What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-12 compared with 2025-05-14 · 141 added, 89 removed, 165 unchanged (58% of the section changed)

67 unchanged sentences

research applications.

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.

of June 30, 2025, our accumulated deficit was $163,674,777.

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.

We expect to 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.

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Pursuant to such business, we would formulate, manufacture and sell products designed for cosmetic and aesthetic

In April 2024, we announced that we have entered into a five-year exclusive supply agreement with Cartessa Aesthetics, LLC (“Cartessa”),

In April 2024, we announced that we entered into a five-year exclusive supply agreement with Cartessa Aesthetics, LLC (“Cartessa”),

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

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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

Pursuant to the license agreement, the SCTC has 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.

In consideration of the sublicense, 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.

Common Stock Repurchase Program

16, 2025, our Board of Directors authorized a common stock repurchase program under which we may repurchase up to $2,000,000 of our outstanding

common stock through June 16, 2026.

No repurchases have been made as of June 30, 2025.

of Operations

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,

of the Three Months Ended June 30, 2025 to the Three Months Ended June 30, 2024

financial results for the three months ended June 30, 2025 are summarized as follows in comparison to the three months ended June 30,

For the Three Months Ended

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Operating Expenses:

Research and development

and development

General and administrative

Total Operating Expenses

Loss From Operations

Operating Expenses

From Operations

Other (Expense) Income:

Interest income

Gain on exchange of warrants

Change in fair value of warrant liabilities

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$ (4,028,562 )

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 three months ended June 30, 2025 and 2024, we generated $3,300 and $19,800, 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 June 30, 2025 and 2024, we generated $300,000 and $69,300, 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 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 development expenses include cash and non-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 and Biocosmeceuticals

Research and development expenses are expensed as they are incurred.

For the three months ended June 30, 2025, research and

development expenses increased by $771,882 or 53.1%, as compared to the three months ended June 30, 2024.

The increase was primarily

the result of an increase in recruitment and other costs for our Phase 2 clinical trial of $640,379, an increase in lab supply expense

of $83,768 and an increase in stock-based compensation expense of $38,533, partially offset by a decrease in bonus expense of $30,132.

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

and Administrative

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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.

June 30, 2025, general and administrative expenses increased by $276,559, or 25.2%, as compared to the three months ended June 30, 2024,

primarily driven by an increase in consulting expense of $122,777, an increase in stock-based compensation expense of $105,853, and an

increase in payroll of $36,409 all partially offset by a decrease in professional fees of $13,754.

the three months ended June 30, 2025, interest income was $73,915 as compared to interest income of $175,945 for the three months ended

June 30, 2024.

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

the three months ended June 30, 2025, other income was $518, as compared to other income of $911 for the three months ended June 30,

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

in Fair Value of 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

the three months ended June 30, 2025, we recognized a gain on the change in fair value of warrant liabilities of $574,591, related to

the decrease in fair value of warrants that are accounted for as warrant liabilities.

For the three months ended June 30, 2024, we recognized

a loss on the change in fair value of warrant liabilities of $1,736,611, related to the increase in fair value of warrants that are accounted

for as warrant liabilities.

of the Six Months Ended June 30, 2025 to the Six Months Ended June 30, 2024

financial results for the six months ended June 30, 2025 are summarized as follows in comparison to the six months ended June 30, 2024:

For the Six Months Ended

Cost of goods sold

Operating Expenses:

Research and development

General and administrative

Operating Expenses

Other (Income) Expense:

Interest income

Gain on exchange of warrants

in fair value of warrant liabilities

Total Other (Income) Expense

$ (7,996,062 )

$ (6,251,817 )

the six months ended June 30, 2025 and 2024, we generated $28,300 and $54,800, 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 six months ended June 30, 2025 and 2024, we generated $300,000 and $69,300, respectively, of cosmetic product sales revenue in connection

with our exclusive supply agreement with Cartessa.

and Development

and development expenses include cash and non-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 and Biocosmeceuticals

Research and development expenses are expensed as they are incurred.

For the six months ended June 30, 2025, research and development

expenses increased by $1,341,504, or 38.0%, as compared to the six months ended June 30, 2024.

The increase was primarily the result

of an increase in recruitment and other costs for our Phase 2 clinical trial of $1,180,237, an increase in lab supply expense of $190,519,

and an increase in cash compensation to employees of $45,315, partially offset by a decrease in bonus expense of $68,747 and a decrease

in stock-based compensation expense of $48,041.

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.

For the six months ended

June 30, 2025, general and administrative expenses increased by $392,310, or 12.4%, as compared to the six months ended June 30, 2024,

primarily driven by an increase in stock-based compensation expense of $173,179 related to the vesting of awards, an increase in consulting

expense of $110,966, an increase in professional fees of $38,844, and an increase in payroll of $32,728.

the six months ended June 30, 2025, interest income was $173,881, as compared to interest income of $338,542 for the six months ended

June 30, 2024.

The change was primarily due to interest income from the investments held in marketable securities.

the six months ended June 30, 2025, other income was $2,406, as compared to other income of $149,932 for the six months ended June 30,

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

on Exchange of Warrants

the six months ended June 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.

There was no gain on exchange of warrants for the six months ended June 30, 2025.

in Fair Value of Warrant Liabilities

the six months ended June 30, 2025 and 2024, we recognized a loss on the change in fair value of warrant liabilities of $59,528 and $1,873,930,

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

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

March 31, 2025

June 30, 2025

December 31, 2024

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of Additional Funds

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

the six months ended June 30, 2025, we had a net loss of $8.0 million and negative cash flows from operations of $5.5 million, and as

of June 30, 2025, we had working capital of $3.9 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

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agreements on unattractive terms.

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

Three Months Ended March 31,

the six months ended June 30, 2025 and 2024, our sources and uses of cash were as follows:

Six Months Ended June 30,

Net Cash Used In Operating Activities

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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

cash used in operating activities was $5,472,653 for the six months ended June 30, 2025, primarily due to cash used to fund the net loss

of $7,996,062, adjusted for net non-cash expenses of $2,465,349, and $58,060 of cash provided by changes in operating assets and liabilities.

Net cash used in operating activities was $4,182,945 for the six months ended June 30, 2024, primarily due to cash used to fund the net

loss of $6,251,817, adjusted for net non-cash expenses of $2,351,582, and $282,710 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

cash provided by investing activities was $4,499,158 for the six months ended June 30, 2025 primarily due to a sale of marketable securities

which provided $6,664,238 of cash, offset by a purchase of marketable securities which used $2,128,680 of cash and a purchase of equipment

which used $36,400 of cash.

Net cash used in investing activities was $1,954,831 for the six months ended June 30, 2024 primarily due

to a purchase of marketable securities which used $12,784,535 of cash, offset by a sale of marketable securities which provided $10,865,000

cash provided by financing activities was $1,980,856 for the six months ended June 30, 2025 due to net proceeds of $1,938,445 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 $7,505,646 net cash provided by financing activities for the six months ended June 30, 2024 due to net proceeds received in connection

with the exercise and issuance of warrants.

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.

Financial Statements” of this report.

Quantitative and Qualitative Disclosures about Market Risk

Not applicable.

As a smaller reporting

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

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