Bone Biologics (BBLG) - 2024 Q3 - Quarterly Report

PART I – FINANCIAL INFORMATION Financial Statements The unaudited condensed consolidated financial statements for the nine months ended September 30, 2024, show a $2.6 million net loss and increased cash from financing activities Unaudited Condensed Consolidated Balance Sheets As of September 30, 2024, total assets were $4.1 million, liabilities reduced to $0.27 million, and stockholders' equity increased to $3.8 million from financing activities Condensed Consolidated Balance Sheet Highlights (Unaudited) | Balance Sheet Items | September 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Assets | | | | Cash | $3,566,426 | $3,026,569 | | Total current assets | $4,065,818 | $3,737,763 | | Total assets | $4,065,818 | $3,737,763 | | Liabilities & Equity | | | | Total current liabilities | $273,402 | $831,402 | | Total liabilities | $273,402 | $831,402 | | Total stockholders' equity | $3,792,416 | $2,906,361 | | Total liabilities and stockholders' equity | $4,065,818 | $3,737,763 | Unaudited Condensed Consolidated Statements of Operations For the nine months ended September 30, 2024, the company reported no revenue and a net loss of $2.6 million, a significant improvement driven by reduced R&D expenses Condensed Consolidated Statements of Operations (Unaudited) | Metric | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :--- | :--- | :--- | | Revenues | $0 | $0 | | Research and development | $1,025,814 | $6,460,747 | | General and administrative | $1,638,409 | $1,807,548 | | Loss from operations | $(2,664,223) | $(8,268,295) | | Net loss | $(2,590,705) | $(7,398,846) | | Net loss attributable to common stockholders | $(5,803,209) | $(7,398,846) | | Loss per share – basic and diluted | $(4.85) | $(37.40) | Unaudited Condensed Consolidated Statements of Stockholders' Equity Stockholders' equity increased from $2.9 million to $3.8 million as of September 30, 2024, driven by stock and warrant sales, partially offset by a $3.2 million non-cash deemed dividend - Total stockholders' equity increased from $2.91 million at December 31, 2023, to $3.79 million at September 30, 2024[15] - Key activities impacting equity in the first nine months of 2024 include a public offering raising net proceeds of $1.5 million, a warrant inducement raising net proceeds of $1.8 million, and a non-cash deemed dividend of $3.2 million[15] Unaudited Condensed Consolidated Statements of Cash Flows For the nine months ended September 30, 2024, net cash used in operations decreased to $2.8 million, with financing providing $3.3 million, resulting in a $0.54 million net cash increase and a $3.6 million ending balance Condensed Consolidated Statements of Cash Flows (Unaudited) | Cash Flow Activity | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(2,771,438) | $(7,537,889) | | Net cash provided by financing activities | $3,311,295 | $4,452,163 | | Net increase (decrease) in cash | $539,857 | $(3,085,726) | | Cash, end of period | $3,566,426 | $4,452,586 | Notes to Unaudited Condensed Consolidated Financial Statements The notes detail the company's business, accounting policies, and financial activities, highlighting its 'going concern' status due to an $83.5 million accumulated deficit, recent financing efforts, and a $100,000 milestone payment - The company has an accumulated deficit of approximately $83.5 million and expects significant development expenses, raising substantial doubt about its ability to continue as a going concern[24] - As of September 30, 2024, the company had $3.6 million in cash, anticipated to cover operational needs into the second quarter of 2025[26] - In August 2024, the company executed a warrant inducement, raising net proceeds of $1.81 million and recording a non-cash deemed dividend of $3.21 million[59] - During the nine months ended September 30, 2024, the company triggered a $100,000 milestone payment to UCLA TDG for enrolling the first patient in its pilot clinical study[82] Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on financial results, highlighting the company's development stage, significant R&D expense reduction, and critical need for future financing due to limited liquidity Company Overview The company is a development-stage medical device firm focused on bone regeneration in spinal fusion using NELL-1 technology, having treated its first patient in a pilot clinical study in Australia on June 20, 2024 - The company is a medical device company focused on bone regeneration in spinal fusion using the recombinant human protein NELL-1, licensed exclusively from UCLA TDG[91] - On June 20, 2024, the first patient was treated in the multicenter, prospective, randomized pilot clinical study of the Company's NB1 bone graft device in Australia[95][96] Results of Operations The analysis compares operating results, highlighting a significant decrease in R&D expenses by 84.1% for the nine-month period ended September 30, 2024, due to NELL-1 protein production completion, leading to a reduced net loss Comparison of Operating Results (Nine Months Ended) | Operating Expenses | September 30, 2024 | September 30, 2023 | % Change | | :--- | :--- | :--- | :--- | | Research and development | $1,025,814 | $6,460,747 | (84.12)% | | General and administrative | $1,638,409 | $1,807,548 | (9.36)% | | Total operating expenses | $2,664,223 | $8,268,295 | (67.78)% | | Net loss | $(2,590,705) | $(7,398,846) | (64.99)% | - The decrease in R&D costs is attributed to significant expenses incurred in 2023 for the production of the NELL-1 protein necessary for the initial clinical study[113][117] Liquidity and Capital Resources The company faces substantial doubt about its going concern status due to an $83.5 million accumulated deficit, with $3.6 million cash expected to fund operations only into Q2 2025, necessitating continued capital raises - The company has an accumulated deficit of approximately $83.5 million and estimates operating expenditures for the next twelve months at $5.4 million, raising substantial doubt about its ability to continue as a going concern[120] - Available cash of $3.57 million as of September 30, 2024, is anticipated to cover operational needs into the second quarter of 2025[129] - The company anticipates requiring approximately $5 million to complete first-in-man studies and an additional $24 million in scientific expenses to achieve FDA approval for a spine interbody fusion indication[129] Quantitative and Qualitative Disclosures about Market Risk The company states this item is not applicable, indicating no significant exposure to market risks like interest rate or foreign currency exchange risk - Not applicable[132] Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of September 30, 2024, with no material changes to internal control over financial reporting during the quarter - Management concluded that as of September 30, 2024, the company's disclosure controls and procedures were effective[132] - There were no material changes in internal control over financial reporting during the quarter ended September 30, 2024[133] PART II – OTHER INFORMATION Legal Proceedings The company reports no material updates to legal proceedings previously disclosed in its Annual Report on Form 10-K and prior Quarterly Reports - There are no material updates to the matters previously disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023[133] Risk Factors The company states there have been no material changes from the risk factors previously disclosed in its Annual Report on Form 10-K for the year ended December 31, 2023 - There have been no material changes from the risk factors as previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2023[134] Unregistered Sales of Equity Securities and Use of Proceeds The company reports no issuance of unregistered equity securities during the third quarter of 2024 that were not previously reported - During the third quarter of 2024, the company did not issue any shares in reliance on Section 4(a)(2) of the Securities Act which have not previously been reported[135] Defaults Upon Senior Securities The company reports no defaults upon senior securities - None[135] Mine Safety Disclosures This item is not applicable to the company - Not Applicable[135] Other Information The company discloses that no director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the third quarter of 2024 - During the three months ended September 30, 2024, no director or officer adopted or terminated a Rule 10b5-1 trading arrangement[136] Exhibits This section lists the exhibits filed with the report, including warrant agreements, an 'at the market' offering agreement, and various officer certifications - Exhibits filed include agreements related to the August 2024 warrant inducement, the September 2024 At The Market Offering Agreement, and required CEO/CFO certifications[138]