What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-05-14 compared with 2024-11-12 · 106 added, 171 removed, 148 unchanged (65% of the section changed)

3 unchanged sentences

consolidated financial statements and notes thereto as of and for the year ended December 31, 2024 and the related Management’s

Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our Annual Report on Form 10-K/A

(Amendment No.

1) for the fiscal year ended December 31, 2023, which was filed with the Securities and Exchange Commission (the “SEC”)

on June 11, 2024.

Discussion and Analysis of Financial Condition and Results of Operations, which was filed with the Securities and Exchange Commission

(the “SEC”) on March 28, 2025.

Regarding Forward-Looking Statements

12 unchanged sentences

These statements are only predictions and involve known and unknown risks, uncertainties and other factors,

including the risks set forth in the section entitled “Risk Factors” in our Annual Report on Form 10-K/A (Amendment No.

for the fiscal year ended December 31, 2023, as filed with the SEC on June 11, 2024, any of which may cause our company’s or our

industry’s actual results, levels of activity, performance or achievements to be materially different from any future results,

levels of activity, performance or achievements expressed or implied in our forward-looking statements.

These risks and factors include,

by way of example and without limitation:

including the risks set forth in the section entitled “Risk Factors” in our Annual Report on Form 10-K for the fiscal year

ended December 31, 2024, as filed with the SEC on March 28, 2025, any of which may cause our company’s or our industry’s

actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity,

performance or achievements expressed or implied in our forward-looking statements.

These risks and factors include, by way of example

and without limitation:

ability to obtain financing needed to complete our clinical trials and implement our business plan;

6 unchanged sentences

accuracy of estimates regarding expenses, future revenue, capital requirements, profitability, and needs for additional financing;

interruptions resulting from geo-political actions, including war and terrorism or disease outbreaks (such as the recent outbreak

of COVID-19);

interruptions resulting from geo-political actions, including war and terrorism or disease outbreaks;

ability to attract and retain customers;

31 unchanged sentences

research applications.

of September 30, 2024, our accumulated deficit was $154,042,567.

We have historically only generated a modest amount of revenue, and

our losses have principally been operating expenses incurred in research and development, marketing and promotional activities in order

to commercialize our products and services, plus costs associated with meeting the requirements of being a public company.

to continue to incur substantial costs for these activities over at least the next year.

of March 31, 2025, our accumulated deficit was $161,018,514.

We have historically only generated a modest amount of revenue, and our

losses have principally been operating expenses incurred in research and development, marketing and promotional activities in order to

commercialize our products and services, plus costs associated with meeting the requirements of being a public company.

continue to incur substantial costs for these activities over at least the next year.

develop therapeutic products and medical therapies using cell and tissue protocols, primarily involving adult stem cells.

26 unchanged sentences

2023, and July 2024;

Israeli patents related to our ThermoStem Program were issued in October 2019, May 2020, and March 2022;

European patents related to the ThermoStem Program were issued in April 2020, January 2021, and July 2023 .

Israeli patents related to our ThermoStem Program were issued in October 2019, May 2020, March 2022, and

European patents related to the ThermoStem Program were issued in April 2020, January 2021, July 2023, and March 2025.

have obtained a license for a patented curved needle device that is a needle system designed to deliver cells and/or other therapeutic

9 unchanged sentences

a leading North American based aesthetic company, to supply to Cartessa our first commercial product.

derived some of our revenue pursuant to a license agreement with a stem cell treatment company (the “SCTC”) entered into

in January 2012, as amended in November 2015 and November 2022.

Pursuant to the license agreement, the SCTC granted to us an exclusive

license to use certain intellectual property related to, among other things, stem cell disc procedures and we have granted to the SCTC

a sublicense to use, and the right to sublicense to third parties the right to use, in certain locations in the United States and the

Cayman Islands, certain of the licensed intellectual property.

In consideration of the sublicenses, the SCTC has agreed to pay us royalties

on a per disc procedure basis.

also derived our initial product revenue from our five-year exclusive supply agreement with Cartessa entered into in April 2024.

derive revenue pursuant to a license agreement with a stem cell treatment company (the “SCTC”) entered into in January 2012,

as amended in November 2015 and November 2022.

Pursuant to the license agreement, the SCTC granted to us an exclusive license to use

certain intellectual property related to, among other things, stem cell disc procedures and we have granted to the SCTC a sublicense

to use, and the right to sublicense to third parties the right to use, in certain locations in the United States and the Cayman Islands,

certain of the licensed intellectual property.

In consideration of the sublicenses, the SCTC has agreed to pay us royalties on a per

disc procedure basis.

have also derived product revenue from our five-year exclusive supply agreement with Cartessa entered into in April 2024.

derive any such revenue during the three months ended March 31, 2025.

of Operations

of the Three Months Ended September 30, 2024 to the Three Months Ended September 30, 2023

financial results for the three months ended September 30, 2024 are summarized as follows in comparison to the three months ended September

For the Three Months Ended

(As Restated)

Cost of goods sold

Operating Expenses:

Research and development

General and administrative

Total Operating Expenses

Loss From Operations

Other Income:

Interest income

Change in fair value of warrant liabilities

Total Other Income

Net (Loss) Income

$ (1,091,416 )

the three months ended September 30, 2024 and 2023, we generated $2,900 and $30,700, respectively, of royalty revenue in connection with

our sublicense agreement with the SCTC.

The decrease was primarily due to a decrease in disc procedures.

the three months ended September 30, 2024 and 2023, we generated $230,700 and $0, respectively, of cosmetic product sales revenue in

connection with our exclusive supply agreement with Cartessa.

and Development

and development expenses include cash compensation of (a) our Vice President of Research and Development;

(b) our Scientific Advisory

Board members;

and (c) laboratory staff and costs related to our brown fat and disc/spine initiatives.

Research and development expenses

are expensed as they are incurred.

For the three months ended September 30, 2024, research and development expenses increased by $510,206,

or 63%, as compared to the three months ended September 30, 2023.

The increase was primarily the result of an increase in lab supply

expense of $246,384, an increase in recruitment costs for our Phase 2 clinical trial of $73,194, an increase in payroll expense of $141,079

and an increase in consulting expense of $12,680.

We expect that our research and development expenses will continue to increase in subsequent

fiscal periods.

and Administrative

and administrative expenses consist primarily of salaries, bonuses, payroll taxes and stock-based compensation to employees, as well

as corporate expenses such as legal and professional fees, investor relations and occupancy-related expenses.

of the Three Months Ended March 31, 2025 to the Three Months Ended March 31, 2024

financial results for the three months ended March 31, 2025 are summarized as follows in comparison to the three months ended March 31,

For the Three Months Ended

September 30, 2024, general and administrative expenses decreased by $1,142,999, or 49%, as compared to the three months ended September

30, 2023, primarily driven by a decrease in stock-based compensation expense of $1,209,459 related to the vesting of awards, partially

offset by an increase in cash compensation to employees of $40,075 and an increase in professional fees of $11,836 primarily related

to the recent restatement of our historical financial statements.

the three months ended September 30, 2024, interest income was $158,547, as compared to interest income of $61,667 for the three months

ended September 30, 2023.

The change was primarily due to interest and dividend income on the investments held in marketable securities.

income of $83,333 during the three months ended September 30, 2023 consists of funding received under a National Institutes of Health

Small Business Technology Transfer (STTR) Phase 1 grant, offset by related expenses.

There was no grant income received during the three

months ended September 30, 2024.

the three months ended September 30, 2024 and 2023, other income primarily related to gains from settlements of certain accrued expenses

and realized and unrealized gain on investments.

in Fair Value of Warrant Liabilities

the three months ended September 30, 2024 and 2023, we recognized a gain on the change in fair value of warrant liabilities of $1,036,464

and $7,693,753, respectively, related to the decrease in fair value of warrants that are accounted for as warrant liabilities.

of the Nine Months Ended September 30, 2024 to the Nine Months Ended September 30, 2023

financial results for the nine months ended September 30, 2024 are summarized as follows in comparison to the nine months ended September

For the Nine Months Ended

(As Restated)

Cost of goods sold

4 unchanged sentences

Loss From Operations

(12,000,092 )

Other (Income) Expense:

Other (Expense) Income:

Interest income

1 unchanged sentence

Change in fair value of warrant liabilities

Total Other (Income) Expense

Total Other (Expense) Income

$ (5,339,799 )

$ (2,223,255 )

the nine months ended September 30, 2024 and 2023, we generated $57,700 and $126,500, respectively, of royalty revenue in connection

with our sublicense agreement with the SCTC.

the three months ended March 31, 2025 and 2024, we generated $25,000 and $35,000, respectively, of royalty revenue in connection with

our sublicense agreement with the SCTC.

The decrease was primarily due to a decrease in disc procedures.

the nine months ended September 30, 2024 and 2023, we generated $300,000 and $0, respectively, of cosmetic product sales revenue in connection

with our exclusive supply agreement with Cartessa.

and Development

5 unchanged sentences

are expensed as they are incurred.

For the nine months ended September 30, 2024, research and development expenses increased by $746,035,

or 25%, as compared to the nine months ended September 30, 2023.

The increase was primarily the result of increased lab supply expense

of $532,268 and increased payroll expense of $271,388, all partially offset by a decrease in bonus expense of $196,878.

We expect that

our research and development expenses will continue to increase in subsequent fiscal periods.

For the three months ended March 31, 2025, research and development expenses increased by $656,196,

or 62.0%, as compared to the three months ended March 31, 2024.

The increase was primarily the result of an increase in lab supply expense

of $577,631 and an increase in recruitment costs for our Phase 2 clinical trial of $68,978.

We expect that our research and development

expenses will continue to increase in subsequent fiscal periods.

and Administrative

1 unchanged sentence

as corporate expenses such as legal and professional fees, investor relations and occupancy-related expenses.

For the nine months ended

September 30, 2024, general and administrative expenses decreased by $3,674,608, or 40%, as compared to the nine months ended September

30, 2023, primarily driven by a decrease in stock-based compensation expense of $3,681,621 related to the vesting of awards and a decrease

in payroll expense of $170,434 all partially offset by an increase in professional fees of $179,273 primarily related to the recent restatement

of our historical financial statements.

the nine months ended September 30, 2024, interest income was $497,089, as compared to interest income of $176,070 for the nine months

ended September 30, 2023.

The change was primarily due to interest and dividend income on the investments held in marketable securities.

income of $83,333 during the nine months ended September 30, 2023 consists of funding received under a National Institutes of Health

Small Business Technology Transfer (STTR) Phase 1 grant, offset by related expenses.

There was no grant income received during the nine

months ended September 30, 2024.

the nine months ended September 30, 2024 and 2023, other income primarily related to gains from settlements of certain accrued expenses

and realized and unrealized gain on investments.

on Exchange of Warrants

the nine months ended September 30, 2024, we recognized a gain on exchange of $1,711,698 related to the issuance of warrants and common

stock in exchange for the cancellation of existing warrants.

For the three months ended

March 31, 2025, general and administrative expenses increased by $29,177, or 0.9%, as compared to the three months ended March 31, 2024,

primarily driven by an increase in professional fees of $52,598, partially offset by a decrease in stock-based compensation expense of

$19,248 and a decrease in payroll of $3,681.

the three months ended March 31, 2025, interest income was $99,966, as compared to interest income of $162,597 for the three months ended

March 31, 2024.

The change was primarily due to a decrease in interest income on the investments held in marketable securities.

the three months ended March 31, 2025, other income was $1,888, as compared to other income of $149,021 for the three months ended March

The change was primarily due to a decrease in dividend income on investments held in marketable securities.

in Fair Value of Warrant Liabilities

the nine months ended September 30, 2024, we recognized a loss on the change in fair value of warrant liabilities of $837,466

related to the increase in fair value of warrants that are accounted for as warrant liabilities.

For the nine months ended September

30, 2023, we recognized a gain on the change in fair value of warrant liabilities of $3,476,556 related to the decrease in fair

value of warrants that are accounted for as warrant liabilities.

the three months ended March 31, 2025 and 2024, we recognized a loss on the change in fair value of warrant liabilities of $634,119 and

$137,319, respectively, related to the increase in fair value of warrants that are accounted for as warrant liabilities.

and Capital Resources

measure our liquidity in a number of ways, including the following:

September 30,

(As Restated)

March 31, 2025

December 31, 2024

Cash and cash equivalents

1 unchanged sentence

Working capital

capital increased by $144,223 primarily due to the $7,505,646 of cash provided by financing activities which was partially offset by

$5,882,501 of cash used to fund our operations and $1,018,078 of cash used to fund our investments.

capital decreased by $2,222,574 primarily due to $2,778,786 of cash used to fund our operations and the $2,300,569 decrease in marketable

securities, offset by $2,366,967 of cash provided by investing activities and the $1,092,718 of cash provided by financing activities.

of Additional Funds

upon our accumulated deficit of $154,042,567 as of September 30, 2024, along with our forecast for continued operating losses and our

need for financing to fund our current and contemplated clinical trials, we will eventually require additional equity and/or debt financing

to continue our operations.

However, based on cash and cash equivalents and investments on hand, we believe we have sufficient cash to

fund operations for at least 12 months after the issuance date of these financial statements.

the three months ended March 31, 2025, we had a net loss of $5.3 million and negative cash flows from operations of $2.8 million, and

as of March 31, 2025, we had working capital of $5.2 million.

We anticipate that we will continue to incur net losses and negative cash

flows from operations as we execute our development plans during 2025 and beyond, as well as other potential strategic and business development

Based on these conditions, we believe we may not have sufficient cash for at least twelve months after the issuance date

of the financial statements included in this Quarterly Report which raises substantial doubt about our ability to continue as a going

operating needs include the planned costs to operate our business, including amounts required to fund our clinical trials, working capital

10 unchanged sentences

agreements on unattractive terms.

On November 6, 2024, we entered into an at-the-market offering agreement pursuant to which we have

an ability to issue and sell shares of our common stock up to an aggregate offering price of $3,614,170.

the nine months ended September 30, 2024 and 2023, our sources and uses of cash were as follows:

Nine Months Ended September 30,

(As Restated)

the three months ended March 31, 2025 and 2024, our sources and uses of cash were as follows:

Three Months Ended March 31,

Net Cash Used In Operating Activities

1 unchanged sentence

$ (2,317,780 )

Net Cash (Used In) Provided By Investing Activities

Net Cash Provided By (Used In) Investing Activities

$ (4,928,006 )

Net Cash Provided By Financing Activities

cash used in operating activities was $5,882,501 for the nine months ended September 30, 2024, primarily due to cash used to fund the

net loss of $7,343,233, adjusted for net non-cash expenses of $1,520,670, and $59,938 of cash used in changes in operating assets and

Net cash used in operating activities was $4,842,249 for the nine months ended September 30, 2023, primarily due to cash

used to fund the net loss of $8,113,710, adjusted for non-cash expenses of $2,885,196, and $386,265 of cash provided by changes in operating

assets and liabilities.

cash used in investing activities was $1,018,078 for the nine months ended September 30, 2024 primarily due to a purchase of marketable

securities which used $18,294,566 of cash and a sale of marketable securities which provided $17,370,243 of cash.

Net cash provided by

investing activities was $3,336,841 for the nine months ended September 30, 2023 primarily due to a sale of marketable securities which

provided $18,089,372 of cash and a purchase of marketable securities which used $14,651,512 of cash.

cash provided by financing activities was $7,505,646 for the nine months ended September 30, 2024 due to net proceeds received in connection

with the exercise and issuance of warrants, compared to $2,265,700 net cash provided by financing activities for the nine months ended

September 30, 2023 due to the net proceeds from the at-the-market offering of our common stock.

do not believe that inflation had a material impact on our business, revenues or operating results during the periods presented.

Accounting Policies and Estimates

prepare our unaudited condensed consolidated financial statements in accordance with U.S.

generally accepted accounting principles, which

require our management to make estimates that affect the reported amounts of assets, liabilities and disclosures of contingent assets

and liabilities at the balance sheet dates, as well as the reported amounts of revenues and expenses during the reporting periods.

the extent that there are material differences between these estimates and actual results, our financial condition or results of operations

would be affected.

We base our estimates on our own historical experience and other assumptions that we believe are reasonable after

taking account of our circumstances and expectations for the future based on available information.

We evaluate these estimates on an

ongoing basis.

consider an accounting estimate to be critical if:

(i) the accounting estimate requires us to make assumptions about matters that were

highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from

period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact

on our financial condition or results of operations.

There are items within our unaudited condensed consolidated financial statements

that require estimation but are not deemed critical, as defined above.

a detailed discussion of our significant accounting policies and related judgments, see Note 2 of the Notes to Unaudited Condensed Consolidated

Financial Statements in “Item 1.

Net Increase in Cash

cash used in operating activities was $2,778,786 for the three months ended March 31, 2025, primarily due to cash used to fund the net

loss of $5,339,799, adjusted for net non-cash expenses of $2,592,227, and $31,214 of cash used in changes in operating assets and liabilities.

Net cash used in operating activities was $2,317,780 for the three months ended March 31,

2024 , primarily due to cash used to fund the net loss of $2,223,255, adjusted for net non-cash

expenses of $381,174, and $475,699 of cash used in changes in operating assets and liabilities.

cash provided by investing activities was $2,366,967 for the three months ended March 31, 2025 primarily due to a sale of marketable

securities which provided $3,456,535 of cash, offset by a purchase of marketable securities which used $1,053,168 of cash and a purchase

of equipment which used $36,400 of cash.

Net cash used in investing activities was $4,928,006 for the three months ended March 31, 2024

primarily due to a purchase of marketable securities which used $10,728,006 of cash, offset by a sale of marketable securities which

provided $5,800,000 of cash.

Financing Activities

Net cash provided by financing

activities was $1,092,718 for the three months ended March 31, 2025 due to net proceeds of $1,050,307 received in connection with the

issuance of common stock for the 2024 ATM offering and $42,411 due to the exercise of stock options, compared to $7,518,489 net cash provided

by financing activities for the three months ended March 31, 2024.

Effects of Inflation

We do not believe that inflation

had a material impact on our business, revenues or operating results during the periods presented.

Critical Accounting Policies and Estimates

We prepare our unaudited condensed

consolidated financial statements in accordance with U.S.

generally accepted accounting principles, which require our management to make

estimates that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the balance

sheet dates, as well as the reported amounts of revenues and expenses during the reporting periods.

To the extent that there are material

differences between these estimates and actual results, our financial condition or results of operations would be affected.

estimates on our own historical experience and other assumptions that we believe are reasonable after taking account of our circumstances

and expectations for the future based on available information.

We evaluate these estimates on an ongoing basis.

We consider an accounting estimate

to be critical if:

(i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the

accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different

estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results

of operations.

There are items within our unaudited condensed consolidated financial statements that require estimation but are not deemed

critical, as defined above.

For a detailed discussion of our

significant accounting policies and related judgments, see Note 2 of the Notes to Unaudited Condensed Consolidated Financial Statements

Financial Statements” of this report.

Quantitative and Qualitative Disclosures about Market Risk

As a smaller reporting company, we are not required to provide the information required by this Item.

Not applicable.

As a smaller reporting

company, we are not required to provide the information required by this Item.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis