed four critical milestones: ● Demonstrating a successful small laboratory scale pilot run for the manufacturing of the recombinant NELL-1 protein in Chinese hamster ovary cells; ● Validation of protein dosing and efficacy in established large animal sheep models pilot study; ● Completed pivotal animal study; and ● Initiated a first-in-man pilot clinical trial in Australia. 5 Our lead product candidate is expected to be purified NELL-1 mixed with 510(k) cleared DBM Demineralized Bone Putty recommended for use in conjunction with applicable hardware consistent with the indication.
As of December 31, 2022, none of the above milestones has been met. We are obligated to diligently proceed with developing and commercializing licensed products under UCLA TDG patents set forth in the Amended License Agreement.
As of December 31, 2023, none of the above milestones have been met. We are obligated to diligently proceed with developing and commercializing licensed products under UCLA TDG patents set forth in the Amended License Agreement.
The production and marketing of our products and ongoing research and development activities will be subject to extensive regulation by numerous governmental authorities in the United States.
The production and marketing of our products and ongoing research and development activities are subject to extensive regulation by numerous governmental authorities in the United States.
The medical need to find a solution to counter a decrease in bone mass and density seen in women most frequently after menopause or a similar effect on astronauts in microgravity environments for an extended period is a major medical challenge.
Globally an $11.2 billion market opportunity, the medical need to find a solution to counter a decrease in bone mass and density seen in women most frequently after menopause or a similar effect on astronauts in microgravity environments for an extended period is a major medical challenge.
The Company, the IRB or the FDA, may suspend clinical trials at any time if it is believed that the individuals participating in such trials are being exposed to unacceptable health risks.
The Company, the institutional review board (“IRB”) or the FDA, may suspend clinical trials at any time if it is believed that the individuals participating in such trials are being exposed to unacceptable health risks.
We anticipate that these regulations will apply separately to each product. We believe that complying with these regulations will involve a considerable level of time, expense and uncertainty. In the U.S., devices are subject to rigorous federal regulation and, to a lesser extent, state regulation.
We believe that complying with these regulations will involve a considerable level of time, expense and uncertainty. 10 In the U.S., devices are subject to rigorous federal regulation and, to a lesser extent, state regulation.
The testing and approval process is likely to require substantial time and effort. In addition to the results of non-clinical and clinical testing, the PMA applicant must submit detailed information about chemistry, manufacturing and controls that will describe how the product is made and tested through the manufacturing process.
In addition to the results of non-clinical and clinical testing, the PMA applicant must submit detailed information about chemistry, manufacturing and controls that will describe how the product is made and tested through the manufacturing process.
While use of the patient’s own bone, also referred to as autograft, to enhance fusion of vertebral segments remains the optimal use for this type of treatment, complications associated with use of autograft bone including pain, increased surgical time and infection limit its use. Non-Union Trauma Cases .
The global bone graft substitute market presents a $3 billion market opportunity. While use of the patient’s own bone, also referred to as autograft, to enhance fusion of vertebral segments remains the optimal use for this type of treatment, complications associated with use of autograft bone including pain, increased surgical time and infection limit its use. Non-Union Trauma Cases .
Clinical Trials Our pilot clinical study which is planned for late 2023, will evaluate the safety and effectiveness of NB1 in adult subjects with spinal degenerative disc disease (“DDD”) at one level from L2-S1, who may also have up to Grade 1 spondylolisthesis or Grade 1 retrolisthesis at the involved level who undergo transforaminal lumbar interbody fusion (“TLIF”).
Our first-in-man pilot clinical study commenced year-end 2023 and will evaluate the safety and effectiveness of NB1 in adult subjects with spinal degenerative disc disease at one level from L2-S1, who may also have up to Grade 1 spondylolisthesis or Grade 1 retrolisthesis at the involved level who undergo transforaminal lumbar interbody fusion.
Our Business Strategy Our business plan is to develop our target specific growth factor for bone regeneration that has demonstrated increases in the quantity and quality of bone, while displaying strong safety profile.
Our Business Strategy Our business plan is to develop our target-specific growth factor for bone regeneration, based on preclinical and clinical data that has demonstrated increases in the quantity and quality of bone, and a strong safety profile.
The multi-center, prospective, randomized trial will consist of 30 patients in Australia, with the primary end-point being fusion success at 12 months and change from baseline in the ODI (“Oswestry Disability Index”) pain score. Our clinical, and regulatory strategy involves a well-established pathway to success.
The multi-center, prospective, randomized trial will consist of 30 patients in Australia, with the primary end-point being fusion success at 12 months and change from baseline in the Oswestry Disability Index pain score. We expect completion of the trial 12 months following enrollment of the 30 th patient. Our clinical, and regulatory strategy involves a well-established pathway to success.
In addition, rhNELL-1 was shown to be well tolerated and there were no findings of inflammation. Proposed Initial Clinical Application The NELL-1/DBM Fusion Device will be indicated for spinal fusion procedures in skeletally mature patients with DDD at one level from L2-S1. These DDD patients may also have up to Grade I spondylolisthesis at the involved level.
In addition, rhNELL-1 was shown to be well tolerated and there were no findings of inflammation. Proposed Initial Clinical Application The NELL-1/DBM Fusion Device will be indicated for spinal fusion procedures in skeletally mature patients with spinal degenerative disk disease (“DDD”) at one level from L2-S1.
We anticipate that it will require approximately $15 million to complete first in man studies and an estimated additional $27 million to achieve FDA approval for a spine interbody fusion indication.
We anticipate that we will require approximately $5 million to complete first-in-man studies, and an estimated additional $24 million in scientific expenses to achieve FDA approval, if possible, for a spine interbody fusion indication.
Since licensing the exclusive worldwide intellectual property rights from UCLA TDG, our continued development has been funded through capital raises. Our research and development expenses for the years ended December 31, 2022 and 2021 were $35,623 and $45,500, respectively.
Since licensing the exclusive worldwide intellectual property rights from UCLA TDG, our continued development has been funded through capital raises. Our research and development expenses for the years ended December 31, 2023 and 2022 were $6,907,824 and $1,579,298, respectively.
In the event of any accident, we could be held liable for any damages that result and any such liability could exceed our resources. 12 Employees and Human Capital As of the date hereof, we have two (2) full-time employees.
In the event of any accident, we could be held liable for any damages that result and any such liability could exceed our resources. Employees and Human Capital As of the date hereof, we have two full-time employees, Jeffery Frelick and Deina Walsh. See “Management” below for biographies of Mr. Frelick and Ms. Walsh.
Effective July 24, 2018, we implemented a reverse split of the common stock of the Company on a basis of 1 new common share for 10 old common shares. Effective October 12, 2021, we implemented a reverse split of the common stock of the Company on a basis of 1 new common share for 2.5 old common shares.
Effective July 24, 2018, we implemented a reverse split of the outstanding common stock of the Company at a ratio of 1-for-10. Effective October 12, 2021, we implemented a reverse split of the outstanding common stock of the Company at a ratio of 1-for-2.5.
Further, each clinical study must be conducted under the auspices of an independent institutional review board. The institutional review board will consider, among other things, ethical factors, the safety of human subjects and the possible liability of the institution. The drug product used in clinical trials must be manufactured according to the FDA’s current Good Manufacturing Practices.
Further, each clinical study must be conducted under the auspices of an independent institutional review board. The institutional review board will consider, among other things, ethical factors, the safety of human subjects and the possible liability of the institution.
NELL-1 provides regulation over skeletal tissue formation and stem cell differentiation during bone regeneration. We obtained the platform technology pursuant to an exclusive license agreement with UCLA TDG.
NELL-1 provides regulation over skeletal tissue formation and stem cell differentiation during bone regeneration. We obtained the platform technology pursuant to an exclusive license agreement with UCLA TDG which grants us exclusive rights to develop and commercialize NELL-1 for spinal fusion by local administration, osteoporosis and trauma applications.
We are also obligated pay to UCLA TDG a fee (the “Diligence Fee”) of $8,000,000 upon the sale of any Licensed Product (the “Triggering Sale Date”) in accordance with the payment schedule below: ● Due upon cumulative Net Sales equaling $50,000,000 following the Triggering Sale Date - $2,000,000; ● Due upon cumulative Net Sales equaling $100,000,000 following the Triggering Sale Date - $2,000,000; and ● Due upon cumulative Net Sales equaling $200,000,000 following the Triggering Sale Date - $4,000,000. 8 Our obligation to pay the Diligence Fee will survive termination or expiration of the agreement and we are prohibited from assigning, selling, or otherwise transferring any of its assets related to any Licensed Product unless our Diligence Fee obligation is assigned, sold, or transferred along with such assets, or unless we pay UCLA TDG the Diligence Fee within ten (10) days of such assignment, sale or other transfer of such rights to any Licensed Product.
Our obligation to pay the Diligence Fee will survive termination or expiration of the Amended License Agreement and we are prohibited from assigning, selling, or otherwise transferring any of its assets related to any Licensed Product unless our Diligence Fee obligation is assigned, sold, or transferred along with such assets, or unless we pay UCLA TDG the Diligence Fee within ten (10) days of such assignment, sale or other transfer of such rights to any Licensed Product.
Our competitors also may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market.
Our competitors also may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market. 9 The NELL-1 growth factor is mechanistically distinct from bone morphogenetic proteins (“BMPs”) and can minimize complications associated with BMP therapies.
International Approval Whether or not FDA approval has been obtained, approval of a product by regulatory authorities in foreign countries must be obtained prior to the commencement of commercial sales of the medical product in such countries.
Additionally, in the event of non-compliance, FDA may issue warning letters and/or seek criminal and civil penalties, enjoin manufacture, seize product or revoke approval. 12 International Approval Whether or not FDA approval has been obtained, approval of a product by regulatory authorities in foreign countries must be obtained prior to the commencement of commercial sales of the medical product in such countries.
Most cases of lower back pain can be linked to a general cause such as muscle strain, injury, overuse, or can be attributed to a specific condition like herniated disc, degenerative disc disease, spondylolisthesis, spinal stenosis, or osteoarthritis. 9 Intellectual Property We have an intellectual property portfolio that includes exclusive, worldwide licenses from UCLA TDG which we believe constitute a formidable barrier to entry.
Most cases of lower back pain can be linked to a general cause such as muscle strain, injury, overuse, or can be attributed to a specific condition like herniated disc, degenerative disc disease, spondylolisthesis, spinal stenosis, or osteoarthritis.
We are obligated to make the following milestone payments to UCLA TDG for each Licensed Product or Licensed Method: ● $100,000 upon enrollment of the first subject in a Feasibility Study; ● $250,000 upon enrollment of the first subject in a Pivotal Study: ● $500,000 upon Pre-Market Approval of a Licensed Product or Licensed Method; and ● $1,000,000 upon the First Commercial Sale of a Licensed Product or Licensed Method.
We are obligated to make the following milestone payments to UCLA TDG for each Licensed Product or Licensed Method: ● $100,000 upon enrollment of the first subject in a Feasibility Study; ● $250,000 upon enrollment of the first subject in a Pivotal Study: ● $500,000 upon Pre-Market Approval of a Licensed Product or Licensed Method; and ● $1,000,000 upon the First Commercial Sale of a Licensed Product or Licensed Method. 8 We are also obligated pay to UCLA TDG a fee (the “Diligence Fee”) of $8,000,000 upon the sale of any Licensed Product (the “Triggering Sale Date”) in accordance with the payment schedule below: ● Due upon cumulative Net Sales equaling $50,000,000 following the Triggering Sale Date - $2,000,000; ● Due upon cumulative Net Sales equaling $100,000,000 following the Triggering Sale Date - $2,000,000; and ● Due upon cumulative Net Sales equaling $200,000,000 following the Triggering Sale Date - $4,000,000.
We face substantial competition from many different sources, including large and specialty orthopedic companies, biotechnology companies, academic research institutions and governmental agencies along with public and private research institutions.
Competition The orthobiologic and orthopedic industries are characterized by rapidly advancing technologies, intense competition and a strong emphasis on intellectual property. We face substantial competition from many different sources, including large and specialty orthopedic companies, biotechnology companies, academic research institutions and governmental agencies along with public and private research institutions.
Customers The populations of interest include spine surgeons, and patients with a skeletal bone defect or bone-related condition in their spine, for which intervention is undertaken to correct such a defect.
The early proof of concept animal studies has shown the efficacy of NELL-1 combined with demineralized bone matrix as a novel bone graft material for interbody spine fusion. Customers The populations of interest include spine surgeons, and patients with a skeletal bone defect or bone-related condition in their spine, for which intervention is undertaken to correct such a defect.
Our spine fusion product focus entails advancing through clinical studies to achieve FDA approval for our target specific protein exhibiting efficacy and safety when compared to the gold standard for spine fusion (autografted).
Our initial focus on lumbar spinal fusion entails advancing our target-specific growth factor through clinical studies to achieve FDA approval with comparable efficacy and safety to the gold standard for spine fusion (autografts).
The NELL-1/DBM Fusion Device is to be implanted via an anterior open or an anterior laparoscopic approach in conjunction with a cleared intervertebral body fusion device. Patients receiving the device should have had at least six months of non-operative treatment prior to treatment with the device. A cervical indication is currently under consideration.
Patients receiving the device should have had at least six months of non-operative treatment prior to treatment with the device. A cervical indication is currently under consideration.
Summary Date Issued 7544486 NELL-1 Peptide Expression Systems 6/9/2009 7691607 Expression system of NELL-1 peptide 4/6/2010 7807787 NELL-1 Peptide 10/5/2010 7833968 Pharmaceutical compositions for treating or preventing bone conditions 11/16/2010 9447155 Isoform NELL-1 peptide 9/20/2016 9511115 Pharmaceutical compositions for treating or preventing bone conditions 12/6/2016 9598480 Recombinant NEL-like (NELL) protein production 3/21/2017 9974828 Isoform NELL-1 peptide 5/22/2018 10335458 Pharmaceutical compositions for treating or preventing bone conditions 7/2/2019 Government Regulation The manufacturing and marketing of any product which we may formulate with our technologies as well as our related research and development activities are subject to regulation for safety, efficacy and quality by governmental authorities in the U.S. and other countries.
Summary Date Issued 7544486 NELL-1 Peptide Expression Systems 6/9/2009 7691607 Expression system of NELL-1 peptide 4/6/2010 7807787 NELL-1 Peptide 10/5/2010 7833968 Pharmaceutical compositions for treating or preventing bone conditions 11/16/2010 9447155 Isoform NELL-1 peptide 9/20/2016 9511115 Pharmaceutical compositions for treating or preventing bone conditions 12/6/2016 9598480 Recombinant NEL-like (NELL) protein production 3/21/2017 9974828 Isoform NELL-1 peptide 5/22/2018 10335458 Pharmaceutical compositions for treating or preventing bone conditions 7/2/2019 These patents will expire between 2024 and 2033.
We intend to rely upon third-party contractors to advise and assist us in the preparation of our IDEs and the conduct of clinical trials that will be conducted under the IDEs. 11 Premarket Approval and FDA Approval Process The results of the manufacturing process, development work, non-clinical studies and clinical studies are submitted to the FDA in the form of a PMA prior to marketing and selling the product.
We intend to rely upon third-party contractors to advise and assist us in the preparation of our IDEs and the conduct of clinical trials that will be conducted under the IDEs.
The NELL-1 technology platform, has been licensed exclusively for worldwide applications to us through a technology transfer from the UCLA Technology Development Group on behalf of UC Regents (“UCLA TDG”). UCLA TDG and the Company received guidance from the FDA that NELL-1/DBM will be classified as a device/drug combination product with a pre-market approval filing (“PMA”).
The NELL-1 technology platform has been licensed exclusively for worldwide applications to us through a technology transfer from the UCLA Technology Development Group on behalf of UC Regents (“UCLA TDG”).
We are currently focused on bone regeneration in lumbar spinal fusion, in keeping with our exclusive license agreement, using NELL-1 in combination with DBM, a demineralized bone matrix from Musculoskeletal Transplant Foundation (“MTF”). The NELL-1/DBM medical device is a combination product which is an osteopromotive recombinant protein that provides target specific control over bone regeneration.
We believe NELL-1 will address these unmet clinical challenges for effective bone regeneration, especially in hard healers. We are currently focused on bone regeneration in lumbar spinal fusion, in keeping with our exclusive license agreement, using NELL-1 in combination with DBM, a demineralized bone matrix from Musculoskeletal Transplant Foundation (“MTF”).
Additional patent applications are currently in preparation. The intellectual property portfolio comprehensively covers NELL-1 manufacture, NELL-1 compositions and NELL-1 use in wide ranging clinical and diagnostic applications. We protect our proprietary technology through mechanisms including U.S. and foreign patent filings, trade secret protections, and collaboration agreements with domestic and international corporations, universities and research institutions.
We protect our proprietary technology through mechanisms including U.S. and foreign patent filings, trade secret protections, and collaboration agreements with domestic and international corporations, universities and research institutions. We are the exclusive licensee for the following nine (9) UCLA TDG issued patents: U.S. Patent No.
We are required to indemnify UCLA TDG against any third party claims arising out of our exercise of the rights under the Amended License Agreement or any sublicense. Competition The orthobiologic and orthopedic industries are characterized by rapidly advancing technologies, intense competition and a strong emphasis on intellectual property.
We are required to indemnify UCLA TDG against any third party claims arising out of our exercise of the rights under the Amended License Agreement or any sublicense. Payments to UCLA TDG under the Amended License Agreement for the years ended December 31, 2023 and 2022 were $30,845 and $35,623, respectively.
Subsequent patents and continuations in part describing NELL-1 manufacturing, delivery, and cartilage regeneration were filed to further strengthen the patent portfolio. Research & Publications We believe our scientific evidence validates the many benefits of NELL-1.
Subsequent patents and continuations in part describing NELL-1 manufacturing, delivery, and cartilage regeneration were filed to further strengthen the patent portfolio. We have completed two preclinical sheep studies that demonstrated our recombinant NELL-1 (“rhNELL-1”) growth factor effectively promotes bone formation in a phylogenetically advanced spine model.
Clinical trials under IDE regulations are typically conducted in two sequential trials.
The drug product used in clinical trials must be manufactured according to the FDA’s current Good Manufacturing Practices. 11 Clinical trials under IDE regulations are typically conducted in two sequential trials.
Removed
This is the largest market for bone substitute product, representing greater than 70% of the total U.S. market according to Transparency Market Research.
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UCLA TDG and the Company received guidance from the Food and Drug Administration (“FDA”) that NELL-1/DBM will be classified as a device/drug combination product that will require an FDA-approved pre-market approval application (“PMA”) before it can be commercialized in the United States.
Removed
The NELL-1 growth factor is mechanistically distinct from bone morphogenetic proteins (“BMPs”) and can minimize complications associated with BMP therapies. The early proof of concept animal studies has shown the efficacy of NELL-1 combined with demineralized bone matrix as a novel bone graft material for interbody spine fusion.
Added
A major challenge associated with orthopedic surgery is effective bone regeneration, including challenges related to rapid, uncontrolled bone growth which can cause unsound structure; cysts and less dense bone formation; unwanted bone formation, and swelling; and intense inflammatory response to current bone regeneration compounds.
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We are the exclusive licensee for the following nine (9) UCLA TDG issued patents: U.S. Patent No.
Added
The NELL-1/DBM medical device is a combination product which is an osteopromotive recombinant protein that provides target specific control over bone regeneration.
Removed
Additionally, in the event of non-compliance, FDA may issue warning letters and/or seek criminal and civil penalties, enjoin manufacture, seize product or revoke approval.
Added
In addition, rhNELL-1 was shown to be well tolerated and there were no findings of inflammation. Our pivotal sheep study evaluated the effect of rhNELL-1 combined with DBM on lumbar interbody arthrodesis in an adult ovine model and demonstrated a 37.5% increased frequency of fusion at 26 weeks from the control.
Added
The multi-center, prospective, randomized trial consists of 30 patients in Australia, with the primary end-point being fusion success at 12 months and change from baseline in the Oswestry Disability Index pain score. We expect completion of the trial 12 months following enrollment of the 30 th patient.
Added
We intend to use the pilot clinical trial data from Australia to enable a future larger U.S. pivotal clinical study, prior to submission of a PMA to the FDA. 6 Research & Publications We believe our scientific evidence validates the many benefits of NELL-1.
Added
These DDD patients may also have up to Grade I spondylolisthesis at the involved level. The NELL-1/DBM Fusion Device is to be implanted via an anterior open or an anterior laparoscopic approach in conjunction with a cleared intervertebral body fusion device.
Added
Effective June 5, 2023, we implemented a reverse split of the outstanding common stock of the Company at a ratio of 1-for-30. Effective December 20, 2023, we implemented a reverse split of the outstanding common stock of the Company at a ratio of 1-for-8.
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All share and per share amounts have been retro-actively restated as if the reverse split occurred at the beginning of the earliest period presented.
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Intellectual Property We have an intellectual property portfolio that includes exclusive, worldwide licenses from UCLA TDG which we believe constitute a formidable barrier to entry. Additional patent applications are currently in preparation. The intellectual property portfolio comprehensively covers NELL-1 manufacture, NELL-1 compositions and NELL-1 use in wide ranging clinical and diagnostic applications.
Added
Government Regulation The manufacturing and marketing of any product which we may formulate with our technologies as well as our related research and development activities are subject to regulation for safety, efficacy and quality by governmental authorities in the U.S. and other countries. We anticipate that these regulations will apply separately to each product.
Added
Clinical Trials Our first-in-man pilot clinical study commenced year-end 2023 and will evaluate the safety and effectiveness of NB1 in adult subjects with DDD at one level from L2-S1, who may also have up to Grade 1 spondylolisthesis or Grade 1 retrolisthesis at the involved level who undergo transforaminal lumbar interbody fusion.
Added
Premarket Approval and FDA Approval Process The results of the manufacturing process, development work, non-clinical studies and clinical studies are submitted to the FDA in the form of a PMA prior to marketing and selling the product. The testing and approval process is likely to require substantial time and effort.
Added
We also have engaged and plan to continue to engage regulatory consultants to advise us on our dealings with the FDA and other foreign regulatory authorities and have been and will be required to retain additional consultants and employees.
Added
Our future performance will depend in part on our ability to successfully integrate newly hired officers into our management team and our ability to develop an effective working relationship among senior management. Losing key personnel or failing to recruit necessary additional personnel would impede our ability to attain our development objectives.
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Corporate Information Our principal executive offices are located at 2 Burlington Woods Drive, Suite 100, Burlington MA 01803 and our telephone number is (781) 552-4452. Our website address is www.bonebiologics.com.
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Our website and the information contained on, or that can be accessed through, the website will not be deemed to be incorporated by reference in, and are not considered part of, this Annual Report.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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For example, we may enter into exclusive license agreements with various third parties (for example, universities and research institutions), we may be required to use commercially reasonable efforts to engage in various development and commercialization activities with respect to licensed products, and may need to satisfy specified milestones and royalty payment obligations.
For example, we may enter into exclusive license agreements with various third parties (for example, universities and research institutions) and may be required to use commercially reasonable efforts to engage in various development and commercialization activities with respect to licensed products, and may need to satisfy specified milestones and royalty payment obligations.
We may be at risk of securities class action litigation. In the past, medical device, biotechnology and pharmaceutical companies have experienced significant stock price volatility, particularly when associated with binary events such as clinical trials and product approvals.
We may be at risk of securities class action litigation. We may be at risk of securities class action litigation. In the past, medical device, biotechnology and pharmaceutical companies have experienced significant stock price volatility, particularly when associated with binary events such as clinical trials and product approvals.
Restrictions under applicable federal and state healthcare laws and regulations that may affect our ability to operate include the following: ● the federal healthcare Anti-Kickback Statute which prohibits, among other things, individuals and entities from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under a federal healthcare program such as Medicare and Medicaid; ● federal civil and criminal false claims laws, including the federal False Claims Act that can be enforced through civil whistleblower or qui tam actions, and civil monetary penalty laws, prohibit individuals or entities from knowingly presenting, or causing to be presented, to the federal government, including the Medicare and Medicaid programs, claims for payment or approval that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government; 37 ● the federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) which imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program and also created federal criminal laws that prohibit knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statements in connection with the delivery of or payment for healthcare benefits, items or services, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”) which imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information on entities subject to the law, such as certain healthcare providers, health plans, and healthcare clearinghouses, known as covered entities, and their respective business associates that perform services for them that involve the creation, use, maintenance or disclosure of, individually identifiable health information; ● the federal physician sunshine requirements under the ACA which requires certain manufacturers of , devices, biologics and medical supplies, with certain exceptions, to report annually to HHS information related to payments and other transfers of value to physicians, other healthcare providers, and teaching hospitals, and ownership and investment interests held by physicians and other healthcare providers and their immediate family members and applicable group purchasing organizations; ● analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; some state laws which require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government and may require device manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers, marketing expenditures or pricing information; and certain state and local laws which require the registration of pharmaceutical sales representatives; and ● state and foreign laws govern the privacy and security of health information in specified circumstances, many of which differ from each other in significant ways and often are not pre-empted by HIPAA, thus complicating compliance efforts.
Restrictions under applicable federal and state healthcare laws and regulations that may affect our ability to operate include the following: ● the federal healthcare Anti-Kickback Statute which prohibits, among other things, individuals and entities from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under a federal healthcare program such as Medicare and Medicaid; ● federal civil and criminal false claims laws, including the federal False Claims Act that can be enforced through civil whistleblower or qui tam actions, and civil monetary penalty laws, prohibit individuals or entities from knowingly presenting, or causing to be presented, to the federal government, including the Medicare and Medicaid programs, claims for payment or approval that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government; ● the federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) which imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program and also created federal criminal laws that prohibit knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statements in connection with the delivery of or payment for healthcare benefits, items or services, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 which imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information on entities subject to the law, such as certain healthcare providers, health plans, and healthcare clearinghouses, known as covered entities, and their respective business associates that perform services for them that involve the creation, use, maintenance or disclosure of, individually identifiable health information; ● the federal physician sunshine requirements under the ACA which requires certain manufacturers of , devices, biologics and medical supplies, with certain exceptions, to report annually to HHS information related to payments and other transfers of value to physicians, other healthcare providers, and teaching hospitals, and ownership and investment interests held by physicians and other healthcare providers and their immediate family members and applicable group purchasing organizations; ● analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; some state laws which require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government and may require device manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers, marketing expenditures or pricing information; and certain state and local laws which require the registration of pharmaceutical sales representatives; and ● state and foreign laws govern the privacy and security of health information in specified circumstances, many of which differ from each other in significant ways and often are not pre-empted by HIPAA, thus complicating compliance efforts.
The above estimates and our long-term capital requirements will depend on many factors, including, among others: ● the number of potential formulations, products and technologies in development; ● continued progress and cost of our research and development programs; ● progress with pre-clinical studies and clinical trials; ● time and costs involved in obtaining regulatory (including FDA) clearance; ● costs involved in preparing, filing, prosecuting, maintaining and enforcing patent claims; 13 ● costs of developing sales, marketing and distribution channels and our ability to sell our formulations or products; ● costs involved in establishing manufacturing capabilities for commercial quantities of our products; ● competing technological and market developments; ● market acceptance of our device formulations or products; ● costs for recruiting and retaining employees and consultants; ● costs for training physicians; ● legal, accounting and other professional costs; and ● the effect of the novel coronavirus will have on our product development, clinical trials, and availability, cost, and type of financing.
The above estimates and our long-term capital requirements will depend on many factors, including, among others: ● the number of potential formulations, products and technologies in development; ● continued progress and cost of our research and development programs; ● progress with pre-clinical studies and clinical trials; ● time and costs involved in obtaining regulatory (including FDA) clearance; ● costs involved in preparing, filing, prosecuting, maintaining and enforcing patent claims; ● costs of developing sales, marketing and distribution channels and our ability to sell our formulations or products; ● costs involved in establishing manufacturing capabilities for commercial quantities of our products; ● competing technological and market developments; ● market acceptance of our device formulations or products; ● costs for recruiting and retaining employees and consultants; ● costs for training physicians; ● legal, accounting and other professional costs; and ● the effect of the novel coronavirus will have on our product development, clinical trials, and availability, cost, and type of financing.
Many factors may affect our ability to identify, enroll and maintain qualified patients, including the following: 17 ● eligibility criteria of our ongoing and planned clinical trials with specific characteristics appropriate for inclusion in our clinical trials; ● design of the clinical trial; ● size and nature of the patient population; ● patients’ perceptions as to risks and benefits of the product candidate under study and the participation in a clinical trial generally in relation to other available therapies; ● the availability and efficacy of competing therapies and clinical trials; ● pendency of other trials underway in the same patient population; ● willingness of physicians to participate in our planned clinical trials; ● severity of the disease under investigation; ● proximity of patients to clinical sites; ● patients who do not complete the trials for personal reasons; and ● issues with Contract Research Organizations (“CROs”) and/or with other vendors that handle our clinical trials.
Many factors may affect our ability to identify, enroll and maintain qualified patients, including the following: ● eligibility criteria of our ongoing and planned clinical trials with specific characteristics appropriate for inclusion in our clinical trials; ● design of the clinical trial; ● size and nature of the patient population; ● patients’ perceptions as to risks and benefits of the product candidate under study and the participation in a clinical trial generally in relation to other available therapies; ● the availability and efficacy of competing therapies and clinical trials; ● pendency of other trials underway in the same patient population; ● willingness of physicians to participate in our planned clinical trials; ● severity of the disease under investigation; ● proximity of patients to clinical sites; ● patients who do not complete the trials for personal reasons; and ● issues with Contract Research Organizations (“CROs”) and/or with other vendors that handle our clinical trials.
If a third party has also filed a patent application relating to an invention claimed by us or one or more of our licensors, we may be required to participate in an interference or derivation proceeding declared or instituted by the United States Patent and Trademark Office, which could result in substantial uncertainties and cost for us, even if the eventual outcome is favorable to us.
If a third party has also filed a patent application relating to an invention claimed by us or one or more of our licensors, we may be required to participate in an interference or derivation proceeding declared or instituted by the United States Patent and Trademark Office (the “USPTO”), which could result in substantial uncertainties and cost for us, even if the eventual outcome is favorable to us.
Even if we believe that we have adequate data to support an application for regulatory approval to market our current product candidate or any future product candidates, the FDA or other regulatory authorities may not agree and may require that we conduct additional clinical trials. 18 Risks associated with operating in foreign countries could materially adversely affect our product development.
Even if we believe that we have adequate data to support an application for regulatory approval to market our current product candidate or any future product candidates, the FDA or other regulatory authorities may not agree and may require that we conduct additional clinical trials. Risks associated with operating in foreign countries could materially adversely affect our product development.
Future growth would impose significant added responsibilities on members of management, including: ● managing our clinical trials effectively; ● identifying, recruiting, maintaining, motivating and integrating additional employees; 35 ● managing our internal development efforts effectively while complying with our contractual obligations to licensors, licensees, contractors and other third parties; ● improving our managerial, development, operational, information technology, and finance systems; and ● expanding our facilities.
Future growth would impose significant added responsibilities on members of management, including: ● managing our clinical trials effectively; ● identifying, recruiting, maintaining, motivating and integrating additional employees; ● managing our internal development efforts effectively while complying with our contractual obligations to licensors, licensees, contractors and other third parties; ● improving our managerial, development, operational, information technology, and finance systems; and ● expanding our facilities.
Other countries have similar laws that permit secrecy of patent applications, and thus the third party’s patent or patent application may be entitled to priority over our applications in such jurisdictions. Some of our competitors may be able to sustain the costs of complex patent litigation more effectively than we can because they have substantially greater resources.
Other countries have similar laws that permit secrecy of patent applications, and thus the third party’s patent or patent application may be entitled to priority over our applications in such jurisdictions. 27 Some of our competitors may be able to sustain the costs of complex patent litigation more effectively than we can because they have substantially greater resources.
If cash resources are insufficient to satisfy our on-going cash requirements, we will be required to scale back or discontinue its product development programs, or obtain funds if available (although there can be no certainties) through strategic alliances that may require us to relinquish rights to our technology, or substantially reduce or discontinue our operations entirely.
If cash resources are insufficient to satisfy our on-going cash requirements, we will be required to scale back or discontinue our product development programs, or obtain funds if available (although there can be no certainties) through strategic alliances that may require us to relinquish rights to our technology, or substantially reduce or discontinue our operations entirely.
Our ability to commercialize any product successfully will depend, in part, on the extent to which coverage and adequate reimbursement for such product and related treatments will be available from third-party payors, including government health administration authorities, private health insurers and other organizations. 30 Third-party payors determine which medications they will cover and establish reimbursement levels.
Our ability to commercialize any product successfully will depend, in part, on the extent to which coverage and adequate reimbursement for such product and related treatments will be available from third-party payors, including government health administration authorities, private health insurers and other organizations. Third-party payors determine which medications they will cover and establish reimbursement levels.
If any physicians or other healthcare providers or entities with whom we expect to do business are found to not be in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs. The application of privacy provisions of HIPAA is uncertain.
If any physicians or other healthcare providers or entities with whom we expect to do business are found to not be in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs. 38 The application of privacy provisions of HIPAA is uncertain.
Some of our competitors may develop and commercialize products that compete directly with those incorporating our technology or may introduce products to market earlier than our product or on a more cost-effective basis. Our competitors compete with us in recruiting and retaining qualified scientific and management personnel as well as in acquiring technologies complementary to our technology.
Some of our competitors may develop and commercialize products that compete directly with those incorporating our technology or may introduce products to market earlier than our product candidates or on a more cost-effective basis. Our competitors compete with us in recruiting and retaining qualified scientific and management personnel as well as in acquiring technologies complementary to our technology.
Because we have limited financial and managerial resources, we are focused on our lead product for spine fusion. As a result, we may forego or delay pursuit of opportunities with other product candidates or, for other indications for which there may be a greater likelihood of success or may prove to have greater commercial potential.
Because we have limited financial and managerial resources, we are focused on our lead product candidate for spine fusion. As a result, we may forego or delay pursuit of opportunities with other product candidates or, for other indications for which there may be a greater likelihood of success or may prove to have greater commercial potential.
If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business and results of operations, including the imposition of significant civil, criminal and administrative penalties, damages, fines, imprisonment, exclusion from government funded healthcare programs, such as Medicare and Medicaid, and integrity oversight and reporting obligations. 22 Risks Related to our Intellectual Property We rely on patents and patent applications and various regulatory exclusivities to protect some of our product candidates, and our ability to compete may be limited or eliminated if we are not able to protect our products.
If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business and results of operations, including the imposition of significant civil, criminal and administrative penalties, damages, fines, imprisonment, exclusion from government funded healthcare programs, such as Medicare and Medicaid, and integrity oversight and reporting obligations. 24 Risks Related to our Intellectual Property We rely on patents and patent applications and various regulatory exclusivities to protect some of our product candidates, and our ability to compete may be limited or eliminated if we are not able to protect our products.
Any elongation or de-prioritization of our clinical trials or delay in regulatory review resulting from such disruptions could materially affect the development and study of our product candidates. We currently utilize third parties to, among other things, manufacture raw materials.
Any elongation or de-prioritization of our clinical trials or delay in regulatory review resulting from such disruptions could materially affect the development and study of our product candidates. Furthermore, we currently utilize third parties to, among other things, manufacture raw materials.
If we cannot execute any one of the foregoing or similar matters relating to our business, the business may fail, in which case you would lose the entire amount of your investment in us. Our long-term capital requirements are subject to numerous risks.
If we cannot execute any one of the foregoing or similar matters relating to our business, the business may fail, in which case you would lose the entire amount of your investment in us. 15 Our long-term capital requirements are subject to numerous risks.
If we are not able to achieve and maintain profitability, the value of our company and our common stock could decline significantly. 14 We face a number of risks associated with the incurrence of substantial debt which could adversely affect our financial condition.
If we are not able to achieve and maintain profitability, the value of our company and our common stock could decline significantly. We face a number of risks associated with the incurrence of substantial debt which could adversely affect our financial condition.
In addition, if the market for stocks in our industry or industries related to our industry, or the stock market in general, experiences a loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, financial condition and results of operations.
In addition, if the market for stock in our industry or industries related to our industry, or the stock market in general, experiences a loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, financial condition and results of operations.
If we are unable to obtain approval of any of our current product candidate or any future product candidates we may pursue by regulatory authorities in the European Union, United Kingdom, Asia or elsewhere, the commercial prospects of that product candidate may be significantly diminished, our business prospects could decline and this could materially adversely affect our business, results of operations and financial condition. 19 Even if our lead product candidate received regulatory approval, it may still face future development and regulatory difficulties.
If we are unable to obtain approval of any of our current product candidate or any future product candidates we may pursue by regulatory authorities in the European Union, United Kingdom, Asia or elsewhere, the commercial prospects of that product candidate may be significantly diminished, our business prospects could decline and this could materially adversely affect our business, results of operations and financial condition. 21 Even if our lead product candidate received regulatory approval, it may still face future development and regulatory difficulties.
If we do find replacement providers, we may not be able to enter into agreements with suppliers on favorable terms and conditions, or there could be a substantial delay before a new third party could be qualified and registered with the FDA and foreign regulatory authorities as a provider. 21 We depend on third parties, including researchers, who are not under our control.
If we do find replacement providers, we may not be able to enter into agreements with suppliers on favorable terms and conditions, or there could be a substantial delay before a new third party could be qualified and registered with the FDA and foreign regulatory authorities as a provider. 23 We depend on third parties, including researchers, who are not under our control.
Pendency or approval of future proposals or reforms could result in a decrease in our stock price or limit our ability to raise capital or to obtain strategic partnerships or licenses. 31 There have been, and likely will continue to be, legislative and regulatory proposals at the foreign, federal and state levels directed at containing or lowering the cost of healthcare.
Pendency or approval of future proposals or reforms could result in a decrease in our stock price or limit our ability to raise capital or to obtain strategic partnerships or licenses. 32 There have been, and likely will continue to be, legislative and regulatory proposals at the foreign, federal and state levels directed at containing or lowering the cost of healthcare.
Our competitors may also develop devices that are safer, more effective, more widely used and cheaper than ours, and may also be more successful than us in manufacturing and marketing their products. These appreciable advantages could render our product candidate obsolete or non-competitive before we can recover the expenses of development and commercialization.
Our competitors may also develop devices that are safer, more effective, more widely used and cheaper than ours, and may also be more successful than us in manufacturing and marketing their products. These appreciable advantages could render our product candidates obsolete or non-competitive before we can recover the expenses of development and commercialization.
Even if we are able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders, in the case of equity financing. As a result, we can provide no assurance as to whether or if we will ever be profitability.
Even if we are able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders, in the case of equity financing. As a result, we can provide no assurance as to whether or if we will ever be profitable.
Our Amended and Restated Certificate of Incorporation and our Amended and Restated Bylaws, and Delaware law could make it more difficult for a third party to acquire us, even if closing such a transaction would be beneficial to our stockholders. We are authorized to issue up to 20,000,000 shares of preferred stock.
Our Certificate of Incorporation, Bylaws, and Delaware law could make it more difficult for a third party to acquire us, even if closing such a transaction would be beneficial to our stockholders. We are authorized to issue up to 20,000,000 shares of preferred stock.
We cannot assure you that we will, in the future, identify areas requiring improvement in our internal control over financial reporting.
We cannot assure you that we will not, in the future, identify areas requiring improvement in our internal control over financial reporting.
Any actual or alleged failure to comply with labeling and promotion requirements may have a negative impact on our business. 20 The results of our clinical trials may not support our product candidate claims and the results of preclinical studies and completed clinical trials are not necessarily predictive of future results.
Any actual or alleged failure to comply with labeling and promotion requirements may have a negative impact on our business. 22 The results of our clinical trials may not support our product candidate claims and the results of preclinical studies and completed clinical trials are not necessarily predictive of future results.
Changes to patent law, for example the Leahy-Smith America Invests Act, AIA or Leahy-Smith Act, of 2011 and the Patent Reform Act of 2009 and other future article of legislation in the U.S., may substantially change the regulations and procedures surrounding patent applications, issuance of patents, prosecution of patents, challenges to patent validity, and patent enforcement.
Changes to patent law, for example the Leahy-Smith America Invests Act of 2011 and the Patent Reform Act of 2009 and other future article of legislation in the U.S., may substantially change the regulations and procedures surrounding patent applications, issuance of patents, prosecution of patents, challenges to patent validity, and patent enforcement.
The obligations of being a public company in the U.S. require significant expenditures and will place significant demands on our management and other personnel, including costs resulting from public company reporting obligations under the Exchange Act and the rules and regulations regarding corporate governance practices, including those under the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, and the listing requirements of the stock exchange on which our securities are listed.
The obligations of being a public company in the U.S. require significant expenditures and will place significant demands on our management and other personnel, including costs resulting from public company reporting obligations under the Exchange Act and the rules and regulations regarding corporate governance practices, including those under the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Jumpstart Our Business Startups Act, and the listing requirements of the stock exchange on which our securities are listed.
As a result of these factors, these competitors may obtain regulatory approval of their products before we are able to obtain patent protection or other intellectual property rights, which will limit our ability to develop or commercialize our current product candidate.
As a result of these factors, these competitors may obtain regulatory approval of their products before we are able to obtain patent protection or other intellectual property rights, which will limit our ability to develop or commercialize our current product candidate or future product candidates.
In addition, significant delays in the development of our product candidate could allow our competitors to bring products to market before we do and impair our ability to commercialize our product candidate. The biotechnology industry is intensely competitive and involves a high degree of risk.
In addition, significant delays in the development of our product candidates could allow our competitors to bring products to market before we do and impair our ability to commercialize our product candidates. The biotechnology industry is intensely competitive and involves a high degree of risk.
If the equity markets deteriorate, or if adverse developments are experienced by financial institutions, it may cause short-term liquidity risk and also make any necessary equity financing more difficult, more costly and more dilutive.
If these conditions or the equity markets deteriorate, or if adverse developments are experienced by financial institutions, it may cause short-term liquidity risk and also make any necessary equity financing more difficult, more costly and more dilutive.
An inability to successfully complete our product development or commercializing our product candidate could result in our having limited prospects for establishing market share or generating revenue. 33 Many of our competitors or potential competitors have significantly greater established presence in the market, financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved products than we do, and as a result may have a competitive advantage over us.
An inability to successfully complete our product development or commercializing our product candidates could result in our having limited prospects for establishing market share or generating revenue. 34 Many of our competitors or potential competitors have significantly greater established presence in the market, financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved products than we do, and as a result may have a competitive advantage over us.
United States patents and patent applications may be subject to interference and derivation proceedings, United States patents may also be subject to post grant proceedings, including re-examination, derivation, Inter Partes Review and Post Grant Review, in the United States Patent and Trademark Office and foreign patents may be subject to opposition or comparable proceedings in corresponding foreign patent offices, which could result in either loss of the patent or denial of the patent application or loss or reduction in the scope of one or more of the claims of the patent or patent application.
United States patents and patent applications may be subject to interference and derivation proceedings, United States patents may also be subject to post grant proceedings, including re-examination, derivation, Inter Partes Review and Post Grant Review, in the USPTO and foreign patents may be subject to opposition or comparable proceedings in corresponding foreign patent offices, which could result in either loss of the patent or denial of the patent application or loss or reduction in the scope of one or more of the claims of the patent or patent application.
We face substantial competition, which may result in others discovering, developing or commercializing products before or more successfully than we do. We will face competition from numerous medical device, pharmaceutical and biotechnology enterprises, as well as from academic institutions, government agencies and private and public research institutions for our current product candidate.
We face substantial competition, which may result in others discovering, developing or commercializing products before or more successfully than we do. We face competition from numerous medical device, pharmaceutical and biotechnology enterprises, as well as from academic institutions, government agencies and private and public research institutions for our current product candidate or future product candidates.
We may infringe the intellectual property rights of others, which may prevent or delay our product development efforts and stop us from commercializing or increase the costs of commercializing our product candidates. Our success will depend in part on our ability to operate without infringing the proprietary rights of third parties.
We may infringe the intellectual property rights of others, which may prevent or delay our product development efforts, stop us from commercializing or increase the costs of commercializing our product candidates, and force us to pay damages. Our success will depend in part on our ability to operate without infringing the proprietary rights of third parties.
As of December 31, 2022, management assessed the effectiveness of our internal controls over financial reporting, and based on that evaluation, they concluded that our internal controls and procedures were effective. As a public company, we have significant additional requirements for enhanced financial reporting and internal controls.
As of December 31, 2023, management assessed the effectiveness of our internal controls over financial reporting, and based on that evaluation, they concluded that our internal controls and procedures were effective. 40 As a public company, we have significant additional requirements for enhanced financial reporting and internal controls.
Competition could result in reduced sales and pricing pressure on our current product candidate, if approved, which in turn would reduce our ability to generate meaningful revenues and have a negative impact on our results of operations.
Competition could result in reduced sales and pricing pressure on our current product candidate or future product candidates, if approved, which in turn would reduce our ability to generate meaningful revenues and have a negative impact on our results of operations.
Consequently, we might be limited in our ability to prevent off-label use of a competitor’s product to treat the diseases we intend to commercialize, even if we have issued method of use patents for that indication.
Consequently, we might be limited in our ability to prevent off-label use of a competitor’s product to treat the diseases we intend our product candidates to address, even if we have issued method of use patents for that indication.
The FDA or another regulatory agency can delay, limit or deny approval of a product candidate for many reasons, including, but not limited to: ● the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of clinical trials; ● we may be unable to demonstrate to the satisfaction of the FDA that a product candidate is safe and effective for any indication; ● the FDA may not accept clinical data from trials which are conducted by individual investigators or in countries where the standard of care is potentially different from the U.S.; 15 ● the results of clinical trials may not meet the level of statistical significance required by the FDA for approval; ● we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks; ● the FDA may disagree with our interpretation of data from preclinical studies or clinical trials; ● the FDA may fail to approve the manufacturing processes or facilities of third-party manufacturers with which we or our collaborators contract for clinical and commercial supplies; or ● the approval policies or regulations of the FDA may significantly change in a manner rendering our clinical data insufficient for approval.
Despite the time and expense invested in clinical development of product candidates, regulatory approval is never guaranteed. 17 The FDA or another regulatory agency can delay, limit or deny approval of a product candidate for many reasons, including, but not limited to: ● the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of clinical trials; ● we may be unable to demonstrate to the satisfaction of the FDA that a product candidate is safe and effective for any indication; ● the FDA may not accept clinical data from trials which are conducted by individual investigators or in countries where the standard of care is potentially different from the U.S.; ● the results of clinical trials may not meet the level of statistical significance required by the FDA for approval; ● we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks; ● the FDA may disagree with our interpretation of data from preclinical studies or clinical trials; ● the FDA may fail to approve the manufacturing processes or facilities of third-party manufacturers with which we or our collaborators contract for clinical and commercial supplies; or ● the approval policies or regulations of the FDA may significantly change in a manner rendering our clinical data insufficient for approval.
Site initiation, participant recruitment and enrollment, and study monitoring and data analysis may be paused or delayed due to changes in hospital or university policies, federal, state or local regulations, prioritization of hospital resources toward pandemic efforts, or other reasons related to the pandemic.
Site initiation, participant recruitment and enrollment, and study monitoring and data analysis may be paused or delayed due to changes in hospital or university policies, federal, state or local regulations, prioritization of hospital resources toward the public health crisis efforts, or other reasons related to the public health crisis.
Although we are not currently a party to any patent litigation or any other adversarial proceeding, including any interference or derivation proceeding declared or instituted before the United States Patent and Trademark Office, regarding intellectual property rights with respect to our products, product candidates and technology, it is possible that we may become so in the future.
Although we are not currently a party to any patent litigation or any other adversarial proceeding, including any interference or derivation proceeding declared or instituted before the USPTO, regarding intellectual property rights with respect to our products, product candidates and technology, it is possible that we may become so in the future.
As a result of these factors, if the Company’s common stock is delisted from Nasdaq, the value and liquidity of the Company’s common stock, warrants and pre-funded warrants would likely be significantly adversely affected.
As a result of these factors, if the Company’s common stock is delisted from Nasdaq, the value and liquidity of the Company’s common stock would likely be significantly adversely affected.
The commencement of clinical trials can be delayed for a variety of reasons, including delays in: ● obtaining regulatory clearance to commence a clinical trial; ● identifying, recruiting and training suitable clinical investigators; ● reaching agreement on acceptable terms with prospective clinical research organizations, and trial sites, the terms of which can be subject to extensive negotiation, may be subject to modification from time to time and may vary significantly among different clinical research organizations and trial sites; ● obtaining sufficient quantities of a product candidate for use in clinical trials; ● obtaining an IRB or ethics committee approval to conduct a clinical trial at a prospective site; ● identifying, recruiting and enrolling patients to participate in a clinical trial; ● retaining patients who have initiated a clinical trial but may withdraw due to adverse events from the therapy, insufficient efficacy, fatigue with the clinical trial process or personal issues: and ● issues of relationship between the clinical trial in Australia and FDA approval.
The commencement of clinical trials can be delayed for a variety of reasons, including delays in: ● obtaining regulatory clearance to commence a clinical trial; ● identifying, recruiting and training suitable clinical investigators; ● reaching agreement on acceptable terms with prospective clinical research organizations, and trial sites, the terms of which can be subject to extensive negotiation, may be subject to modification from time to time and may vary significantly among different clinical research organizations and trial sites; ● obtaining sufficient quantities of a product candidate for use in clinical trials; ● obtaining an IRB or ethics committee approval to conduct a clinical trial at a prospective site; ● identifying, recruiting and enrolling patients to participate in a clinical trial; ● retaining patients who have initiated a clinical trial but may withdraw due to adverse events from the therapy, insufficient efficacy, fatigue with the clinical trial process or personal issues: and ● issues of relationship between clinical trials in non-U.S. countries, such as our first-in-man pilot clinical trial being conducted in Australia, and FDA approval.
Our future success is dependent, in part, on the performance and continued service of our officers and directors. We are presently dependent largely upon the experience, abilities and continued services of Jeffrey Frelick, our President and Chief Executive Officer. The loss of services of Mr.
Our future success is dependent, in part, on the performance and continued service of our officers and directors. We are presently dependent largely upon the experience, abilities and continued services of Jeffrey Frelick, our President and Chief Executive Officer, and Deina Walsh, our Chief Financial Officer. The loss of services of Mr. Frelick or Ms.
The timing of our clinical trials depends in part on the rate at which we can recruit patients to participate in clinical trials of our product candidate, and we may experience delays in our clinical trials if we encounter difficulties in enrollment.
Identifying and qualifying patients to participate in clinical trials of our product candidate is essential to our success. The timing of our clinical trials depends in part on the rate at which we can recruit patients to participate in clinical trials of our product candidate, and we may experience delays in our clinical trials if we encounter difficulties in enrollment.
We have a limited operating history, and there is a risk that we will be unable to continue as a going concern. We have minimal assets and no significant financial resources. Our limited operating history makes it difficult to evaluate our current business model and future prospects.
Risks Relating to Our Financial Position and Capital Needs Our limited operating history makes it difficult to evaluate our current business and future prospects. We have a limited operating history, and there is a risk that we will be unable to continue as a going concern. We have minimal assets and no significant financial resources.
Our operations, and those of our directors, advisors, contractors, consultants, CROs, and collaborators, could be adversely affected by earthquakes, floods, hurricanes, typhoons, extreme weather conditions, fires, water shortages, power failures, business systems failures, medical epidemics and other natural and man-made disaster or business interruptions including the current war between Russia and Ukraine.
Our operations, and those of our directors, advisors, contractors, consultants, CROs, and collaborators, could be adversely affected by earthquakes, floods, hurricanes, typhoons, extreme weather conditions, fires, water shortages, power failures, business systems failures, medical epidemics, and other natural and man-made disaster or business interruptions.
In particular, the certificate of incorporation and bylaws and Delaware law, as applicable, among other things: ● provide the board of directors with the ability to alter the bylaws without stockholder approval; ● place limitations on the removal of directors; ● establishing advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted upon at stockholder meetings; and ● provide that vacancies on the board of directors may be filled by a majority of directors in office, although less than a quorum.
In particular, the certificate of incorporation and bylaws and Delaware law, as applicable, among other things: ● provide the Board of Directors with the ability to alter the Bylaws without stockholder approval; ● place limitations on the removal of directors; ● establishing advance notice requirements for nominations for election to the Board of Directors or for proposing matters that can be acted upon at stockholder meetings; and ● provide that vacancies on the Board of Directors may be filled by a majority of directors in office, although less than a quorum. 42 Provisions of our warrants could discourage an acquisition of us by a third party.
Further, if the spread of the coronavirus pandemic continues and our operations are adversely impacted, we risk a delay, default and/or non-performance under existing agreements which may increase our costs. These cost increases may not be fully recoverable or adequately covered by insurance. Infections and deaths related to the pandemic may disrupt the United States’ healthcare and healthcare regulatory systems.
Further, if our operations are adversely impacted by a public health crisis, we risk a delay, default and/or non-performance under existing agreements which may increase our costs. These cost increases may not be fully recoverable or adequately covered by insurance. Additionally, infections and deaths related to a public health crisis may disrupt the United States’ healthcare and healthcare regulatory systems.
We anticipate that it will require approximately $15 million to complete first in man studies and an estimated additional $27 million to achieve FDA approval for a spine interbody fusion indication. These amounts are estimates based on data currently available to us, and are subject to many factors, including the risk factors discussed herein.
We anticipate that we will require approximately $5 million to complete first-in-man studies, and an estimated additional $24 million in scientific expenses to achieve FDA approval, if possible, for a spine interbody fusion indication. These amounts are estimates based on data currently available to us, and are subject to many factors, including the risk factors discussed herein.
We have entered and may be required to enter into intellectual property license agreements that are important to our business, including our license agreements with UCLA TDG. These license agreements have imposed various diligence, milestone payment, royalty and other obligations on us.
We have entered and may be required to enter into intellectual property license agreements that are important to our business, including our license agreement with UCLA TDG. These license agreements may impose various diligence, milestone payment, royalty and other obligations on us, such as those imposed by the license agreement with UCLA TDG.
Concerns over medical epidemics, energy costs, geopolitical issues, the U.S. mortgage market and a deteriorating real estate market, unstable global credit markets and financial conditions, and volatile oil prices have led to periods of significant economic instability, diminished liquidity and credit availability, declines in consumer confidence and discretionary spending, diminished expectations for the global economy and expectations of slower global economic growth, increased unemployment rates, and increased credit defaults in recent years.
Concerns over public health crises, energy costs, terrorism and geopolitical issues, the U.S. mortgage market and a deteriorating real estate market, unstable global credit and financial markets and financial conditions, inflationary pressures and interest rate changes, and volatile oil prices have led to periods of significant economic instability, diminished liquidity and credit availability, declines in consumer confidence and discretionary spending, diminished expectations for the global economy and expectations of slower global economic growth, increased unemployment rates, and increased credit defaults in recent years.
Such disruptions could divert healthcare resources away from, or materially delay FDA review and/or approval with respect to, our clinical trials. It is unknown how long these disruptions could continue, were they to occur.
Such disruptions could divert healthcare resources away from, or materially delay FDA review and/or approval with respect to, our clinical trials. We cannot predict how long these disruptions could continue, were they to occur.
In particular, potential investors should consider that there is a significant risk that we will not be able to: ● implement or execute our current business plan, which may or may not be sound; ● maintain our anticipated management and advisory team; and ● raise sufficient funds in the capital markets to effectuate our business plan.
In particular, potential investors should consider that there is a significant risk that we will not be able to, among other things: ● implement or execute our current business plan, which may or may not be sound; ● maintain our anticipated management and advisory team; ● raise sufficient funds in the capital markets to effectuate our business plan; and ● utilize the funds that we do have and/or raise in the future to efficiently execute our business strategy.
Market acceptance of any product candidates for which we receive approval depends on a number of factors, including: ● the efficacy and safety of such product candidates as demonstrated in clinical trials; ● the clinical indications and patient populations for which the product candidate is approved; ● acceptance by physicians, major treatment centers and patients of the product candidates as a safe and effective treatment; ● the potential and perceived advantages of product candidates over alternative treatments; ● the safety of product candidates seen in a broader patient group, including our use outside the approved indications; ● any restrictions on use together with other medications; ● the prevalence and severity of any side effects; ● product labeling or product insert requirements of the FDA or other regulatory authorities; ● the timing of market introduction of our product as well as competitive products; ● the development of manufacturing and distribution processes for commercial scale manufacturing for our current product candidate and any future product candidates; ● the cost of treatment in relation to alternative treatments; ● the availability of coverage and adequate reimbursement from third-party payors and government authorities; ● relative convenience and ease of administration; and ● the effectiveness of our sales and marketing efforts and those of our collaborators.
Market acceptance of any product candidates for which we receive approval depends on a number of factors, including: ● receipt of regulatory approval of marketing claims for the uses that we are developing; ● the efficacy and safety of such product candidates as demonstrated in clinical trials; ● the clinical indications and patient populations for which the product candidate is approved; ● acceptance by physicians, major treatment centers and patients of the product candidates as a safe and effective treatment; ● the potential and perceived advantages of product candidates over alternative treatments; ● relative convenience and ease of administration; ● the safety of product candidates seen in a broader patient group, including our use outside the approved indications; ● any restrictions on use together with other medications; ● the prevalence and severity of any side effects; ● product labeling or product insert requirements of the FDA or other regulatory authorities; ● the timing of market introduction of our product as well as competitive products; ● the development of manufacturing and distribution processes for commercial scale manufacturing for our current product candidate and any future product candidates; ● the cost of treatment in relation to alternative treatments; ● the availability of coverage and adequate reimbursement from government and third-party payors, such as insurance companies, health maintenance organizations and other health plan administrators; ● our ability to attract corporate partners, including medical device, biotechnology and pharmaceutical companies, to assist in commercializing our proposed products; and ● the effectiveness of our sales and marketing efforts and those of our collaborators.
If the coronavirus continues to spread, some participants and clinical investigators may not be able to comply with clinical trial protocols. For example, quarantines or other travel limitations (whether voluntary or required) may impede participant movement, affect sponsor access to study sites, or interrupt healthcare services, and we may be unable to conduct our clinical trials.
During a public health crisis, some participants and clinical investigators may not be able to comply with clinical trial protocols. For example, quarantines or other travel limitations (whether voluntary or required) may impede participant movement, affect sponsor access to study sites, or interrupt healthcare services, and we may be unable to conduct our clinical trials.
If any of our product candidates cause unacceptable adverse events in clinical trials, we may not be able to obtain regulatory approval or commercialize such product or, if such product candidate is approved for marketing, future adverse events could cause us to withdraw such product from the market.
If any of our product candidates cause unacceptable adverse events in clinical trials, we may not be able to obtain regulatory approval or commercialize such product or, if such product candidate is approved for marketing, future adverse events could cause us to withdraw such product from the market. 18 Delays in the commencement of clinical trials could result in increased costs and delay our ability to pursue regulatory approval.
If we face such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business and results in a decline in the market price of our common stock.
If we face such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business and results in a decline in the market price of our common stock. Market and economic conditions may negatively impact our business, financial condition and share price.
Even if we obtain regulatory approval for our lead product candidate or any future product candidates, the products may not gain market acceptance among physicians, healthcare payors, patients or the medical community, including treatment centers.
Our future financial performance will depend upon the introduction and customer acceptance of our products. Even if we obtain regulatory approval for our lead product candidate or any future product candidates, the products may not gain market acceptance among physicians, healthcare payors, patients or the medical community, including treatment centers.
If any of the foregoing occurs, it could cause our stock price to fall and may expose us to lawsuits that, even if unsuccessful, could be costly to defend and a distraction to management. A sale or perceived sale of a substantial number of shares of our common stock may cause the price of our common stock to decline.
If any of the foregoing occurs, it could cause our stock price to fall and may expose us to lawsuits that, even if unsuccessful, could be costly to defend and a distraction to management.
If the Company is delisted from Nasdaq, its common stock may be eligible for trading on an over-the-counter market. If the Company is not able to obtain a listing on another stock exchange or quotation service for its common stock, it may be extremely difficult or impossible for stockholders to sell their shares of common stock.
If the Company is not able to obtain a listing on another stock exchange or quotation service for its common stock, it may be extremely difficult or impossible for stockholders to sell their shares of common stock.
A delisting of the Company’s common stock from Nasdaq could also adversely affect the Company’s ability to obtain financing for its operations and/or result in a loss of confidence by investors, employees and/or business partners. If the Company implements a reverse stock split, liquidity of its common stock may be adversely effected.
A delisting of the Company’s common stock from Nasdaq could also adversely affect the Company’s ability to obtain financing for its operations and/or result in a loss of confidence by investors, employees and/or business partners.
We also rely on proprietary trade secrets and unpatented know-how to protect our research and development activities, particularly when we do not believe that patent protection is appropriate or available. However, trade secrets are difficult to protect.
If we are not able to protect and control our unpatented trade secrets, know-how and other technological innovation, we may suffer competitive harm. We also rely on proprietary trade secrets and unpatented know-how to protect our research and development activities, particularly when we do not believe that patent protection is appropriate or available. However, trade secrets are difficult to protect.
Many of these companies may have more resources than us. We cannot provide any assurances that our products will be FDA-approved prior to our competitors. The FDA does not regulate the practice of medicine and, as a result, cannot direct physicians to select certain products for their patients.
We cannot provide any assurances that our product candidates will be FDA-approved prior to our competitors. The FDA does not regulate the practice of medicine and, as a result, cannot direct physicians to select certain products for their patients.
Accordingly, you should consider our prospects in light of the costs, uncertainties, delays and difficulties frequently encountered by companies in the early stages of development. Potential investors should carefully consider the risks and uncertainties that a new company with no operating history will face.
Our limited operating history makes it difficult to evaluate our current business model and future prospects. Accordingly, you should consider our prospects in light of the costs, uncertainties, delays and difficulties frequently encountered by companies in the early stages of development. Potential investors should carefully consider the risks and uncertainties that a company with a limited operating history will face.
If a patent or other proceeding is resolved against us, we may be enjoined from researching, developing, manufacturing or commercializing our products or product candidates without a license from the other party and we may be held liable for significant damages.
If a patent or other proceeding is resolved against us, we may be enjoined from researching, developing, manufacturing or commercializing our products or product candidates without a license from the other party and we may be held liable for significant damages. We may not be able to obtain any required license on commercially acceptable terms or at all.
Provisions of our Certificate of Incorporation and our Amended and Restated Bylaws and Delaware law also could have the effect of discouraging potential acquisition proposals or making a tender offer or delaying or preventing a change in control, including changes a stockholder might consider favorable.
Provisions of our Certificate of Incorporation and our Bylaws and Delaware law also could have the effect of discouraging potential acquisition proposals or making a tender offer or delaying or preventing a change in control, including changes a stockholder might consider favorable. Such provisions may also prevent or frustrate attempts by our stockholders to replace or remove our management.
In addition, there is a risk that one or more of our current service providers, financial institutions, manufacturers and other partners may be adversely affected by the foregoing risks, which could directly affect our ability to conduct our business plans on schedule and on budget.
In addition, there is a risk that one or more of our current service providers, financial institutions, manufacturers and other partners may be adversely affected by the foregoing risks, which could directly affect our ability to conduct our business plans on schedule and on budget. 41 If securities or industry analysts do not publish research or reports, or publish unfavorable research or reports about our business, our stock price and trading volume may decline.
In the ordinary course of business, we collect, store and transmit large amounts of confidential information (including, but not limited to, personal information and intellectual property).
We rely and plan to rely to a large extent upon sophisticated information technology systems to operate our business. In the ordinary course of business, we collect, store and transmit large amounts of confidential information (including, but not limited to, personal information and intellectual property).
If we fail to comply with any obligations under our agreements with any of these licensors, we may be subject to termination of the license agreements in whole or in part; increased financial obligations to our licensors or loss of exclusivity in a particular field or territory, in which case our ability to develop or commercialize products covered by the license agreements will be impaired. 24 In addition, disputes may arise regarding intellectual property subject to a license agreement, including: ● the scope of rights granted under the license agreement and other interpretation-related issues; ● the extent to which our technology, products, methods and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; ● our diligence obligations under the license agreement and what activities satisfy those obligations; ● if a third party expresses interest in an area under a license that we are not pursuing, under the certain terms of our license agreement, we may be required to sublicense rights in that area to the third party, and that sublicense could harm our business; and ● the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us.
In addition, disputes may arise regarding intellectual property subject to a license agreement, including: ● the scope of rights granted under the license agreement and other interpretation-related issues; ● the extent to which our technology, products, methods and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; ● our diligence obligations under the license agreement and what activities satisfy those obligations; ● if a third party expresses interest in an area under a license that we are not pursuing, under the certain terms of our license agreement, we may be required to sublicense rights in that area to the third party, and that sublicense could harm our business; and ● the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us. 26 If disputes over the intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates.
We may also be subject to state and foreign privacy laws under which breaches could lead to substantial fines and liability. 38 Risks Related to Owning our Common Stock If we are unable to establish appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations, result in the restatement of our financial statements, harm our operating results, subject us to regulatory scrutiny and sanction, cause investors to lose confidence in our reported financial information and have a negative effect on the market price for shares of our Common Stock and Public Warrants.
General Risk Factors If we are unable to establish appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations, result in the restatement of our financial statements, harm our operating results, subject us to regulatory scrutiny and sanction, cause investors to lose confidence in our reported financial information and have a negative effect on the market price for shares of our common stock.
Once a clinical trial has begun, patient recruitment and enrollment may be slower than we anticipate. Clinical trials may also be delayed as a result of ambiguous or negative interim results or difficulties in obtaining sufficient quantities of product manufactured in accordance with regulatory requirements.
Clinical trials may also be delayed as a result of ambiguous or negative interim results or difficulties in obtaining sufficient quantities of product manufactured in accordance with regulatory requirements.
Even if we are able to commercialize our lead product candidate or any future product candidates, the products may not receive coverage and adequate reimbursement from third-party payors in the U.S. and in other countries in which we seek to commercialize our products, which could harm our business.
If our current product and any future product candidates are approved but fail to achieve market acceptance, we will not be able to generate significant revenues, which would compromise our ability to become profitable. 31 Even if we are able to commercialize our lead product candidate or any future product candidates, the products may not receive coverage and adequate reimbursement from third-party payors in the U.S. and in other countries in which we seek to commercialize our products, which could harm our business.
These third parties could bring claims against us or our collaborators that would cause us to incur substantial expenses and, if successful against us, could cause us to pay substantial damages.
Third parties may own or control these patents and patent applications in the United States and elsewhere. These third parties could bring claims against us or our collaborators that would cause us to incur substantial expenses and, if successful against us, could cause us to pay substantial damages.
To that end, we must be able to manage our development efforts and preclinical studies and clinical trials effectively and hire, train and integrate additional management, research and development, manufacturing, administrative and sales and marketing personnel. The failure to accomplish any of these tasks could prevent us from successfully growing our company.
To that end, we must be able to manage our development efforts and preclinical studies and clinical trials effectively and hire, train and integrate additional management, research and development, manufacturing, administrative and sales and marketing personnel.
If securities or industry analysts do not publish research or reports, or publish unfavorable research or reports about our business, our stock price and trading volume may decline. The trading market for our common stock will rely in part on the research and reports that industry or financial analysts publish about us, our business, our markets and our competitors.
The trading market for our common stock relies in part on the research and reports that industry or financial analysts publish about us, our business, our markets and our competitors. We do not control these analysts. If securities analysts do not cover our common stock, the lack of research coverage may adversely affect the market price of our common stock.
These NOL carryforwards could expire unused and be unavailable to offset future income tax liabilities. Under the Tax Act, federal NOLs incurred in tax years ending after December 31, 2017 may be carried forward indefinitely, but the deductibility of such federal NOLs is limited.
Under the Tax Act, federal NOLs incurred in tax years ending after December 31, 2017 may be carried forward indefinitely, but the deductibility of such federal NOLs is limited.
The perception of our ability to continue as a going concern may make it more difficult for us to obtain financing for the continuation of our operations and could result in the loss of confidence by investors, suppliers and employees.
The perception of our ability to continue as a going concern may make it more difficult for us to obtain financing for the continuation of our operations and could result in the loss of confidence by investors, suppliers and employees. 16 We have incurred losses since inception and we expect our operating expenses to increase in the foreseeable future, which may make it more difficult for us to achieve and maintain profitability.
Moreover, the perceived risk of this potential dilution could cause stockholders to attempt to sell their shares and investors to short our common stock.
Such sales may also result in material dilution to our existing stockholders, and new investors could gain rights superior to our existing stockholders. Moreover, the perceived risk of this potential dilution could cause stockholders to attempt to sell their shares and investors to short our common stock.

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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The Complaint alleges claims for breach of contract against the Company and tortious interference with contract against the Individual Defendants and MTF arising from the termination of the Professional Service Agreements, dated as of January 8, 2016, between the Company and each of the Plaintiffs.
The Complaint alleged claims for breach of contract against the Company and tortious interference with contract against the Individual Defendants and MTF arising from the termination of the Professional Service Agreements, dated as of January 8, 2016, between the Company and each of the Plaintiffs.
The Individual Defendants have been sued for actions taken by them in connection with their service to the Company as directors and/or officers of the Company. As such, the Company has certain indemnification obligations to the Individual Defendants. The Company and the Individual Defendants intend to vigorously defend against the allegations in the Complaint.
The Individual Defendants were sued for actions taken by them in connection with their service to the Company as directors and/or officers of the Company. As such, we have certain indemnification obligations to the Individual Defendants.
Item 3. Legal Proceedings In July 2019, Dr. Bessie (Chia) Soo and Dr. Kang (Eric) Ting (“Plaintiffs”) filed a complaint (the “Complaint”) in federal court in Massachusetts against the Company, Bruce Stroever (“Stroever”), John Booth (“Booth”), Stephen LaNeve (“LaNeve”, and together with Stroever and Booth, the “Individual Defendants”), and MTF Biologics (f/k/a The Musculoskeletal Transplant Foundation, Inc.) (“MTF”).
Kang (Eric) Ting (“Plaintiffs”) filed a complaint (the “Complaint”) in the United States District Court for the District of Massachusetts against the Company, Bruce Stroever (“Stroever”), John Booth (“Booth”), Stephen LaNeve (“LaNeve”, and together with Stroever and Booth, the “Individual Defendants”), and MTF Biologics (f/k/a The Musculoskeletal Transplant Foundation, Inc.) (“MTF”).
However, there are currently no legal actions pending against us or, to our knowledge, are any such proceedings contemplated. Item 4. Mine Safety Disclosures Not applicable. 44 PART II
However, except as noted above, there are currently no legal actions pending against us or, to our knowledge, are any such proceedings contemplated.
Removed
Although the Complaint was filed several years ago, due to the Covid-19 Pandemic and long delays in the court ruling on various motions to dismiss, in terms of case progression the case is still in its early stages with the claims in the case not being set until April 2022 and preliminary discovery starting since then.
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Item 3. Legal Proceedings On July 11, 2019, Dr. Bessie (Chia) Soo and Dr.
Removed
Based on the early stage of the litigation, it is not possible to estimate the amount or range of any possible loss arising from the expenditure of defence fees, a judgment or settlement of the matter. In the normal course of our business, we may periodically become subjected to various lawsuits.
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On January 10, 2024 we entered into a Settlement Agreement and Mutual General Release (the “Agreement”) with the Plaintiffs on the one hand, and the Company and LaNeve on the other hand, in settlement of the claims for breach of contract and tortious interference with contract. The Agreement is effective as of January 9, 2024.
Added
Under the Agreement, the Company agreed to pay the plaintiffs $750,000, and on February 7, 2024, the Company paid $414,989, and the Company’s insurance carrier paid $335,011 for the total settlement.
Added
The parties to the Agreement have filed a joint stipulation to dismiss the action with prejudice with the Court and the Company expects the action to be dismissed by the Court. In the normal course of our business, we may periodically become subject to various lawsuits.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Market Effective October 13, 2021, our common stock and warrants began to trade on The Nasdaq Capital Market under the symbols “BBLG” and “BBLGW,” respectively. Prior to October 13, 2021, our common stock traded on the OTCQB.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Market Our common stock, par value $0.001 per share, and certain warrants to purchase shares of common stock trade on The Nasdaq Capital Market under the symbols “BBLG” and “BBLGW,” respectively.
Common Stock High Low Fiscal Year 2022 First Quarter $ 5.39 $ 1.48 Second Quarter $ 3.04 $ 1.19 Third Quarter $ 1.73 $ 1.05 Fourth Quarter $ 1.09 $ 0.19 Fiscal Year 2021 First Quarter $ 10.00 $ 10.00 Second Quarter $ 10.00 $ 10.00 Third Quarter $ 10.00 $ 7.50 Fourth Quarter $ 18.75 $ 6.25 Holders As of March 28, 2023, we had 31 stockholders of record holding 16,702,912 shares of our common stock outstanding, including 14,060,792 shares of common stock held by an indeterminate number of beneficial owners of securities whose shares are held in the names of various depository accounts, brokerage firms and clearing agencies.
Holders As of February 14, 2024, we had 22 stockholders of record holding 11,038 shares of our common stock outstanding, including 534,238 shares of common stock held by an indeterminate number of beneficial owners of securities whose shares are held in the names of various depository accounts, brokerage firms and clearing agencies.
Dividends To date, we have paid no cash dividends on our Common Stock. For the foreseeable future, earnings generated from our operations will be retained for use in our business and not to pay dividends.
Dividends We have never declared or paid cash dividends on our common stock, and we do not anticipate paying any cash dividends on our common stock in the foreseeable future. We intend to retain all available funds and future earnings, if any, to fund the development and expansion of our business.
Removed
Quotations represent prices between dealers, do not include retail markups, markdowns or commissions, and do not necessarily represent prices at which actual transactions were affected. There is a limited public trading market for our securities.
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Any future determination to pay dividends on the common stock will be at the discretion of our Board of Directors and will depend upon a number of factors, including our results of operations, financial condition, future prospects, contractual restrictions, restrictions imposed by applicable law and other factors our Board of Directors deems relevant.
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All share and per share amounts and information presented herein have been retroactively adjusted for all periods presented to reflect the 1-for-2.5 reverse stock split effected October 12, 2021.
Added
Repurchases of Equity Securities None Recent Sales of Unregistered Securities During the fourth quarter of the year ended December 31, 2023, we did not issue any shares in reliance on Section 4(a)(2) of the Securities Act, as amended as a transaction not involving a public offering which have not previously been reported in a Quarterly Report on Form 10-Q or in a Current Report on Form 8-K.
Removed
Repurchases of Equity Securities None Recent Sales of Unregistered Securities None 45 Securities Authorized for Issuance under Equity Compensation Plans 2015 Equity Incentive Plan We have 1,077,529 shares of Common Stock authorized and reserved for issuance under our 2015 Equity Incentive Plan for option awards.
Removed
This reserve may be increased by the Board each year by up to the number of shares of stock equal to 5% of the number of shares of stock issued and outstanding on the immediately preceding December 31.
Removed
Appropriate adjustments will be made in the number of authorized shares and other numerical limits in our 2015 Equity Incentive Plan and in outstanding awards to prevent dilution or enlargement of participants’ rights in the event of a stock split or other change in our capital structure.
Removed
Shares subject to awards granted under our 2015 Equity Incentive Plan which expire, are repurchased or are cancelled or forfeited will again become available for issuance under our 2015 Equity Incentive Plan. The shares available will not be reduced by awards settled in cash. Shares withheld to satisfy tax withholding obligations will not again become available for grant.
Removed
The gross number of shares issued upon the exercise of stock appreciation rights or options exercised by means of a net exercise or by tender of previously owned shares will be deducted from the shares available under our 2015 Equity Incentive Plan.
Removed
Awards may be granted under our 2015 Equity Incentive Plan to our employees, including officers, director or consultants, and our present or future affiliated entities.
Removed
While we may grant incentive stock options only to employees, we may grant non-statutory stock options, stock appreciation rights, restricted stock purchase rights or bonuses, restricted stock units, performance shares, performance units and cash-based awards or other stock based awards to any eligible participant. The 2015 Equity Incentive Plan is administered by our compensation committee.
Removed
Subject to the provisions of our 2015 Equity Incentive Plan, the compensation committee determines, in its discretion, the persons to whom, and the times at which, awards are granted, as well as the size, terms and conditions of each award. All awards are evidenced by a written agreement between us and the holder of the award.
Removed
The compensation committee has the authority to construe and interpret the terms of our 2015 Equity Incentive Plan and awards granted under our 2015 Equity Incentive Plan.
Removed
Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) Weighted- average exercise price of outstanding options, warrants and rights (b) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) Equity compensation plans approved by security holders 452,829 $ 16.84 624,700 Equity compensation plans not approved by security holders - - - Total 452,829 $ 16.84 624,700 Item 6. [Reserved]

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Item 6. [Reserved] 46 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 46 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 50 Item 8. Financial Statements and Supplementary Data 50 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 50 Item 9A. Controls and Procedures 50
Item 6. [Reserved] 45 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 45 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 48 Item 8. Financial Statements and Supplementary Data 48 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 48 Item 9A. Controls and Procedures 48 Item 9B.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Critical Accounting Policies and Estimates Use of Estimates and Assumptions.
Critical Accounting Policies and Use of Estimates Use of Estimates and Assumptions.
If cash resources are insufficient to satisfy our on-going cash requirements, we will be required to scale back or discontinue its product development programs, or obtain funds if available (although there can be no certainties) through strategic alliances that may require us to relinquish rights to our technology, substantially reduce or discontinue its operations entirely.
If cash resources are insufficient to satisfy our on-going cash requirements, we will be required to scale back or discontinue our product development programs, or obtain funds if available (although there can be no certainties) through strategic alliances that may require us to relinquish rights to our technology or substantially reduce or discontinue our operations entirely.
Our platform technology has application in delivering improved outcomes in the surgical specialties of spinal, orthopedic, general orthopedic, plastic reconstruction, neurosurgery, interventional radiology, and sports medicine. Lead product development and clinical studies are targeted on spinal fusion surgery, one of the larger segments in the orthopedic market. We are a development stage entity.
We believe our platform technology has application in delivering improved outcomes in the surgical specialties of spinal, orthopedic, general orthopedic, plastic reconstruction, neurosurgery, interventional radiology, and sports medicine. Lead product development and clinical studies are targeted on spinal fusion surgery, one of the larger segments in the orthopedic market. We are a development stage entity.
Prior to marketing in the United States, any combination product developed by us must undergo rigorous preclinical (animal) and clinical (human) testing and an extensive regulatory approval process implemented by the FDA under the Food, Drug and Cosmetic Act.
Prior to marketing in the United States, any combination product developed by us must undergo rigorous preclinical (animal) and clinical (human) testing and an extensive regulatory approval process implemented by the FDA under the Federal Food, Drug, and Cosmetic Act.
Accordingly, pursuant to ASC 815, we have classified the fair value of the warrants as a liability to be re-measured at the end of every reporting period with the change in value reported in the statement of operations. The change in fair value of warrant liability represents the re-measurement of the outstanding warrants at December 31, 2022.
Accordingly, pursuant to ASC 815, we have classified the fair value of the warrants as a liability to be re-measured at the end of every reporting period with the change in value reported in the statement of operations. The change in fair value of warrant liability represents the re-measurement of the outstanding warrants at December 31, 2023.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations We are a medical device company that is currently focused on bone regeneration in spinal fusion using the recombinant human protein, known as NELL-1/DBM. The NELL-1/DBM combination product is an osteopromotive recombinant protein that provides target specific control over bone regeneration.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations We are a medical device company that is currently focused on bone regeneration in spinal fusion using the recombinant human protein known as NELL-1. NELL-1 in combination with DBM, demineralized bone matrix, is an osteopromotive recombinant protein that provides target specific control over bone regeneration.
The production and marketing of our products and ongoing research and development activities will be subject to extensive regulation by numerous governmental authorities in the United States.
The production and marketing of our products and ongoing research and development activities are subject to extensive regulation by numerous governmental authorities in the United States.
In addition the Company’s independent registered public accounting firm, in their report on the Company’s December 31, 2022, audited financial statements, raised substantial doubt about the Company’s ability to continue as a going concern.
In addition, our independent registered public accounting firm, in their report on the Company’s December 31, 2023, audited financial statements, expressed substantial doubt about our ability to continue as a going concern.
Even if we are able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders, in the case of equity financing. As of December 31, 2022 and 2021, we had cash of $7,538,312 and $6,675,365, respectively.
Even if we are able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders, in the case of equity financing. As of December 31, 2023 and 2022, we had cash of $3,026,569 and $7,538,312, respectively.
Costs related to research, design and development of products are charged to research and development expense as incurred. Stock Based Compensation ASC 718, Compensation – Stock Compensation , prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired.
Costs related to research, design and development of products are charged to research and development expense as incurred. Stock Based Compensation ASC 718, Compensation – Stock Compensation, prescribes accounting and reporting standards for all share-based payment transactions to employees and non-employees.
Cash Flows The following is a summary of our cash flows from operating, investing and financing activities for the years ended December 31, 2022 and 2021: Operating activities During the year ended December 31, 2022 and 2021, cash used in operating activities was $3,566,913 and $1,228,586 respectively.
Cash Flows The following is a summary of our cash flows from operating, investing and financing activities for the years ended December 31, 2023 and 2022: Operating activities During the year ended December 31, 2023 and 2022, cash used in operating activities was $9,555,904 and $3,566,913 respectively.
We anticipate that it will require approximately $15 million to complete first in man studies, and an estimated additional $27 million to achieve FDA approval for a spine interbody fusion indication.
We anticipate that we will require approximately $5 million to complete first-in-man studies, and an estimated additional $24 million in scientific expenses to achieve FDA approval, if possible, for a spine interbody fusion indication.
These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued.
These factors raise substantial doubt about our ability to continue as a going concern within a reasonable period of time, which is considered to be one year after the date that the financial statements are issued.
The consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. On October 13, 2022, we completed a public offering generating net proceeds to us of $4,429,860.
The consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
The protein, as part of the UCB-1 technology platform has been licensed exclusively for worldwide applications to us through a technology transfer from UCLA TDG. UCLA TDG and the Company received guidance from the FDA that NELL-1/DBM will be classified as a combination product with a device lead.
The NELL-1 technology platform has been licensed exclusively for worldwide applications to us through a technology transfer from UCLA TDG. UCLA TDG and the Company received guidance from the FDA that NELL-1/DBM will be classified as a device/drug combination product that will require an FDA-approved PMA before it can be commercialized in the United States.
Finance cost related to public offering Finance cost related to public offering of $731,714 represents the excess of the fair value of the derivative warrant instruments issued on our October 2022 over the net proceeds from the offering.
Finance cost related to public offering Finance cost related to public offering of $731,714 represents the excess of the fair value of the derivative warrant instruments issued in our October 2022 offering over the net proceeds from the offering. 46 Change in fair value of warrant liability In October 2022, we completed a public equity offering, which included the issuance of 54,174 warrants.
There can be no assurance that we will not encounter problems in clinical trials that will cause us or the FDA to delay or suspend the clinical trials. 46 Our success will depend in part on our ability to obtain patents and product license rights, maintain trade secrets, and operate without infringing on the proprietary rights of others, both in the United States and other countries.
Our success will depend in part on our ability to obtain patents and product license rights, maintain trade secrets, and operate without infringing on the proprietary rights of others, both in the United States and other countries.
Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
During the year ended December 31, 2022, cash provided by financing activities of $4,429,860 resulted from the net proceeds of our October 2022 public offering of common stock units. 47 Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). We account for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, Equity – based Payments to Non-Employees .
That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). Recognition of compensation expense for non-employees is in the same period and manner as if the Company had paid cash for the services.
Liquidity and Capital Resources Going Concern and Liquidity We have no significant operating history and since inception to December 31, 2022 have incurred accumulated losses of approximately $72 million. The Company will continue to incur significant expenses for development activities for their lead product NELL-1/DBM. Operating expenditures for the next twelve months are estimated at $8.8 million.
We will continue to incur significant expenses for development activities for our lead product NELL-1/DBM. Operating expenditures for the next twelve months are estimated at $5.5 million. The accompanying consolidated financial statements for the year ended December 31, 2023 have been prepared assuming we will continue as a going concern.
Year ended December 31, 2022 Year ended December 31, 2021 % Change Operating expenses Research and development $ 1,579,298 $ 82,044 1824.94 % General and administrative 2,085,875 1,021,032 104.29 % Total operating expenses 3,665,173 1,103,076 232.27 % Loss from operations (3,665,173 ) (1,103,076 ) 232.27 % Interest expense - (805,109 ) (100.00 )% Finance cost related to public offering (731,714 ) - - % Change in fair value of warrant liability 2,912,267 - - % Gain on forgiveness of deferred compensation - 297,500 (100.00 )% Net loss $ (1,484,620 ) $ (1,610,685 ) (7.83 )% Research and Development Our research and development increased from $82,044 during the year ended December 31, 2021 to $1,579,298 during the year ended December 31, 2022.
Year ended December 31, 2023 Year ended December 31, 2022 % Change Operating expenses Research and development $ 6,907,824 $ 1,579,298 337.40 % General and administrative 2,520,479 2,085,875 20.84 % Total operating expenses 9,428,303 3,665,173 157.24 % Loss from operations (9, 428,303) (3,665,173 ) 157.24 % Finance cost related to public offering - (731,714 ) (100.00 )% Change in fair value of warrant liability 892,693 2,912,267 (69.35 )% Legal settlement, net of insurance (414,989 ) - (100.00 )% Interest Income 1,868 - 100.00 % Net loss $ (8,948,731 ) $ (1,484,620 ) 502.76 % Research and Development Our research and development expenses increased from $1,579,298 during the year ended December 31, 2022 to $6,907,824 during the year ended December 31, 2023.
The accompanying consolidated financial statements for the year ended December 31, 2022 have been prepared assuming the Company will continue as a going concern. As reflected in the financial statements, the Company incurred a net loss of $1,484,620, and used net cash in operating activities of $3,566,913 during the year ended December 31, 2022.
As reflected in the financial statements, we incurred a net loss of $8.9 million, and used net cash in operating activities of $9.6 million during the year ended December 31, 2023.
Cash expenditures for the year ended December 31, 2022 increased primarily due to implementing research activities after curtailing our operations during 2021, directors’ compensation, the revised CFO employment agreement for full-time services and investor relation services. 48 Financing activities During the year ended December 31, 2022, cash provided by financing activities of $4,429,860 resulted from the net proceeds of our October 2022 public offering of common stock units.
Cash expenditures for the year ended December 31, 2023 increased primarily due to production of our Nell-1 protein as we prepare for our pilot clinical study. Financing activities During the year ended December 31, 2023, cash provided by financing activities of $5,044,161 resulted from the net proceeds of our July and November 2023 public offerings of common stock units.
Results of Operations Since our inception, we devoted substantially all of our efforts and funding to the development of the NELL-1 protein and raising capital. We have not yet generated revenues from our planned operations.
The Company received notice from Nasdaq on January 9, 2024 that it had regained compliance with the minimum bid price requirement. The Company will remain under a Nasdaq discretionary panel monitor until June 28, 2024. Results of Operations Since our inception, we devoted substantially all of our efforts and funding to the development of the NELL-1 protein and raising capital.
The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date. 49 Recently Issued Accounting Standards See discussion in Note 2 to the consolidated financial statements.
Recently Issued Accounting Standards See discussion in Note 2 to the consolidated financial statements for the year ended December 31, 2023 .
Removed
There can be no assurance that patents issued to or licensed by us will not be challenged, invalidated, or circumvented, or that the rights granted thereunder will provide proprietary protection or competitive advantages to us.
Added
There can be no assurance that we will not encounter problems in clinical trials that will cause us or the FDA to delay or suspend the clinical trials.
Removed
Nasdaq Notification of Failure to Satisfy a Continued Listing Rule or Standard On November 17, 2022, we received a notification from Nasdaq related to our failure to maintain a minimum bid price of $1 per share. Based upon the closing bid price for the last 30 consecutive business days, we no longer meet this requirement.
Added
There can be no assurance that patents issued to or licensed by us will not be challenged, invalidated, rendered unenforceable, or circumvented, or that the rights granted thereunder will provide proprietary protection or competitive advantages to us. 45 Nasdaq Panel Decision On September 27, 2023, the Company received a written notice from the Nasdaq notifying the Company that it was not in compliance with the $1.00 per share minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2) and that Nasdaq’s staff had determined to delist the Company’s securities On December 11, 2023, a Nasdaq Hearings Panel granted the Company’s request for continued listing on Nasdaq subject to the Company demonstrating compliance with the minimum bid price requirement prior to January 12, 2024.
Removed
However, the Nasdaq Listing Rules also provide us a compliance period of 180 calendar days in which to regain compliance.
Added
We have not yet generated revenues from our planned operations.
Removed
Accordingly, if at any time from the date of this notice until May 16, 2023, the closing bid price our common stock is at least $1 for a minimum often consecutive business days, Nasdaq will provide us with written confirmation of compliance and the matter will be closed.
Added
The increase of $5,328,526 is primarily due to production of our Nell-1 protein as we prepare for our pilot clinical study. We will continue to incur significant expenses for development activities for NELL-1 in the future.
Removed
If we do not regain compliance with the minimum bid price requirement by May 16, 2023, we may be afforded a second 180 calendar day period to regain compliance. To qualify, we would be required to meet all other initial listing standards, except for the minimum bid price requirement.
Added
General and Administrative Our general and administrative expenses increased from $2,085,875 during the year ended December 31, 2022 to $2,520,479 during the year ended December 31, 2023. The $434,604 increase was primarily due to consultants for our annual proxy and special meeting and to assist with our NASDAQ notice.
Removed
In addition, we would be required to notify Nasdaq of our intent to cure the deficiency during the second compliance period. If we do not regain compliance with the minimum bid price requirement by the end of the compliance period (or the second compliance period, if applicable), our common stock will become subject to delisting.
Added
We incurred stock based compensation expense for our directors and management team totaling $152,599. The management team incentive bonus accruals were based on performance targets established for each fiscal year.
Removed
If we are delisted from Nasdaq, our common stock may be eligible for trading on an over-the-counter market. If we are not able to obtain a listing on another stock exchange or quotation service for our common stock, it may be extremely difficult or impossible for stockholders to sell their shares.
Added
Legal settlement, net of insurance On January 10, 2024 we entered into a Settlement Agreement and Mutual General Release (the “Agreement”) with the Plaintiffs on the one hand, and the Company and LaNeve on the other hand, in settlement of the claims for breach of contract and tortious interference with contract. The Agreement is effective as of January 9, 2024.
Removed
We intend to monitor the closing bid price of our common stock and may be required to seek approval from our stockholders to effect a reverse stock split of the issued and outstanding shares of our common stock. However, there can be no assurance that the reverse stock split would be approved by our stockholders.
Added
The parties to the Agreement have filed a joint stipulation to dismiss the action with prejudice with the Court and we expect the action to be dismissed by the Court.
Removed
Further, there can be no assurance that the market price per new share of our common stock after the reverse stock split will remain unchanged or increase in proportion to the reduction in the number of old shares of our common stock outstanding before the reverse stock split.
Added
Under the Agreement, the Company agreed to pay the plaintiffs $750,000, and on February 7, 2024, the Company paid $414,989, and the Company’s insurance carrier paid $335,011 for the total settlement. Liquidity and Capital Resources Going Concern and Liquidity We have no significant operating history and since inception to December 31, 2023 have incurred accumulated losses of approximately $80.9 million.
Removed
Even if the reverse stock split is approved by our stockholders, there can be no assurance that we will be able to regain compliance with the minimum bid price requirement or will otherwise be in compliance with other Nasdaq listing rules.
Added
On June 14, 2023, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with EF Hutton, division of Benchmark Investments, LLC (“EF Hutton”) acting as representatives of the several underwriters in connection with a public offering (the “June Offering”) of an aggregate of 317,259 shares of its common stock.
Removed
We continue to implement research activities after curtailing our operations during 2021. We will continue to incur significant expenses for development activities for NELL-1 in the future. General and Administrative Our general and administrative expenses increased from $1,021,032 during the year ended December 31, 2021 to $2,085,875 during the year ended December 31, 2022.
Added
The public offering price was $15.76 per share and the underwriters agreed to purchase 317,259 shares at a 7% discount to the public offering price. The Company granted EF Hutton a 45-day option to purchase up to 47,589 additional shares, to cover over-allotments, if any, which was not exercised.
Removed
The $1,064,843 increase was due to resuming operations in 2022. Significant expenses incurred during 2022 were Directors and Officers insurance, directors’ compensation, the revised CFO employment agreement for full-time services and the services of an investor relations firm.
Added
The Offering closed on June 16, 2023, resulting in gross proceeds of $5 million, before deducting underwriting discounts and commissions and other offering expenses. The net proceeds in relation to the June Offering were $4,452,163.
Removed
We incurred stock based compensation expense for our directors and management team totaling $266,633. 47 Interest Expense Our interest expense decreased from $805,109 for the year ended December 31, 2021 to $-0- during the year ended December 31, 2022. All the outstanding convertible notes were converted in October 2021.
Added
On November 20, 2023 we sold and issued, in the Registered Direct Offering, 142,384 shares of common stock, at an offering price of $5.12 per share to the Purchasers pursuant to the Purchase Agreement.
Removed
Change in fair value of warrant liability In October 2022, we completed a public equity offering (see Financial Statements Note 5), which included the issuance of 13,001,445 warrants.
Added
Pursuant to the Purchase Agreement, in a concurrent private placement, we issued to the Purchasers the November Warrants to purchase up to an aggregate of 142,384 shares of common stock, which represent 100% of the shares of common stock issued and sold in the Registered Direct Offering.
Removed
During the year ended December 31, 2021, cash provided by financing activities of $7,903,951 resulted primarily from draws on our second and third credit facilities with Hankey Capital and the October 2021 Primary Offering which provided proceeds from sale of common stock units in public offering, net of offering costs of $6,858,843.
Added
The November Warrants are exercisable at an exercise price of $4.16 per share, were exercisable immediately upon issuance, and will expire five and one-half years from the date of issuance.
Removed
Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued.
Added
In addition, we issued the placement agent as compensation in connection with the November Offering, the November Placement Agent Warrants to purchase up to an aggregate of 8,543 shares of common stock (equal to 6.0% of the aggregate number of shares sold in the Registered Direct Offering).
Added
The November Placement Agent Warrants have substantially the same terms and conditions as the November Warrants, except that the November Placement Agent Warrants have a term of five years from the commencement of sales in the November Offering and an exercise price of $6.40 per share. The net proceeds of the November Offering were $591,998.