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Item 1. Business

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We are a biotechnology company with a mission to cure patients of cancers, injuries, and birth defects of the gastro-intestinal tract and the airways.

We believe our technology is likely to be used to treat esophageal cancer, esophageal injuries, and birth defects in the esophagus.

Additional product candidates in our pipeline may treat bronchial cancer, intestinal cancer, and colon cancer.

Our first esophageal product candidate, the Biostage TM Esophageal Implant, or BEI, was used in the first successful regeneration of the esophagus in a patient with esophageal cancer.

are a clinical-stage biotechnology company developing regenerative-medicine treatments for disorders of the gastro-intestinal system

and the airway resulting from cancer, trauma or birth defects.

Our technology is based on our proprietary cell-therapy platform that

uses a patient’s own stem cells to regenerate and restore function to damaged organs.

We believe that our technology represents

a next-generation solution for restoring organ function because it allows the patient to regenerate their own organ, thus eliminating

the need for human donor or animal transplants, the sacrifice of another of the patient’s own organs or permanent artificial implants.

August 2017, we conducted the world’s first successful regeneration of the esophagus after the cancer in the patient’s esophagus

had been surgically removed.

This surgery was performed by Dr.

Denis Wigle, Chair of Thoracic Surgery at the Mayo Clinic.

The results were published in JTO Clinical and Research Reports in August 2021.

The paper concluded that our BEI product candidate “would have considerable clinical use”.

As noted in interviews that can be viewed on our website, leading surgeons at other leading hospitals have stated that they believe that our product candidate is “revolutionary” and “a breakthrough”.

The BEI was previously referred to by us as the Cellspan Esophageal Implant.

This successful first-in-human experience, plus the research we have performed on 45 pigs, led the FDA to approve our 10-patient combined phase 1 and phase 2 clinical trial.

This combination trial will measure both safety and efficacy in the patient population.

According to the American Cancer Society, every year approximately 17,000 Americans are diagnosed with esophageal cancer and approximately 15,000 of these diagnosed patients die from it.

Dennis Wigle, Chair of Thoracic Surgery at the Mayo Clinic.

were published in the Journal of Thoracic Oncology Clinical and Research Reports in August 2021.

The procedure demonstrated that our

technology was able to successfully regenerate esophageal tissue, including the mucosal lining, to restore the integrity, continuity

and functionality of the esophageal tube.

technology uses mesenchymal stem cells that are retrieved via biopsy from the patient’s abdominal adipose, or fat, tissue prior to surgery.

These stem cells are isolated, expanded and then implanted on a hollow, tubular scaffold made from extremely thin fibers of polyurethane.

The scaffold is then incubated in a customized bioreactor where the stem cells expand further and begin to adhere to the fibers of the

The finished graft is then surgically implanted to replace the resected portion of the damaged organ.

Several weeks after surgery,

once a conduit has been established, the implanted scaffold is removed.

No permanent artificial implant remains in the body.

are initially targeting regeneration of the organs of the gastro-intestinal tract and the airway, where organ transplants are not medically

possible today.

Human-donor organ transplants or animal xenotransplants are currently not performed for these organs due to high rates

of rejection.

Additionally, we believe that our technology and intellectual property will allow us to develop organ-regeneration treatments

for other organs.

on our successful first-in-human procedure and our preclinical procedures in over 50 pigs, the U.S.

Food and Drug Administration, or

FDA has approved our Investigational New Drug (IND) application to begin a combined phase 1/2 clinical trial for esophageal

regeneration.

This open-label trial will assess both safety and efficacy in up to ten patients requiring up to a 6cm esophageal

replacement for any reason, including cancer, at up to five U.S.

We have contracted with IQVIA, a leading global provider

of advanced analytics, technology solutions and clinical research services to the life sciences industry, as the contract research

organization (CRO) to manage our first clinical trial.

We intend to initiate this trial in the second quarter of

Our product candidates are currently in development

and have not yet received regulatory approval for sale anywhere in the world.

believe our organ-regeneration technology has the potential for broad applications in the field of medicine, for the repair or replacement

of diseased or damaged organs.

We are initially targeting conditions of the esophagus, including cancer, traumatic injury and birth defects.

Additional product candidates in our development pipeline include ones to treat cancer, injury and birth defects of the bronchus.

on discussions with surgeons familiar with regenerative medicine techniques, we believe that our technology may also be applicable to

treating cancer, injury and birth defects in the colon and intestine.

strategy is to develop and advance our pipeline of products, beginning with our lead product for the treatment of esophageal cancer,

through clinical development and commercialization.

The key elements of our strategy include:

phase 1/2 clinical trial for our lead product candidate, the Biostage TM Esophageal Implant, for the treatment of severe

esophageal disease.

Based upon our successful initial case of esophageal regeneration and our animal models, the FDA has approved

our Investigational New Drug (IND) application to commence a clinical trial in up to ten patients.

We plan to initiate this trial

in early 2023.

Advance our other pipeline

products through clinical development.

Based on the establishment of a favorable safety and efficacy profile that we expect to demonstrate

in our phase 1/2 clinical trial for regeneration of the esophagus, we intend to initiate a clinical trial for the treatment of esophageal

atresia, a rare birth defect.

As we build our safety and efficacy data, we plan to initiate clinical trials in other areas including

cancer, injury and birth defects in the bronchus.

Develop our technology

for use in other life-threatening conditions that have a relatively shorter time to market.

We believe our technology has broad applications

to treat organ failure.

We intend to develop products focused on life-threatening conditions where current treatments are ineffective,

expensive or both.

Many organ failures are orphan diseases, and we have orphan drug designations from the FDA on our product candidates

for severe disease in both the esophagus and the trachea.

We believe that developing products for such conditions will require smaller

clinical trials and an overall less expensive development pathway than developing treatments for less severe conditions.

Pursue development pathways

in international markets.

In addition to the U.S., we intend to pursue regulatory approval for our products in several key international

markets, including China, Europe and the UK.

Many of the conditions we are targeting have significantly higher patient populations

in foreign countries than in the U.S., thereby making them attractive commercial markets.

We intend to engage foreign health regulatory

bodies to develop clinical and regulatory strategies to gain international approvals.

Collaborate with leading

medical and research institutions to develop our products and build awareness.

We intend to continue to collaborate with thought-leading

medical institutions as we continue clinical development of our products and ultimately reach commercialization.

We currently have

a co-development initiative with the Mayo Clinic and with the Connecticut Children’s Medical Center.

We intend to build additional

partnerships and collaborations with leading institutions that we believe will help to drive awareness of our products and increase

the likelihood of market adoption.

to the American Cancer Society, every year approximately 17,000 Americans are diagnosed with esophageal cancer and approximately 15,000

of these diagnosed patients die from it.

A year after being diagnosed with esophageal cancer, 50% of the patients have died.

After five years, 80% of these patients have died.

According to the World Health Organization’s International Agency for Research on Cancer, every year, there are more than 600,000 patients diagnosed with esophageal cancer worldwide.

The current treatment for patients with esophageal cancer is removal of the diseased part of the esophagus in a surgical procedure called an esophagectomy.

The gap left by the removal of part of the esophagus is then repaired using one of two, difficult and expensive surgeries, both of which have significant complications.

years, 80% of these patients have died.

According to the World Health Organization’s International Agency for Research on Cancer,

every year, there are more than 600,000 patients diagnosed with esophageal cancer worldwide.

current treatment for patients with esophageal cancer is removal of the diseased part of the esophagus in a surgical procedure

called an esophagectomy.

The gap left by the removal of part of the esophagus is then repaired using one of two, difficult and

expensive surgeries, both of which have frequent and significant complications.

The first type of surgery is gastric pull-up.

In this surgery, the patient’s stomach is reshaped into a tube and pulled up from the abdomen into the chest to connect to the top of the esophagus.

this surgery, the patient’s stomach is reshaped into a tube and pulled up from the abdomen into the chest to connect to the

top of the esophagus.

With gastric pull-up, the patient no longer has a stomach with which to digest food.

In the second type of surgery, termed colonic interposition, a piece of the patient’s bowel is cut out and used to bridge the gap where the diseased esophagus was removed.

In the second type of

surgery, termed colonic interposition, a piece of the patient’s bowel is cut out and used to bridge the gap where the diseased

esophagus was removed.

With colonic interposition, the patient often has insufficient intestine to digest food properly.

Both surgical procedures have high rates of complications such as damage to the lungs and infections caused by leakage of stomach acids into the chest.

surgical procedures have high rates of complications such as damage to the lungs and infections caused by leakage of stomach acids

into the chest.

Even with these surgical treatments, esophageal cancer is one of the deadliest forms of cancer.

In addition to cancer, there are other injuries to the esophagus such as fistulas (holes), injuries caused by the accidental ingestion of acids and alkalis, and birth defects.

addition to cancer, there are other injuries to the esophagus such as fistulas (holes), injuries caused by the accidental ingestion of

acids and alkalis, and birth defects.

These are all difficult to treat surgically and often have significant long-term complications.

Hence, there is a huge need for a better treatment for cancer, injuries and birth defects of the esophagus.

The Biostage Esophageal Implant consists of a hollow, tubular scaffold consisting of extremely thin fibers of plastic made in the shape of the esophagus.

This scaffold is seeded with the patient’s own stem cells which are obtained a few weeks before surgery with a simple biopsy of fat tissue.

The cells are seeded onto our scaffold and, during several days of incubation in our bioreactor, attach to and grow on and into the top 25% of the scaffold.

The cell-seeded scaffold is then stitched into the patient to bridge the gap created where the surgeon removed the diseased or damaged part of the esophagus.

The cells then stimulate the body’s natural wound-healing process, and the scaffold guides the growth of the new cells into a tube.

After about a month, a complete biological tube has formed and after about three months, the tube will develop into a layered structure that contains the critical blood supply, muscles, and mucous-secreting glands to make a functioning esophagus.

At this point, the scaffold is removed, as it is not a permanent implant.

As the scaffold is removed through the mouth, it does not require a second surgery in the chest.

Our Technology Platform:

there is an enormous need for, and a huge market for, a better treatment for cancer, injuries and birth defects of the esophagus.

Solution – Biostage Organ-Regeneration Technology

organ-regeneration technology uses a patient’s own stem cells seeded on a temporary scaffold to regrow and restore their damaged

We believe our technology has numerous advantages over other attempts to restore organ function because our implant is

not a transplant of a human-donor organ, it is not a transplant of an animal organ, it is not a piece of one of the patient’s other

organs, and it is not an artificial implant that remains permanently in the body.

Our implants will allow the patient to regenerate

their own organ inside their own body.

Our esophageal implant consists of a hollow, tubular scaffold consisting of a thin polyurethane fiber mesh that is formed in the shape of the

damaged section of the organ.

This scaffold is seeded with the patient’s own mesenchymal stem cells which are obtained

a few weeks before surgery through a biopsy of adipose (fat) tissue from the patient’s abdomen.

The stem cells are isolated

and expanded and then seeded onto the tubular scaffold.

The scaffold is then be placed into a customized bioreactor for incubation

and further cell expansion.

During several days of incubation in our bioreactor, the stem cells attach to and grow into the

outer 25% of the scaffold.

The stem cell-seeded scaffold is then surgically implanted into the patient to bridge the gap created

where diseased or damaged part of the esophagus was removed.

stem cells then stimulate the body’s natural wound-healing process including stimulating new blood vessel formation,

scar-tissue formation and the remodeling of that scar tissue into esophageal tissue.

The scaffold guides the growth of

new cells to regenerate the esophagus.

After approximately one month, a complete biological tube, or conduit, has formed and after approximately three months, the tube has developed into a layered structure that contains the critical

blood supply, muscles, and mucous-secreting glands to create a functioning esophagus.

At this point, the implanted scaffold is

removed, as it is not a permanent implant.

Technology Platform:

How the Biostage Esophageal Implant Works

The bioreactor and scaffold are made in our clean-room facilities in Holliston, Massachusetts and the cell seeding is performed at the FDA-approved, clinical-grade human cell culture facility at the University of Texas Medical Branch.

Advantages of the Biostage Esophageal Implant

Compared with the current standard of care for esophageal cancer patients (either gastric pull-up or colonic interposition), the Biostage Esophageal Implant offers the following major advantages:

● The Biostage Esophageal Implant does not require the sacrifice of the patient’s stomach or colon.

o Patients do not suffer the frequently life-threatening complications of either gastric pull up or colonic interposition surgery;

o Patients can eat a reasonable diet.

● The Biostage Esophageal Implant leaves no plastic permanently implanted in the body.

o Other plastic implants such as hernia meshes and breast implants have caused considerable long-term complications for some patients, including needing to have the implants removed.

● The Biostage Esophageal Implant leaves no sutures where the two ends of the esophagus join together.

o The suture line is a frequent cause of leaks in patients.

After the scaffold is removed, which typically occurs at about three months from surgery, however, it can be removed earlier if the doctors have the justification, there is nothing left inside except the patient’s own esophagus which has been regrown, as a result of the

Biostage Esophageal Implant.

In our pig studies, the scaffold was removed at approximately three weeks subsequent to surgery.

The scaffold in our first-in-human study, completed in partnership with the Mayo Clinic, was removed at the three-month mark.

We believe that these significant medical advantages will lead to strong demand from patients and doctors for the Biostage Esophageal Implant and strong reimbursement from insurers because they will be able to save considerable money by avoiding the complications associated with the current surgeries.

Scientific Proof of Esophageal Regeneration

The photographs below, taken from the paper published in August 2021 in JTO Clinical and Research Reports, show the explanted esophagus from the first human patient at the Mayo Clinic.

bioreactor and scaffold are made in our clean-room facilities in Holliston, Massachusetts and the cell seeding is performed at the FDA-approved,

clinical-grade human cell culture facility at the University of Texas Medical Branch.

manufacturing process for the bioreactors and scaffolds has been approved by the FDA for the clinical trial.

Based on expected FDA inspections

additional development may be necessary for product approval.

our scaffolds, our primary materials are medical-grade plastic resins and solvents used to liquefy the resins in our manufacturing process.

These materials are readily available from a variety of suppliers and do not currently represent a large proportion of our total costs.

For our autoseeders and bioreactors, we perform final assembly and testing of components that we buy from third parties like machine

shops, parts distributors, molding facilities and printed circuit board manufacturers.

These manufacturing operations are performed primarily

at our Holliston, Massachusetts headquarters.

of the Biostage Esophageal Implant

with the current standard of care procedures for esophageal cancer patients, either gastric pull-up or colonic interposition, our

esophageal implant offers the following major advantages:

avoid the frequently life-threatening complications of either gastric pull up or colonic interpositioning surgery;

Autologous stem cells eliminate

the risk of immune system rejection;

The procedure does not

require the sacrifice of the patient’s stomach or colon, so those organs remain intact and function accordingly;

It leaves no permanent

implant or artificial structure in the body.

Permanent implants can lead to long-term complications, including infection, which can

lead to further surgical procedures including removal;

Eliminates the need for

sutures where the two ends of the esophagus are joined together.

The sutures are a frequent cause of fluid leaks and infections post-surgery;

Patients can remain on

a reasonable diet after a procedure with our esophageal implant.

believe that these significant medical advantages will lead to strong demand from patients and doctors for our esophageal implant.

Additionally, we believe that it will receive a favorable reimbursement

profile from payors and insurance companies because of the high cost and complications associated with alternative procedures.

First-In-Human

Use of the Biostage Esophageal Implant and Scientific Proof of Esophageal Regeneration

August 7, 2017, we announced the use of our esophageal implant in a patient at the Mayo Clinic via an FDA-approved single-use expanded

access, or compassionate use, application.

The patient was a 75-year-old male with a life-threatening cancerous mass in his chest that

spanned his heart, a lung, and his esophagus.

The surgery was performed by Dr.

Dennis Wigle, Chair of Thoracic Surgery, to remove the

tumor, repair the heart, part of one lung, and a section of the esophagus.

Our esophageal implant was interpositioned into the gap in

the esophagus created by the removal of the tumor.

The patient’s surgeon informed us at that time that the surgery was successful,

and the patient was discharged from the hospital 42 days after implantation.

The scaffold and stent were removed on day 104 after implantation.

February 2018, the surgeon informed us that the patient had died after living approximately eight months after surgery.

The surgeon stated

that the cause of death was a stroke, and that the stroke was unrelated to the esophageal implant.

The surgeon also informed us that

a preliminary autopsy had shown that the esophageal implant resulted in a regenerated esophageal tube in the patient, except for a very

small (approximately 5mm) hole outside the implant zone on the lateral wall that was right up against a synthetic graft inserted as part

of the patient’s heart repair on the vena cava in that same surgery.

The synthetic graft on the pericardium was not related to

our esophageal implant product candidate and may have acted as an irritant to esophageal tissue where it contacted the esophageal implant.

The surgeon also informed us that the esophageal regeneration in this patient was consistent with the regeneration previously observed

in our pig studies.

results were published in the Journal of Thoracic Oncology Clinical and Research Reports in August 2021.

The photographs below,

taken from the paper, show the explanted esophagus from this procedure.

The image on the left is the actual esophagus.

Note that the implant zone is visually almost identical to the area both above and below the implant zone which is the native esophagus.

The thickness, color and texture of the regenerated esophagus is almost indistinguishable from the native esophagus.

The dark-brown tube in the center of the esophagus is the stent that was added to avoid narrowing of the esophagus which is a common complication of surgery in the esophagus.

The images on the righthand side are photographs taken under a microscope to show, from left to right, cells (stained pink), layered structure (stained blue and purple) and muscles (stained yellow).

The consistency of the regenerated esophagus with the native esophagus, both to the naked eye and under the microscope, is remarkable.

The yellowish coloration along the left side of the right-most panel of images shows a continuous line of muscles running up the regenerated esophagus.

below, the implant zone is visually almost identical to native esophagus which is the area both above and below the implant zone.

The thickness, color and texture of the regenerated esophagus is nearly indistinguishable from the

native esophagus.

The dark-brown tube in the center of the esophagus

is the stent that was added to avoid narrowing of the esophagus.

The stent for this patient was changed twice, once prior to our esophageal

implant scaffold removal and once after the scaffold and the second stent were removed.

The final stent was removed at five and a half

months post-surgery.

We anticipate that patients treated with our esophageal implant are likely to undergo at least one stent exchange

during their recovery with the discontinuation of stents by six to nine months post-surgery.

Stents are deployed and retrieved endoscopically,

that is, via the mouth, and accordingly, there is no surgical incision in the chest.

images on the righthand side are photographs taken under a microscope to show, from left to right, cells (stained pink), layered

structure (stained blue and purple) and muscles (stained yellow).

The images show a high level of consistency between the

regenerated esophagus and the native esophagus, both to the naked eye and under the microscope.

In the right most panels, the

yellowish coloration along the left side of the images shows a continuous line of muscles running up the regenerated esophagus.

These muscles are the muscularis mucosae which contract to eject mucous into the esophagus.

This mucosal lining is essential to the long-term survival of the patient because it both lubricates the esophagus to allow food to be swallowed and provides a barrier to infection.

This mucosal lining was seen at three months in the human patient and the pigs.

One of the secondary performance endpoints in the clinical trial is the development of this mucosal lining by twelve months.

The primary endpoint of the clinical trial is the development of a continuous biological conduit (tube) by three months.

We saw this tube at one month in this human patient and the pigs.

The image below is taken from a paper we published in Nature Partner Journals Regenerative Medicine in January 2022, in conjunction with our long-time partner is pediatric conditions, Connecticut Children’s Medical Center.

Connecticut Children’s Medical Center is an investor in the Company.

This image shows an esophagus explanted from a pig 90 days after the Biostage Esophageal Implant was implanted.

The implant zone is almost visually identical to the native tissue to the left and right of it.

We can note the regeneration of the interior surface of the esophagus and the surrounding tissue that is visible in red at the top of the red box.

The red color of the surrounding tissue indicates the presence of a healthy blood supply.

We note further the glossy, reflective coating on the inside of the esophagus.

This mucosal lining is essential to the

long-term survival of the patient because it both lubricates the esophagus to allow food to be swallowed and provides a barrier to

This mucosal lining was seen at three months in both the human patient and in our pig models.

this patient we saw the development of a tube of the patient’s own tissue within one month, and the development of the mucosal

lining within three months.

In pig models we have similarly seen the development of a tube within one month and the development of the

mucosal lining within three months.

In our clinical trial, the primary endpoint is the development of the tube of the patient’s

tissue within three months and one of the secondary endpoints is the development of the mucosal lining within twelve months.

Models - Pig Studies

pre-clinical animal studies using our esophageal implant investigated several key aspects of the product pertaining to the implant

procedure, cell survival, the architecture of the regenerated tissue at multiple survival time points, the post-implantation

clinical management procedures including Computed Tomography, or CT imaging to assess the growth of new tissue, esophageal stent

management, endoscopy procedures, barium swallow tests and nutritional management.

implantation, CT imaging revealed early tissue deposition and the formation of a contiguous tissue conduit.

Endoscopic evaluation at

multiple time points revealed complete epithelialization of the lumenal surface by day 90.

Histologic evaluation at several necropsy

time points, post-implantation, demonstrated that the tissue continues to remodel over the course of a one-year survival time period,

resulting in the development of esophageal structural features, including the mucosal epithelium, muscularis mucosae, lamina propria,

as well as smooth muscle proliferation/migration initiating the formation of a laminated adventitia.

One-year survival demonstrated restoration

of oral nutrition, normal animal growth and the overall safety of this treatment regimen.

image below is taken from a paper we published in Nature Partner Journals Regenerative Medicine in January 2022, in conjunction with

our development partner, Connecticut Children’s Medical Center.

image shows an esophagus explanted from a pig 90 days after our esophageal implant was implanted.

The implant zone is visually

almost identical to the native tissue to the left and right of it.

We can note the regeneration of the interior surface of the

esophagus and the regeneration of the surrounding tissue that is visible in red at the top of the red box.

The red color of the

surrounding tissue indicates the presence of a healthy blood supply.

We note further the glossy, reflective coating on the inside of

the esophagus.

This is evidence of the mucosal lining which is essential to the long-term survival of the patient.

This mucosal lining was seen at 90 days in the pigs and was also observed in the human patient.

The authors of this paper remarked that at one year “it was difficult to distinguish neo-tissue versus the native tissue”.

First-In-Human Use of the Biostage Esophageal Implant

On August 7, 2017, we announced the use of the Biostage Esophageal Implant in a patient at the Mayo Clinic via an FDA-approved single-use expanded access, or compassionate use, application.

The patient was a 75-year-old male with a life-threatening cancerous mass in his chest that spanned his heart, a lung, and his esophagus.

The surgery was performed in May 2017 to remove the tumor, repair the heart, part of one lung, and a section of the esophagus.

The Biostage Esophageal Implant was interpositioned into the gap in the esophagus created by the removal of the tumor.

The patient’s surgeon informed us at that time that the surgery was a success, and the patient was later discharged from the hospital.

In February 2018 the surgeon informed us that the patient had died after living approximately eight months after surgery.

The surgeon stated that the cause of death was a stroke, and that the stroke was unrelated to the esophageal implant.

The surgeon also informed us that a preliminary autopsy had shown that the esophageal implant resulted in a regenerated esophageal tube in the patient, except for a very small (approximately 5mm) hole outside the implant zone on the lateral wall that was right up against a synthetic graft inserted as part of the patient’s heart repair on the vena cava in that same surgery.

The synthetic graft on the pericardium was not related to our esophageal implant product candidate and may have acted as an irritant to esophageal tissue where it contacted the esophageal implant.

The surgeon also informed us that the esophageal regeneration in this patient was consistent with the regeneration previously observed in our pig studies.

Our product candidates are currently in development and have not yet received regulatory approval for sale anywhere in the world.

Birth Defects in the Esophagus

Each year, it is estimated that approximately 1,000 children in the United States, or U.S., are born with a congenital abnormality known as esophageal atresia, a condition where an infant is born with an esophagus that does not extend completely from the mouth to the stomach.

When a long segment of the esophagus is lacking, the current standard of care is a series of surgical procedures where surgical sutures are applied to both ends of the esophagus in an attempt to stretch them and pull them together so they can be connected at a later date.

This process can take weeks and the procedure is plagued by serious complications and may carry high rates of failure.

Such an approach also requires, in time, at least two separate surgical interventions.

Other options include the use of the child’s stomach or intestine that would be pulled up into the chest to allow a connection to the mouth.

We are working to develop a Biostage Esophageal Implant solution to address the complications of esophageal atresia, that could potentially be life-changing, organ-sparing, or both.

In January 2022, we published, in collaboration with Connecticut Children’s Medical Center, our research on 15 piglets that received the Biostage Esophageal Implant.

This paper was published in Nature Partner Journals Regenerative Medicine.

lining was seen at three months in the pigs and was also observed in the human patient.

The investigators concluded that at one year it was difficult to distinguish

neo-tissue versus the native tissue.

Phase 1/2 Clinical Trial

on both the successful in-human procedure at the Mayo Clinic and our extensive large-animal research, the FDA has approved our Investigational

New Drug application to commence our clinical trial.

The trial will be a ten-patient combined phase 1/2 trial, in up to five hospitals

that measures both the safety and efficacy of our product candidate in the patient population.

Enrollment criteria includes

any patient that requires removal of a part of the esophagus that is less than six centimeters long for any medical reason.

enrolled patients to include esophageal cancer patients, but we may enroll patients with other esophageal conditions that require regeneration.

We expect to initiate the trial in the second quarter of 2023.

primary endpoint of the upcoming trial is the establishment of a continuous biological neoconduit, or tube, by three months post-surgery.

We saw this tube at one month in the human patient and in the pigs.

One of the secondary endpoints will be the development of a mucosal

lining in the esophagus by twelve months post-surgery.

We saw this mucosal lining by three months in the human patient and the pigs.

Because we reached the primary endpoint and one of the secondary endpoints in both the human patient and the pigs, we believe that we

have a high likelihood of success in this clinical trial.

on the FDA’s approval of our clinical trial for any condition that requires removal of part of the esophagus, we believe that we

are able to pursue the treatment of multiple diseases, injuries or birth defects with a single clinical trial.

As a result, we believe

that this clinical trial will advance the Biostage Esophageal Implant for numerous indications including to treat esophageal cancer,

Barrett esophagus, fistulas, traumatic injury to the esophagus and birth defects in the esophagus.

Compared to developing treatments

for a single underlying medical condition, we believe that addressing multiple medical conditions in a single clinical trial has the

potential to significantly reduce our costs to expand the market for our products.

January 2022, together with Connecticut Children’s Medical Center, we published in Nature Partner Journals Regenerative Medicine

the results of implanting pediatric-sized esophageal implants in 15 piglets.

Numerous survival times were histologically analyzed to

understand the tissue development and timing of the regeneration.

Overall, the graft implantation procedure was deemed safe and feasible.

The piglets showed regeneration of a conduit, or tube, by one month and the regeneration of a normal mucosal lining by three months.

The piglets showed normal growth and weight gain.

This research also developed novel post-surgical techniques that closely mimic the hospital care that human babies undergo.

These techniques included non-invasive CT imaging of the regenerated tissue (which, in adults, would

normally be achieved with invasive biopsies that are very difficult to perform in babies) and feeding the piglets via G tubes which are normally used to feed human babies after surgeries in the gastro-intestinal tract.

This study lays both the scientific and clinical groundwork for treating babies with birth defects in the esophagus with the Biostage Esophageal Implant.

The FDA approval for the clinical trial allows us to treat babies once we have established safety in adult patients.

Orphan Drug Designation – Seven Years of Exclusivity

In November 2016, we were granted Orphan Drug Designation for the Biostage Esophageal Implant by the FDA to restore the structure and function of the esophagus subsequent to esophageal damage due to cancer, injury or congenital abnormalities.

Orphan Drug Designation provides a seven-year marketing exclusivity period against competition in the U.S.

Additionally, histological evaluation demonstrated that the tissue continued to develop throughout the course of the one-year survival

Importantly, the piglets also showed normal growth and weight gain which are considered critical in treating human babies.

research also developed novel post-surgical techniques that closely mimic the hospital care that human babies undergo.

These techniques

included non-invasive CT imaging of the regenerated tissue and feeding the piglets via G tubes which are normally used to feed human

babies after surgeries in the gastro-intestinal tract.

believe that this study laid both the scientific and clinical groundwork for treating babies with birth defects in the esophagus with

the Biostage Esophageal Implant.

The FDA approval for the clinical trial allows us to treat children once we have established safety

in adult patients in the phase 1/2 clinical trial.

Once we have established the safety of the implant in adults, we expect to recruit

children into the clinical trial.

Drug Designation – Seven Years of Exclusivity

November 2016, we were granted Orphan Drug Designation for our esophageal implant by the FDA to restore the structure and function

of the esophagus subsequent to esophageal damage due to cancer, injury or congenital abnormalities.

We also were granted Orphan Drug

Designation for trachea on September 4, 2014.

Orphan Drug Act provides incentives to manufacturers to develop and market drugs and biologics for rare diseases and conditions affecting

fewer than 200,000 persons in the U.S.

at the time of application for orphan drug designation, or more than 200,000 individuals in the

and for which there is no reasonable expectation that the cost of developing and making a drug or biological product available in

for this type of disease or condition will be recovered from sales of the product.

Orphan product designation must be requested

before submitting a new drug application, or NDA, or Biologics License Application or BLA.

After the FDA grants orphan product designation, the identity of the therapeutic

agent and its potential orphan use are disclosed publicly by the FDA.

Orphan product designation does not convey any advantage in or

shorten the duration of the regulatory review and approval process.

The first developer to receive FDA marketing approval for an orphan

biologic is entitled to a seven-year exclusive marketing period in the U.S.

for that product as well as a waiver of the BLA user fee.

The exclusivity prevents FDA approval of another application for the same product for the same indication for a period of seven years,

except in limited circumstances where there is a change in formulation in the original product and the second product has been proven

to be clinically superior to the first.

In addition, Orphan Drug Designation provides a seven-year marketing exclusivity period against

competition in the U.S.

from the date of a product’s approval for marketing.

This exclusivity would be in addition to any exclusivity we may obtain from our patents.

Additionally, orphan designation provides certain incentives, including tax credits and a waiver of the Biologics License Application, or BLA, fee.

We also plan to apply for Orphan Drug Designation for the Biostage Esophageal Implant in Europe.

Orphan Drug Designation in Europe would pr ovide market exclusivity in Europe for a period of ten years from the date of the product’s approval for marketing.

Our business strategy to accomplish our mission of curing patients of cancers, and other severe conditions, of the gastro-intestinal tract and the airways, includes:

Targeting life-threatening medical conditions.

We are focused on creating products to help physicians treat life-threatening conditions to the esophagus, central lung and trachea caused by cancer, injury, or infection.

We are also developing products for the treatment of birth defects of the esophagus and airways.

We are not targeting less severe conditions that have reasonable existing treatment options such as the regeneration of skin or cartilage.

Solutions for life-threatening medical conditions present a favorable therapeutic index, or risk/benefit relationship, by providing the opportunity of a significant medical benefit for patients who have poor or no treatment alternatives.

We believe that products targeting life-threatening medical conditions may be eligible for review and approval by regulatory authorities under established expedited review programs, which may result in savings of time in the regulatory approval process.

Also, we believe that products targeting life-threatening medical conditions may be more likely to receive favorable reimbursement compared with treatments for less critical medical conditions.

Developing products that have a relatively short time to market.

Since the number of patients diagnosed each year in the U.S.

with a life-threatening esophageal condition that would require a short segment esophageal implant following clinically indicated short segment resection of the thoracic esophagus is relatively small, we expect the number of patients that we would likely need to enroll in a clinical trial will also be relatively small.

Ten patients will be enrolled in our first clinical trial, which implies a relatively fast enrollment time, subject to milestone achievement requirements on initial patient(s) imposed by the FDA prior to enrolling additional patients, and a less expensive clinical development program.

Therefore, we expect to be able to conduct a clinical trial in a relatively short period of time, subject to enrollment time constraints, compared to clinical trials in indications with larger patient populations.

We intend to work closely with regulatory agencies and clinical experts to design and size the clinical studies appropriately based on the specific conditions our product candidates are intended to treat.

Using our platform technology to address multiple organs.

We believe that the clinical and pre-clinical data we have produced suggest that our technology is a novel and innovative approach to restoring organ function that may provide an ability to develop products that would address life-threatening conditions in the esophagus, bronchus and trachea, and perhaps lower portions of the gastrointestinal, or GI, tract such as the intestine and colon.

We believe that our technology may allow physicians to treat certain life-threatening conditions in ways not currently possible, and in some combination, to save patients’ lives, avoid or reduce complications experienced in the current standard of care, and improve the patients’ quality of life, while at the same time reducing the overall cost of patient care to the healthcare system.

Collaborating with leading medical and research institutions.

We have and will continue to collaborate with leading medical and research institutions.

We have a co-development initiative with Mayo Clinic for regenerative medicine organ implant product candidates for the esophagus and airways based on our technology.

We are also collaborating with Connecticut Children’s Medical Center on a co-development project to translate our technology for pediatric esophageal atresia from pre-clinical studies to clinical trials.

We believe the use of our product candidates by leading surgeons and institutions will increase the likelihood that other surgeons and institutions will use our products.

Our Technology

Biocompatible Scaffold Component

Our proprietary biocompatible scaffold component of the Biostage Esophageal Implant is constructed primarily of extremely thin polyurethane fibers.

This exclusivity would be in addition to any exclusivity

we may obtain from our patents.

Additionally, orphan designation provides certain incentives, including tax credits and a waiver of the BLA fee.

We also plan to apply for Orphan Drug Designation for our esophageal implant in

Orphan Drug Designation in Europe would provide market exclusivity in Europe for a period of ten years from the date of the product’s

approval for marketing.

strategy is to develop and advance our pipeline of products, beginning with our lead product for the treatment of esophageal cancer,

through clinical development and commercialization.

The key elements of our strategy include:

the phase 1/2 clinical trial for our lead esophageal implant product candidate for the treatment

of severe esophageal disease.

Based upon our successful initial case of esophageal regeneration and our animal models, the FDA

has approved our IND application to commence a clinical trial in up to ten patients.

We plan to initiate this trial in the second quarter of 2023.

our other pipeline products through clinical development.

Based on the establishment of a favorable safety and efficacy profile

that we expect to demonstrate in our phase 1/2 clinical trial for regeneration of the esophagus, we intend to initiate a clinical

trial for the treatment of esophageal atresia, a rare birth defect.

As we build our safety and efficacy data, we plan to initiate

clinical trials in other areas including cancer, injury and birth defects in the bronchus.

our technology for use in other life-threatening conditions that have a relatively shorter time to market.

We intend to develop

products focused on life-threatening conditions where current treatments are ineffective, expensive or both.

Many organ failures

are orphan diseases, and we have orphan drug designations from the FDA on our product candidates for severe disease in both the esophagus

and the trachea.

We believe that developing products for such conditions will require smaller clinical trials and an overall less

expensive development pathway than developing treatments for less severe conditions.

development pathways in international markets.

In addition to the U.S., we intend to pursue regulatory approval for our products

in several key international markets, including China, Europe and the UK.

Many of the conditions we are targeting, have significantly

higher patient populations in foreign countries than in the U.S., thereby making them attractive commercial markets.

engage foreign health regulatory bodies to develop clinical and regulatory strategies to gain international approvals.

with leading medical and research institutions to develop our products and build awareness.

We intend to continue to collaborate

with thought-leading medical institutions as we continue clinical development of our products and ultimately reach commercialization.

We currently have a co-development initiative with the Mayo Clinic and with the Connecticut Children’s Medical Center.

to build additional partnerships and collaborations with leading institutions that we believe will help to drive awareness of our

products and increase the likelihood of market adoption.

Biocompatible

Scaffold Component

proprietary biocompatible scaffold component of our esophageal implant is constructed primarily of extremely thin polyurethane

This material was chosen based on extensive testing of various materials.

The scaffold is made using a manufacturing process known as electrospinning.

The combination of the electrospinning process, which provides control over the desired microstructure of the scaffold fabric, with the polyurethane results in a scaffold that we believe has favorable biocompatibility characteristics.

The Patient’s Cells

The cells we seed onto the scaffold are obtained from the patient’s adipose tissue, or abdominal fat.

This fat tissue is obtained from a standard biopsy during the weeks leading up to the implant surgery.

Mesenchymal stromal cells are extracted and isolated from the adipose tissue biopsy.

The isolated cells are then expanded, or grown, for a short period prior to surgery in order to derive a sufficient cell population to be seeded on the scaffold.

The cells are then seeded on the scaffold in our proprietary bioreactor and incubated there before the implant surgery.

Our technology is protected by seven issued U.S.

patents (including patents on the bioreactor, the structure of the scaffold and the retrievable nature of the scaffold), two Orphan-Drug Designations from the U.S.

Food and Drug Administration, or FDA, both of which confer seven years of exclusivity in addition to protection offered by the patents, and our first-mover advantage which allows us to improve the standard of care.

Potential competitors would now have to improve upon our new standard of care rather than just improve on the existing standard of care in order to get their product candidates approved by the FDA.

In addition, our patent claims cover patches as well as tubular structures.

The scaffold is made using a manufacturing process

known as electrospinning.

The combination of the electrospinning process, which provides control over the desired microstructure of the

scaffold fabric, with the polyurethane results in a scaffold that we believe has favorable biocompatibility characteristics.

Patient’s Cells

cells we seed onto the scaffold are obtained from the patient’s adipose tissue, or abdominal fat.

This fat tissue is obtained from

a standard biopsy during the weeks leading up to the implant surgery.

Mesenchymal stromal cells are extracted and isolated from the adipose

tissue biopsy.

The isolated cells are then expanded, or grown, for a short period prior to surgery in order to derive a sufficient cell

population to be seeded on the scaffold.

The cells are then seeded on the scaffold in our proprietary bioreactor and incubated there

before the implant surgery.

technology is protected by twelve issued U.S.

patents (including patents on the bioreactor, the structure of the scaffold and the retrievable

nature of the scaffold), two Orphan-Drug Designations from the FDA, both of which confer seven

years of exclusivity in addition to protection offered by the patents, and our first-mover advantage which allows us to improve the standard

Potential competitors would now have to improve upon our new standard of care rather than just improve on the existing standard

of care in order to get their product candidates approved by the FDA.

In addition, our patent claims cover patches as well as tubular

We intend to develop patches for the repair of tubular organs as well as solid organs.

See the “Intellectual Property, Licenses and Related Agreements” section below for more details.

Unmet Patient Needs and Biostage’s Solutions

Targetted Diseases

According to the World Health Organization, or WHO, International Agency for Research on Cancer’s Global Cancer Observatory database, worldwide there were over 600,000 cases of esophageal cancer in 2020.

the “Intellectual Property, Licenses and Related Agreements” section below for more details.

Targeted Diseases

to the World Health Organization, or WHO, International Agency for Research on Cancer’s Global Cancer Observatory database, worldwide

there were over 600,000 cases of esophageal cancer in 2020.

There are over one million cases of colon cancer.

In addition, there are approximately 22,000 cases of bronchus cancer that, based on conversations with surgeons, we believe could be treated with our technology.

In addition, there are

approximately 22,000 cases of bronchus cancer that, based on conversations with surgeons, we believe could be treated with our technology.

The following are the approximate case counts by certain geographic region pertaining to the cancers noted below:

Case Count by Geography

Treatable Bronchus

These numbers of patients do not include those with fistulas, ulcers, injuries or birth defects, all of which we believe may be treatable with our technology.

Because our product candidates are likely to save or extend lives, improve the quality of life, and save money by reducing the complications associated with current surgical repair techniques, we expect to charge more than $250,000 per product in the U.S.

Treating even one tenth of only those patients who are diagnosed with esophageal cancer each year could generate billions of dollars in annual revenue.

We believe that the market potential for our products is significantly higher than this.

Esophageal Disease

Esophageal cancer is one of the deadliest types of cancer.

According to the American Cancer Society, there are approximately 17,000 new diagnoses of esophageal cancer in the U.S.

Count by Geography

Global Cancer Statistics 2020:

GLOBOCAN Estimates of Incidence and Mortality Worldwide for 36 Cancers in 185 Countries Hyuna Sung,

Jacques Ferlay, MSc, ME;

Mathieu Laversanne, MSc;

Isabelle Soerjomataram, MD, MSc, PhD;

Ahmedin Jemal, DMV,

Freddie Bray, BSc, MSc, PhD.

above table excludes case counts for Tracheal Cancer.

We estimate there are approximately 1,000 cases per year of trachea cancer in the

and Europe that are severe enough to be treated with our technology.

Please see “Life-threatening conditions of the Trachea”

These numbers of patients do not include those with fistulas, ulcers, injuries or birth defects, all of which we believe may be

treatable with our technology.

our product candidates are likely to save or extend lives, improve the quality of life, and save money by reducing the complications

associated with current surgical repair techniques, we expect to charge more than $250,000 per product in the U.S.

even one tenth of only those patients who are diagnosed with esophageal cancer each year could generate billions of dollars in annual

We believe that the market potential for our products is significantly higher.

cancer is one of the deadliest types of cancer.

According to the American Cancer Society, there are approximately 17,000 new diagnoses

of esophageal cancer in the U.S.

each year, and there are more than 15,000 deaths.

Typically, a year after diagnosis with esophageal cancer, 50% of the patients are dead and after 5 years, 80% are dead.

There are approximately 600,000 new diagnoses of esophageal cancer globally each year, according to the World Health Organization’s International Agency for Research on Cancer.

Hence, there is a vast need for a better treatment for esophageal cancer.

Approximately 5,000 esophagectomy surgeries occur in the U.S.

annually to treat esophageal cancer, and approximately 10,000 esophagectomies occur in Europe annually.

We believe that approximately one half of the world’s esophageal cancer cases occur in China, which would represent the largest potential patient population for our adult esophageal product candidate.

We believe that our Biostage Esophageal Implant, if approved, has the potential to provide a major advance over the current esophagectomy procedures for addressing esophageal disease, which have high complication and morbidity rates.

We believe that our Biostage Esophageal Implant has the potential to provide physicians a new, simpler procedure to restore organ function while significantly reducing complication and morbidity rates compared with the current standard of care, and without creating significant quality of life issues for patients.

Pediatric Esophageal Atresia

Esophageal Atresia, or EA, is a rare congenital abnormality in which an infant is born without part of the esophagus.

About 1 in 4,000 infants in the U.S.

is born with EA.

In some cases, the two sections can be connected surgically.

However, in cases where the gap is too great for a simple surgical reconnection, the current standard of care is a gastric pull-up, a colon interposition, or a procedure known as the Foker process.

In the Foker process, traction devices are surgically attached to the two ends of the esophagus.

Traction is then applied, usually for several weeks during which time the infant remains in an Intensive Care Unit, to stimulate the ends of the esophagus to grow and narrow the gap.

If the Foker process is successful in narrowing the gap sufficiently, a second surgery is necessary to connect the two ends of the esophagus.

In addition to the Foker process being complex, it is also a very expensive procedure because the infant will normally be in the hospital for several months during the process.

We believe that a pediatric Biostage Esophageal Implant may provide pediatric surgeons with a better procedure to treat EA that would result in a connected esophagus with higher success rates, lower complications, and lower overall costs to the healthcare system.

Based on input from our Scientific Advisory Board, which includes some of the leading surgeons and in the field of regenerative medicine, we are planning to research regenerating other parts of the gastro-intestinal tract such as the stomach, intestine and colon.

All these organs require replacement when they are damaged by cancer, injury, and birth defects.

There are over one million patients diagnosed with colon cancer every year.

Typically, a year after diagnosis with esophageal

cancer, 50% of the patients are dead and after 5 years, 80% are dead.

are approximately 600,000 new diagnoses of esophageal cancer globally each year, according to the World Health Organization’s International

Agency for Research on Cancer.

there is a vast need for a better treatment for esophageal cancer.

Approximately

5,000 esophagectomy surgeries occur in the U.S.

annually to treat esophageal cancer, and approximately 10,000 esophagectomies occur in

Europe annually.

We believe that approximately one half of the world’s esophageal cancer cases occur in China, which would represent

the largest potential patient population for our adult esophageal product candidate.

We believe that our esophageal implant,

if approved, has the potential to provide a major advance over the current esophagectomy procedures for addressing esophageal disease,

which have high complication and morbidity rates.

believe that our esophageal implant has the potential to provide physicians a new, simpler procedure to restore organ function

while significantly reducing complication and morbidity rates compared with the current standard of care, and without creating significant

quality of life issues for patients.

Esophageal Atresia

year, it is estimated that approximately 1,000 children in the U.S.

are born with a congenital birth defect known as esophageal atresia.

Esophageal atresia is a condition where an infant is born with an esophagus that does not extend completely from the mouth to the stomach.

When a long segment of the esophagus is lacking, the current standard of care is a series of surgical procedures where sutures are applied

to both ends of the esophagus in an attempt to stretch them and pull them together so they can be surgically connected at a later date.

surgical process can take several weeks, and the procedure often involves serious complications and high rates of failure.

usually must remain in the neonatal intensive-care unit for this time which can cost thousands of dollars per day.

This process also

requires at least two separate surgical interventions.

Other surgical options include the use of the child’s stomach or intestine

that would be pulled up into the chest to allow a connection to the mouth.

These methods are similar to the use of gastric pull ups and

interpositioning used in adult patients and carry similar side effect and safety profiles.

We are working in collaboration with the Connecticut

Children’s Medical Center, to advance an esophageal implant solution to address esophageal atresia that we believe will

be more effective, safer, and less expensive than the current procedures.

on input from our Scientific Advisory Board, which includes certain well-known surgeons in the field of regenerative medicine, we are

planning to research regenerating other parts of the gastro-intestinal tract such as the stomach, intestine and colon.

All these organs

require replacement when they are damaged by cancer, injury, and birth defects.

There are over one million patients diagnosed with colon

cancer every year.

(Central Lung) Cancer

Lung cancer is the most common form of cancer and the most common cause of death from cancer worldwide.

There are more than 700,000 new lung cancer diagnoses annually in the U.S.

In approximately 25% of all lung cancer cases, the cancerous tumor resides only in a bronchus and not in the lobes of the lungs and is known as central lung cancer.

Approximately 33,000 central lung cancer cases diagnosed in the U.S.

and Europe are Stage I and II and are considered eligible for surgical resection, often with adjuvant chemotherapy and radiation.

Approximately 5,000 of those patients are treated via pneumonectomy, a surgical procedure involving the resection of the cancer tumor, the whole bronchus below the tumor and the entire lung to which it is connected.

It is a complex surgery and, due to the removal of a lung, results in a 50% reduction in the patient’s respiratory capacity.

The procedure has reported rates of post-surgical, or in hospital, mortality of 8% to 15%.

Complication rates associated with pneumonectomy are reported as high as 50%, and include post-operative pneumonia, supraventricular arrhythmias, and anastomotic leakage, placing patients at significant mortality risk post-discharge.

Using a cell-seeded scaffold, which we call the Biostage Bronchial Implant, or BBI, we have performed the repair of a bronchus that was surgically removed from a pig.

The bronchus regenerated, much as in the esophagus, first forming a tube and later developing into a bronchus with a functional lining known as the respiratory epithelium.

The respiratory epithelium was seen in about two months in the pig.

This respiratory epithelium is essential to the avoidance of infections such as pneumonia.

This pig lived almost two years until scheduled euthanasia.

Hence, we intend to develop the Biostage Bronchial Implant to treat bronchial cancer, bronchial fistulas or holes, and birth defects in the bronchus.

Based on discussions with suregons in the field, we estimate that approximately 7,000 of these conditions in the U.S.

and Europe would be potentially treatable with our technology.

We believe that a Biostage Bronchial Implant, or BBI, once developed and approved for marketing, has the potential to provide physicians a treatment alternative superior to the pneumonectomy procedure to treat central lung cancer, a simpler procedure to restore organ function of the bronchus without sacrificing one of the patient’s lungs, which we believe will result in fewer post-surgery complications, improved mortality rates and improved quality of life for the patient.

Life-threatening conditions of the Trachea

There are approximately 8,000 patients per year in the U.S.

and Europe who suffer from a condition of the trachea that put the patient at high risk of death.

cancer is the most common form of cancer and the most common cause of death from cancer worldwide.

There are more than 700,000 new lung

cancer diagnoses annually in the U.S.

In approximately 25% of all lung cancer cases, the cancerous tumor resides only in

a bronchus and not in the lobes of the lungs and is known as central lung cancer.

Approximately 33,000 central lung cancer cases diagnosed

and Europe are Stage I and II and are considered eligible for surgical resection, often with adjuvanted chemotherapy and

Approximately

5,000 of these patients are treated via pneumonectomy, a surgical procedure involving the resection of the cancer tumor, the whole bronchus

below the tumor and the entire lung to which it is connected.

It is a highly complex surgery and due to the removal of a lung, results

in a 50% reduction in the patient’s respiratory capacity.

The procedure has reported rates of post-surgical, or in-hospital, mortality

of 8% to 15%.

Complication rates associated with pneumonectomy are reported as high as 50%, and include post-operative pneumonia, supraventricular

arrhythmias, and anastomotic leakage, placing patients at significant mortality risk post-discharge.

intend to develop a Biostage bronchial implant to treat bronchial cancer, bronchial fistulas (holes), and birth defects in the bronchus.

Based on discussions with surgeons in the field, we estimate that approximately 7,000 of these conditions in the U.S.

and Europe would

be potentially treatable with our technology.

Life-threatening

conditions of the Trachea

are approximately 8,000 patients per year in the U.S.

and Europe who suffer from a condition of the trachea that put the patient at high

risk of death.

These conditions can be due to tracheal trauma, tracheal stenosis or trachea cancer.

There are approximately 40,000 tracheal trauma patients diagnosed each year in the U.S.

There are approximately 40,000 tracheal

trauma patients diagnosed each year in the U.S.

Of those, approximately 1,000 are severe enough to need surgical resection procedures.

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Approximately 2,000 patients are diagnosed with stenosis from tracheostomy in the U.S.

Trachea cancer is a very rare but extremely deadly cancer.

Trachea cancer is a very rare but extremely

deadly cancer.

Trachea cancer patients in the U.S.

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There were approximately 200 cases of primary trachea cancer diagnosed in the U.S.

Based on these facts, we estimate that there are approximately 8,000 patients in the U.S.

and Europe with conditions of the trachea that put them at high risk of death, but for whom there is currently no clinically effective tracheal implant or replacement method currently available.

We believe that a Biostage Tracheal Implant, or BTI, may provide physicians a treatment to re-establish the structural integrity and function of a damaged or diseased trachea to address life-threatening conditions due to tracheal trauma, stenosis, cancer, or birth defects.

We have not performed regeneration of a trachea using a BTI.

However, based on the regeneration observed in the bronchus, we believe that regeneration of the trachea may be possible.

We were incorporated under the laws of the State of Delaware on May 3, 2012 as a wholly-owned subsidiary of Harvard Bioscience, Inc., or Harvard Bioscience, to provide a means for separating its regenerative medicine business from its other businesses.

Harvard Bioscience decided to separate its regenerative medicine business into our company, a separate corporate entity, or the Separation, and it spun off its interest in our business to its stockholders in November 2013.

Since the Separation we have been a separately-traded public company and Harvard Bioscience has not been a stockholder of our common stock or controlled our operations.

Following the Separation, we continued to innovate our bioreactors based on our physiology expertise, we developed our materials science capabilities and we investigated and developed a synthetic tracheal scaffold.

By that time, we had built and staffed cell biology laboratories at our Holliston facility, to give ourselves the ability to perform and control our scientific investigation and developments internally.

At that point, we began the second phase of our company’s development.

In mid-2014, we increased the pace of our scientifically-based internal analysis and development of our first-generation tracheal implant product candidate, the HART-Trachea.

From large-animal studies conducted thereafter we found that the product candidate elicited an unfavorable inflammatory response after implantation, which required additional development and testing.

These requirements extended our expectations regarding our regulatory milestones, and we announced the additional testing and extended milestone expectations in January 2015.

During 2015 we isolated and tested all major variables of the organ scaffold and the cell source and protocols, examining the effects of alternatives against the then-existing product approach.

Through extensive in vitro preclinical studies, and small-animal and large-animal studies, we made dramatic improvements, and discovered that the mechanism of action of our current approach was very different from our hypothesis regarding that of the first-generation product candidate.

Our technology uses a different scaffold material and microstructure, a different source and concentration of the patient’s cells and several other changes from our earlier trachea initiative.

These changes resulted in a scaffold that was temporary and could be removed via the

mouth in an endoscopic procedure that did not require major surgery in the chest.

The temporary nature of the scaffold reduces the risk of long-term complications that can arise from permanent implants such as those from hernia meshes and breast implants.

Clinical Trials

The FDA has approved our first clinical trial.

Based on both the successful human experience at the Mayo Clinic, and our extensive large-animal research (we have performed surgeries on 45 pigs including for both adult and pediatric diseases), the FDA has approved our clinical trial.

The trial will be a 10-patient combined phase 1 and phase 2 trial that measures both the safety and efficacy of our product candidate in the patient population.

This clinical trial is for any patient that requires removal of a part of the esophagus that is less than 6cm long for any reason.

The primary endpoint in the trial is the establishment of a continuous biological neoconduit, or tube, by three months.

In the human patient, this tube was seen in one month.

In the pig research, we have seen the formation of a conduit by one month.

One of the secondary endpoints will be the development of a mucosal lining in the esophagus by 12 months or earlier.

In the one human patient treated so far, this mucosal lining was seen at three months.

Based on these facts, we estimate that there

are approximately 8,000 patients in the U.S.

and Europe with conditions of the trachea that put them at high risk of death, but for whom

there is currently no clinically effective tracheal implant or replacement method currently available.

believe that a Biostage tracheal implant may provide physicians a treatment to re-establish the structural integrity and function of

a damaged or diseased trachea to address life-threatening conditions due to tracheal trauma, stenosis, cancer, or birth defects.

have not performed regeneration of a trachea using a Biostage tracheal implant.

However, based on the regeneration observed in the bronchus,

we believe that regeneration of the trachea may be possible.

were incorporated under the laws of the State of Delaware on May 3, 2012 as a wholly-owned subsidiary of Harvard Bioscience, Inc., or

Harvard Bioscience, to provide a means for separating its regenerative medicine business from its other businesses.

Harvard Bioscience

decided to separate its regenerative medicine business into our company, a separate corporate entity, or the Separation, and it spun

off its interest in our business to its stockholders in November 2013.

Since the Separation we have been a separately-traded public company

and Harvard Bioscience has not controlled our operations.

Following the Separation, we continued to innovate our bioreactors based

on our physiology expertise, we developed our materials science capabilities and we investigated and developed a synthetic tracheal scaffold.

By that time, we had built and staffed cell biology laboratories at our Holliston facility, to give ourselves the ability to perform

and control our scientific investigation and developments internally.

At that point, we began the second phase of our company’s

mid-2014, we increased the pace of our scientifically-based internal analysis and development of our first-generation tracheal implant

product candidate, the HART-Trachea.

From large-animal studies conducted thereafter we found that the product candidate elicited an unfavorable

inflammatory response after implantation, which required additional development and testing.

These requirements extended our expectations

regarding our regulatory milestones, and we announced the additional testing and extended milestone expectations in January 2015.

2015 we isolated and tested all major variables of the organ scaffold and the cell source and protocols, examining the effects of alternatives

against the then-existing product approach.

Through extensive in vitro preclinical studies, and small-animal and large-animal

studies, we made dramatic improvements, and discovered that the mechanism of action of our current approach was very different from our

hypothesis regarding that of the first-generation product candidate.

Our technology uses a different scaffold material and microstructure,

a different source and concentration of the patient’s cells and several other changes from our earlier trachea initiative.

changes resulted in a scaffold that was temporary and could be removed via the mouth in an endoscopic procedure that did not require

major surgery in the chest.

The temporary nature of the scaffold reduces the risk of long-term complications that can arise from permanent

implants such as those from hernia meshes and breast implants.

FDA has approved our first clinical trial.

on both the successful human experience at the Mayo Clinic, and our extensive large-animal research (we have performed surgeries on over

50 pigs including for both adult and pediatric diseases), the FDA has approved our clinical trial.

The trial will be a 10-patient combined

phase 1 and phase 2 trial that measures both the safety and efficacy of our product candidate in the patient population.

This clinical

trial is for any patient that requires removal of a part of the esophagus that is less than 6cm long for any reason.

The primary endpoint

in the trial is the establishment of a continuous biological neoconduit, or tube, by three months.

In the human patient, this tube was

seen in one month.

In the pig research, we have seen the formation of a conduit by one month and sometimes by 14 days.

One of the secondary

endpoints will be the development of a mucosal lining in the esophagus by 12 months or earlier.

In the one human patient treated so far,

this mucosal lining was seen at three months.

In the pig research, we have seen this mucosal lining in three months.

The FDA approval for our clinical trial allows us to treat babies born without a complete esophagus once we have established safety in adults.

The Biostage Esophageal Implant will not be tested for safety on healthy volunteers (the usual goal of a phase 1 trial) or for dose-response and maximum-tolerated dose (the usual goals of a phase 2 trial).

Measuring safety and efficacy in the patient population is normally the goal of a phase 3 clinical trial.

Hence, our approved trial is more similar to a small phase 3 trial than a typical first clinical trial.

FDA approval for our clinical trial allows us to treat babies born without a complete esophagus once we have established safety in adults.

Our esophageal implant will not be tested for safety on healthy volunteers (the usual goal of a phase 1 trial) or for dose-response

and maximum-tolerated dose (the usual goals of a phase 2 trial).

Measuring safety and efficacy in the patient population is normally

the goal of a phase 3 clinical trial.

Hence, our approved trial is more similar to a small phase 3 trial than a typical first clinical

We expect to add patients to this trial, including in Europe and China until we have sufficient data to gain approval.

Unlike the normal drug discovery process, which assesses a drug for its ability to treat a single disease, we can pursue multiple diseases with a single clinical trial.

This is because any medical condition that requires the removal of part of the esophagus can be repaired with the Biostage Esophageal Implant.

It does not matter that the need to surgically remove part of the esophagus is caused by esophageal cancer, Barrett esophagus (damage to the lower esophagus caused by the reflux of stomach acids into the esophagus), a fistula (a hole in the esophagus), a birth defect, or a wound or injury to the esophagus.

The Biostage Esophageal Implant can be used to treat any of these conditions.

Because of this, we believe that the available market in treating the esophagus to be far larger than that for treating esophageal cancer alone.

In addition, we can access that large patient population without having to conduct a new clinical trial for each underlying medical condition.

Compared to the development of new drugs, this greatly reduces our costs to expand the market size for our products.

We intend to request Fast Track status, Breakthrough Therapy designation, Regenerative Medicine Advanced Therapy, or RMAT, designation, Accelerated Approval, Priority Review and a Priority Review Voucher from the FDA.

There are many benefits of such designations, including reduced costs and faster times to market.

the normal drug discovery process, which assesses a drug for its ability to treat a single disease, we can pursue multiple diseases with

a single clinical trial.

This is because any medical condition that requires the removal of part of the esophagus can be repaired with

the our esophageal implant.

It does not matter that the need to surgically remove part of the esophagus is caused by esophageal

cancer, Barrett esophagus (damage to the lower esophagus caused by the reflux of stomach acids into the esophagus), a fistula (a hole

in the esophagus), a birth defect, or a wound or injury to the esophagus.

Our esophageal implant can be used to treat any of

these conditions.

Because of this, we believe that the available market in treating the esophagus to be far larger than that for treating

esophageal cancer alone.

In addition, we can access that large patient population without having to conduct a new clinical trial for

each underlying medical condition.

Compared to the development of new drugs, this greatly reduces our costs to expand the market size

for our products.

intend to request Fast Track status, Breakthrough Therapy designation, Regenerative Medicine Advanced Therapy, or RMAT, designation,

Accelerated Approval, Priority Review and a Priority Review Voucher from the FDA.

There are many benefits of such designations, including

reduced costs and faster times to market.

Please refer the Regulatory Strategy section for more details.

Our first clinical trial will be in the U.S.

first clinical trial will be in the U.S.

for patients with cancer, injury, or birth defects in the esophagus.

However, there are far more patients with these conditions in Europe and Asia than there are in the U.S.

For this reason, we intend to expand our clinical trial to include patients in Europe and Asia and to seek regulatory approval in those countries as well.

In addition to having large patient populations, for product candidates like ours, both the European Union, or E.U., and China allow for “conditional approval”.

Conditional approval is country specific but, in general, it would allow us to market our products, and obtain revenue from the sales of the respective product, after successful phase 2 results.

Conditional approval is granted subject to the regulatory authority being able to rescind the approval if something goes wrong in as more patients get treated.

Hence, it is possible that we could see revenue in either China or the E.U.

However, there are far

more patients with these conditions in Europe and Asia than there are in the U.S.

For this reason, we intend to expand our clinical trial

to include patients in Europe and Asia and to seek regulatory approval in those countries as well.

addition to having large patient populations, for product candidates like ours, both the European Union, or E.U., and some countries

in Asia allow for “conditional approval”.

Conditional approval is country specific but, in general, it would allow us to

market our products, and obtain revenue from the sales of the respective product, after successful phase 2 results.

Conditional approval

is granted subject to the regulatory authority being able to rescind the approval if something goes wrong as more patients get treated.

Hence, it is possible that we could see revenue in either Asia or the E.U.

before we see revenue in the U.S.

Research and Development

Our primary research and development activities are focused in three areas:

and Development

primary research and development activities are focused in three areas:

materials science, cell biology and engineering.

In materials science, we focus on designing and testing biocompatible organ scaffolds, testing the structural integrity and the cellularization capacities of the scaffolds.

In cell biology, we focus on developing and testing isolation and expansion protocols, cell characterization and fate studies, investigating the effects of various cell types and concentrations, evaluating the biocompatibility of scaffolds, experimenting with different cell seeding methodologies, and developing protocols for implantation experiments.

engineering group supports the materials science and cell biology groups across an array of their activities, i.e.

designing, engineering and making our proprietary bioreactors and autoseeders.

science, we focus on designing and testing biocompatible organ scaffolds, testing the structural integrity and the cellularization capacities

of the scaffolds.

In cell biology, we focus on developing and testing isolation and expansion protocols, cell characterization and fate

studies, investigating the effects of various cell types and concentrations, evaluating the biocompatibility of scaffolds, experimenting

with different cell seeding methodologies, and developing protocols for implantation experiments.

Our engineering group supports the

materials science and cell biology groups across an array of their activities, i.e.

designing, engineering and making our proprietary

bioreactors and autoseeders.

All three of our R&D groups combine to plan and execute our in vitro studies.

A fundamental part of our R&D effort in developing our technology has been dedicated to the discovery and development of small and large-animal model studies.

A fundamental part

of our R&D effort in developing our technology has been dedicated to the discovery and development of small and large-animal model

The large-animal model employs the use of Yucatan mini-pigs.

In addition to our in-house engineering and scientific development team, we collaborate with leaders in the field of regenerative medicine who are performing the fundamental research and surgeries in this field to develop and test new product candidates that will advance and improve the procedures being performed.

We will work with our collaborators to further enhance our product candidates to make them more efficient and easier to use by surgeons.

In the U.S., our principal collaborations have been with Mayo Clinic and Connecticut Children’s Medical Center.

Collaboration typically involves us developing new technologies specifically to address issues these researchers and clinicians encounter, and then working together to translate our technology from pre-clinical studies to clinical trials.

In certain instances, we have entered into agreements that govern the ownership of the technologies developed in connection with these collaborations.

We incurred approximately $1.6 million and $2.1 million of research and development expenses in 2021 and 2020, respectively.

As we have not yet applied for or received regulatory approval to market any clinical products, no amount of these research and development costs have been passed on to our customers.

On March 28, 2018, we were awarded a Fast-Track Small Business Innovation Research, or SBIR, grant by the Eunice Kennedy National Institute of Child Health and Human Development, or NICHD, to support testing of pediatric version of the Biostage Esophageal Implant.

The award for Phase I provided for the reimbursement of approximately $0.2 million of qualified research and development costs which was received and recognized as grant income during 2018.

On October 26, 2018, we were awarded the Phase II Fast-Track SBIR grant from the Eunice Kennedy NICHD grant aggregating $1.1 million to support development, testing, and translation to the clinic through September 2019 and represented years one and two of the Phase II portion of the award.

On August 3, 2020, we were awarded a third year of the Phase II grant totaling $0.5 million for support of development, testing, and translation to the clinic covering qualified expenses incurred from October 1, 2019 through September 30, 2020.

In September of 2020, we filed and were granted a one year, no-cost extension for the Phase II grant period extending through September 30, 2021.

For the years ended December 31, 2021 and 2020, we recognized $165 thousand and $447 thousand of grant income, respectively, from Phase II of the SBIR grant.

The aggregate SBIR grant to date provides us with a total award of $1.8 million, of which, approximately $1.5 million has been recognized through December 31, 2021.

The Phase II portion of the award expired effective September 30, 2021.

The research conducted under this grant led to the publication on the regeneration of the esophagus in piglets that was published in January 2022 in collaboration with Connecticut Children’s Medical Center.

Manufacturing and Resources

The bioreactor and scaffold are made in our clean-room facilities in Holliston, Massachusetts and the cell seeding is currently performed at the FDA-approved clinical-grade human cell culture facility at the University of Texas Medical Branch.

Our manufacturing process for the bioreactors and scaffolds has been approved by the FDA for the clinical trial.

Additional development is likely to be necessary for product approval.

For our scaffolds, our primary materials are medical-grade plastic resins and solvents used to liquefy the resins in our manufacturing process.

addition to our in-house engineering and scientific development team, we collaborate with leaders in the field of regenerative medicine

who are performing the fundamental research and surgeries in this field to develop and test new product candidates that will advance

and improve the procedures being performed.

We will work with our collaborators to further enhance our product candidates to make them

more efficient and easier to use by surgeons.

In the U.S., our principal collaborations have been with Mayo Clinic and Connecticut Children’s

Medical Center.

Collaboration typically involves us developing new technologies specifically to address issues these researchers and

clinicians encounter, and then working together to translate our technology from pre-clinical studies to clinical trials.

instances, we have entered into agreements that govern the ownership of the technologies developed in connection with these collaborations.

incurred approximately $1.7 million and $1.6 million of research and development expenses in 2022 and 2021, respectively.

not yet applied for or received regulatory approval to market any clinical products, no amount of these research and development costs

have been passed on to our customers.

March 28, 2018, we were awarded a Fast-Track Small Business Innovation Research, or SBIR, grant by the Eunice Kennedy National Institute

of Child Health and Human Development, or NICHD, to support testing of pediatric version of our esophageal implant.

for Phase I provided for the reimbursement of approximately $0.2 million of qualified research and development costs which was received

and recognized as grant income during 2018.

October 26, 2018, we were awarded the Phase II Fast-Track SBIR grant from the Eunice Kennedy NICHD grant aggregating $1.1 million to

support development, testing, and translation to the clinic through September 2019 and represented years one and two of the Phase II

portion of the award.

On August 3, 2020, we were awarded a third year of the Phase II grant totaling $0.5 million for support of development,

testing, and translation to the clinic covering qualified expenses incurred from October 1, 2019 through September 30, 2020.

of 2020, we filed and were granted a one year, no-cost extension for the Phase II grant period extending through September 30, 2021.

the years ended December 31, 2022 and 2021, we recognized $0 and $0.2 million of grant income, respectively, from Phase II of the SBIR

The aggregate SBIR grant to date provided us with a total award of $1.8 million, of which approximately $1.5 million had been

recognized through December 31, 2021.

Phase II portion of the award expired effective September 30, 2021.

research conducted under this grant led to the publication on the regeneration of the esophagus in piglets that was published in January

2022 in collaboration with Connecticut Children’s Medical Center.

Manufacturing

and Resources

bioreactor and scaffold are made in our clean-room facilities in Holliston, Massachusetts and the cell seeding is currently performed

at the FDA-approved clinical-grade human cell culture facility at the University of Texas Medical Branch.

manufacturing process for the bioreactors and scaffolds has been approved by the FDA for the clinical trial.

Additional development is

likely to be necessary for product approval.

our scaffolds, our primary materials are medical-grade plastic resins and solvents used to liquefy the resins in our manufacturing process.

These materials are readily available from a variety of suppliers and do not currently represent a large proportion of our total costs.

For our autoseeders and bioreactors, we perform final assembly and testing of components that we buy from third parties like machine shops, parts distributors, molding facilities and printed circuit board manufacturers.

These manufacturing operations are performed primarily at our Holliston, Massachusetts headquarters.

Sales and Marketing

We expect that most surgeries using the Biostage Esophageal Implant will be performed at a relatively small number of major hospitals in the U.S., China and in the European Union.

In addition, our technology platform is initially aimed at treating the esophagus, the bronchi, and the trachea, all of which are treated by thoracic surgeons.

As a result, we expect to employ only a small sales force as compared to companies selling treatments for larger patient populations.

We expect to price the product commensurate with the medical value created for the patient and the costs avoided with the use of our product.

Because our products are likely to save or extend lives, improve the quality of life, and save money by reducing the complications associated with current surgical repair techniques, we expect to charge more than $250,000 per product in the U.S.

We further expect to be paid by the hospital that buys the product from us.

Finally, we expect that the hospital would seek reimbursement from payers for the entire transplant procedure, including the use of our products.

Intellectual Property, Licenses, and Related Agreements

We have seven issued U.S.

For our autoseeders and bioreactors, we perform final assembly and testing of components that we buy from third parties like machine

shops, parts distributors, molding facilities and printed circuit board manufacturers.

These manufacturing operations are performed primarily

at our Holliston, Massachusetts headquarters.

and Marketing

expect that most surgeries using our esophageal implant will be performed at a relatively small number of major hospitals in

the U.S., Asia and in Europe.

In addition, our technology platform is initially aimed at treating the esophagus, the bronchi, and the

trachea, all of which are treated by thoracic surgeons.

As a result, we expect to employ only a small sales force as compared to companies

selling treatments for larger patient populations.

expect to price the product commensurate with the medical value created for the patient and the costs avoided with the use of our product.

Because our products are likely to save or extend lives, improve the quality of life, and save money by reducing the complications associated

with current surgical repair techniques, we expect to charge approximately $250,000 per product in the U.S.

We further expect to be paid by the hospital that

buys the product from us.

Finally, we expect that the hospital would seek reimbursement from government payers, private health insurers

and other third-party payers for the entire transplant procedure, including the use of our products.

Property, Licenses, and Related Agreements

have twelve issued U.S.

patents that cover the bioreactor, the scaffold, and the surgical procedure.

These patents include the claim of having a removable scaffold.

The patent claims cover the use of synthetic scaffolds for any use in the gastro-intestinal tract and the airways.

The patent claims cover the use

of synthetic scaffolds for any use in the gastro-intestinal tract and the airways.

These patents include the claim of having a removable

The patent claims cover patches as well as tubes.

1 unchanged sentence

We also have two issued patents in China and there are numerous other filings pending.

These patents should provide protection into the mid to late 2030s.

Sublicense Agreement with Harvard Bioscience

We own the right to use the brand name “Harvard Apparatus Regenerative Technology” in the medical sciences field under a license agreement with Harvard University via a sublicense from Harvard Bioscience.

Harvard Bioscience’s right to use the name arises from a license agreement, effective December 19 th , 2002, between it and the President and Fellows of Harvard University.

Harvard Bioscience began at Harvard University in 1903 as Harvard Apparatus and has a license to the name Harvard Apparatus in research and industrial fields.

We expect these patents to provide protection

into the mid to late 2030’s.

Agreement with Harvard Bioscience

own the right to use the brand name “Harvard Apparatus Regenerative Technology” in the medical sciences field under a license

agreement with Harvard University via a sublicense from Harvard Bioscience.

Harvard Bioscience’s right to use the name arises from

a license agreement, effective December 19 th , 2002, between it and the President and Fellows of Harvard University.

Bioscience began at Harvard University in 1903 as Harvard Apparatus and has a license to the name Harvard Apparatus in research and industrial

Our right to use the names in the medical field arises from the sublicense signed when Biostage, Inc.

(then known as Harvard Apparatus Regenerative Technology) was separated from Harvard Bioscience in 2013 (as more fully described below).

Harvard Bioscience delegated its right to use the name in the medical field to us and Harvard Bioscience has no right to use the Harvard mark in the medical field.

(then known as Harvard

Apparatus Regenerative Technology) was separated from Harvard Bioscience in 2013 (as more fully described below).

Harvard Bioscience

delegated its right to use the name in the medical field to us and Harvard Bioscience has no right to use the Harvard mark in the medical

We intend to use this brand name on our products in the future.

We do not have the right to use the Harvard or Harvard Apparatus marks alone but only as Harvard Apparatus Regenerative Technology.

We believe we are the only licensee of the Harvard name in the medical products’ field.

We do not have the right to use the Harvard or Harvard Apparatus

marks alone but only as Harvard Apparatus Regenerative Technology.

We believe we are the only licensee of the Harvard name in the medical

products’ field.

This license is perpetual, worldwide and royalty-free.

There are restrictions on our use of the name such as not using it in the color crimson and not using it in a serifed font.

There are restrictions on our use of the name such as not

using it in the color crimson and not using it in a serifed font.

We currently have no affiliation with Harvard University.

Separation Agreements with Harvard Bioscience

On November 1, 2013, to effect the Separation, Harvard Bioscience distributed all of the shares of our common stock to the Harvard Bioscience stockholders, or the Distribution.

Prior to the Distribution, Harvard Bioscience contributed the assets of its regenerative medicine business, and approximately $15 million in cash, to our company to fund our operations following the Distribution.

In connection with the Separation and immediately prior to the Distribution, we entered into a Separation and Distribution Agreement, Intellectual Property Matters Agreement, Product Distribution Agreement, Tax Sharing Agreement, Transition Services Agreement, and Sublicense Agreement with Harvard Bioscience to effect the Separation and Distribution and provide a framework for our relationship with Harvard Bioscience after the Separation.

These agreements govern the current relationships among us and Harvard Bioscience and provided for the allocation among us and Harvard Bioscience of Harvard Bioscience’s assets, liabilities, and obligations (including employee benefits and tax-related assets and liabilities) attributable to periods prior to the Separation.

Government Regulation

Any product that we may develop based on our technology, and any other clinical products that we may develop, will be subject to considerable regulation by governments.

We were informed by the FDA that the Biostage Esophageal Implant would be regulated under the BLA pathway in the U.S., and we were informed by the European Medicines Agency, or EMA, that the previous generation

tracheal product would be regulated under the Advanced Therapy Medicinal Products, or ATMP, pathway in the E.U.

On October 18, 2016, we also received written confirmation from FDA’s Center for Biologics Evaluation and Research, or CBER, that the FDA intends to regulate the Biostage Esophageal Implant as a combination product under the primary jurisdiction of CBER.

We further understand that CBER may choose to consult or collaborate with the FDA’s Center for Devices and Radiological Health, or CDRH, with respect to the characteristics of the synthetic scaffold component of our product based on CBER’s determination of need for such assistance.

Regulatory Strategy

Domestic Regulation of Our Products and Business

The testing, manufacturing, and potential labeling, advertising, promotion, distribution, importing and marketing of our products are subject to extensive regulation by governmental authorities in the U.S.

and in other countries.

In the U.S., the FDA, under the Public Health Service Act, the Federal Food, Drug and Cosmetic Act, and its implementing regulations, regulates biologics and medical device products.

The labeling, advertising, promotion, marketing and distribution of biopharmaceuticals, or biologics and medical devices also must be in compliance with the FDA and U.S.

Federal Trade Commission, or FTC, requirements which include, among others, standards and regulations for off-label promotion, industry sponsored scientific and educational activities, promotional activities involving the internet, and direct-to-consumer advertising.

The FDA and FTC have very broad enforcement authority, and failure to abide by these regulations can result in penalties, including the issuance of a warning letter directing us to correct deviations from regulatory standards and enforcement actions that can include seizures, injunctions and criminal prosecution.

Further, we are required to meet regulatory requirements in countries outside the U.S., which can change rapidly with relatively short notice.

We have been informed by the FDA that our Biostage Esophageal Implant is a combination biologic/device products.

Biological products must satisfy the requirements of the Public Health Services Act and the Food, Drug and Cosmetics Act and their implementing regulations.

In order for a biologic product to be legally marketed in the U.S., the product must have a BLA approved by the FDA.

The BLA Approval Process

The steps for obtaining FDA approval of a BLA to market a biopharmaceutical, or biologic product in the U.S.

● completion of pre-clinical laboratory tests, animal studies and formulation studies under the FDA’s GLP regulations;

● submission to the FDA of an IND application, for human clinical testing, which must become effective before human clinical trials may begin and which must include Institutional Review Board, or IRB, approval at each clinical site before the trials may be initiated;

● performance of adequate and well-controlled clinical trials in accordance with Good Clinical Practices, or GCP, to establish the safety and efficacy of the product for each indication;

● submission to the FDA of a BLA, which contains detailed information about the chemistry, manufacturing and controls for the product, extensive pre-clinical information, reports of the outcomes of the clinical trials, and proposed labeling and packaging for the product;

● the FDA’s acceptance of the BLA for filing;

● satisfactory review of the contents of the BLA by the FDA, including the satisfactory resolution of any questions raised during the review or by the advisory committee, if applicable;

● satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with cGMP regulations, to assure that the facilities, methods and controls are adequate to ensure the product’s identity, strength, quality and purity;

● FDA approval of the BLA.

Based on discussions with the FDA, we expect clinical trials for our esophageal implant product candidates to be conducted in two sequential phases:

● An initial trial that combines both phase 1 and phase 2 into a single trial.

Agreements with Harvard Bioscience

November 1, 2013, to effect the Separation, Harvard Bioscience distributed all of the shares of our common stock to the Harvard Bioscience

stockholders, or the Distribution.

Prior to the Distribution, Harvard Bioscience contributed the assets of its regenerative medicine

business, and approximately $15 million in cash, to our company to fund our operations following the Distribution.

connection with the Separation and immediately prior to the Distribution, we entered into a Separation and Distribution Agreement, Intellectual

Property Matters Agreement, Product Distribution Agreement, Tax Sharing Agreement, Transition Services Agreement, and Sublicense Agreement

with Harvard Bioscience to effect the Separation and Distribution and provide a framework for our relationship with Harvard Bioscience

after the Separation.

These agreements govern the current relationships among us and Harvard Bioscience and provided for the allocation

among us and Harvard Bioscience of Harvard Bioscience’s assets, liabilities, and obligations (including employee benefits and tax-related

assets and liabilities) attributable to periods prior to the Separation.

product candidates and our operations are subject to extensive regulation by the U.S.

FDA and other federal and state authorities, as

well as comparable authorities in foreign jurisdictions, which are discussed below.

The FDA is divided into various “Centers”

by product type such as the Center for Drug Evaluation and Research, or CDER, the Center for Biologics Evaluation and Research, or CBER,

and the Center for Devices and Radiological Health, or CDRH.

Different Centers review drug, biologic, or device applications.

candidates are subject to regulation as combination products, biologics and medical devices, in the United States under the Federal Food,

Drug, and Cosmetic Act, or FDCA, and the Public Health Services Act, or PHS Act, and their implementing regulations as implemented and

enforced by the FDA.

regulates medical devices related to licensed blood and cellular products by applying appropriate medical device laws and regulations.

Specifically, CBER regulates the medical devices involved in the collection, processing, testing, manufacture and administration of licensed

blood, blood components and cellular products.

The medical devices regulated by CBER are intimately associated with the blood collection

and processing procedures as well as the cellular therapies regulated by CBER.

CBER has developed specific expertise in blood, blood

products and cellular therapies and the integral association of certain medical devices with those biological products supports the regulation

of those devices by CBER.

CBER also regulates biologics, which includes cells and tissues, serum, vaccines, blood and blood products,

and analogous substances.

receiving FDA approval or clearance, an approved or cleared product must comply with post-market safety reporting requirements applicable

to the product based on the application type under which it received marketing authorization.

In the case of current good manufacturing

practices, or cGMP, the applicant may take one of two approaches:

(1) complying with cGMP for each constituent part, or (2) a streamlined

approach specific to combination products, subject to certain limitations.

Regulation of our Product Candidates - FDA Approval Process

FDA extensively regulates, among other things, the research, development, testing, manufacture, quality control, approval, labeling,

packaging, storage, record-keeping, promotion, advertising, distribution, marketing and import and export of medical products.

governs the following activities that we may perform or that may be performed on our behalf, to ensure that the medical products we may

in the future manufacture, promote and distribute domestically or export internationally are safe and effective for their intended uses:

product design,

preclinical and clinical development and manufacture;

product premarket clearance

and approval;

product safety, testing,

labeling and storage;

recordkeeping procedures;

product marketing, sales

and distribution;

post-marketing surveillance,

complaint handling and adverse event reporting, including reporting of deaths, serious injuries, malfunctions or other deviations;

recall of products, including

repairs or remediation.

labeling, advertising, promotion, marketing and distribution of biologics and medical devices also must be in compliance with the FDA

Federal Trade Commission, or FTC, requirements which include, among others, standards and regulations for off-label promotion,

industry sponsored scientific and educational activities, promotional activities involving the internet, and direct-to-consumer advertising.

The FDA and FTC have very broad enforcement authority, and failure to abide by these regulations can result in penalties, including the

issuance of a warning letter directing us to correct deviations from regulatory standards and enforcement actions that can include seizures,

injunctions and criminal prosecution.

Recently, promotional activities for FDA-regulated products of other companies have been the subject

of enforcement action brought under healthcare reimbursement laws and consumer protection statutes.

In addition, under the federal Lanham

Act and similar state laws, competitors and others can initiate litigation relating to advertising claims.

In addition, we are required

to meet regulatory requirements in countries outside the U.S., which can change rapidly with relatively short notice.

FDA has broad post-market and regulatory enforcement powers.

Manufacturers of biologics and medical devices are subject to unannounced

inspections by the FDA to determine compliance with applicable regulations, and these inspections may include the manufacturing facilities

of some of our subcontractors.

Failure by manufacturers or their suppliers to comply with applicable regulatory requirements can result

in enforcement action by the FDA or other regulatory authorities.

Potential FDA enforcement actions include:

untitled letters,

warning letters, fines, injunctions, consent decrees and civil penalties;

unanticipated expenditures

to address or defend such actions

customer notifications

for repair, replacement, refunds;

recall, detention or seizure

of our products;

operating restrictions

or partial suspension or total shutdown of production;

refusing or delaying our

requests for 510(k) clearance or premarket approval of new products or modified products;

operating restrictions;

withdrawing 510(k) clearances

on PMA approvals that have already been granted;

refusal to grant export

approval for our products;

criminal prosecution.

addition, other government authorities influence the success of our business, including the availability of adequate reimbursement from

third party payors, including government programs such as Medicare and Medicaid.

Medicare and Medicaid reimbursement policies can also

influence corresponding policies of private insurers and managed care providers, which can further affect our business.

combination product is the combination of two or more regulated components, i.e., drug/device, biologic/device, drug/biologic, or drug/device/biologic,

that are combined or mixed and produced as a single entity;

packaged together in a single package or as a unit;

or a drug, device, or

biological product packaged separately that according to its investigational plan or proposed labeling, is intended for use only with

an approved individually specified drug, device, or biological product where both are required to achieve the intended use, indication,

determine which FDA center or centers will review a combination product candidate submission, companies may submit a request for assignment

Those requests may be handled formally or informally.

In some cases, jurisdiction may be determined informally based on the

FDA’s experience with similar products.

However, informal jurisdictional determinations are not binding on the FDA.

Companies also

may submit a formal “Request for Designation” to the FDA Office of Combination Products.

The Office of Combination Products

will review the request and make its jurisdictional determination within 60 days of receiving a Request for Designation.

FDA will determine which center or centers within the FDA will review the product candidate and under what legal authority the product

candidate will be reviewed.

Depending on how the FDA views the product candidates that are developed, the FDA may have aspects of the

product candidate reviewed by CBER, CDRH, or CDER, though one center will be designated as the center with primary jurisdiction, based

on the product candidate’s primary mode of action.

The FDA determines the primary mode of action based on the single mode of action

that provides the most important therapeutic action of the combination product candidate.

This would be the mode of action expected to

make the greatest contribution to the overall intended therapeutic effects of the combination product candidate.

The review of such combination

product candidates is often complex and time consuming, as the FDA may select the combination product candidate to be reviewed and regulated

by one, or multiple FDA centers identified above, which could affect the path to regulatory clearance or approval.

Furthermore, the FDA

may also require submission of separate applications to multiple centers.

commercialized, manufacturers of combination products must generally comply with the applicable regulations governing each constituent

For example, in January 2013, the FDA finalized 21 CFR Part 4, “Current Good Manufacturing Practice Requirements for Combination

Products”, which was effective July 22, 2013.

Associated guidance was also issued in January 2017.

Both the rule and guidance reiterate

that combination product manufacturers are responsible for compliance with both biologic and device cGMPs when engaging in manufacturing

both constituent parts.

The guidance allows the use of an abbreviated approach as well.

Manufacturers of combination products also must

comply with post marketing safety reporting, or PMSR, requirements in accordance with 21 CFR Part 4.

have been informed by the FDA that our esophageal implant is a combination biologic/device product.

Biological products must

satisfy the requirements of the PHS Act and the FDCA and their implementing regulations.

The lead reviewing FDA Center will be the Center

for Biologics Evaluation and Research or CBER.

The CBER may choose to consult or collaborate with the FDA’s Center for Devices

and Radiological Health, or CDRH, with respect to the characteristics of the synthetic scaffold component of our product based on the

CBER’s determination of need for such assistance.

Because the CBER is the lead, in order for our esophageal implant to

be legally marketed in the U.S., the product must have a BLA approved by the FDA.

discuss both the CBER and the CDRH regulatory paradigms below, as potential future products may implicate elements of each, largely at

the CBER’s discretion to involve the CDRH in the review and approval process.

BLA Approval Process

basic steps for obtaining FDA approval of a BLA to market a biopharmaceutical, or biologic product in the U.S.

of preclinical laboratory tests, animal studies and formulation studies under the FDA’s GLP regulations;

to the FDA of an IND application, for human clinical testing, which must become effective before human clinical trials may begin

and which must include Institutional Review Board, or IRB, approval at each clinical site before the trials may be initiated;

of adequate and well-controlled clinical trials in accordance with Good Clinical Practices, or GLP, to establish the safety, purity,

and potency of the product for each indication;

to the FDA of a BLA, which contains detailed information about the chemistry, manufacturing and controls for the product, reports

of the outcomes of the clinical trials, and proposed labeling and packaging for the product;

FDA’s acceptance of the BLA for filing;

review of the contents of the BLA by the FDA, including the satisfactory resolution of any questions raised during the review or

by the advisory committee, if applicable;

completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance

with cGMP regulations, to assure that the facilities, methods and controls are adequate to ensure the product’s identity, strength,

quality and purity;

approval of the BLA.

order to obtain approval to market a biological product in the United States, a marketing application must be submitted to the FDA that

provides sufficient data establishing the safety, purity and potency of the proposed biological product for its intended indication.

The application includes all relevant data available from pertinent preclinical and clinical trials, including negative or ambiguous

results as well as positive findings, together with detailed information relating to the product’s chemistry, manufacturing, controls

and proposed labeling, among other things.

Data can come from company-sponsored clinical trials intended to test the safety and effectiveness

of a use of a product, or from a number of alternative sources, including studies initiated by investigators.

To support marketing approval,

the data submitted must be sufficient in quality and quantity to establish the safety, purity and potency of the biological product to

the satisfaction of the FDA.

results of product development, preclinical studies and clinical trials, along with descriptions of the manufacturing process, analytical

tests conducted on the chemistry of the drug, proposed labeling, and other relevant information are submitted to the FDA as part of a

BLA requesting approval to market the product.

The submission of a BLA is subject to the payment of user fees;

a waiver of such fees

may be obtained under certain limited circumstances.

The FDA initially reviews all BLAs submitted to ensure that they are sufficiently

complete for substantive review before it accepts them for filing.

The FDA generally completes this preliminary review within 60 calendar

The FDA may request additional information rather than accept a BLA for filing.

In this event, the BLA must be resubmitted with

the additional information.

The resubmitted application also is subject to review before the FDA accepts it for filing.

Once the submission

is accepted for filing, the FDA begins an in-depth substantive review.

FDA may refer the BLA to an advisory committee for review, evaluation

and recommendation as to whether the application should be approved and under what conditions.

The FDA is not bound by the recommendation

of an advisory committee, but it generally follows such recommendations.

The approval process is lengthy and often difficult, and the

FDA may refuse to approve a BLA if the applicable regulatory criteria are not satisfied or may require additional clinical or other data

and information.

Even if such data and information are submitted, the FDA may ultimately decide that the BLA does not satisfy the criteria

for approval.

Data obtained from clinical trials are not always conclusive and the FDA may interpret data differently than we interpret

the same data.

FDA reviews a BLA to determine, among other things whether the product is safe, pure and potent and the facility in which

it is manufactured, processed, packed or held meets standards designed to assure the product’s continued safety, purity and potency.

Before approving a BLA, the FDA will inspect the facility or facilities where the product is manufactured.

The FDA may issue a complete

response letter, which may require additional clinical or other data or impose other conditions that must be met in order to secure final

approval of the BLA, or an approval letter following satisfactory completion of all aspects of the review process.

may receive either standard or priority review.

Under current FDA review goals, standard review of an original BLA will be 10 months

from the date that the BLA is filed.

A biologic representing a significant improvement in treatment, prevention or diagnosis of disease

may receive a priority review of six months.

Priority review does not change the standards for approval but may expedite the approval

the FDA determines the application, manufacturing process or manufacturing facilities are not acceptable, it will either issue “not

approvable” letter or an “approvable” letter.

A “not approvable” letter means that the FDA refuses to approve

the application because the BLA or manufacturing facilities do not satisfy the regulatory criteria for approval.

An “approvable”

letter means that the FDA considers the BLA and manufacturing facilities to be favorable, but the letter will outline the deficiencies

and provide the applicant with an opportunity to submit additional information or data to address the deficiencies.

If and when those

conditions have been met to the FDA’s satisfaction, the FDA will typically issue an approval letter.

If a product receives regulatory

approval, the approval may be limited to specific diseases and dosages or the indications for use may otherwise be limited, which could

restrict the commercial value of the product.

In addition, the FDA may require a sponsor to conduct Phase IV testing which involves clinical

trials designed to further assess a drug’s safety and effectiveness after BLA approval and may require testing and surveillance

programs to monitor the safety of approved products which have been commercialized.

Notwithstanding the submission of any requested additional

information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval.

Separate approval

is required for each proposed indication.

If we want to expand the use of an approved product, we will have to design additional clinical

trials, submit the trial designs to the FDA for review and complete those trials successfully.

Food and Drug Administration Safety and Innovation Act, or FDASIA, which was enacted in 2012, made permanent the Pediatric Research Equity

Act, or PREA, which requires a sponsor to conduct pediatric studies for most biologics with a new active ingredient, new indication,

new dosage form, new dosing regimen or new route of administration.

Under PREA, BLAs and supplements thereto, must contain a pediatric

assessment unless the sponsor has received a deferral or waiver.

The required assessment must assess the safety and effectiveness of

the product for the claimed indications in all relevant pediatric subpopulations and support dosing and administration for each pediatric

subpopulation for which the product is safe and effective.

The sponsor or FDA may request a deferral of pediatric studies for some or

all of the pediatric subpopulations.

A deferral may be granted for several reasons, including a finding that the biologic is ready for

approval for use in adults before pediatric studies are complete or that additional safety or effectiveness data needs to be collected

before pediatric studies can begin.

After April 2013, the FDA must send a non-compliance letter to any sponsor that fails to submit a

required pediatric assessment within specified deadlines or fails to submit a timely request for approval of a pediatric formulation,

or Expedited Review Pathways for BLAs

may seek fast track designation for their products.

Fast track products are those that are intended for the treatment of a serious or

life-threatening condition and that demonstrate the potential to address unmet medical needs for such a condition.

If awarded, the fast

track designation applies to the product only for the indication for which the designation was received.

Fast track products are eligible

for two means of potentially expediting product development and FDA review of BLAs.

First, a fast track product may be approved on the

basis of either a clinical endpoint or a surrogate endpoint that is reasonably likely to predict clinical benefit.

Approvals of this

kind may be subject to requirements for appropriate post-approval studies to validate the surrogate endpoint or otherwise confirm the

effect on the clinical endpoint, and to certain other conditions.

Second, if the FDA determines after review of preliminary clinical

data submitted by the sponsor that a fast track product may be effective, it may begin review of portions of a BLA before the sponsor

submits the complete BLA, thereby accelerating the date on which review of a portion of the BLA can begin.

There can be no assurance

that any of our other products will receive designation as fast track products.

And even if they are designated as fast track products,

we cannot assure you that our products will be reviewed or approved more expeditiously for their fast track indications than would otherwise

have been the case or will be approved promptly, or at all.

Furthermore, the FDA can revoke fast track status at any time.

addition, products studied for their safety and effectiveness in treating serious or life-threatening illnesses and that provide meaningful

therapeutic benefit over existing treatments may receive accelerated approval and may be approved on the basis of adequate and well-controlled

clinical trials establishing that the drug product has an effect on a surrogate endpoint that is reasonably likely to predict clinical

benefit or on the basis of an effect on a clinical endpoint other than survival or irreversible morbidity.

As a condition of approval,

the FDA may require that a sponsor of a drug receiving accelerated approval perform adequate and well-controlled post-approval clinical

trials to verify and further define the drug’s clinical benefit and safety profile.

There can be no assurance that any of our products

will receive accelerated approval.

Even if accelerated approval is granted, the FDA may withdraw such approval if the sponsor fails to

conduct the required post-approval clinical trials, or if the post-approval clinical trials fail to confirm the early benefits seen during

the accelerated approval process.

designation and accelerated approval should be distinguished from priority review although products awarded fast track status may also

be eligible for priority review.

Products regulated by the CBER may receive priority review if they provide significant improvement in

the safety or effectiveness of the treatment, diagnosis, or prevention of a serious or life-threatening disease.

Products awarded priority

review are given abbreviated review goals by the agency.

Under the Prescription Drug User Fee Act of 2007, the agency has agreed to the

performance goal of reviewing products awarded priority review within six months, whereas products under standard review receive a ten-month

The review process, however, is often significantly extended by FDA requests for additional information or clarification regarding

information already provided in the submission.

Priority review is requested at the time the BLA is submitted, and the FDA makes a decision

as part of the agency’s review of the application for filing.

We plan to seek priority review for our trachea transplant products

but cannot guarantee that the FDA will grant the designation and cannot predict if awarded, what impact, if any, it will have on the

review time for approval of our product.

intend to request Fast Track status, Breakthrough Therapy designation, Regenerative Medicine Advanced Therapy, or RMAT, designation,

Accelerated Approval and Priority Review.

If we are awarded any of these designations, combined with our Orphan Drug designations, discussed

below, we believe that our future clinical trial designs and approval pathway may be streamlined and expedited.

Although, if granted,

Fast-Track designation, accelerated approval, and priority review may expedite the approval process, they do not change the standards

for approval.

On September 30, 2020, Congress provided a short-term extension of the rare pediatric disease Priority Review Voucher Program.

According to the current statutory sunset provisions:

December 11, 2020, the FDA may only award a voucher for an approved RPD product application if the sponsor has RPD designation for

the drug and that designation was granted by December 11, 2020.

December 11, 2022, the FDA may not award any RPD priority review vouchers.

Creating Hope Reauthorization Act, which was received in the Senate on September 30, 2020, proposes to replace those cutoffs with “September

30, 2024” and “September 30, 2026,” respectively, thus extending the authorized period for RPD designation and granting

of RPD priority review vouchers from the 21 st Century Cures Act by four years.

We cannot be certain that this extension will

generally require clinical data in order for FDA review and approval.

Clinical trials are subject to extensive monitoring, recordkeeping

and reporting requirements.

Clinical trials must be conducted under the oversight of an IRB for the relevant clinical trial sites and

must comply with FDA regulations, including but not limited to those relating to GCP.

Adverse events must be reported and investigated

To conduct a clinical trial, a company is also required to obtain the patients’ informed consent in form and substance

that complies with both FDA requirements and state and federal privacy and human subject protection regulations.

The sponsor, the FDA

or the IRB could suspend a clinical trial at any time for various reasons, including a belief that the risks to trial subjects outweigh

the anticipated benefits.

A protocol for each clinical trial and any subsequent protocol amendments must be submitted to the FDA as part

In addition, an IRB at each site at which the trial is conducted must approve the protocol and any amendments.

Foreign studies

performed under an IND must meet the same requirements that apply to U.S.

The FDA will accept a foreign clinical trial not conducted

under an IND only if the trial is well-designed, well-conducted, performed by qualified investigators in accordance with international

principles for GCP, and conforms to the ethical principles contained in the Declaration of Helsinki, or with the laws and regulations

of the country in which the research was conducted, whichever provides greater protection of the human subjects.

The FDA, however, has

substantial discretion in deciding whether to accept data from foreign non-IND clinical trials.

trials involving biopharmaceutical products are typically conducted in three sequential phases.

The phases may overlap or be combined.

A fourth, or post-approval, phase may include additional clinical trials.

These phases are described generally below.

Briefly, the phases

of clinical development generally include the following:

Phase I clinical trials involve the initial introduction of the medicine into human subjects to determine the adverse effects

associated with increasing doses.

Such Phase I studies frequently are highly abbreviated or combined with Phase II studies (as outlined

Phase II clinical trials usually involve studies in a limited patient population to evaluate the efficacy of the product

for specific, targeted indications to identify possible adverse effects and safety risks.

If the biologic is found to be potentially effective and to have an acceptable safety profile in Phase II (or sometimes

Phase I) trials, the clinical trial program will be expanded to further demonstrate clinical efficacy, optimal dosage and safety

within an expanded patient population at geographically dispersed clinical trial sites.

As noted, the exact number of subjects needed,

the duration of clinical follow-up, and the endpoints by which safety and efficacy are demonstrated are based on the condition being

Post-Approval

Post-approval clinical trials are required of or agreed to by a sponsor as a condition of, or subsequent to marketing

Further, if the FDA becomes aware of new safety information about an approved product, it is authorized to require post

approval trials of the biological product.

These trials are used to gain additional experience from the treatment of patients in

the intended therapeutic indication and to document a clinical benefit in the case of biologics approved under accelerated approval

If the FDA approves a product while a company has ongoing clinical trials that were not necessary for approval, a company

may be able to use the data from these clinical trials to meet all or part of any Phase IV clinical trial requirement.

These clinical

trials are often referred to as Phase III/IV post approval clinical trials.

Failure to promptly conduct Phase IV clinical trials

could result in withdrawal of approval for products approved under accelerated approval regulations.

devices, however, typically rely on one or a few pivotal studies rather than Phase I, II, and III clinical trials.

the development of a new medical product, sponsors are given opportunities to meet with the FDA at certain points.

These points may be

prior to submission of an IND or IDE, at the end of Phase II, and before a BLA or PMA is submitted.

Meetings at other times may be requested.

These meetings can provide an opportunity for the sponsor to share information about the data gathered to date, for the FDA to provide

advice, and for the sponsor and FDA to reach agreement on the next phase of development.

Sponsors typically use the end of Phase II meeting

to discuss their Phase II clinical results and present their plans for the pivotal Phase III clinical trial that they believe will support

approval of the new biologic.

Similarly, sponsors typically use the end of feasibility studies to do the same for planning for their

pivotal trial or trials for a medical device.

with clinical trials, companies usually complete additional animal studies and must also develop additional information about the chemistry

and physical characteristics of a biologic and finalize a process for manufacturing the product in commercial quantities in accordance

with cGMP requirements.

For biologics, the manufacturing process must be capable of consistently producing quality batches of the product

candidate and, among other things, the manufacturer must develop methods for testing the identity, strength, quality and purity of the

final product.

Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate

that the product candidate does not undergo unacceptable deterioration over its shelf life.

Before approving a BLA, the FDA typically

will inspect the facility or facilities where the product is manufactured.

The FDA will not approve an application unless it determines

that the manufacturing processes and facilities are in full compliance with cGMP requirements and adequate to assure consistent production

of the product within required specifications.

The PHSA in particular emphasizes the importance of manufacturing control for products

like biologics whose attributes cannot be precisely defined.

on the FDA’s approval of our clinical trial for any condition that requires removal of part of the esophagus, we believe that we

are able to pursue the treatment of multiple diseases, injuries or birth defects with a single clinical trial.

As a result, we believe

that this clinical trial will advance our esophageal implant for numerous indications including to treat esophageal cancer,

Barrett esophagus, fistulas, traumatic injury to the esophagus and birth defects in the esophagus.

Compared to developing treatments

for a single underlying medical condition, we believe that addressing multiple medical conditions in a single clinical trial has the

potential to significantly reduce our costs to expand the market for our products.

Based on discussions with the FDA, we also expect

clinical trials for our esophageal implant product candidates to be conducted in two sequential phases:

initial trial that combines both phase 1 and phase 2 into a single trial.

This trial has already been approved by the FDA.

● If successful, the initial trial would be followed by a phase 2 Registration, or Pivotal Trial, to test the product candidate’s safety and efficacy in a larger patient population.

We believe that the nature of the Biostage Esophageal Implant and the sizes of their targeted patient populations would lead to a small number of patients in this trial, relative to most biotechnology clinical trials.

Clinical testing may not be completed successfully within any specified time period, if at all.

The FDA closely monitors the progress of each phase of clinical trials that are conducted under an IND and may, at its discretion, reevaluate, alter, suspend, or terminate the testing based upon the data accumulated to that point and the FDA’s assessment of the risk/benefit ratio to the patient.

The FDA or the sponsor may suspend or terminate clinical trials at any time for various reasons, including a finding that the subjects or patients are being exposed to an unacceptable health risk.

The FDA can also request that additional pre-clinical studies or clinical trials be conducted as a condition to product approval.

Companies also may seek Fast Track or Breakthrough Therapy designation for their products.

Fast Track or Breakthrough Therapy products are those that are intended for the treatment of a serious or life-threatening condition and that demonstrate the potential to address unmet medical needs for such a condition.

If awarded, the Fast Track or Breakthrough Therapy designation applies to the product only for the indication for which the designation was received.

If the FDA determines after review of preliminary clinical data submitted by the sponsor that a Fast Track or Breakthrough Therapy product may be effective, it may begin review of portions of a BLA before the sponsor submits the complete BLA, or rolling review, thereby accelerating the date on which review of a portion of the BLA can begin.

There can be no assurance that any of our product candidates will be granted Fast Track or Breakthrough Therapy designation.

And even if they are designated as Fast Track or Breakthrough Therapy products, we cannot ensure our product candidates will be reviewed or approved more expeditiously for their Fast Track or Breakthrough Therapy indications than would otherwise have been the case or will be approved promptly, or at all.

Furthermore, the FDA can revoke Fast Track or Breakthrough Therapy designation at any time.

In addition, products studied for their safety and effectiveness in treating serious or life-threatening illnesses and that provide meaningful therapeutic benefit over existing treatments may receive Accelerated Approval and may be approved on the basis of adequate and well-controlled clinical trials establishing that the product has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit or on the basis of an effect on a clinical endpoint other than survival or irreversible morbidity.

As a condition of approval, the FDA may require that a sponsor of a product receiving Accelerated Approval perform adequate and well-controlled post-approval clinical trials to verify and further define the product’s clinical benefit and safety profile.

There can be no assurance that any of our product candidates will receive Accelerated Approval.

Even if Accelerated Approval is granted, the FDA may withdraw such approval if the sponsor fails to conduct the required post-approval clinical trials, or if the post-approval clinical trials fail to confirm the early benefits seen during the Accelerated Approval Process.

Priority Review Voucher

Fast Track or Breakthrough Therapy designation and Accelerated Approval should be distinguished from Priority Review designation although product candidates awarded Fast Track or Breakthrough Therapy designation may also be eligible for Priority Review designation.

Product candidates regulated by the CBER may receive Priority Review designation if they provide significant improvement in the safety or effectiveness of the treatment, diagnosis, or prevention of a serious or life-threatening disease.

The agency has agreed to the performance goal of reviewing product candidates awarded Priority Review designation within six months, whereas product candidates under standard review receive a ten-month target.

The review process, however, can be significantly extended by FDA requests for additional information or clarification regarding information already provided in the submission.

Priority Review

designation is requested at the time the BLA is submitted, and the FDA makes a decision as part of the agency’s review of the application for filing.

Separately, but somewhat related, is a product’s ability to qualify its sponsor to receive a Priority Review Voucher, or PRV.

For a product aimed at prevention or treatment of a “rare pediatric disease” as defined in the Food, Drug and Cosmetics Act, and that also meets certain other qualifying attributes, the product’s sponsor may qualify, apply for and receive a PRV, from the FDA.

A PRV entitles its holder to Priority Review for a drug application, and the PRV is transferable.

Some companies who have received PRV’s have sold their PRV’s to other companies who have then used the PRV to receive Priority Review for a drug application with the FDA.

Recent transfers of PRV’s from one company to another have occurred at prices in the $80 – 125 million range.

We intend to apply for rare pediatric disease designation, such as birth defects in the esophagus, for our pediatric esophageal implant product candidate as a first step in pursuit of a PRV.

A PRV is earned only upon marketing approval of the product.

There is no certainty that our pediatric esophageal product candidates will achieve marketing approval from the FDA, or that if it does, that FDA would award us a PRV.

Further, if received, there is no certainty that the value of a PRV at that future date will compare favorably with the values reflected in recent transfers of PRVs.

Orphan Drug Designations

The Orphan Drug Act provides incentives to manufacturers to develop and market drugs and biologics for rare diseases and conditions affecting fewer than 200,000 persons in the U.S.

at the time of application for Orphan Drug Designation.

In September 2014 the FDA granted orphan designation to our HART-Trachea product in the U.S.

The first developer to receive FDA marketing approval for an orphan biologic is entitled to a seven-year exclusive marketing period in the U.S.

for that product.

The marketing exclusivity prevents FDA approval of another application for the same product for the same indication for a period of seven years.

Orphan status also entitles the product’s sponsor to certain other benefits, such as a waiver of the BLA user fee, which is currently a $2 million value.

Orphan product designation does not convey any advantage in or shorten the duration of the regulatory review and approval process.

successful, the initial trial would be followed by a phase 2 Registration, or Pivotal Trial, to test the product candidate’s

safety and efficacy in a larger patient population.

We believe that the nature of the our esophageal implant and the sizes of

their targeted patient populations would lead to a small number of patients in this trial, relative to most biotechnology clinical

with any clinical trial, clinical testing of our esophageal implant may not be completed successfully within any specified time

period, if at all.

The FDA closely monitors the progress of each phase of clinical trials that are conducted under an IND and may, at

its discretion, reevaluate, alter, suspend, or terminate the testing based upon the data accumulated to that point and the FDA’s

assessment of the risk/benefit ratio to the patient.

The FDA or the sponsor may suspend or terminate clinical trials at any time for

various reasons, including a finding that the subjects or patients are being exposed to an unacceptable health risk.

The FDA can also

request that additional pre-clinical studies or clinical trials be conducted as a condition to product approval.

will submit a BLA once we have sufficient data from the clinical trials to assess the safety and efficacy of our esophageal

We estimate that this process may span a period of three to six years, or longer, considering the uncertainty of a successful

clinical trial.

We anticipate approvals in countries outside of the United States may be shorter, however, we can give no assurance of

such approvals.

Post-Approval

BLA approval is obtained, companies are required to comply with a number of post-approval requirements relating to manufacturing, labeling,

packaging, adverse event reporting, storage, advertising, promotion, distribution and recordkeeping.

For example, as a condition of approval

of a BLA, the FDA may require post-approval testing and surveillance to monitor the product’s safety or efficacy.

holders of an approved BLA are required to keep extensive records, to report certain adverse reactions and production deviations and

problems to the FDA, to provide updated safety and efficacy information and to comply with requirements concerning advertising and promotional

labeling for their products.

If we fail to comply with the regulatory requirements of the FDA and other applicable U.S.

and foreign regulatory

authorities, or previously unknown problems with any approved commercial products, manufacturers or manufacturing processes are discovered,

we could be subject to administrative or judicially imposed sanctions or other setbacks.

Accordingly, manufacturers must continue to

expend time, money and effort in the area of production and quality control to maintain compliance with cGMP and other aspects of regulatory

Specifically,

our products could be subject to voluntary recall if we or the FDA determine, for any reason, that our products pose a risk of injury

or are otherwise defective.

Moreover, the FDA can order a mandatory recall if there is a reasonable probability that our device would

cause serious adverse health consequences or death.

In addition, the FDA could suspend the marketing of or withdraw a previously approved

product from the market upon receipt of newly discovered information regarding the drug’s safety or effectiveness.

Drug Designation

November 2016, we were granted Orphan Drug Designation for our esophageal implant by the FDA to restore the structure and function

of the esophagus subsequent to esophageal damage due to cancer, injury or congenital abnormalities.

We also were granted Orphan Drug

Designation for trachea on September 4, 2014.

Orphan Drug Act provides incentives to manufacturers to develop and market drugs and biologics for rare diseases and conditions affecting

fewer than 200,000 persons in the U.S.

at the time of application for orphan drug designation, or more than 200,000 individuals in the

and for which there is no reasonable expectation that the cost of developing and making a drug or biological product available in

for this type of disease or condition will be recovered from sales of the product.

Orphan product designation must be requested

before submitting a new drug application, or NDA, or BLA.

After the FDA grants orphan product designation, the identity of the therapeutic

agent and its potential orphan use are disclosed publicly by the FDA.

Orphan product designation does not convey any advantage in or

shorten the duration of the regulatory review and approval process.

The first developer to receive FDA marketing approval for an orphan

biologic is entitled to a seven year exclusive marketing period in the U.S.

for that product as well as a waiver of the BLA user fee.

The exclusivity prevents FDA approval of another application for the same product for the same indication for a period of seven years,

except in limited circumstances where there is a change in formulation in the original product and the second product has been proven

to be clinically superior to the first.

In addition, Orphan Drug Designation provides a seven-year marketing exclusivity period against

competition in the U.S.

from the date of a product’s approval for marketing.

This exclusivity would be in addition to any exclusivity

we may obtain from our patents.

Additionally, orphan designation provides certain incentives, including tax credits and a waiver of the

Biologics License Application, or BLA, fee.

We also plan to apply for Orphan Drug Designation for our esophageal implant in

Orphan Drug Designation in Europe would provide market exclusivity in Europe for a period of ten years from the date of the product’s

approval for marketing.

International

We plan to seek required regulatory approvals and comply with extensive regulations governing product safety, quality, manufacturing and reimbursement processes in order to market our products in other major foreign markets.

In addition to having large patient populations, both the E.U.

and China allow for “conditional approval” for product candidates like ours.

Conditional approval is country specific but, in general, it would allow us to market our products, and obtain revenue from the sales of them, after successful phase 2 results.

Conditional approval is granted subject to the regulatory authority being able to rescind the approval if something goes wrong in as more patients get treated.

Hence, it is possible that we could see revenue in either China or the E.U.

plan to seek required regulatory approvals and comply with extensive regulations governing product safety, quality, manufacturing and

reimbursement processes in order to market our products in other major foreign markets.

addition to having large patient populations, both the E.U.

and some countries in Asia allow for “conditional approval” for

product candidates like ours.

Conditional approval is country specific but, in general, it would allow us to market our products, and

obtain revenue from the sales of them, after successful phase 2 results.

Conditional approval is granted subject to the regulatory authority

being able to rescind the approval if something goes wrong in as more patients get treated.

Hence, it is possible that we could see revenue

in either Asia or the E.U.

before we see revenue in the U.S.

The regulation of our products in the Asian and European markets, and in other foreign markets varies significantly from one jurisdiction to another.

The classification of the particular products and related approval or CE marking procedures can involve additional product testing and additional administrative review periods.

The time required to obtain these foreign approvals or to CE mark our products may be longer or shorter than that required in the U.S., and requirements for approval may differ from the FDA requirements.

Regulatory approval in one country does not ensure regulatory approval in another, but a failure or delay in obtaining regulatory approval in one country may negatively impact the regulatory process in others.

Legislation similar to the Orphan Drug Act has been enacted in other jurisdictions, including the E.U.

regulation of our products in the Asian and European markets, and in other foreign markets varies significantly from one jurisdiction

The classification of the particular products and related approval or CE marking procedures can involve additional product

testing and additional administrative review periods.

The time required to obtain these foreign approvals or to CE mark our products

may be longer or shorter than that required in the U.S., and requirements for approval may differ from the FDA requirements.

approval in one country does not ensure regulatory approval in another, but a failure or delay in obtaining regulatory approval in one

country may negatively impact the regulatory process in others.

similar to the Orphan Drug Act has been enacted in other jurisdictions, including the E.U.

The orphan legislation in the E.U.

is available for therapies addressing conditions that affect five or fewer out of 10,000 persons.

The marketing exclusivity period is for ten years, although that period can be reduced to six years if, at the end of the fifth year, available evidence establishes that the product is sufficiently profitable not to justify maintenance of market exclusivity.

We intend to apply for orphan drug-designation for our Biostage Esophageal Implant in Europe.

We have also formed a subsidiary in Hong Kong, Harvard Apparatus Regenerative Technology Limited, as we continue to assess the market and regulatory approval pathway in China as to our product candidates.

for therapies addressing conditions that affect five or fewer out of 10,000 persons.

The marketing exclusivity period is for ten years,

although that period can be reduced to six years if, at the end of the fifth year, available evidence establishes that the product is

sufficiently profitable not to justify maintenance of market exclusivity.

We intend to apply for orphan drug-designation for our esophageal implant in Europe.

have also formed a subsidiary in Hong Kong, Harvard Apparatus Regenerative Technology Limited, as we continue to assess the market and

regulatory approval pathway in China as to our product candidates.

We have other subsidiaries in the U.K.

We are not certain at this time as to which market, including U.S.

or China for example, may provide the most viable initial pathway for regulatory approval to a commercial product.

This will depend on a number of factors, including the approval and development

processes, related costs, ability to raise capital and the terms and conditions thereof, as well as the ongoing impact of the COVID-19 pandemic, among other factors.

Any development and capital raising efforts in China may include a joint venture in relation to our Hong Kong subsidiary, and would also involve a number of commercial variables, including rights and obligations pertaining to licensing, development and financing, among others.

Our failure to receive or obtain such clearances or approvals on a timely basis or at all, whether that be in the U.S., China or otherwise, would have an adverse effect on our results of operations.

Employees and Human Capital Resources

As of December 31, 2021, we had 7 employees working in our business, of whom 6 were full-time and one was part-time.

At that date, all of our employees were based in the U.S.

Any development

and capital raising efforts in China may include a joint venture in relation to our Hong Kong subsidiary, and would also involve a number

of commercial variables, including rights and obligations pertaining to licensing, development and financing, among others.

to receive or obtain such clearances or approvals on a timely basis or at all, whether that be in the U.S., China or otherwise, would

have an adverse effect on our results of operations.

and Human Capital Resources

of December 31, 2022, we had 8 employees working in our business, of whom 7 were full-time and one was part-time.

At that date, all of

our employees were based in the U.S.

None of our employees are unionized.

In general, we consider our relations with our employees to be good.

In general, we consider our relations with our employees to

Our employees are highly skilled, and many hold advanced degrees.

Our future performance depends significantly upon the continued service of our key scientific, technical and senior management personnel and our continued ability to attract and retain highly skilled employees.

Our future performance depends significantly upon the continued

service of our key scientific, technical and senior management personnel and our continued ability to attract and retain highly skilled

We have taken proactive steps throughout the COVID-19 pandemic to protect the health and safety of our employees.

We expect to continue to implement these measures until we determine that the COVID-19 pandemic is adequately contained for purposes of our business.

We may take further actions, in compliance with all appropriate government regulations, that we determine to be in the best interest of our employees.

We are not aware of any companies whose products are directly competitive with our cell-seeded biocompatible synthetic scaffold system.

However, in our key markets we may in the future compete with multiple pharmaceutical, biotechnology, and medical device companies, including, among others, Aldagen, Asterias Biotherapeutics, Athersys, Caladrius Biosciences, Cytori Therapeutics, E.

du Pont de Nemours and Company, Humacyte, InVivo Therapeutics, Lineage Cell Therapeutics, Mesoblast, Miromatrix Medical, Nanofiber Solutions, Neuralstem, Orgagen, Organogenesis, Organovo, Osiris Therapeutics, Pluristem, Smiths Medical, Tissue Genesis, Inc., Tissue Growth Technologies, United Therapeutics, Vericel Corporation and W.L.

Gore and Associates.

In addition, there are many academic and clinical centers that are developing regenerative technologies that may one day become competitors of ours.

Many of our potential competitors have substantially greater financial, technological, research and development, marketing, and personnel resources than we do.

We cannot forecast if or when these or other companies may develop competitive products.

We expect that other products will compete with our products and potential products based on efficacy, safety, cost, and intellectual property positions.

While we believe that these will be the primary competitive factors, other factors include, in certain instances, obtaining marketing exclusivity under the Orphan Drug Act, availability of supply, manufacturing, marketing and sales expertise and capability, and reimbursement coverage.

Information about our Executive Officers

The following table shows information about our executive officers:

Interim Chief Executive Officer

to continue to implement these measures until we determine that the COVID-19 pandemic is adequately contained for purposes of our business.

We may take further actions, in compliance with all appropriate government regulations, that we determine to be in the best interest

of our employees.

are not aware of any companies whose products are directly competitive with our cell-seeded biocompatible synthetic-scaffold system.

However, in our key markets we may in the future compete with multiple pharmaceutical, biotechnology, and medical device companies, many

of which have substantially greater financial, technological, research and development, marketing and personnel resources than we do.

In addition, there are many academic and clinical centers that are developing regenerative technologies that may one day become competitors

expect that other products will compete with our products and potential products based on efficacy, safety, cost, and intellectual property

While we believe that these will be the primary competitive factors, other factors include, in certain instances, obtaining

marketing exclusivity under the Orphan Drug Act, availability of supply, manufacturing, marketing and sales expertise and capability,

and reimbursement coverage.

about our Executive Officers

following table shows information about our executive officers as of March 6, 2023:

Junli (Jerry) He

Executive Officer

William Fodor

Chief Scientific Officer

Pellegrino Jr.

Interim Vice President of Finance

David Green – Founder, Chairman and Interim Chief Executive Officer

Green was appointed as our Interim Chief Executive Officer on November 26, 2021.

Green served as President and a member of the Board of Directors of Harvard Bioscience, Inc.

from March 1996 until the spin-off of Biostage on November 1, 2013, as Interim CEO of Harvard Bioscience, Inc.

from May 2013 and August 2013, and remained a Director of Harvard Bioscience, Inc.

from the spin-off until 2017.

Green served on the Board of Directors of Biostage until May 2016 and was the founder and a former Chairman, President, and Chief Executive Officer of Biostage, Inc.

Prior to joining Harvard Bioscience, Inc, Mr.

Green was a strategy consultant with Monitor Company, a strategy consulting company, in Cambridge, Massachusetts and Johannesburg, South Africa from June 1991 until September 1995 and a brand manager for household products with Unilever PLC, a packaged consumer goods company, in London from September 1985 to February 1989.

Green was president and a director of the Harvard Business School Healthcare Initiative.

Green graduated from Oxford University with a B.A.

Honors degree in physics and holds a M.B.A.

degree with distinction from Harvard Business School.

Hong Yu, BS, MS, CFA – President

Scientific Officer

Financial Officer

Junli (Jerry) He – Chairman and Chief Executive Officer

He was appointed as our Chairman and Chief Executive Officer on March 1,

He has served as a member of our Board of Directors since September 1, 2021.

He serves as the Executive Vice Chairman of Bright

Scholar Holdings and has been in that position since January 2019.

Prior to the promotion, Mr.

He had served as the CEO of Bright Scholar.

Prior to joining Bright Scholar, Mr.

He was a Managing Director at Tstone Corp, and served as CFO, CEO and a director of Noah Education

Holdings Ltd., a former NYSE listed private education services provider in China.

He was a portfolio manager at Morgan Stanley Global

Wealth Management from June 2008 to June 2009 and was employed by Bear Stearns from November 2006 to May 2008.

He obtained a bachelor’s

degree in science from Peking University and an M.B.A.

with Honors from the University of Chicago, Booth School of Business.

also a CFA charter holder.

Yu, BS, MS, CFA – President

Yu has served as our President since May 31, 2018 and has raised over $20 million in capital for Biostage.

Yu is a seasoned executive with extensive experience in fundraising, strategic analytics, wealth management, and investment research.

Yu is a seasoned executive

with extensive experience in fundraising, strategic analytics, wealth management, and investment research.

Prior to Biostage, Mr.

Yu was a Senior Vice President at Bank of America, where he was employed for nearly 20 years.

was a Senior Vice President at Bank of America, where he was employed for nearly 20 years.

During his career, Mr.

Yu has developed an expertise in matching emerging companies with cross-border investors.

Yu has developed an

expertise in matching emerging companies with cross-border investors.

Yu holds a B.S.

degree from Peking University (Beijing, China), and a M.S.

degree from Peking University (Beijing, China),

degree from University of Illinois (Chicago, IL).

3 unchanged sentences

On July 2, 2018, Dr.

Fodor became an employee of Biostage after serving via a consulting arrangement.

Fodor was a founding scientist at Alexion Pharmaceuticals, where he served as an executive management team member and Senior Director of the Cell/Tissue Engineering, Transgenic Animal and Transplant Programs.

He has also served as an Associate Professor at the University of Connecticut Department of Molecular Cell Biology and the Center for Regenerative Biology, extending research areas into cells and cell engineering.

Fodor was Senior Director of Product Development at ViaCell Inc., leading programs in hematopoietic stem cell process development and manufacturing, mesenchymal stem cell basic research and manufacturing for cardiac repair and pancreatic stem cell research.

He was a consultant for the biotechnology industry, serving clients in stem cell research, gene therapy, stem cell manufacturing and stem cell genome engineering.

Fodor has expertise in programs targeting transplant immunology, hematopoiesis, cardiac repair, stem cell potency, gene therapy for liver diseases, tissue engineering, design and oversight of pre-clinical non-GLP and GLP animal models and IND Applications (Pre-clinical and CMC Modules).

Fodor became an employee of Biostage after

serving as a consultant to the Company.

Fodor was a founding scientist at Alexion Pharmaceuticals, where he served as an executive

management team member and Senior Director of the Cell/Tissue Engineering, Transgenic Animal and Transplant Programs.

He has also served

as an Associate Professor at the University of Connecticut Department of Molecular Cell Biology and the Center for Regenerative Biology,

extending research areas into cells and cell engineering.

Fodor was Senior Director of Product Development at ViaCell Inc., leading

programs in hematopoietic stem cell process development and manufacturing, mesenchymal stem cell basic research and manufacturing for

cardiac repair and pancreatic stem cell research.

He was a consultant for the biotechnology industry, serving clients in stem cell research,

gene therapy, stem cell manufacturing and stem cell genome engineering.

Fodor has expertise in programs targeting transplant immunology,

hematopoiesis, cardiac repair, stem cell potency, gene therapy for liver diseases, tissue engineering, design and oversight of pre-clinical

non-GLP and GLP animal models and IND Applications (Pre-clinical and CMC Modules).

Fodor earned a PhD.

in genetics from Ohio State University.

He completed post-doctoral work at Yale University School of Medicine in the department of immunobiology, investigating the regulation of MHC class I and MHC class II genes in the histocompatibility complex.

Pellegrino Jr.

– Interim Vice President of Finance

Pellegrino has been working as a consultant for the Company since March 1, 2020 pursuant to our engagement of Point Providence Consulting, a financial consultancy firm that specializes in working with life sciences companies.

Pellegrino was appointed as our Interim Vice President of Finance prior to the filing of this Form 10-K and is currently President of Point Providence Consulting.

In his tenure at Point Providence, Mr.

Pellegrino serves in a variety of financial roles to a number of public and private companies in various stages of research, clinical development and commercialization.

Immediately prior to forming Point Providence

Consulting, Mr.

Pellegrino served as Vice President, Corporate Controller and Treasurer of Verastem, Inc., a publicly traded biopharmaceutical company, from 2018 to 2019.

From 2017 to 2018, Mr.

Pellegrino was employed by Merus, Inc., a publicly traded oncology company, as Vice President, Corporate Controller.

Previously, Mr.

Pellegrino was Corporate Controller of Aspen Aerogels, Inc., a publicly traded designer, developer, and manufacturer of insulation products from 2009 to 2017.

Prior to 2009, he served in various managerial positions in the areas of accounting and financial reporting.

Pellegrino holds a B.S.

in business administration from Bryant University.

Available Information and Website

Our website address is www.biostage.com .

Our Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and exhibits and amendments to those reports filed or furnished with the Securities and Exchange Commission, or SEC, pursuant to Section 13(a) of the Exchange Act are available for review on our website and the SEC website at www.sec.gov.

Any such materials that we file with, or furnish to, the SEC in the future will be available on our website as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC.

In genetics from Ohio State

He completed post-doctoral work at Yale University School of Medicine in the department of immunobiology, investigating the

regulation of MHC class I and MHC class II genes in the histocompatibility complex.

– Chief Financial Officer

Damasio has served as our Chief Financial Officer since August 8, 2022.

He has over 20 years of finance and accounting experience.

to joining our company, he was Vice President of Finance at Inhibikase Therapeutics, a publicly-traded clinical stage biopharmaceutical

company, since October 2021.

Before joining Inhibikase, Mr.

Damasio was Controller at Cue Biopharma from June 2020 to October 2021, Controller

at XL Fleet from February 2019 to June 2020, and Chief Financial Officer at Pressure BioSciences, Inc.

from April 2017 to February 2019.

Damasio earned a bachelor’s degree in accounting, with honors, from the University of Massachusetts.

He holds an MBA and MSF

from Boston College and is a Certified Public Accountant in Massachusetts.

Information and Website

website address is www.biostage.com .

Our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and exhibits and amendments

to those reports filed or furnished with the Securities and Exchange Commission, or SEC, pursuant to Section 13(a) of the Exchange Act

are available for review on our website and the SEC website at www.sec.gov.

Any such materials that we file with, or furnish to, the

SEC in the future will be available on our website as soon as reasonably practicable after they are electronically filed with, or furnished

The information on our website is not incorporated by reference into this Annual Report on Form 10-K.

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-K

Item 1. Business