BBLG US Equity☆

UNITED

STATES

SECURITIES

AND EXCHANGE COMMISSION

Washington,

D.C. 20549

FORM

10-K

For

the fiscal year ended: December 31, 2022

For

the transition period from _________ to _________

Commission

File Number: 001-40899

Bone

Biologics Corporation

(Exact

name of registrant as specified in its charter)

Delaware

(State

or other jurisdiction of

incorporation

or organization)

42-1743430

(I.R.S.

Employer

Identification

No.)

2

Burlington Woods Drive, Ste 100, Burlington, MA01803

(781)

552-4452

Securities

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

Title of each class Trading Symbol(s) Name of each exchange on which registered

Common stock, $0.001 par value per share BBLG The Nasdaq Stock Market LLC

Indicate

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

Indicate

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

Indicate

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

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

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

Indicate

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

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

Yes ☒ No ☐

Indicate

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

company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company”

in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ☐ Accelerated filer ☐

Non-accelerated filer ☒ Smaller reporting company ☒

Emerging growth company ☐

If

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

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

Indicate

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

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

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

If securities are registered pursuant

to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect

the correction of an error to previously issued financial statements. ☐

If securities are registered pursuant to

Section 12(b) of the Act, indicate by check mark whether any of those error corrections are restatements that required a recovery analysis

of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant

to §240.10D-1(b). ☐

Indicate

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

Approximate

aggregate market value of registrant’s common equity held by non-affiliates of the registrant at the close of business on June

30, 2022, was $4,403,460.

As

of March 28, 2023, there were 16,702,912 shares of common stock, par value $0.001, outstanding.

Documents

Incorporated by Reference

None.

TABLE

OF CONTENTS

Page

Part I

Item 1. Business 5

Item 1A. Risk Factors 13

Item 1B. Unresolved Staff Comments 44

Item 2. Properties 44

Item 3. Legal Proceedings 44

Item 4. Mine Safety Disclosures 44

Part II

Item 6. [Reserved] 46

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 50

Item 8. Financial Statements and Supplementary Data 50

Item 9A. Controls and Procedures 50

Item 9B. Other Information 51

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 51

Part III

Item 10. Directors, Executive Officers and Corporate Governance 51

Item 11. Executive Compensation 55

Item 14. Principal Accounting Fees and Services 62

Part IV

Item 15. Exhibits, Financial Statement Schedules 63

Signatures 66

Power of Attorney 67

Index to Consolidated Financial Statements F-1

Cautionary

Note on Forward-Looking Statements

This

annual report on form 10-K (“Annual Report”) contains forward-looking statements. Such forward-looking statements include

those that express plans, anticipation, intent, contingency, goals, targets or future development and/or otherwise are not statements

of historical fact. These forward-looking statements are based on our current expectations and projections about future events and they

are subject to risks and uncertainties known and unknown that could cause actual results and developments to differ materially from those

expressed or implied in such statements.

All

statements other than historical facts contained in this Annual Report, including statements regarding our future financial position,

capital expenditures, cash flows, business strategy and plans and objectives of management for future operations are forward-looking

statements. The words “anticipated,” “believe,” “expect,” “plan,” “intend,”

“seek,” “estimate,” “project,” “could,” “may,” and similar expressions are

intended to identify forward-looking statements. These statements include, among others, information regarding future operations, future

capital expenditures, and future net cash flow. Such statements reflect our management’s current views with respect to future events

and financial performance and involve risks and uncertainties, including, without limitation, our ability to raise additional capital

to fund our operations, obtaining Food and Drug Administration (“FDA”) and other regulatory authorization to market our drug

and biological products, successful completion of our clinical trials, our ability to achieve regulatory authorization to market our

lead product NELL-1/DBM, our reliance on third party manufacturers for our drug products, market acceptance of our products, our dependence

on licenses for certain of our products, our reliance on the expected growth in demand for our products, exposure to product liability

and defect claims, development of a public trading market for our securities, and various other matters, many of which are beyond our

control.

Should

one or more of these risks or uncertainties occur, or should underlying assumptions prove to be incorrect, actual results may vary materially

and adversely from those anticipated, believed, estimated or otherwise indicated. Consequently, all of the forward-looking statements

made in this Annual Report are qualified by these cautionary statements and accordingly there can be no assurances made with respect

to the actual results or developments. We undertake no obligation to revise or publicly release the results of any revision to these

forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue

reliance on such forward-looking statements.

Unless

expressly indicated or the context requires otherwise, the terms “Company,” “we,” “us,” and “our”

in this document refer to Bone Biologics Corporation, a Delaware corporation, and, our wholly owned subsidiary, as defined under Part

I, Item 1-”Business” in this Annual Report.

Glossary

of Abbreviations and Defined Terms

Abbreviations

AIA or Leahy–Smith Act The Leahy–Smith America Invents Act

ACA Affordable Care Act

BMP Bone Morphogenic Protein

CDMO Contract Development and Manufacturing Organization

cGMP current Good Manufacturing Practice

CRO Contract Research Organization

DDD Degenerative disc disease

FDA Food and Drug Administration

HIPAA Health Insurance Portability and Accountability Act of 1996

HREC Human Research Ethics Committee

IDE Investigational Device Exemption

IRB Institutional Review Board

MTF Musculoskeletal Transplant Foundation

NDA New Drug Application

NELL-1 Neural epidermal growth factor-like 1 protein (NELL-1)

NOL Net Operating Loss

ODI Oswestry Disability Index

PMA Pre-market approval

REMS Risk Evaluation and Mitigation Strategies

rhBMP-2 Recombinant Bone Morphogenic Protein

rhNELL-1 Recombinant NELL-1

TLIF Transforaminal lumbar interbody fusion

UCLA TDG UCLA Technology Development Group on behalf of UC Regents

USPTO The United States Patent and Trademark Office

Defined Terms

Demineralized Bone Bone that has had the calcium removed.

Osteopromotive A material that promotes the de novo formation of bone.

Osteostimulative Stimulates bone growth.

PART

I

Item

1. Business

Company

Overview

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 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”).

We

were founded by University of California professors in collaboration with an Osaka University professor and a University of Southern

California surgeon in 2004 as a privately-held company with proprietary, patented technology that has been validated in sheep and non-human

primate models to facilitate bone growth. 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. 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. 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. 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.

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. 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.

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. 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.

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.

Leveraging the resources of investors and strategic partners, we have successfully surpassed four critical milestones:

● Completed pivotal animal study; and

● Filed for a clinical trial outside the United States.

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. 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. 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.

While

the product is initially targeted at the lumbar spine fusion market, in keeping with our exclusive license agreement, we believe NELL-1’s

novel set of characteristics, target specific mechanism of action, efficacy, safety and affordability position the product well for application

in a variety of procedures including:

UCLA’s

initial research was funded with approximately $18 million in resources from UCLA TDG and government grants. 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. 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 various risk factors discussed below under “Risk Factors.”

NELL-1’s

powerful specific bone and cartilage forming properties are derived from the ability of NELL-1 to only target cells that exhibit an activated

“master switch” to develop into bone or cartilage. NELL-1 is a function specific recombinant human protein that has been

proven in laboratory bench models to recapitulate normal human growth and development to provide control over bone and cartilage regeneration.

NELL-1

was isolated in 1996, and the first NELL-1 patent on bone regeneration was filed in 1999. 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. 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. 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. 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. This indication for use would fill a current clinical gap, created by potentially dangerous inflammatory

responses caused by commercially available catalytic bone growth agents, the subject of a Public Health Notification from the FDA on

July 1, 2008 about life threatening complications associated with a recombinant human protein in cervical spine fusion. We do not expect

our product to see the same adverse events with NELL-1/DBM as have been observed with other commercially available protein. We have performed

a rat femoral onlay model to compare proinflammatory response of rhBMP-2 and NELL-1 within Helistate collagen sponges. While NELL-1 induced

normal healing, rhBMP-2 induced significant amounts of swelling and histological evidence of intense inflammatory response.

Description

of the DBM Putty to Be Used With Nell-1

The

DBM Demineralized Bone Putty provided as part of the convenience kit with NELL-1/DBM is a Class II device. The common name is “Bone

Void Filler Containing Human Demineralized Bone Matrix.” The product is regulated under 21 C.F.R. §888.3045 Resorbable calcium

salt bone void filler device, Product Codes MQV, GXP, and MBP. MTF is the manufacturer of the DBM Putty that was cleared by the FDA for

spine indication in December 2006.

DBM

Putty is a matrix composed of processed human cortical bone. Demineralized bone granules are mixed with sodium hyaluronate to form the

DBM Putty. Every lot of final DBM Putty product is tested in an athymic mouse model or in an alkaline phosphatase assay, which has been

shown to have a positive correlation with the athymic mouse model, to ensure osteostimulation.

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”).

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 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). Continued capital funding is critical to facilitate the development

of our Nell-1 technology through the clinical regulatory path.

Development

of the Company

We were incorporated under the laws of the State of Delaware on October

18, 2007 as AFH Acquisition X, Inc. Pursuant to a Merger Agreement, dated September 19, 2014, by and among the Company, its wholly-owned

subsidiary, Bone Biologics Acquisition Corp., a Delaware corporation (“Merger Sub”), and Bone Biologics, Inc. Merger Sub merged

with and into Bone Biologics Inc., with Bone Biologics Inc. remaining as the surviving corporation in the merger. Upon the consummation

of the merger, the separate existence of Merger Sub ceased. On September 22, 2014, the Company officially changed its name to “Bone

Biologics Corporation” to more accurately reflect the nature of its business and Bone Biologics, Inc. became a wholly owned subsidiary

of the Company. Bone Biologics, Inc. was incorporated in California on September 9, 2004.

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.

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. The Amended License Agreement amends

and restates the Amended and Restated Exclusive License Agreement, dated as of June 19, 2017 (the “2017 Agreement”). The

2017 Agreement amended and restated the Exclusive License Agreement, effective March 15, 2006, between the Company and UCLA TDG, as amended

by ten amendments. Under the terms of the Amended License Agreement, the Regents have continued to grant us exclusive rights to develop

and commercialize NELL-1 (the “Licensed Product”) for spinal fusion by local administration, osteoporosis and trauma applications.

The Licensed Product is a recombinant human protein growth factor that is essential for normal bone development.

We

have agreed to pay an annual maintenance fee to UCLA TDG of $10,000 as well as pay certain royalties to UCLA TDG under the Amended License

Agreement at the rate of 3.0% of net sales of licensed products or licensed methods. We must pay the royalties to UCLA TDG on a quarterly

basis. Upon a first commercial sale, we also must pay a minimum annual royalty between $50,000 and $250,000, depending on the calendar

year which is after the first commercial sale. If we are required to pay any third party any royalties as a result of us making use of

UCLA TDG patents, then we may reduce the royalty owed to UCLA TDG by 0.333% for every percentage point paid to a third party. If we grant

sublicense rights to a third party to use the UCLA TDG patent, then we will pay UCLA TDG 10% to 20% of the sublicensing income we receive

from such sublicense.

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:

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:

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.

We

are also obligated to pay UCLA TDG a cash milestone payment within thirty (30) days of a Liquidity Event (including a Change of Control

Transaction) and a payment election by UCLA TDG exercisable after December 22, 2016) such payment to equal the greater of:

● 2% of all proceeds in connection with a Change of Control Transaction.

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. UCLA TDG has the right to either terminate the license or reduce the license to a non-exclusive license if we do not

meet certain diligence milestone deadlines set forth in the Amended License Agreement.

We

must reimburse or pre-pay UCLA TDG for patent prosecution and maintenance costs incurred during the term of the Amended License Agreement.

We have the right to bring infringement actions against third party infringers of the Amended License Agreement, UCLA TDG may join voluntarily,

at its own expense, or, at our expense, be joined involuntarily to the action. 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 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.

Our

business is in a very competitive and evolving field, that faces competition from large established orthopedic companies such as (but

not limited to) Medtronic, Stryker, Zimmer-Biomet, and DePuy-Synthes that possess considerably more resources than Bone Biologics.

Our

commercial opportunity could be reduced if our competitors develop and commercialize products that are safer, more effective, have fewer

or less severe side effects, are more convenient or are less expensive than any products that we may develop. 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.

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.

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. Spine surgeons and patients can choose to eliminate the need to perform a

second painful surgery to obtain autograft harvest of hip bone for fusion procedures by utilizing various other types of biologics.

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.

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. 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. Summary Date Issued

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. 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. The Federal Food, Drug and Cosmetic

Act, as amended, and the regulations promulgated thereunder, and other federal and state statutes and regulations govern, among other

things, the testing, manufacture, safety, efficacy, labeling, storage, record keeping, approval, advertising and promotion of our products.

Device development and approval within this regulatory framework is difficult to predict, requires a number of years and involves the

expenditure of substantial resources. Moreover, ongoing legislation by U.S. Congress and rule making by the FDA presents an ever-changing

landscape where we could be required to undertake additional activities before any governmental approval is granted allowing us to market

our products. The steps required before a biological device may be marketed in the U.S. include:

● The submission of a PMA to the FDA; and

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.

Non-clinical

Trials

Non-clinical

testing includes laboratory evaluation of chemistry and formulation as well as tissue culture and animal studies to assess the safety

and potential efficacy of the product. Non-clinical safety tests must be conducted by laboratories that comply with FDA regulations regarding

good laboratory practices. Non-clinical testing is inherently risky and the results can be unpredictable or difficult to interpret. The

results of non-clinical testing are submitted to the FDA as part of an IDE and are reviewed by the FDA prior to the commencement of clinical

trials. Unless the FDA objects to an IDE, clinical studies may begin 30 days after the IDE is submitted. We have relied and intend to

continue to rely on third-party contractors to perform non-clinical trials.

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”). 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. 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. Clinical trials must be conducted in accordance with good clinical practices under protocols that detail the objectives

of the study, the parameters to be used to monitor safety and the efficacy criteria to be evaluated. Each protocol must be submitted

to the FDA prior to its conduct. 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.

Clinical

trials under IDE regulations are typically conducted in two sequential trials. In the Pilot trial, the initial introduction of the product

into healthy human subjects, the drug is tested for safety (adverse side effects), absorption, metabolism, bio-distribution, excretion,

food and drug interactions, abuse as well as limited measures of pharmacologic effect and proof of principle that involves studies in

a limited patient population in order to:

● demonstrate efficacy in a limited patient population;

● identify the range of doses likely to be effective for the indication; and

● identify possible adverse events and safety risks.

When

there is evidence that the product may be effective and has an acceptable safety profile in pilot evaluations, pivotal trials are undertaken

to establish and confirm the clinical efficacy and establish the safety profile of the product within a larger population at geographically

dispersed clinical study sites. Pivotal trials frequently involve randomized controlled trials and, whenever possible, studies are conducted

in a manner so that neither the patient nor the investigator knows what treatment is being administered. 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. 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.

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.

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.

The

PMA review process involves FDA investigation into the details of the manufacturing process, as well as the design and analysis of each

of the non-clinical and clinical studies. This review includes inspection of the manufacturing facility, the data recording process for

the clinical studies, the record keeping at a sample of clinical trial sites and a thorough review of the data collected and analyzed

for each non-clinical and clinical study. Through this investigation, the FDA reaches a decision about the risk-benefit profile of a

product candidate. 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.

The

approval process is affected by a number of factors, including the severity of the disease, the availability of alternative treatments

and the risks and benefits demonstrated in clinical trials. Consequently, there is a risk that approval may not be granted on a timely

basis, if at all. The FDA may deny a PMA if applicable regulatory criteria are not satisfied, require additional testing or information

or require post-marketing testing (Phase 4) and surveillance to monitor the safety of a company’s product if it does not believe

the PMA contains adequate evidence of the safety and efficacy of the product. Moreover, if regulatory approval of a product is granted,

such approval may entail limitations on the indicated uses for which it may be marketed. Finally, product approvals may be withdrawn

if compliance with regulatory standards is not maintained or health problems are identified that would alter the risk-benefit analysis

for the product. Post-approval studies may be conducted to explore the use of the product for new indications or populations such as

pediatrics.

Among

the conditions for PMA approval is the requirement that any prospective manufacturer’s quality control and manufacturing procedures

conform to the FDA’s Good Manufacturing Practices and the specifications approved in the PMA. In complying with standards set forth

in these regulations, manufacturers must continue to expend time, money and effort in the area of product and quality control to ensure

full technical compliance. Manufacturing establishments, both foreign and domestic, also are subject to inspections by or under the authority

of the FDA and by other federal, state or local agencies. 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.

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. The requirements governing the conduct of clinical trials

and product approvals vary widely from country to country, and the time required for approval may be longer or shorter than that required

for FDA approval. Although there are some procedures for unified filings for certain European countries, in general, each country at

this time has its own procedures and requirements.

Other

Regulation

In

addition to regulations enforced by the FDA, we are also subject to U.S. regulation under the Controlled Substances Act, the Occupational

Safety and Health Act, the Environmental Protection Act, the Toxic Substances Control Act, the Resource Conservation and Recovery Act

and other present and potential future federal, state, local or similar foreign regulations. Our research and development may involve

the controlled use of hazardous materials, chemicals and radioactive compounds. Although we believe that its safety procedures for handling

and disposing of such materials comply with the standards prescribed by state and federal regulations, the risk of accidental contamination

or injury from these materials cannot be completely eliminated. 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 (2) full-time employees. We have relied and plan on continuing to rely on independent organizations,

advisors and consultants to perform certain services for us, including handling substantially all aspects of regulatory approval, clinical

management, manufacturing, marketing, and sales. Such services may not always be available to us on a timely basis or at costs that we

can afford. Our future performance will depend in part on our ability to successfully integrate newly hired officers and to engage and

retain consultants, as well as our ability to develop an effective working relationship with our management and consultants.

Item

1A. Risk Factors

The

following factors, as well as factors described elsewhere in this Form 10-K, or in other filings by us with the Securities and Exchange

Commission, could adversely affect our consolidated financial position, results of operations or cash flows. Other factors not presently

known to us or that we presently believe are not material could also affect our business operations and financial results.

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 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 new

company with no operating history will face. 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.

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.

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 we will need to raise substantial additional

funds for the pivotal clinical trial prior to marketing our first product. The above estimates and our long-term capital requirements

will depend on many factors, including, among others:

● 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;

● 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

We

may consume available resources more rapidly than currently anticipated, resulting in the need for additional funding. We may seek to

raise any necessary additional funds through equity or debt financings, collaborative arrangements with corporate partners or other sources,

which may be dilutive to existing stockholders or otherwise have a material effect on our current or future business prospects. If adequate

funds are not available, we may be required to significantly reduce or refocus our development and commercialization efforts with regard

to our delivery technologies and our proposed formulations and products.

Our

recurring operating losses have raised substantial doubt regarding our ability to continue as a going concern.

Our recurring operating losses raise substantial doubt about our ability

to continue as a going concern. During the year ended December 31, 2022, we incurred a net loss of $1,484,620, and used net cash in operating

activities of $3,566,913. As a result, our independent registered public accounting firm included an explanatory paragraph in its report

on our financial statements as and for the year ended December 31, 2022, with respect to this uncertainty. 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.

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.

We

have no significant operating history and since inception to December 31, 2022 have incurred accumulated losses of approximately $72

million. We will continue to incur significant expenses for development activities for our lead product NELL-1/DBM.

On

October 13, 2022, we completed a public offering generating net proceeds to us of $4,429,860.

We

will continue to attempt to raise additional capital through debt and/or equity financing to provide additional working capital and fund

future operations. However, there is no assurance that such financing will be consummated or obtained in sufficient amounts necessary

to meet our needs. 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. No assurance

can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to us. 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. 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.

If

we incur a substantial amount of debt, we may be required to use a significant portion of any cash flow to pay principal and interest

on the debt, which will reduce the amount available to fund working capital, capital expenditures, and other general purposes. Any indebtedness

may negatively impact our ability to operate our business and limit our ability to borrow additional funds by increasing our borrowing

costs, and impact the terms, conditions, and restrictions contained in possible future debt agreements, including the addition of more

restrictive covenants; impact our flexibility in planning for and reacting to changes in our business as covenants and restrictions contained

in possible future debt arrangements may require that we meet certain financial tests and place restrictions on the incurrence of additional

indebtedness and place us at a disadvantage compared to similar companies in our industry that have less debt.

Risks

Related to the Development and Regulatory Approval of our Product Candidates

Our

product candidates are at an early stage of development and may not be successfully developed or commercialized.

Our

products are in the early stage of development and will require substantial further capital expenditures, development, testing, and regulatory

clearances prior to commercialization. The development and regulatory approval process takes several years, and it is not likely that

our products, technologies or processes, even if successfully developed and approved by the FDA, would be commercially available for

five or more years. Of the large number of devices in development, only a small percentage successfully completes the FDA regulatory

approval process and is commercialized. Accordingly, even if we are able to obtain the requisite financing to fund our development programs,

we cannot assure you that our product candidates will be successfully developed or commercialized. Our failure to develop, manufacture

or receive regulatory approval for or successfully commercialize any of our product candidates, could result in the failure of our business

and a loss of all of your investment in our company.

Any

product candidates advanced into clinical development are subject to extensive regulation, which can be costly and time consuming, cause

unanticipated delays or prevent the receipt of the required approvals to commercialize such product candidates.

The

clinical development, manufacturing, labeling, storage, record-keeping, advertising, promotion, import, export, marketing and distribution

of our product candidates are subject to extensive regulation by the FDA in the U.S. and by comparable health authorities in foreign

markets. In the U.S., we may not be permitted to market our product candidates until we receive approval of our PMA from the FDA. The

process of obtaining PMA approval is expensive, often takes many years and can vary substantially based upon the type, complexity and

novelty of the products involved. In addition to the significant clinical testing requirements, our ability to obtain marketing approval

for these products depends on obtaining the final results of required non-clinical testing, including characterization of the manufactured