What changed in this filing

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Item 9A. Controls and Procedures

2024-03-28 compared with 2023-03-30 · 597 added, 1401 removed, 604 unchanged (77% of the section changed)

Controls and Procedures.

Annual Report on Form 10-K includes the certifications of our principal executive officer and principal financial officer required by Rule 13a-14 of the

Securities Exchange Act of 1934, as amended, or the Exchange Act.

Annual Report on Form 10-K includes the certifications of our principal executive officer and principal financial officer required by

Rule 13a-14 of the Securities Exchange Act of 1934, as amended, or the Exchange Act.

See Exhibits 31.1 and 31.2.

This Item 9A includes information concerning

the controls and control evaluations referred to in those certifications.

This Item 9A includes

information concerning the controls and control evaluations referred to in those certifications.

Evaluation of Disclosure Controls and Procedures

controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are designed to ensure that information

required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported

within the time periods specified in Securities and Exchange Commission’s rules and forms and that such information is

accumulated and communicated to management, including our principal executive officer and principal financial officer, to allow

timely decisions regarding required disclosures.

Based on the evaluation, our principal executive and principal financial officers concluded that, as of December 31, 2022, our disclosure

controls and procedures were effective.

required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within

the time periods specified in Securities and Exchange Commission’s rules and forms and that such information is accumulated and

communicated to management, including our principal executive officer and principal financial officer, to allow timely decisions regarding

required disclosures.

Based on the evaluation, our principal executive and principal financial officers concluded that, as of December

31, 2023, our disclosure controls and procedures were effective.

connection with the preparation of this Annual Report on Form 10-K, our management, under the supervision and with the participation

30 unchanged sentences

or that the degree of compliance with the policies or procedures may deteriorate.

connection with the preparation of this Annual Report on Form 10-K, our management conducted an evaluation of the effectiveness of our internal control over

financial reporting as of December 31, 2022 based on the criteria established in Internal Control - Integrated Framework (2013)

issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO.

As a result of that evaluation, management has

concluded that our internal control over financial reporting was effective as of December 31, 2022.

connection with the preparation of this Annual Report on Form 10-K, our management conducted an evaluation of the effectiveness of our

internal control over financial reporting as of December 31, 2023 based on the criteria established in Internal Control - Integrated

Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO.

As a result of that evaluation,

management has concluded that our internal control over financial reporting was effective as of December 31, 2023.

a smaller reporting company, we are exempt from the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002.

As a result, Marcum LLP, our independent registered public accounting firm, has not audited or issued an attestation

report with respect to the effectiveness of our internal control over financial reporting as of December 31, 2022.

As a result, Marcum LLP, our independent registered public accounting firm, has not audited or issued an attestation report with respect

to the effectiveness of our internal control over financial reporting as of December 31, 2023.

Changes in Internal Controls Over Financial Reporting

13 unchanged sentences

Directors, Executive Officers and Corporate Governance.

concerning executive officers of our company is included in Part I of this Annual Report on Form 10-K as Item 1.

Business - Information

about our Executive Officers and incorporated herein by reference.

of Biostage, Inc.

following information is current as of March 6, 2023, based on information furnished to the Company by each Director:

with the Company

Class I Directors

Shmerling, DHA, FACHE (1)(2)

Junli (Jerry)

Class II Directors

Class III Directors

Jing Chen (2)(3)

Vice Chairman

Sanchez (1)(3)

of the Audit Committee

of the Compensation Committee

of the Governance Committee

Shmerling, DHA, FACHE — Director

Shmerling has served as a member of our Board of Directors since March

29, 2018 and is the Chairman of the Audit Committee and Compensation Committee.

Shmerling has served as the President and Chief Executive

Officer of Connecticut Children’s Medical Center since October 2015.

Shmerling is a seasoned executive who has worked in leadership

roles at several pediatric hospitals around the United States during his career.

For over three decades, he has served in management roles

at children’s hospitals across the country and is nationally recognized as a leader in issues concerning children’s health

and wellness.

Prior to joining Connecticut Children’s, Dr.

Shmerling spent eight years as the Chief Executive Officer of Children’s

Hospital Colorado.

Before that, he was the Executive Director and Chief Executive Officer of the Monroe Carell Jr.

Children’s Hospital

at Vanderbilt from 2002 to 2007.

Shmerling is a Fellow in the American College of Health Care Executives (ACHE).

He is an adjunct

faculty member in the Hospital Administration programs, University of Alabama at Birmingham.

Shmerling received a B.S.

in Health Education

from the University of Tennessee, an M.S.

in Hospital and Health Administration from the University of Alabama in Birmingham, an M.B.A.

from Samford University and a Doctorate of Health Administration from the Medical University of South Carolina.

We believe Dr.

qualifications to sit on our Board of Directors include his extensive leadership experience at children’s hospitals and his status

as a leader in issues concerning children’s health and wellness.

Junli (Jerry)

He – Chairman and Chief Executive Officer

He has served as a member of our Board of Directors since September 1,

2021 and has served as Chairman since March 1, 2023.

He’s biographical information is provided under the caption “Information

about our Executive Officers” above on page 22.

We believe Mr.

He’s qualifications to sit on our Board of Directors include

his extensive leadership and CFO experience, in particular in relation to finance, accounting and operations, as well as his public company

Li — Director

Li has served as a member of our Board of Directors since November 6, 2018.

Li is also a member of the Compensation Committee.

Li brings over 20 years of investment banking experience, building relationships between customers and enterprises.

currently a managing partner at Donghai Securities Co., Ltd, a top asset management company in China, and also serves as the Vice

President of the Jilin Enterprise Chamber of Commerce and advisor of the School of Continuing Education of Tsinghua University.

Li holds a bachelor’s degree in accounting from China’s Changchun Taxation College in Changchun, Jilin Province, and a

master’s degree in software engineering from Jilin University, also in Changchun.

We believe Ms.

Li’s qualifications to

sit on our Board of Directors include her extensive education and investment banking experience.

Green — Director

Green has served as a member of our Board of Directors since November

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 Alumni

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.

The Board of Directors selected Mr.

Green as a director because of his

twenty-years experience as president or Chief Executive Officer, and director, of NASDAQ-listed public companies as well as his founding

of Biostage and previous roles as CEO and Chairman of the Board of Biostage.

We believe Mr.

Green’s qualifications to sit

on our Board of Directors include his executive leadership experience, his experience founding our regenerative medicine business, his significant operating and management expertise and the knowledge and understanding of our company

that he acquired throughout his service to our company following the spin-off

from Harvard Bioscience as well as his extensive years of service prior thereto as the President and director of Harvard Bioscience.

III Directors

Jing Chen — Vice Chairman

Chen has served as a member of our Board of Directors since February 6, 2018.

Chen is our Vice Chairman as well as a member of the Compensation Committee

and Chairman of the Governance Committee.

Chen has served as Senior Vice President of Business

Development of Digitone Group, and Chief Executive Officer of its subsidiary DST Robotics Co Ltd.

since October 2014.

Prior to joining

Digitone, Mr.

Chen worked for Formica, as the General Manager of its Greater China business, from December 2010 to October 2014.

Chen served as Vice President for Barco Great China and General Manager for the Security & Monitoring Division — China for

Barco, Inc., a global company that develops networked solutions for the entertainment, enterprise and healthcare markets, from March

2008 to November 2009.

Prior to joining Barco, Mr.

Chen was the General Manger of the China and Hong Kong region for Waters Corporation

from January 2005 to March 2008 where, among other managerial responsibilities, he was responsible for developing and implementing marketing

strategies to grow the Chinese market.

Prior to his time at Waters Corporation, Mr.

Chen held various managerial roles of increasing

importance at Hilti China.

Chen began his career as an electrical engineer at Capital Iron & Steel Co.

Chen received his

MBA from Brigham Young University and has a B.S.

in Electrical Engineering from the North China University of Technology, Beijing, China.

We believe Mr.

Chen’s qualifications to sit on our Board of Directors include his broad expertise and leadership experience in

global commerce.

Sanchez has served as a member of our Board of Directors since January 19, 2021 and is a member of the Audit Committee and Governance Committee.

has been working in the life sciences industry for over 20 years in various positions including designing and running randomized

trial research, optimizing of clinical administration of health services, and working as a strategic consultant to the life sciences

He is currently a Senior Partner helping run Trinity Life Sciences’ strategy consulting business.

Sanchez joined

Trinity over a decade ago and has worked closely with clients to support strategic decision making across the product lifecycle.

his work consulting for pharmaceutical/biotech and medical device companies he has covered several diseases/therapeutic areas

including oncology, rare and ultra-rare diseases, cell therapies, cardiovascular, diabetes, alcohol abuse/dependence, neurological,

orthopedic, and renal diseases.

Sanchez has been published in peer-reviewed publications on various topics including renal

disease, patient epidemiology, medication adherence, suicidal ideation, minority patient recruiting, alcohol use/abuse and

depression/anxiety treatment.

Sanchez, prior to working in the life sciences industry, earned an MBA from the Tuck School of

Business at Dartmouth College and an AB in Psychology from Harvard University.

We believe that Mr.

Sanchez’s qualifications to

sit on our Board of Directors include his broad expertise and leadership experience in the life sciences industry, specifically in

relation to trial research, clinical matters and product strategy.

REGARDING THE BOARD OF DIRECTORS AND ITS COMMITTEES

the year ended December 31, 2022, our Board of Directors held 26 meetings.

Each of the Directors attended at least

75% of the total number of meetings of the Board of Directors and of the committees of which they were a member.

The Board of Directors

encourages Directors to attend in person, or virtually if being conducted only virtually, the Annual Meeting of Stockholders of the Company,

or Special Meeting in lieu thereof, or, if unable to attend in person, to participate by other means, if practicable.

In recognition

of this policy, the Board of Directors typically schedules a regular meeting of the Board of Directors to be held on the date of, and

immediately following, the Annual Meeting of Stockholders.

All of the Directors in office at the time attended (virtually or telephonically)

the 2022 Annual Meeting of Stockholders held on June 22, 2022.

The non-employee Directors meet regularly in executive sessions outside

the presence of management.

Green served as the Chairman of the Board as well as our Chief Executive

Officer until February 28, 2023.

Jason Jing Chen serves as the Vice Chairman of the Board.

Among other things, each of the Chairman and

Vice Chairman provides feedback to the Officers on executive sessions and facilitates discussion among the independent directors outside

of meetings of the Board of Directors.

Our Chief Executive Officer is responsible for the day-to-day management of our Company and the

development and implementation of our Company’s strategy.

While our Board of Directors currently believes that separating the roles

of Chief Executive Officer and Chairman contributes to an efficient and effective board, such Chairman and Chief Executive Officer roles

will be combined until the Board of Directors determines otherwise.

Our Board of Directors does not have a current requirement that the

roles of Chief Executive Officer and Chairman of the Board be either combined or separated, because the Board currently believes it is

in the best interests of our Company to make this determination based on the position and direction of our Company and the constitution

of the Board and management team.

From time to time, the Board will evaluate whether the roles of Chief Executive Officer and Chairman

of the Board should be combined or separated, including following any hiring of a Chief Executive Officer following the interim nature

Green’s role in such position.

Board of Directors has established an Audit Committee, a Compensation Committee and a Governance Committee.

Board of Directors continuously evaluates the membership and role of each of the committees of the Board of Directors, as well as the

charters governing the same.

Audit Committee currently consists of Dr.

Shmerling and Mr.

Shmerling serves as the Chairman.

The Audit Committee is comprised entirely of independent Directors and it operates under a Board-approved

charter that sets forth its duties and responsibilities.

The Audit Committee met four times during 2022.

its charter, the Audit Committee is responsible for, among other things:

with the independent registered public accounting firm and management the adequacy and effectiveness of internal controls over financial

reporting and related matters;

and consulting with management and the independent registered public accounting firm on matters related to the annual audit, the

annual and quarterly financial statements and related disclosures, earnings releases and related accounting principles, policies,

practices and judgments;

a recommendation to the Board as to whether our audited financial statements should be included in our Annual Report on Form 10-K;

retaining and terminating, and determining compensation of, the Company’s independent auditors;

of the regular rotation of audit partners, including any lead and concurring partners, in accordance with applicable laws and regulations;

of the Audit Committee report required to be included in our annual proxy statement;

matters that arise relating to quality or integrity of our financial statements, legal compliance, performance of the independent

auditors and other matters, to the Board and reviewing such matters with the Board;

oversight of the Company’s independent auditors and the evaluation of the independent auditors’ qualifications, performance

and independence, including performance of the lead audit partner, and reporting of such evaluation to the Board.

Audit Committee is responsible for reviewing and discussing with management our policies with respect to risk assessment and risk management.

The Board and the Audit Committee discuss matters relating to risks that arise or may arise.

Audit Committee is also responsible for, and has established policies and procedures with respect to, the pre-approval of all services

provided by the independent auditors.

When assessing the independence of our auditors, the Audit Committee considers the independent

registered public accounting firm’s provision of non-audit services to the Company.

Audit Committee has also established procedures for the receipt, retention and treatment, on a confidential basis, of complaints received

by the Company.

The Board of Directors and the Audit Committee adopted a Code of Business Conduct and Ethics, a current copy of which

is available on the Corporate Governance page in the Investor section of our website at www.biostage.com .

respect to the Company’s independent registered public accounting firm, in accordance with SEC rules, audit partners are subject

to rotation requirements to limit the number of consecutive years an individual partner may provide service to our Company.

and concurring audit partners, the maximum number of consecutive years of service in that capacity is five years.

Our Audit Committee

is involved in the selection of the lead audit partner.

The process for selection of our lead audit partner pursuant to this rotation

policy involves a meeting between the Chairman of the Audit Committee and the candidate for the role, as well as discussion by the full

Audit Committee and with management.

Board of Directors has determined that all members of the Audit Committee are “independent” as such term is currently

defined by NASDAQ rules (although we are not listed on the NASDAQ), meet the criteria for independence set forth under the rules of

the SEC, and are able to read and understand fundamental financial statements.

The Board of Directors has also determined that Mr.

Shmerling each qualifies as an “audit committee financial expert” under the rules of the SEC.

Audit Committee Charter is available on the Corporate Governance page in the Investors section of our website at www.biostage.com .

Please note that the information contained on the Company website is not incorporated by reference in, or considered to be a part of,

this Annual Report on Form 10-K.

Compensation Committee currently consists of Ms.

Shmerling, who serves as the Chairman.

Compensation Committee is comprised entirely of independent Directors and it operates under a Board-approved charter that sets forth

its duties and responsibilities.

In light of the authority of the Board of Directors as to compensation matters that existed during periods of 2022, the Compensation

Committee did not hold a formal meeting in 2022.

Compensation Committee assists the Board with determining and overseeing the execution of our compensation philosophy and overseeing

the administration of our executive compensation programs.

Its responsibilities also include assisting the Board with oversight as to

the Company’s compensation and benefit plans and policies, retaining or terminating committee advisors, independence evaluation

of compensation advisors, administering its stock plans (including reviewing and approving equity grants) and reviewing and approving

annually all compensation decisions for the Company’s executive officers, including our Chief Executive Officer.

we are not listed on the NASDAQ, the Board of Directors has determined that all members of the Compensation Committee are “independent”

as such term is currently defined by NASDAQ rules.

Compensation Committee Charter is available on the Corporate Governance page in the Investors section of our website at www.biostage.com .

Please note that the information contained on the website is not incorporated by reference in, or considered to be a part of, this Annual Report on Form 10-K.

current members of the Governance Committee are Mr.

Sanchez and Mr.

Chen, who serves as the Chairman.

The Governance

Committee is comprised entirely of independent directors and it operates under a Board-approved charter that sets forth its duties

and responsibilities.

In light of the authority of the Board of Directors as to governance matters that existed during periods of 2022, the Governance Committee did

not hold a formal meeting in 2022.

the terms of its charter, the Governance Committee is responsible for identifying individuals qualified to become Board members, consistent

with criteria recommended by the Governance Committee and approved by the Board of Directors, and recommending that the Board of Directors

select the director nominees for election at each annual meeting of stockholders.

Its responsibilities also include recommending to the

Board of Directors the criteria for membership on Board Committees.

The Governance Committee is also responsible for reviewing all stockholder

nominations and proposals submitted to the Company, determining whether such nominations or proposals were timely submitted and assisting

the Board of Directors with such corporate governance matters as the Board of Directors may request.

identifying and evaluating nominees for the Board of Directors, the Governance Committee may solicit recommendations from any or all

of the following sources:

non-management Directors, including our Chairman, the Chief Executive Officer, other executive officers, third-party

search firms or any other source it deems appropriate.

In addition, the Governance Committee has established a policy that it will review

and consider any Director candidates who have been recommended by securityholders in compliance with certain procedures established by

the Governance Committee.

The procedures to be followed by securityholders in submitting such recommendations are described in the section

entitled “Submission of Securityholder Recommendations for Director Candidates” included in the Company’s Definitive Proxy Statement on Schedule 14A, filed on

The Governance

Committee will review and evaluate the qualifications of any such proposed Director candidate and conduct inquiries it deems appropriate.

Governance Committee will evaluate all such proposed Director candidates, including those recommended by securityholders in compliance

with the procedures established by the Governance Committee, in the same manner, with no regard to the source of the initial recommendation

of such proposed Director candidate.

When considering a potential candidate for membership on the Board of Directors, the Governance

Committee may consider, in addition to the minimum qualifications and other criteria for Board membership approved by the Board of Directors,

all facts and circumstances that the Governance Committee deems appropriate or advisable, including, among other things, the skills of

the proposed Director candidate, his or her availability, depth and breadth of business experience or other background characteristics,

his or her independence and the needs of the Board of Directors.

At a minimum, each nominee must have high personal and professional

integrity, have demonstrated ability and judgment, and be effective, in conjunction with the other Directors and nominees, in collectively

serving the long-term interests of the stockholders.

Although there is no specific policy regarding the consideration of diversity in

identifying director nominees, the Governance Committee may consider whether the nominee, if elected, assists in achieving a mix of Board

members that represents a diversity of background and experience.

The Governance Committee also may consider whether the nominee has

direct experience in the biotechnology, pharmaceutical and/or life sciences industries or in the markets in which the Company operates.

we are not listed on the NASDAQ, the Board of Directors has determined that all members of the Governance Committee are “independent”

as such term is currently defined by NASDAQ rules.

Governance Committee Charter is available on the Corporate Governance page in the Investor section of our website at www.biostage.com .

Please note that the information contained on the website is not incorporated by reference in, or considered to be a part of, this Annual Report on Form 10-K.

Board’s Role in Risk Oversight

to the Company are discussed by the Board of Directors during the year.

Management is responsible for the day-to-day management of risks

we face, while the Board, as a whole and through its Committees, oversees risk management.

The Audit Committee is responsible for reviewing

and discussing with management our policies with respect to risk assessment and risk management.

The Board of Directors and the Audit

Committee review and discuss, including with management, risks that arise or may arise, including in relation to legal, compliance and

cyber-security.

For example, the Audit Committee discusses financial risk, including with respect to financial reporting and internal

controls, with management and our independent registered public accounting firm and the steps management has taken to minimize those

Our Board of Directors also administers its risk oversight function through the required approval by the Board (or a Committee

of the Board) of significant transactions and other material decisions.

OF BUSINESS CONDUCT AND ETHICS

Board of Directors has adopted a Code of Business Conduct and Ethics, which applies to all Directors, officers and employees of our Company

and its subsidiaries including, without limitation, the Chairman of the Board, Interim Chief Executive Officer, the President, Interim

Vice President of Finance, Chief Scientific Officer, as well as any Chief Financial Officer.

The Code of Business Conduct and Ethics

is available on the Corporate Governance page in the Investor section of our website at www.biostage.com .

We intend to post any

amendments to or waivers from this Code of Business Conduct and Ethics at this location on our website.

Please note, however, that the information

contained on the website is not incorporated by reference in, or considered a part of, this Annual Report on Form 10-K.

SECTION 16(a) REPORTS

executive officers, Directors and beneficial owners of more than 10% of our Common Stock are required under Section 16(a) of the Securities

Exchange Act of 1934 to file reports of ownership and changes in ownership with the Securities and Exchange Commission.

Copies of those

reports must also be furnished to us.

Based solely on a review of the

copies of the reports furnished to us, and written representations from certain reporting persons that no other reports were required,

we believe that during the year ended December 31, 2022, the reporting persons complied on a timely basis with all Section 16(a) filing

requirements applicable to them, except for (i) William Fodor and Hong Yu, whose Form 4 filings, reporting stock option grants in December

2021, were late, (ii) James Shmerling, David Green and DST Capital LLC, whose Form 4 filings, reporting securities acquired in a private

placement in May 2022, were late, and (iii) Junli (Jerry) He, whose Form 4 filing, reporting a sale of stock in December 2022, was late.

OF THE AUDIT COMMITTEE

Notwithstanding

anything to the contrary set forth in any of the Company’s previous or future filings under the Securities Act of 1933, as amended,

or the Securities Exchange Act of 1934, as amended, that might incorporate this Annual Report on Form 10-K or any future filing with

the Securities and Exchange Commission, in whole or in part, the following report shall not be deemed incorporated by reference into

any such filing.

undersigned members of the Audit Committee of the Board of Directors of the Company submit this report in connection with the committee’s

review of the financial reports of the Company for the fiscal year ended December 31, 2022 as follows:

The Audit Committee

has reviewed and discussed with management the audited financial statements of the Company for the fiscal year ended December 31,

The Audit Committee has

discussed with representatives of Marcum LLP the matters required to be discussed with them by applicable requirements of Public

Company Accounting Oversight Board Auditing Standard No.

The Audit Committee has

received the written disclosures and the letter from the independent accountant required by the Public Company Accounting Oversight

Board regarding the independent accountant’s communications with the Audit Committee concerning independence and has discussed

with the independent accountant the independent accountant’s independence.

on the review and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited financial

statements be included in this Annual Report on Form 10-K for the fiscal year ended December 31, 2022 for filing with the Securities

and Exchange Commission.

by the Audit Committee:

Shmerling, DHA, FACHE, Chairman of the Audit Committee

Executive Compensation.

We are smaller reporting company and as a result, we have elected to comply

with the reduced disclosure requirements applicable to smaller reporting companies in accordance with SEC rules.

At the end of fiscal

year 2022, we had three named executive officers, being David Green, our then Interim Chief Executive Officer, Director, and Chairman,

Hong Yu, our President, and William Fodor, Ph.D., our Chief Scientific Officer.

On August 8, 2022, the Company appointed Mr.

the Chief Financial Officer, but in accordance with such reduced disclosure requirements, at the end of fiscal year 2022 Mr.

not one of the two most highly compensated officers for fiscal year 2022.

As such, disclosure of Mr.

Damasio’s compensation is not

included below.

Effective as of March 1, 2023, we transitioned the role of Chief Executive Officer to Junli (Jerry) He, our existing director,

Green remains on our Board of Directors.

COMPENSATION TABLE

table below summarizes the total compensation paid or earned by each of the named executive officers listed below for services rendered

in all capacities during the fiscal years ended December 31, 2022 and December 31, 2021.

Principal Position

Other Compensation

Executive Officer

William Fodor, PhD

Scientific Officer

on the aggregate grant date fair value computed in accordance with the provisions of FASB ASC 718, “Compensation — Stock

Compensation”, excluding the impact of estimated forfeitures.

Assumptions used in the calculation of this amount are set forth

under Share-Based Compensation in Note 15 to our audited financial statements included elsewhere in this Annual Report on Form 10-K.

Amounts shown for

Green do not include values attributable to performance-based options that have been not been earned due to the achievement of

certain milestones.

Assuming all of the milestones of such performance based options were achieved, the grant date fair value excluding

the impact of estimated forfeitures of the related award would be $557,426.

In May 2022, we also issued options Mr.

Yu to acquire 22,089 shares of

common stock to satisfy sales commissions in the amount of $89,160 incurred in relation to this private placement.

represents $1,505 for matching contributions made by the Company to Mr.

Green’s tax-qualified 401(k) Savings Plan account and

premiums in the amount of $79 for a life insurance policy.

represents $7,500 for matching contributions made by the Company to Mr.

Yu’s tax-qualified

401(k) Savings Plan account and premiums in the amount of $557 for a life insurance policy.

represents $7,500 for matching contributions made by the Company to Mr.

Yu’s tax-qualified 401(k) Savings Plan account and

premiums in the amount of $450 for a life insurance policy.

represents $9,824 for matching contributions made by the Company to Dr.

Fodor’s tax-qualified 401(k) Savings Plan account and

premiums in the amount of $1,535 for a life insurance policy.

represents $8,651 for matching contributions made by the Company to Dr.

Fodor’s tax-qualified 401(k) Savings Plan account and

premiums in the amount of $1,901 for a life insurance policy.

of Summary Compensation Table and Related Matters

by reference to our definitive Proxy Statement to be filed pursuant to Regulation 14A under the Exchange Act, in connection with our

2024 Annual Meeting of Stockholders.

Information concerning executive officers of our company is included in Part I of this Annual Report

on Form 10 K as Item 1.

Business - Information about our Executive Officers and incorporated herein by reference.

Executive Compensation.

2022, the Board of Directors reviewed the overall executive compensation of the Company’s named executive officers.

variety of factors, with respect to the named executive officers, the Board of Directors elected to restore a portion of Dr.

Fodor’s salary that was reduced in 2021.

Effective May 15, 2022, Dr.

Fodor’s base salary increased to $228,750.

February 15, 2021, to support short term initiatives regarding management of expenses, we and Dr.

Fodor mutually agreed to a

temporary reduction of Dr.

Fodor’s base salary by fifty percent (50%) to $152,500.

Company entered into an employment agreement with Mr.

Green dated as of November 26, 2021 and effective as of November 26, 2021.

Green’s employment agreement provided for an initial annual base salary of the minimum required by applicable law, being

$35,568, and is subject to annual review, provided that such base salary shall not be decreased without Mr.

Green’s consent.

Such employment agreement has been amended and restated as discussed below.

Equity Incentive Compensation

In 2022, the Board of Directors did not make any grants of long-term equity incentive awards in the form of stock options to its named executive officers as part of its annual compensation assessment.

As described above, Mr.

Yu was awarded a fully vested stock option in May 2022 in relation to our private placement that closed in May 2022.

2021, the Board of Directors approved grants of long-term equity incentive awards in the form of stock options to executives as part

of our total compensation package.

These awards included grants to Mr.

Green in connection with his hiring as Interim Chief Executive

Officer, as well as Mr.

The long-term equity incentive awards were granted in an effort to achieve certain key objectives,

including (i) to attract and retain high performing and experienced executives, (ii) motivate and reward executives whose knowledge,

skills and performance are critical to our success, and (iii) to align the interests of our executives and our stockholders by providing

our executives with strong incentives to increase stockholder value and a significant reward for doing so.

Our decisions regarding the

amount and type of long-term equity incentive compensation and relative weighting of these awards among total executive compensation

have also been based on our understanding of market practices of our peers and take into account additional factors such as level of

individual responsibility, experience and performance.

The long-term incentive grants made to our named executive officers during the

fiscal year ended December 31, 2021 are described in the table below.

Principal Position

Option Awards

Chief Executive Officer

William Fodor, PhD

Chief Scientific Officer

to continued employment or service through the applicable vesting dates, (i) commencing on December 26, 2021, up to 106,884 of these

options vest monthly in twelve consecutive equal monthly installments on the 26 th day of each month through November 26,

2022, and (ii) up to 267,210 shall vest in three increments, two for 80,163 shares each and the third for 106,884 shares, each such

vesting subject to certain performance milestones set by our Board of Directors.

to continued employment or service through the applicable vesting dates, these options vest in four equal amounts on each of December 29, 2021, 2022, 2023 and 2024.

Historically,

when granted, the long-term equity incentive awards are granted in an effort to achieve certain key objectives, including (i) to attract

and retain high performing and experienced executives, (ii) motivate and reward executives whose knowledge, skills and performance are

critical to our success, and (iii) to align the interests of our executives and our stockholders by providing our executives with strong

incentives to increase stockholder value and a significant reward for doing so.

Our decisions regarding the amount and type of long-term

equity incentive compensation and relative weighting of awards among total executive compensation are also historically based on our

understanding of market practices of our peers and take into account additional factors such as level of individual responsibility, experience

and performance.

and Other Benefits

have established a 401(k) tax-deferred savings plan, which permits participants, including our named executive officers, to make

contributions by salary deduction pursuant to Section 401(k) of the Internal Revenue Code of 1986, as amended.

We are responsible for administrative

costs of the 401(k) plan.

We may, in our discretion, make matching contributions to the 401(k) plan.

In addition, all full-time

employees, including our named executive officers, may participate in our health and welfare benefit programs, including medical

coverage, vision coverage, dental coverage, disability insurance, and life insurance.

Green, our Director and former Chief Executive Officer and Chairman

Company entered into an amended and restated employment agreement with Mr.

Green dated as of January 11, 2023, which amended and

restated his employment agreement with the Company dated November 26, 2021.

Green’s employment agreement was effective

until terminated by the Company or the Mr.

Green upon written notice.

Following an amendment to such amended and restated employment

agreement effective as of January 25, 2023, Mr.

Green’s initial annual base salary of $300,000 was reduced to the minimum

required by applicable law, being $35,568, and is subject to annual review, provided that such base salary shall not be decreased

Green’s consent.

In lieu of such cash reduction for such next year, Mr.

Green was granted a nonqualified stock option to purchase a share amount determined based on Black-Scholes value of the salary

difference, being $264,432, which subject to continued employment, would vest monthly on each monthly

anniversary of January 25, 2023 for twelve months following the Grant Date.

to and in connection with such amended and restated employment agreement,

in addition and in lieu of additional cash salary, on February 28, 2023 (the Grant Date), Mr.

Green received a nonqualified stock option

to purchase a share amount determined based on Black-Scholes value of $200,000 as of the Grant Date, which subject to continued employment,

would vest monthly on each monthly anniversary of the Grant Date for twelve months following the Grant Date, with the first vesting to

be in an amount equal to 1/4 of the aggregate share amount and then the remaining amount to vest in eleven substantially equal amounts

Green was also eligible to receive cash incentive compensation on an annual basis of up to a one hundred percent (100%) of his base salary

upon meeting objectives as determined by the Board of Directors of the Company or the Compensation Committee thereof.

addition, on the Grant Date, Mr.

Green received the following:

(I) as additional

compensation in recognition of past performance, a nonqualified stock option to purchase a share amount determined based on Black-Scholes

value of $200,000 as of the Grant Date, which such option was fully vested as of the Grant Date, and (II) as a long term incentive grant,

a nonqualified stock option to purchase shares of Common Stock (the LTI Grant) in a share amount equal to six percent (6%) of the then

outstanding shares of Common Stock of the Company as of the Grant Date, which subject to continued employment, would vest monthly in thirty-six

substantially equal monthly installments on each monthly anniversary of the Grant Date.

Green was also eligible to receive incentive compensation and employee benefit plans, including without limitation stock option

plans, stock purchase plans and other employee benefit plans, as determined by the Board of Directors or the Compensation

As discussed below under “ Potential Payments upon Termination

and Change in Control Benefits, ” effective as of March 1, 2023, we transitioned the role of Chief Executive Officer to Junli

(Jerry) He, our existing director, and Mr.

Green remains on our Board of Directors.

Fodor, Ph.D., our Chief Scientific Officer

July 2, 2018, William Fodor, Ph.D., our Chief Scientific Officer became an employee of the Company.

The employment commenced in

accordance with an offer letter executed as of June 4, 2018.

Fodor is an at-will employee and his offer letter provides for an

annual base salary in the amount of three hundred five thousand dollars ($305,000), which effective February 15, 2021, to support

short term initiatives regarding management of expenses, was temporarily reduced by fifty percent (50%) to $152,500.

Effective May 15,

Fodor’s base salary increased to $228,750.

Fodor is eligible to participate in all of our employee benefit

plans, including without limitation, our Amended and Restated Equity Incentive Plan, retirement plans, stock purchase plans and

medical insurance plans.

Yu, our President

as of May 29, 2018, the Board of Directors of the Company appointed Hong Yu as President of the Company.

Prior to being elected President

of the Company, Mr.

Yu assisted the Company with strategic activities, including capital raising, and also assisted the Company’s

lead investor, DST Capital, LLC, with respect to board, management and governance matters pertaining to the Company.

Yu’s employment

commenced in accordance with an offer letter executed as of May 16, 2018.

Yu is an at-will employee and his offer letter provides

for an annual base salary in the amount of one hundred and fifty thousand dollars ($150,000).

Yu is eligible to participate in all

of our employee benefit plans, including without limitation, our Amended and Restated Equity Incentive Plan, retirement plans, stock

purchase plans and medical insurance plans.

Payments upon Termination and Change in Control Benefits

accordance with our Amended and Restated Equity Incentive Plan, or the Plan, the outstanding options thereunder, including those held

by our Named Executive Officers, upon the consummation of a Sale Event or Change of Control, which are defined in the Plan, all such

options shall then become fully vested and exercisable.

Effective as of March 1, 2023, we transitioned the role of Chief Executive

Officer to Junli (Jerry) He, our existing director, and Mr.

Green remains on our Board of Directors.

Such transition was treated as a

termination without cause in connection with the hiring of a replacement Chief Executive Officer under Mr.

Green’s amended and restated

employment agreement.

In connection with such transition, Mr.

Green received accrued and unpaid base salary through the date of his termination,

and following his execution of the required release, the remaining unvested portion of the LTI Grant that would have vested within the

twelve (12) months following the Grant Date accelerated and become fully vested.

The unvested portions of his other stock option grants

described above were forfeited as of such transition.

OF THE COMPENSATION COMMITTEE

rules of the Securities and Exchange Commission, as a Smaller Reporting Company, we are not required to provide a report of the Compensation

use a combination of cash and stock-based incentive compensation to attract and retain qualified candidates to serve on our Board of

In setting director compensation, the Board of Directors and the Compensation Committee consider the significant amount of

time that directors expend in fulfilling their duties to the Company as well as the skill-level required by the Company of members of

the Board of Directors.

who are also employees of the Company receive no additional compensation for service as a director.

Board of Directors has approved the following compensation arrangements for our non-employee directors:

grant of stock options with a value of $25,000 at the grant date to vest in full in equity quarterly increments over a period of

one year from the grant date.

compensation to consist of a grant of stock options, in lieu of cash fees,

with a value of $20,000 at the date of grant, with all such awards to vest in full in quarterly increments over a period of one year following

the grant date and a grant of stock options with a value of $25,000 at the grant date, where the grant date shall be the fifth business

day following the Corporation’s annual stockholders meeting, with all such awards to vest in full in quarterly increments over a

period of one year from the grant date.

addition, all non-employee directors shall be reimbursed for their expenses incurred in connection with attending Board and Committee

COMPENSATION TABLE

following table presents the compensation provided by us to the non-employee directors who served during the fiscal year ended December

Junli (Jerry) He

Herman Sanchez

James Shmerling, DHA, FACHE

on the aggregate grant date fair value computed in accordance with the provisions of FASB ASC 718, “Compensation — Stock

Compensation”.

Assumptions used in the calculation of this amount are included under Share-Based Compensation in Note 15 to

our audited financial statements for the fiscal year ended December 31, 2022, included elsewhere in this Annual Report on Form 10-K.

aggregate number of option awards outstanding and held by each non-employee director at our fiscal year ended December 31, 2022 were

110,535 for Mr.

Chen, 37,692 for Mr.

He, 104,251 for Ms.

Li, 102,981 for Dr.

Shmerling, and 68,205 for Mr.

EQUITY AWARDS AT FISCAL YEAR-END — 2022

following table sets forth information concerning the number and value of exercisable and unexercisable options to purchase Common Stock,

and the number of restricted stock units held by our named executive officers as of December 31, 2022.

Option Awards

Unexercisable

William Fodor, Ph.D

option was granted on November 26, 2021 and is fully vested, as it vested twelve consecutive equal monthly installments on the 26 th

day of each month through November 26, 2022.

option was granted on November 26, 2021 and, assuming continued employment or service with our Company, the unvested shares shall

vest and become exercisable in three increments, two for 80,163 shares each and the third for 106,884 shares, based to the achievement

of certain milestone targets determined by our Board of Directors.

options are fully vested according to a separation agreement in 2015.

The options that were already vested prior to such resignation

would be exercisable until the respective scheduled expiration date of such options.

option was granted on December 29, 2021 and, assuming continued employment with our Company, the unvested shares become exercisable

in equal installments on December 29 th of each of 2021, 2022, 2023 and 2024.

option was granted on May 29, 2018 and, assuming continued employment with our Company, the unvested shares became exercisable in

equal installments on December 31 st of each of 2018, 2019, 2020 and 2021.

option was granted on May 29, 2018 and, assuming continued employment with our Company, the unvested shares become exercisable based

to the achievement of certain milestone targets determined by our Board of Directors.

The options are fully vested in satisfaction of sales commissions incurred in relation to the May 2022 private placement.

by reference to our definitive Proxy Statement to be filed pursuant to Regulation 14A under the Exchange Act, in connection with our

2024 Annual Meeting of Stockholders.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Common Stock is currently our only class of voting securities issued and outstanding.

The following table sets forth information

regarding the beneficial ownership of all classes of our voting securities as of March 6, 2023 by:

(i) all persons known by us to

own beneficially more than 5% of our voting securities;

(ii) each of our directors and nominee for Director;

(iii) each of our named

executive officers;

and (iv) all of our current directors and executive officers as a group.

number of shares beneficially owned by each stockholder is determined under rules issued by the SEC and includes voting or

investment power with respect to securities.

Under these rules, beneficial ownership includes any shares as to which the individual

or entity has sole or shared voting power or investment power and includes any shares as to which the individual or entity has the

right to acquire beneficial ownership within 60 days after March 6, 2023 through the exercise of any warrant, stock option or other

The inclusion of such shares, however, does not constitute an admission that the named stockholder is a direct or indirect

beneficial owner of such shares.

Common stock subject to options currently exercisable, or exercisable within 60 days after March

6, 2023, are deemed outstanding for the purpose of computing the percentage ownership of the person holding those options, but are

not deemed outstanding for computing the percentage ownership of any other person.

otherwise indicated below, to our knowledge, all persons named in the table have sole voting and investment power with respect to their

shares of Common Stock, except to the extent spouses share authority under community property laws.

Beneficially Owned

Name and Address of Beneficial Owner (1)

Greater than 5% Holder

DST Capital LLC

Harvard Bioscience

Named Executive Officers

Junli (Jerry) He (current CEO)

David Green (former CEO, current director)

William Fodor, Ph.D

Non-employee Directors

Jason Jing Chen

Herman Sanchez

James Shmerling, DHA FACHE

All current executive officers and directors, as a group (8 persons)

less than 1% of all of the outstanding shares of Common Stock (as calculated in accordance with footnote (2) below).

otherwise indicated, the address for all persons shown is c/o Biostage, Inc., 84 October Hill Road, Suite 11, Holliston, Massachusetts

on 12,206,400 shares of Common Stock outstanding on March 6, 2023, together with the applicable options and warrants held by the

respective stockholder in the table above that become exercisable within 60 days.

information is based in part upon a Schedule 13D (Amendment No.

9) filed jointly by DST Capital LLC (“DST Capital”),

and Bin Zhao reporting beneficial ownership as of September 1, 2021.

Consists of 3,694,047 shares of Common Stock.

information is based upon a Schedule 13G/A filed by An Zhang on February 16, 2023 reporting beneficial ownership as of December 31,

information is based upon a Schedule 13D filed by Du Xiaoyu reporting beneficial ownership as of May 29, 2018.

information is based in part upon a Schedule 13G filed by Harvard Bioscience, Inc.

reporting beneficial ownership as of June 21,

2022 and 180 shares of Series E convertible preferred stock issued as dividends through December 31, 2022.

The shares included assume

an optional conversion in accordance with the applicable terms of the certificate of designation of the Series E Preferred Stock

held by Harvard Bioscience, Inc.

as of March 6, 2023.

235,135 shares of Common Stock and options to acquire 36,132 shares of Common Stock exercisable within 60 days of March 6, 2023.

175,329 shares of Common Stock, warrants to purchase up to 67,905 shares of Common Stock, as well as options to acquire 415,612 shares

of Common Stock that are exercisable within 60 days of March 6, 2023.

266,979 shares of Common Stock as well as options to acquire 204,219 shares of Common Stock that are exercisable within 60 days of

March 6, 2023.

options to acquire 223,624 shares of Common Stock that are exercisable within 60 days of March 6, 2023.

161,468 shares of Common Stock, and options to acquire 108,975 shares of Common Stock that are exercisable within 60 days of March

options to acquire 102,691 shares of Common Stock that are exercisable within 60 days of March 6, 2023.

options to acquire 66,645 shares of Common Stock that are exercisable within 60 days of March 6, 2023.

16,892 shares of Common Stock, warrants to purchase up to 8,446 shares of Common Stock, as well as options to acquire 101,421 shares

of Common Stock that are exercisable within 60 days of March 6, 2023.

855,803 shares of Common Stock, warrants to purchase up to 76,351 shares of Common Stock, as well as options to acquire 1,259,319

shares of Common Stock that are exercisable within 60 days of March 6, 2023.

COMPENSATION PLAN INFORMATION

following table sets forth information as of December 31, 2022 concerning the number of shares of Common Stock issuable under our existing

equity compensation plans.

of Securities to be Issued Upon Exercise of Outstanding Options, Restricted Stock Units, Warrants and Rights

Average Exercise Price of Outstanding Options, Warrants, and Rights

of Securities Remaining Available For Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))

Equity compensation

plans approved by security holders (1)

Equity compensation plans not approved by security

of our Amended and Restated Equity Incentive Plan and our Employee Stock Purchase Plan.

2,560,389 shares available for future issuance under our Amended and Restated Equity Incentive Plan and 2,966 shares available for

future issuance under our Employee Stock Purchase Plan.

by reference to our definitive Proxy Statement to be filed pursuant to Regulation 14A under the Exchange Act, in connection with our

2024 Annual Meeting of Stockholders.

Certain Relationships and Related Transactions, and Director Independence.

Audit Committee charter sets forth the standards, policies and procedures that we follow for the review, approval or ratification of

any related person transaction that we are required to report pursuant to Item 404(a) of Regulation S-K promulgated by the Securities

and Exchange Commission.

Under the Audit Committee charter, which is in writing, the Audit Committee must conduct an appropriate review

of these related person transactions on an ongoing basis, and the approval of the Audit Committee is required for all such transactions.

The Audit Committee relies on management to identify related person transactions and bring them to the attention of the Audit Committee.

the 2022 and 2021 fiscal years, we were not a participant in any related person transactions that required disclosure under this heading.

by reference to our definitive Proxy Statement to be filed pursuant to Regulation 14A under the Exchange Act, in connection with our

2024 Annual Meeting of Stockholders.

Principal Accounting Fees and Services.

independent public accounting firm is Marcum LLP, Boston, Massachusetts, PCAOB Auditor ID 688.

Our predecessor independent public accounting

firm was Wei, Wei & Co., LLP, Flushing, New York, PCAOB Auditor ID 2388 .

following table provides a summary of fees for professional services provided by Marcum LLP, our current independent registered

public accounting firm, Wei, Wei & Co., and RSM US, LLP, our former

independent registered public accounting firms, during the fiscal years ended December 31, 2022 and 2021, in each of the following

categories as set forth in the table below.

Audit-related Fees (2)

Fees for both 2022 and 2021 included fees associated with the annual audit of our consolidated financial statements and the reviews

of our Quarterly Report on Form 10-Q.

Audit-related Fees for RSM, Wei, Wei & Co., LLP and Marcum LLP for 2022 included fees relating to the filing of a Registration Statement on

Form S-1 and auditor transition.

Tax Fees included domestic and international tax compliance, tax advice and tax planning.

All Other Fees

of the services performed in the years ended December 31, 2022 and December 31, 2021 were pre-approved by the Audit Committee.

the Audit Committee’s policy to pre-approve all audit and permitted non-audit services to be provided to us by the independent

registered public accounting firm.

The Audit Committee’s authority to pre-approve non-audit services may be delegated to one or

more members of the Audit Committee, who shall present all decisions to pre-approve an activity to the full Audit Committee at its first

meeting following such decision.

The Audit Committee has delegated this pre-approval authority to its Chairman for non-audit services

with aggregate fees of $10,000 or less.

In addition, the Audit Committee has considered whether the provision of the non-audit services

above is compatible with maintaining the independent registered public accounting firm’s independence.

by reference to our definitive Proxy Statement to be filed pursuant to Regulation 14A under the Exchange Act, in connection with our

2024 Annual Meeting of Stockholders.

Exhibits, Financial Statement Schedules.

1 unchanged sentence

Financial Statements.

The consolidated financial statements of Biostage, Inc.

and its subsidiaries filed under this Item 15:

to Consolidated Financial Statements

of Independent Registered Public Accounting Firms

Balance Sheets as of December 31, 2022 and 2021

Statements of Operations for the years ended December 31, 2022 and 2021

Statements of Stockholders’ Equity (Deficit) for the years ended December 31, 2022 and 2021

Statements of Cash Flows for the years ended December 31, 2022 and 2021

to Consolidated Financial Statements

The consolidated financial statements of Harvard Apparatus Regenerative Technology, Inc.

and its subsidiaries filed

under this Item 15:

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of December 31, 2023 and 2022

Consolidated Statements of Operations for the years ended December 31, 2023 and 2022

Consolidated Statements of Stockholders’ Equity (Deficit) for the years ended December 31, 2023 and 2022

Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022

Notes to Consolidated Financial Statements

Financial Statement Schedules:

7 unchanged sentences

TO CONSOLIDATED FINANCIAL STATEMENTS

of Independent Registered Public Accounting Firms

Balance Sheets as of December 31, 2022 and 2021

Statements of Operations for the years ended December 31, 2022 and 2021

Statements of Stockholders’ Equity (Deficit) for the years ended December 31, 2022 and 2021

Statements of Cash Flows for the years ended December 31, 2022 and 2021

to Consolidated Financial Statements

APPARATUS REGENERATIVE TECHNOLOGY, INC.

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of December 31, 2023 and 2022

Consolidated Statements of Operations for the years ended December 31, 2023 and 2022

Consolidated Statements of Stockholders’ Equity (Deficit) for the years ended December 31, 2023 and 2022

Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022

Notes to Consolidated Financial Statements

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Shareholders and Board of Directors of

Apparatus Regenerative Technology, Inc.

and Subsidiaries

on the Financial Statements

have audited the accompanying consolidated balance sheet of Biostage, Inc.

and subsidiaries (the “Company”) as of

December 31, 2022, the related consolidated statements of operations, changes in stockholders’ deficit and cash flows

for the year then ended, and the related notes (collectively referred to as the “financial statements”).

In our opinion,

the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022,

and the results of its operations and its cash flows for the year ended December 31, 2022, in conformity with accounting principles

generally accepted in the United States of America.

have audited the accompanying consolidated balance sheets of Harvard Apparatus Regenerative Technology, Inc.

and Subsidiaries (the

“Company”) (formerly known as Biostage, Inc.) as of December 31, 2023 and 2022, the related consolidated statements of

operations, changes in stockholders’ equity (deficit) and cash flows for each of the two years in the period ended December 31, 2023, and the related notes

(collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in

all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and

its cash flows for each of the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of

Paragraph – Going Concern

4 unchanged sentences

the Company’s ability to continue as a going concern.

Management’s plans in regard to these matters are also described in Note 1.

consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Management’s plans in regard to these matters are also described in

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s

financial statements based on our audit.

financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

1 unchanged sentence

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit

As part of our audits

we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion

1 unchanged sentence

Accordingly, we express no such opinion.

audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or

fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides

a reasonable basis for our opinion.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error

or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence

regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles

used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

believe that our audits provide a reasonable basis for our opinion.

critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated

27 unchanged sentences

We Addressed the Matter in Our Audit

identified the Company’s expense recognition for share-based awards that contain performance-based vesting provisions as a critical

audit matter.

The principal considerations for our determination that the expense recognition for share-based awards that contain performance-based

vesting provision awards is a critical audit matter are the assumptions and risk of bias related to the conclusion of the probability

of achievement of the performance conditions impacting vesting of the awards, or more specifically, the achievement of the business milestones,

as defined in the grant agreements.

Auditing management’s assumptions regarding the probability of achievement of the business

milestones defined in the grant agreements was complex and required a high degree of auditor judgment and increased audit effort.

audit procedures related to the expense recognition of share-based awards that contain performance-based vesting provisions included

6 unchanged sentences

have served as the Company’s auditor since 2022.

(PCAOB ID # 688)

of Independent Registered Public Accounting Firm

and the Board of Directors of

on the Consolidated Financial Statements

have audited the accompanying consolidated balance sheet of Biostage, Inc.

and subsidiaries (the Company) as of December 31, 2021, the

related consolidated statements of operations, changes in stockholders’ deficit and cash flow for the year then ended, and the

related notes to the consolidated financial statements (collectively, the consolidated financial statements).

In our opinion, the consolidated

financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021, and the

results of its operations and its cash flow for the year ended December 31, 2021, in conformity with accounting principles generally

accepted in the United States of America.

of Matter Regarding Going Concern

accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

in Note 1 to the consolidated financial statements, the Company has suffered recurring losses from operations, has an accumulated deficit,

uses cash flows in its operations, and will require additional financing to continue to fund its operations.

This raises substantial

doubt about the Company’s ability to continue as a going concern.

Management’s plans in regard to these matters also are

described in Note 1.

The consolidated financial statements do not include any adjustments that might result from the outcome of this

consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion

on the Company’s consolidated financial statements based on our audit.

We are a public accounting firm registered with the Public

Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing

an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due

to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence

regarding the amounts and disclosures in the consolidated financial statements.

Our audit also included evaluating the accounting principles

used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provides a reasonable basis for our opinion.

critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that

was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material

to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication

of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are

not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or

disclosures to which it relates.

Compensation – Performance-Based Awards

described in Note 15 to the consolidated financial statements, the Company has 510,742 unvested performance-based options outstanding

for which there is unrecognized compensation expense of approximately $1.3 million at December 31, 2021.

No expense has been recognized

for these unvested awards as of December 31, 2021 given that the milestone achievements for these awards have not yet been deemed probable

for accounting purposes.

As described in Note 2 to the consolidated financial statements, the Company measures all stock options and

restricted stock awards granted to employees, directors and non-employees based on the fair value on the date of the grant and recognizes

compensation expense of those awards, net of estimated forfeitures, over the requisite vesting period.

Expense on share-based awards

for which vesting is performance or milestone based is recognized on a straight-line basis from the date when it is determined that the

achievement of the milestone is probable to the vesting/milestone achievement date.

identified the Company’s expense recognition for share-based awards that contain performance-based vesting provisions as a critical

audit matter.

The principal considerations for our determination that the expense recognition for share-based awards that contain performance-based

vesting provision awards is a critical audit matter are the assumptions and risk of bias related to the conclusion of the probability

of achievement of the performance conditions impacting vesting of the awards, or more specifically, the achievement of the business milestones,

as defined in the grant agreements.

Auditing management’s assumptions regarding the probability of achievement of the business

milestones defined in the grant agreements was complex and required a high degree of auditor judgment and increased audit effort.

audit procedures related to the expense recognition of share-based awards that contain performance-based vesting provisions included

the following, among others:

obtained and read the grant agreements for all outstanding share-based awards with performance-based vesting provisions,

recalculated the total outstanding share-based awards with performance-based vesting provisions at year-end based upon cumulative

grants, net of cumulative forfeitures, and

discussed with management and evaluated their conclusions ed on the probability of achievement of the business milestones within

the performance-based awards by assessing the Company’s liquidity requirements needed to fund the achievement of the milestones

outlined in the grant agreements and reviewed the Company’s public press releases through the issuance date below.

Wei, Wei & Co., LLP

served as the Company’s auditor during 2021.

March 28, 2024

APPARATUS REGENERATIVE TECHNOLOGY, INC.

AND SUBSIDIARIES

2 unchanged sentences

Current assets:

Restricted cash

Cash and cash equivalents

Accounts receivable

Prepaid research and development

expenses and other current assets

Prepaid expenses and other current assets

Total current assets

Property, plant and equipment,

Property, plant and equipment, net

Right-of-use assets, net

financing costs

LIABILITIES AND STOCKHOLDERS’

Deferred financing costs

Long-term prepaid contracts

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

Current liabilities:

Accounts payable

Accrued and other current

Accrual for contingency

Warrant liability

portion of operating lease liability

Accrued and other current liabilities

Operating lease liability, current

Total current liabilities

lease liability, net of current portion

Operating lease liability, net of current portion

Total liabilities

Commitments and contingencies (Note 9)

Series E convertible preferred stock, $ 0.01

par value per share, 5,000 shares authorized, 4,180 shares issued and outstanding

Stockholders’ deficit:

Common stock, par value

$ 0.01 per share, 60,000,000 shares authorized;

Series E convertible preferred stock, par value $ 0.01 per share, 5,000 shares authorized;

0 and 4,180 shares issued and outstanding at December 31, 2023 and 2022, respectively

Stockholders’ equity (deficit):

Common stock, par value $ 0.01 per share, 60,000,000 shares authorized;

13,947,324 and 12,174,467 issued and outstanding at December 31, 2023 and 2022, respectively

Additional paid-in capital

Total stockholders’

Total liabilities and

stockholders’ deficit

Accumulated deficit

Total stockholders’ equity (deficit)

Total liabilities and stockholders’ equity (deficit)

accompanying notes to consolidated financial statements.

APPARATUS REGENERATIVE TECHNOLOGY, INC.

AND SUBSIDIARIES

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thousands, except share and per share data)

Ended December 31,

Product revenue

Operating expenses:

and administrative

Cost of sales

Research and development

Sales and marketing

General and administrative

Total operating expenses

Operating loss

Other income, net:

Forgiveness of notes payable

Other income (expense), net:

Sublease income

Change in fair value of

warrant liability

(expense) income, net

Total other income,

preferred stock

Net loss attributable

to common stockholders

Basic and diluted net

loss per share

Weighted average common shares, basic

Change in fair value of warrant liability

Interest income

Interest expense

Other expense

Total other income, net

Preferred stock dividends

Net loss attributable to common stockholders

Basic and diluted net loss per share attributable to common stockholders

Weighted average common shares outstanding, basic and diluted

accompanying notes to consolidated financial statements.

APPARATUS REGENERATIVE TECHNOLOGY, INC.

AND SUBSIDIARIES

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thousands, except share data)

E Convertible Preferred Stock

of Common Shares Outstanding

Paid-in Capital

Stockholders Equity (Deficit)

Series E Convertible Preferred Stock

Number of Common Shares Outstanding

Additional Paid-in Capital

Accumulated Deficit

Total Stockholders Equity (Deficit)

Series E Convertible Preferred Stock

Number of Common Shares Outstanding

Additional Paid-in Capital

Accumulated Deficit

Total Stockholders’ Equity (Deficit)

Balance at January 1, 2022

Share-based compensation

Issuance of common stock

and warrants to purchase common stock

Issuance of series E convertible preferred stock

Preferred stock dividends

Issuance of common stock and warrants to purchase common stock

Issuance of common stock from exercise of warrants

Balance at December 31, 2022

Share-based compensation

Issuance of series E convertible preferred

Conversion of preferred stock for common stock

Preferred stock dividends

Issuance of common stock and warrants to purchase

Issuance of common stock

from exercise of warrants

Issuance of common stock from exercise of options

Balance at December 31, 2023

accompanying notes to consolidated financial statements.

APPARATUS REGENERATIVE TECHNOLOGY, INC.

AND SUBSIDIARIES

STATEMENTS OF CASH FLOWS

ended December 31,

Year ended December 31,

OPERATING ACTIVITIES

Adjustments to reconcile net loss to net cash

used in operating activities:

Forgiveness of notes payable

Share-based compensation

Change in fair value of

warrant liability

Deferred financing costs

Changes in operating assets

and liabilities:

Grant receivable

Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities:

Share-based compensation expense

Amortization of operating right-of-use assets

Change in fair value of warrant liability

Changes in operating assets and liabilities:

Accounts receivable

Prepaid research and development

Prepaid expenses and other

current assets

Prepaid expenses and other current assets

Deferred financing costs

Long-term prepaid contracts

Accounts payable

Accrued and other current

for contingency matter

Net cash used in operating

Operating lease liability

Accrued and other current liabilities

Net cash used in operating activities

INVESTING ACTIVITIES

Purchases of property,

plant and equipment

Net cash used in investing

FINANCING ACTIVITIES

Proceeds from issuance

of common stock and warrants

Net cash provided by

Purchases of short-term investments

Redemption of short-term investments

Purchases of property, plant and equipment

Net cash used in investing activities

FINANCING ACTIVITIES

Net (decrease) increase in cash and restricted

Cash and restricted

cash at the beginning of the year

Cash and restricted

cash at the end of the year

Proceeds from issuance of common stock

Proceeds from exercise of stock options

Net cash provided by financing activities

Net decrease in cash and cash equivalents

Cash and cash equivalents at the beginning of the year

Cash and cash equivalents at the end of the year

SUPPLEMENTAL INFORMATION

Interest paid in cash

Supplemental disclosure of non-cash activities:

of contingency matter

of due to Harvard Bioscience included in accrued and other current liabilities

Issuance of Series E

convertible preferred stock

stock dividends

of right-of-use asset and liability due to lease extension

Settlement of contingency matter

Settlement of due to Harvard Bioscience included in accrued and other current liabilities

Issuance of Series E convertible preferred stock

Preferred stock dividends

Increase of right-of-use asset and liability due to lease extension

accompanying notes to consolidated financial statements.

APPARATUS REGENERATIVE TECHNOLOGY, INC.

AND SUBSIDIARIES

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Ended December 31, 2023 and 2022

(Biostage or the Company) is a biotechnology company with a mission to cure patients of cancers, injuries, and birth defects of

the gastro-intestinal tract and the airways.

The Company believes its technology is likely to be used to treat esophageal cancer, esophageal

injuries, and birth defects in the esophagus.

The Company believes additional product candidates in its pipeline may treat bronchial

cancer, intestinal cancer, and colon cancer.

Since inception, the Company has devoted substantially all of its efforts to business planning,

research and development, recruiting management and technical staff, and acquiring operating assets.

October 31, 2013, Harvard Bioscience, Inc., or Harvard Bioscience, contributed its regenerative medicine business assets, plus $ 15

million of cash, into Biostage, or the Separation.

On November 1, 2013, the spin-off of the Company from Harvard Bioscience was completed.

On that date, the Company became an independent

company that operates the regenerative medicine business previously owned by Harvard Bioscience.

The spin-off was completed through the

distribution to Harvard Bioscience stockholders of all the shares of common stock of Biostage, or the Distribution.

As of December 31,

2022, Harvard Bioscience owned 4,180

shares of Series E Preferred Stock at a price

Apparatus Regenerative Technology, Inc.

(Harvard Apparatus Regenerative Technology or the Company) is a biotechnology company with a

mission to cure patients of cancers, injuries, and birth defects of the gastro-intestinal tract and the airways.

The Company believes

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

believes additional product candidates in its pipeline may treat intestinal cancer and colon cancer.

Since inception, the Company has

devoted substantially all of its efforts to business planning, research and development, recruiting management and technical staff, and

acquiring operating assets.

October 31, 2013, Harvard Bioscience, Inc., or Harvard Bioscience, contributed its regenerative medicine business assets, plus $ 15 million

of cash, into Harvard Apparatus Regenerative Technology, or the Separation.

On November 1, 2013, the spin-off of the Company from Harvard

Bioscience was completed.

On that date, the Company became an independent company that operates the regenerative medicine business previously

owned by Harvard Bioscience.

The spin-off was completed through the distribution to Harvard Bioscience stockholders of all the shares

of common stock of Harvard Apparatus Regenerative Technology, or the Distribution.

of Presentation

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with generally accepted accounting principles in the United States, or U.S.

Company has incurred substantial operating losses since its inception, and as of December 31, 2022 had an accumulated deficit of approximately

Company has incurred substantial operating losses since its inception, and as of December 31, 2023 had an accumulated deficit of

approximately $ 92.0

million and will require additional financing to fund future operations.

The Company expects that its operating cash on-hand as

of December 31, 2022 of approximately $ 1.2 million will enable it to fund its operating expenses and capital expenditure requirements

only into the second quarter of 2023.

Therefore, these conditions raise substantial doubt about the Company’s ability to continue

as a going concern.

The Company expects that its operating cash on-hand as of

December 31, 2023 of approximately $ 0.4

million and debt financing of $ 0.5

million in gross proceeds received subsequent to December 31, 2023 will enable it to fund its operating expenses and capital

expenditure requirements only into the second quarter of 2024.

Therefore, these conditions raise substantial doubt about the

Company’s ability to continue as a going concern.

Company will need to raise additional funds to fund its operations.

In the event the Company does not raise additional capital from outside

sources before or during the second quarter of 2023, it may be forced to curtail or cease its operations.

Cash requirements and cash

resource needs will vary significantly depending upon the timing of the financial and other resource needs that will be required to complete

ongoing development, pre-clinical and clinical testing of product candidates, as well as regulatory efforts and collaborative arrangements

necessary for the Company’s product candidates that are currently under development.

The Company is currently seeking and will

continue to seek financings from other existing and/or new investors to raise necessary funds through a combination of public or private

equity offerings.

The Company may also pursue debt financings, other financing mechanisms, research grants, or strategic collaborations

and licensing arrangements.

sources during the first quarter of 2024, it may be forced to curtail or cease its operations.

Cash requirements and cash resource

needs will vary significantly depending upon the timing of the financial and other resource needs that will be required to complete ongoing

development, pre-clinical and clinical testing of product candidates, as well as regulatory efforts and collaborative arrangements necessary

for the Company’s product candidates that are currently under development.

The Company is currently seeking and will continue to

seek financings from other existing and/or new investors to raise necessary funds through a combination of public or private equity offerings.

The Company may also pursue debt financings, other financing mechanisms, research grants, or strategic collaborations and licensing arrangements.

The Company may not be able to obtain additional financing on favorable terms, if at all.

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of Consolidation

consolidated financial statements include the accounts of Biostage, and its three wholly-owned subsidiaries, Harvard Apparatus Regenerative

Technology Limited (Hong Kong), Harvard Apparatus Regenerative Technology GmbH (Germany) and Biostage Limited (UK).

The functional currency

for these subsidiaries is the U.S dollar.

All intercompany balances and transactions have been eliminated in consolidation.

consolidated financial statements include the accounts of Harvard Apparatus Regenerative Technology, Inc.

(Regenerative Biotech) and its three

wholly-owned subsidiaries, Harvard Apparatus Regenerative Technology Limited (Hong Kong), Harvard Apparatus Regenerative Technology

(Hangzhou) Limited (China) and Harvard Apparatus Regenerative Technology GmbH (Germany).

All intercompany balances and transactions

have been eliminated in consolidation.

process of preparing consolidated financial statements in conformity with U.S.

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Actual results could differ from those estimates.

Company has one business segment and does not have significant costs or assets outside the U.S.

Cash Concentrations

following table provides a reconciliation of cash and restricted cash reported within the consolidated balance sheets that sum to the

total of the same amounts shown in the consolidated statements of cash flows:

Schedule of Cash and Restricted Cash

(in thousands)

Restricted cash

Total cash and restricted

cash as shown in the consolidated statements of cash flows

cash consisted of approximately $ 50,000 held as collateral for the Company’s credit card program as of December 31, 2021.

2022, we cancelled our corporate credit card and liquidated our money market account that was held as collateral for our corporate credit

The Company’s consolidated statements of cash flows include restricted cash with cash when reconciling the beginning-of-period

and end-of-period total amounts shown on such statements.

recognize revenue in accordance with FASB ASC 606, Revenue from Contracts with Customers .

We offer consumer products primarily

through a third-party online store.

Revenue is recognized at a point in time when control of the goods is transferred to the customer,

which generally occurs upon the delivery to the customer.

For any company direct sales to customers, revenue is recognized at a point

in time upon shipment of product or hand-delivery to customer.

Revenue also excludes any amounts collected on behalf of third parties,

including sales and indirect taxes.

identify a performance obligation as distinct if both the following criteria are true:

the customer can benefit from the good or service

either on its own or together with other resources that are readily available to the customer and the entity’s promise to transfer

the good or service to the customer is separately identifiable from other promises in the contract.

Determining the standalone selling

price (“SSP”) and allocation of consideration from a contract to the individual performance obligations, and the appropriate

timing of revenue recognition, is the result of significant qualitative and quantitative judgments.

Management considers a variety of

factors such as historical sales, usage rates, costs, and expected margin, which may vary over time depending upon the unique facts and

circumstances related to each performance obligation in making these estimates.

While changes in the allocation of the SSP between performance

obligations will not affect the amount of total revenue recognized for a particular contract, any material changes could impact the timing

of revenue recognition, which would have a material effect on our financial position and result of operations.

This is because the contract

consideration is allocated to each performance obligation, delivered or undelivered, at the inception of the contract based on the SSP

of each distinct performance obligation.

of sales primarily consists of the purchase price of consumer products, taxes, inbound and outbound shipping costs.

Shipping costs to

receive products from our suppliers are recognized as cost of sales when incurred.

E-commerce processing and related transaction costs,

including those associated with seller transactions, are classified in sales and marketing on our consolidated statements of

and Development

and development costs are expensed as incurred.

and Marketing

and marketing costs include advertising and payroll and related expenses for personnel engaged in marketing and selling activities.

and Administrative

and administrative expenses primarily consist of costs for corporate functions, including payroll and related expenses;

facilities and

equipment expenses, such as depreciation and amortization expense and rent;

and professional fees.

Segment Information

Company manages its operations as two separate operating segments for the purposes of assessing performance and making operating

The Company has one operating unit focused on the development and commercialization of therapies to cure patients of

cancers, injuries, and birth defects of the gastro-intestinal tract and the airways.

The other operating unit is focused on personal

healthcare through longevity dietary supplements.

We have determined that our chief executive officer is the chief operating

decision maker (CODM).

The CODM reviews financial information presented by operating unit.

Resource allocation decisions are

made by the CODM based on operating unit results.

and Cash Equivalents

Company considers all highly liquid investments with a maturity of three months or less at the date of purchase to be cash

The Company currently invests available cash in money market funds.

As of December 31, 2023, the Company had

approximately $ 111,000

of cash equivalents in a money market fund.

Accounts Receivable

are provided for estimated amounts of accounts receivable which may not be collected.

December 31, 202 3 ,

we determined that no allowance against accounts receivable was necessary.

consisting of products available for sale, are primarily accounted for using the first-in, first-out method, and are valued at the lower

of cost or net realizable value.

maintain ownership of our inventory at the third-party warehouse, regardless of whether fulfillment is provided by us or the third-party

e-commerce seller, and therefore these products are included in our inventories.

Deferred Financing Costs

We capitalized costs relating to a

registered offering that we postponed in 2023 but expect to resume in the near future.

The costs include payments made to attorneys,

accountants, regulators and consultants.

Once we complete the registered offering, the deferred financing costs will be reclassified

to stockholders’ equity (deficit) on the consolidated balance sheets to offset the proceeds from the registered offering.

prepaid contracts

have contracted with partners relating to our clinical trial activities.

Upon execution of the contracts, we made initial payments

million as deposits recorded as long-term assets and will be applied against final invoices which are more than a year away.

The deposits will be recorded as expense when the clinical trial is substantially

Costs for the clinical trial activities throughout our clinical trial under these contracts are recognized as expense and payable

based on costs incurred.

Plant and Equipment

plant and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the

assets as follows:

plant and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets

Schedule of Property Plant and Equipment Estimated Useful Lives

of expected useful life

Leasehold improvements

Shorter of expected useful life

or lease term

machinery and equipment, computer equipment and software

Computer equipment and software

Furniture, machinery and equipment

and repairs are charged to expense as incurred, while any additions or improvements are capitalized.

8 unchanged sentences

Through December 31, 2023, no such impairment charges have been recorded.

and Development

and development costs are expensed as incurred.

Company measures all stock options and restricted stock awards granted to employees, directors and non-employees based on the fair value

19 unchanged sentences

periods if actual forfeitures differ from those estimates.

Until December 31, 2022, we estimated forfeitures at the time of grant

and would revise our estimate, if necessary, in subsequent periods.

As of January 1, 2023, we account for forfeitures as they occur.

fair value of Restricted Stock Units, or RSUs, is based on the number of shares granted and market price of the stock on the date of

11 unchanged sentences

Deferred tax assets and liabilities are recorded net as long-term on the consolidated balance sheets.

Foreign Currency

Assets and liabilities of non-U.S.

operations where

the functional currency is other than the U.S.

dollar are translated from the functional currency into U.S.

dollars at year end exchange

rates, and revenues and expenses are translated at average rates prevailing during the year.

Resulting translation adjustments are accumulated

as part of accumulated other comprehensive income.

Transaction gains or losses are recognized in income or loss in the period in which

The cumulative translation adjustment for the year ended December 31, 2023 was less than $ 1,000 and therefore not separately

reported on the consolidated financial statements.

valuation allowance is recorded when it is more likely than not that some or all of the net deferred tax assets will not be realized.

37 unchanged sentences

believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

income is recognized when qualified research and development costs are incurred and recorded in other income (expense), net in the consolidated

statements of operations.

When evaluating grant revenue from the SBIR grant, the Company considered the accounting requirements under

the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 606, Revenue From Contracts With Customers .

The Company concluded that ASC 606 did not apply as there is no exchange of goods or services or an exchange of intellectual property

between the parties;

therefore, the Company presents grant income in other income.

March 28, 2018, the Company was 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 the pediatric 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, the Company was 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, the Company was 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,

In September of 2020, the Company filed and was 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, the Company recognized approximately $ 0

and $ 165,000

of grant income, respectively, from Phase II of the SBIR grant.

The aggregate SBIR grant provided a total award of $ 1.8

million, of which, approximately $ 1.5

million had been recognized through December 31, 2022.

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

Recent Accounting Pronouncements

Accounting Pronouncements

time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies we adopt as of the specified effective

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impact on our consolidated financial statements.

In June 2016, the FASB issued ASU No.

2016-13, Financial

Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments (ASU 2016-12) .

The new standard requires

that expected credit losses relating to financial assets measured on an amortized cost basis and available-for-sale debt securities be

recorded through an allowance for credit losses.

It also limits the amount of credit losses to be recognized for available-for-sale debt

securities to the amount by which carrying value exceeds fair value and also requires the reversal of previously recognized credit losses

if fair value increases.

The Company adopted this standard on January 1, 2023, and the adoption of ASU 2016-13 did not have a material

impact on its consolidated financial statements.

December 2019 the FASB issued Accounting Standards Update No.

2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for

Income Taxes.

This standard removes certain exceptions to the general principles in Topic 740 and simplifies certain other aspects

of the accounting for income taxes.

This standard became effective on January 1, 2021, and did not have a material impact on the

Company’s consolidated financial statements and related disclosures.

Notes Payable

May 4, 2020, the Company obtained a loan from Bank of America in the aggregate amount of approximately $ 0.4 million, pursuant to the

Paycheck Protection Program, established as part of the CARES Act.

Such loan was evidenced by a promissory note dated May 4, 2020 issued

by the Company and accrued interest at a fixed interest rate of 1 % per annum from the funding date of May 4, 2020.

On December 18, 2020,

the Company submitted the loan forgiveness application for the entire borrowings of approximately $ 0.4 million to the lender and was

notified on January 7, 2021 that the application was submitted to the Small Business Administration, or SBA, for review.

On May 23, 2021,

the Company was notified that the SBA determined that the application for loan forgiveness was approved, and that the SBA remitted the

forgiven amount to the Lender.

Payments of principal and interest were deferred since the funding under the original terms of the promissory

note and all such amounts were forgiven.

Company has accounted for the loan under FASB ASC 470, Debt .

As such, the Notes Payable and applicable accrued interest have been

recorded as forgiveness of the Notes Payable resulting in a gain of approximately $ 408,000 for the year ended December 31, 2021.

June 2016, the FASB issued ASU No.

2016-13, Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial

Instruments (ASU 2016-12) .

The new standard requires that expected credit losses relating to financial assets measured on an amortized

cost basis and available-for-sale debt securities be recorded through an allowance for credit losses.

It also limits the amount of credit

losses to be recognized for available-for-sale debt securities to the amount by which carrying value exceeds fair value and also requires

the reversal of previously recognized credit losses if fair value increases.

The Company adopted this standard on January 1, 2023, and

the adoption of ASU 2016-13 did not have a material impact on its consolidated financial statements.

Fair Value Measurements

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that is significant to the fair value measurement.

Company had no assets or liabilities classified as fair value instruments as of December 31, 2022 and no assets or liabilities

classified as Level 2 as of December 31, 2021.

The Company’s restricted cash served as collateral for the Company’s

credit card program held in a demand money market account and measured at fair value based on quoted prices, which are Level 1

The Company classified warrants to purchase common stock that were accounted for as liabilities as discussed in Note 8 are

classified as Level 3 liabilities.

following fair value hierarchy table presents information about the Company’s financial assets and liabilities measured at fair

value on a recurring basis as of December 31, 2021:

of Assets and Liabilities Measured at Fair Value on a Recurring Basis

Value Measurement as of December 31, 2021

(in thousands)

The Company had no assets or liabilities classified as Level 2 or Level

3 as of December 31, 2023 and 2022.

In 2023, the Company had a certificate of deposit which matured in October 2023 with the remaining

$ 1.2 million released from short-term investments into cash and cash equivalents.

The carrying value of financial instruments (consisting

of cash, accounts payable, accrued compensation and accrued expenses) is considered to be representative of their respective fair values

due to the short-term nature of those instruments.

income is included as interest income in the accompanying consolidated statement of operations for the year ended December 31, 2023.

were no transfers between Level 1, Level 2 and Level 3 in either of the years ended December 31, 2023 and December 31, 2022.

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(in thousands)

Other current assets

Prepaid contracts

Total prepaid expenses and other current assets

5 unchanged sentences

Furniture, machinery and equipment

Computer equipment and

Computer equipment and software

Total property, plant and equipment

accumulated depreciation

Property, plant and

equipment, net

Company determined that there were fully depreciated fixed assets no longer in use and the company therefore wrote off $ 1.1 million

of those assets as of December 31, 2022.

Depreciation expense amounted to approximately $ 52,000

and $ 107,000 for the

years ended December 31, 2022 and 2021, respectively.

Property, plant and equipment, net

expense amounted to approximately $ 35,000 and $ 52,000 for the years ended December 31, 2023 and 2022, respectively.

Long-term prepaid contracts

We have contracted with partners

relating to our clinical trial activities.

Upon execution of the contracts, we made initial payments of $ 1.2

million as deposits recorded as long-term assets and will be applied against final invoices which are more than a year away.

will be recorded as expense when the clinical trial is substantially completed.

Costs for the clinical trial activities throughout

our clinical trial under these contracts are recognized as expense and payable based on costs incurred.

Accrued and Other Current Liabilities

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Audit services

Other liabilities

Total expenses

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warrants continued to be re-measured at each reporting period as long as they were outstanding and un-modified.

In February 2022,

the remaining 92,212 warrants expired unexercised.

Company had re-measured the liability for the remaining outstanding warrants to their estimated fair value using the Black-Scholes option

pricing model with the following weighted average assumptions:

of Option Pricing Weighted Average Assumptions

for Estimating Fair

on Reporting Date of:

Risk-free interest rate

Expected volatility

Expected term (in years)

Expected dividend yield

Exercise Price

Market value of common stock

following table presents a reconciliation of the Company’s warrant liabilities for the years ended December 31, 2022 and 2021:

In February 2022, the

remaining 92,212 warrants expired unexercised.

following table presents a reconciliation of the Company’s warrant liabilities for the year ended December 31, 2022:

of Warrant Liability

(in thousands)

Balance as of December 31, 2020

Change in fair value upon re-measurement

Balance as of December 31, 2021

Change in fair value upon re-measurement

Balance as of December 31, 2022

as of January 1, 2022

in fair value upon re-measurement

as of December 31, 2022

Commitments and Contingencies

April 14, 2017, representatives for the estate of an individual plaintiff filed a wrongful death complaint with the Suffolk Superior

Court, in the County of Suffolk, Massachusetts, or the “Court”, against the Company and other defendants, including Harvard

Bioscience, our former parent entity prior to the spin-off of the Company in 2013, as well as another third party.

The complaint seeks

payment for an unspecified amount of damages and alleges that the plaintiff sustained terminal injuries allegedly caused by products,

including one synthetic trachea scaffold and two bioreactors, provided by certain of the named defendants and utilized in connection

with surgeries performed by third parties in Europe in 2012 and 2013.

This lawsuit relates to the Company’s first-generation trachea

scaffold technology for which the Company discontinued development in 2014, and not to the Company’s current esophageal

Court, in the County of Suffolk, Massachusetts, against the Company and other defendants, including Harvard Bioscience, Inc., or HBIO,

the former parent of the Company that spun off the Company in 2013, as well as another third party.

The complaint sought payment for

an unspecified amount of damages and alleged that the plaintiff sustained terminal injuries allegedly caused by products provided by

certain of the named defendants and utilized in connection with surgeries performed by third parties in Europe in 2012 and 2013.

lawsuit related to the Company’s first-generation trachea scaffold technology for which the Company discontinued development in

2014, and not to the Company’s current HRGN Esophageal Implant.

April 27, 2022, the Company and HBIO executed a settlement with the plaintiffs (the “Settlement”), which resolves all claims

relating to the litigation.

The Settlement resulted in the dismissal with prejudice of the wrongful death claim, and neither we nor HBIO

admitted any fault or liability in connection with the claim.

The Settlement also resolved any and all claims by and between the parties

and our products liability insurance carriers, which resulted in the dismissal with prejudice of all claims asserted by or against those

carriers, the Company and HBIO.

However, based on review of the circumstances surrounding the Settlement, the Company recorded an accrual for

this matter of approximately $ 3.3 million in general and administrative expenses during the year ended December 31, 2021.

relation to the litigation, the Company has incurred approximately $ 5.9 million

of aggregate costs, of which 100 %

has been paid as of December 31, 2022.

This aggregate amount includes the cost of both the accrual for contingency matter of

approximately $ 3.3

million and approximately $ 2.6

million of legal and related costs incurred by us which consist of attorney’s fees and advisor and specialist costs as part of

our defense in this matter.

For the year ended December 31, 2022, the Company incurred legal and related costs of approximately $ 1.3

million recorded in general and administrative expenses.

On March 3, 2022, the Company received a cash payment of approximately $ 0.1

million from Medmarc, our insurance carrier.

This amount represented a reimbursement of previously incurred legal costs and was

recorded as a reduction to general and administrative expenses during the year ended December 31, 2022.

respect to such $ 5.9 million of costs described above, the Company was required to either pay such costs directly or indemnify HBIO as to such

amounts it incurs.

Of such amounts, the Company anticipated that HBIO would pay an aggregate amount of $ 4.0 million by the end of the second quarter

With respect to the indemnification obligation of the Company to HBIO pertaining to such costs, the Company and HBIO entered into a Preferred

Issuance Agreement dated as of April 27, 2022, or the “PIA”.

In connection with the PIA, the Company and HBIO agreed that once HBIO

had paid at least $ 4.0 million in such costs, to satisfy our indemnification obligations with respect thereto, in lieu of paying cash,

the Company would issue senior convertible preferred stock to HBIO that will contain terms as described in the PIA, including the term sheet attached

On June 10, 2022, following the execution of a subscription agreement and HBIO providing evidence of payment of the requisite

$ 4.0 million amount, the Company issued HBIO 4,000 shares of Series E Preferred Stock at a price of $ 1,000 per share to satisfy our related indemnification

obligations aggregating $ 4.0 million, which included the accrual for contingency of approximately $ 3.3 million and approximately $ 0.8

million of legal and related costs paid on behalf of the Company by HBIO.

The Settlement resulted in the dismissal with prejudice of the wrongful death claim, and neither the Company

nor HBIO admit any fault or liability in connection with the claim.

The Settlement also resolved any and all claims by and between the

parties and the Company’s product liability insurance carriers, which resulted in the dismissal with prejudice of all claims asserted

by or against those carriers, the Company and HBIO.

relation to the litigation, the Company paid approximately $ 5.9 million of aggregate costs related to the lawsuit.

As of December 31,

2022, all such lawsuit related costs had been paid or otherwise satisfied as provided below.

This aggregate amount included the cost

of legal and related costs incurred by the Company, which consisted of attorneys’ fees and advisor and specialist costs as part

of its defense in this matter.

On March 3, 2022, the Company received a cash payment of approximately $ 0.1 million from Medmarc, the

Company’s insurance carrier.

This amount represented a reimbursement of previously incurred legal costs and was recorded as a reduction

to general and administrative expenses during the year ended December 31, 2022.

respect to such $ 5.9 million of costs described above, the Company was required to either pay such costs directly or indemnify HBIO as

to such amounts it incurs.

Of such amounts, the Company anticipated that HBIO would pay an aggregate amount of $ 4.0 million by the end

of the second quarter of 2022.

With respect to the indemnification obligation of the Company to HBIO pertaining to such costs, the Company

and HBIO entered into a Preferred Issuance Agreement dated as of April 27, 2022 (the PIA).

In connection with the PIA, the Company and

HBIO agreed that once HBIO had paid at least $ 4.0 million in such costs, to satisfy the Company’s indemnification obligations with

respect thereto, in lieu of paying cash, the Company would issue senior 8 % convertible preferred stock to HBIO that will contain terms

as described in the PIA, including the term sheet attached thereto.

On June 10, 2022, following the execution of a subscription agreement

and HBIO providing evidence of payment of the requisite $ 4.0 million amount, the Company issued HBIO 4,000 shares of Series E 8 % Convertible

Preferred Stock at a price of $ 1,000 per share to satisfy the Company’s related indemnification obligations aggregating $ 4.0 million,

which included the accrual for contingency of $ 3.3 million and approximately $ 0.8 million of legal and related costs paid on behalf of

the Company by HBIO previously included in accrued expenses.

time to time, the Company may be involved in various claims and legal proceedings arising in the ordinary course of business.

the above matter, there are no such matters pending that the Company expects to be material in relation to its business, financial condition,

and results of operations or cash flows.

results of operations, or cash flows.

We currently have a co-development initiative

with Yale University and the McGowan Institute for Regenerative Medicine at the University of Pittsburgh.

We are required to make advance

payments of approximately $ 130,000 and $ 61,000 , respectively at inception of the contracts.

We plan to make these advance payments in

the second quarter of 2024.

The universities started preparatory work in 2023 with substantial work to be done in 2024.

can terminate the contract with reasonable notice and any incurred costs will be reimbursed by us to the universities.

Company leases laboratory and office space and certain equipment with remaining terms ranging from 1 year to 3 years.

laboratory and office arrangement is under a sublease that was renewed in December of 2022 and currently extends through May 31, 2024.

laboratory and office space arrangement is under a sublease that was renewed in December of 2022 and currently extends through May 31,

This lease automatically renews annually for one-year periods unless the Company or the counterparty provides a notice of termination

within one hundred and eighty days prior to May 31st of each year.

of the Company’s leases qualify as operating leases.

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leases in its consolidated balance sheets:

of Operating Leases in Consolidated Balance Sheets

Sheet Classification

Schedule of Operating Leases in Consolidated Balance Sheets

Balance Sheet Classification

(in thousands)

Operating lease assets

Right-of-use asset, net

Current portion of operating lease liabilities

Operating lease liabilities,

net of current portion

Operating lease liabilities,

net of current portion

Total operating lease

paid for leases included in cash used in operating activities in the Company’s consolidated statements of cash flows during

each of the years ended December 31, 2022, and 2021 amounted to approximately $ 121,000 .

Operating lease liabilities, net of current portion

Total operating lease liabilities

paid for leases during each

of the years ended December 31, 2023 and 2022 amounted to approximately $ 127,000 and $ 121,000 , respectively.

weighted average remaining lease terms and weighted average discount rates as of December 31, 2023 and 2022 were as follows:

of Weighted Average Lease Term and Discount Rates

ended December 31,

Year ended December 31,

Remaining lease term (in years)

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following table summarizes the effect of lease costs in the Company’s consolidated statements of operations:

Summary of Lease Expense Categories in Consolidated Statements of Operations

the Year Ended December 31,

of Operating Lease Expense Categories in Consolidated Statements of Operations

For the Year Ended December 31,

(in thousands)

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Research and development

Sales and marketing

General and administrative

minimum lease payments for the next two years and thereafter are as follows:

minimum lease payments for the next year is as follows:

of Minimum Lease Payments

December 31, 2023

(in thousands)

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imputed interest

Present value of

operating lease liabilities

Present value of operating lease liabilities

reconciliation of taxes utilizing the expected federal tax rate of 21 % and the effective tax rate is as follows:

Schedule of Effective Income Tax

ended December 31,

Computed “expected”

income tax benefit

State income tax benefit, net of federal income

Permanent items, primarily change in fair value

of warrants and non-deductible share-based compensation

Stock-option cancellations

Change in valuation

Years ended December 31,

Computed “expected” income tax benefit

State income tax benefit, net of federal income tax benefit

Change in valuation allowance

Total income taxes

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of Deferred tax Assets and Liabilities

ended December 31,

Years ended December 31,

(in thousands)

Deferred tax assets:

Operating loss

and credit carryforwards

Capitalized research and

Operating loss and credit carryforwards

Capitalized research and development

Stock-based compensation

Accrual for contingency

Lease liabilities

book over tax depreciation

Total deferred tax assets

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Deferred tax liability:

Operating lease assets

Total deferred tax liability

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Company’s management believes that it is more likely than not that these assets will not be realized.

The valuation allowance increased

by approximately $ 2.9 million and $ 2.1 million for the years ended December 31, 2022 and 2021, respectively, primarily as a result of

operating losses generated with no corresponding financial statement benefit.

The valuation allowance decreased

by approximately $ 0.2

million for the year ended December 31, 2023 and increased by approximately $ 2.9 million

for the year ended December 31, 2022, respectively, primarily as a result of operating losses generated with no corresponding financial

statement benefit.

of December 31, 2023, the Company had federal net operating loss carryforwards, or NOLs, of approximately $ 68.7 million to offset future

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rulings and the tax opinion that Harvard Bioscience received from legal counsel to Harvard Bioscience rely on certain representations,

assumptions and undertakings, including those relating to the past and future conduct of the Biostage business, and neither the private

letter and supplemental rulings nor the opinion would be valid if such representations, assumptions and undertakings were incorrect.

Moreover, the private letter and supplemental rulings do not address all the issues that are relevant to determining whether the Distribution

will qualify for tax-free treatment.

Notwithstanding the private letter and supplemental rulings and opinion, the IRS could determine

the Distribution should be treated as a taxable transaction for U.S.

federal income tax purposes if, among other reasons, it determines

any of the representations, assumptions or undertakings that were included in the request for the private letter and supplemental rulings

are false or have been violated or if it disagrees with the conclusions in the opinion that are not covered by the IRS ruling.

assumptions and undertakings, including those relating to the past and future conduct of the Harvard Apparatus Regenerative Technology

business, and neither the private letter and supplemental rulings nor the opinion would be valid if such representations, assumptions

and undertakings were incorrect.

Moreover, the private letter and supplemental rulings do not address all the issues that are relevant

to determining whether the Distribution will qualify for tax-free treatment.

Notwithstanding the private letter and supplemental rulings

and opinion, the IRS could determine the Distribution should be treated as a taxable transaction for U.S.

federal income tax purposes

if, among other reasons, it determines any of the representations, assumptions or undertakings that were included in the request for

the private letter and supplemental rulings are false or have been violated or if it disagrees with the conclusions in the opinion that

are not covered by the IRS ruling.

preserve the tax-free treatment to Harvard Bioscience of the Separation and Distribution, for the two-year period following the Distribution,

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Company’s common stock in a taxable sale for its fair market value, and Harvard Bioscience stockholders who received shares of

Biostage common stock in the Distribution would be subject to tax as if they had received a taxable Distribution equal to the fair market

value of such shares.

Harvard Apparatus Regenerative Technology common stock in the Distribution would be subject to tax as if they had received a taxable

Distribution equal to the fair market value of such shares.

the tax sharing agreement between Harvard Bioscience and the Company, the Company would generally be required to indemnify Harvard Bioscience

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share to satisfy the Company’s related indemnification obligations pertaining to the $ 4.0 million, in lieu of paying cash.

December 31, 2022, there were 4,000 shares of Series E Preferred outstanding and approximately $ 180,000 accrued as dividends payable

as shares of Series E Preferred.

rights, preferences, and privileges of the Series E Preferred stock were as follows as of December 31, 2022:

Payable quarterly in additional shares of Series E Preferred stock at a rate of 8 % per annum, accrued daily and compounded quarterly.

The holders of Series E Preferred stock shall have no voting rights except as required by applicable law.

As long as any shares of Series E Preferred stock are outstanding, the holder of the Series E Preferred stock has certain consent

rights with respect to the Company (a) incurring any indebtedness for borrowed money or any guaranty

therefor in excess of $ 500,000 individually or in the aggregate, (b) entering into certain new material related party transactions, and

The Series E Preferred stock shall, with respect to dividends and distributions upon any voluntary or involuntary liquidation,

dissolution or winding up of the Company or a deemed liquidation event or otherwise, rank prior to all classes of Common Stock of the

Company and, except for any Preferred Stock that may be pari passu or senior to the Series E Preferred Stock, in each case, if consented

to by the holder of the Series E Preferred, all other classes or series of Preferred Stock of the Company, whether currently existing

or hereafter created.

Each share of Series E Preferred stock will automatically convert into shares of Common Stock of the Company upon the

earlier to occur of the Company’s offering that includes common stock (whether private placement or public offering) that coincides

with its uplisting onto NASDAQ, its initial public offering pursuant to a Registration Statement on Form S-1 that includes common stock

following the issuance of the Series E Preferred, or its initial private placement that includes common stock following the issuance

of the Series E Preferred in the event the gross proceeds of such private placement are at least $ 4,000,000 .

In such instance, each share

of Series E Preferred will convert into that number of shares of Common Stock determined by dividing (i) the stated value plus all accrued

and unpaid dividends, by (ii) the lowest price per share of common stock purchased in the applicable offering by the Company which triggered

the mandatory conversion, or if such price cannot be reliably determined, a reasonably calculated price per common share determined by

the Company and the holder.

Each share of Series E Preferred stock will also be subject to optional conversion by the holder thereof into that number

of shares of Common Stock determined by dividing (i) the stated value plus all accrued and unpaid dividends, by (ii) a price per share

equal to the average of the volume weighted average trading prices of the Common Stock for the most recently completed sixty (60) consecutive

trading days prior to the date of determination.

Classification :

The conversion options require the settlement through a variable number of shares.

Based on the mechanic of the conversion

options, it is not possible to determine if the company would be able to satisfy the settlement of the conversion option.

approval would be required to increase the number of authorized common shares.

This action would be outside of the control of the Company.

Accordingly, it is presumed that cash settlement would be required.

Management has determined that based upon this analysis, temporary

equity classification would be appropriate.

than Series E Preferred Shares, there were no other shares of any of the other classes of preferred stock outstanding as of December

Authorized shares for each preferred stock class is as follows:

January 18, 2023, HBIO converted 200 Series E Preferred Shares with accrued dividends of $ 9,545 into 31,933 shares of common stock.

connection with the private placement, as of April 12, 2023, the Company had received $ 6.0 million in aggregate proceeds in such private

The private placement resulted in gross proceeds of at least $ 4.0 million which triggered the mandatory conversion of all

the Company’s outstanding Series E Preferred Stock and related accrued dividends into shares of common stock at a conversion price

of $ 6.00 per share.

The conversion resulted in 674,693 shares of common stock being issued to the holder of the Series E Preferred Stock.

Following such conversion, there are no shares of Series E Preferred Stock outstanding.

shares of any of the classes of preferred stock outstanding as of December 31, 2023.

There were no changes to authorized shares for

the years ending December 31, 2022 and 2023.

Authorized shares for each preferred stock class are as follows:

of Categories of Preferred Stock

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Capital Transactions

April 12, 2023 and on March 31, 2023, the Company entered into Securities Purchase Agreements, each a Purchase Agreement, with new and

existing investors, the Investors, pursuant to which the Investors agreed to purchase in a private placement an aggregate of 1,000,967

shares of common stock for the aggregate purchase price of approximately $ 6 million with a purchase price per unit of $ 6.00 .

Capital Transactions

May 12, 2022, the Company entered into Securities Purchase Agreements, each a Purchase Agreement, with new and existing investors, the

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The Company received an aggregate of $ 5.1 million gross and net proceeds from the Private Placement by May 16, 2022.

$ 5.1 million of gross and net proceeds where allocated $ 3.6 million and $ 1.5 million to the common stock and warrants, respectively.

$ 5.1 million of gross and net proceeds were allocated $ 3.6 million and $ 1.5 million to the common stock and warrants, respectively.

The Company classified these warrants on its consolidated balance sheets as equity as the warrants do not have any redemption features

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weighted average assumptions:

Schedule of Classification of Warrants to Equity

Risk-free interest rate

Expected volatility

Expected term

Expected dividend yield

Exercise price

Market value of common stock

June 2022, the Company issued 4,000

shares of Series E Convertible Preferred Stock at a price of $ 1,000

per share to satisfy certain indemnification obligations in the amount of $ 4.0 million,

in lieu of paying cash.

The Company issued an aggregate of 180 shares of Series E Convertible Preferred Stock relating to accrued

dividends during the year ended December 31, 2022.

Capital Transactions

November 26, 2021, the Company issued a total of 72,464 shares of its common stock at a purchase price of $ 3.45 per share and warrants

to purchase 36,232 shares of common stock to its Chief Executive Officer at a purchase price of $ 3.45 per unit.

Each unit consisted of

one share of common stock and a warrant to purchase one half of one share of common stock.

The shares and warrants were sold for aggregate

gross and net proceeds of approximately $ 0.3 million of which, $ 0.2 million and $ 0.1 million was allocated to the common stock and warrants,

respectively.

the year ended December 31, 2021, the Company issued a total of 1,300,000 shares of its common stock at a purchase price of $ 2.00 per

share and warrants to purchase 650,000 shares of common stock to a group of existing investors at a purchase price of $ 2.00 per unit.

Each unit consisted of one share of common stock and a warrant to purchase one half of one share of common stock.

The shares and warrants

were sold for aggregate gross and net proceeds of approximately $ 2.6 million, of which $ 1.8 million and $ 0.8 million was allocated to

the common stock and warrants, respectively.

Company classified the warrants in each of the aforementioned issuances on its consolidated balance sheets as equity, and valued the

respective warrants issued in conjunction with common stock placements using the Black-Scholes model based on the following weighted

average assumptions:

of Black-Scholes Model Based on Weighted Average Assumptions

Risk-free interest rate

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Market value of common stock

June 2022, the Company issued 4,000 shares of Series E Convertible Preferred Stock at a price of $ 1,000 per share to satisfy certain

indemnification obligations in the amount of $ 4.0 million, in lieu of paying cash.

The Company issued an aggregate of 180 shares of Series

E Convertible Preferred Stock relating to accrued dividends during the year ended December 31, 2022.

to purchase common stock activity for the year ended December 31, 2022 was as follows:

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Weighted-average

Outstanding at December 31, 2020

Outstanding at December 31, 2021

exercise price

Outstanding at January 1, 2022

( 1,040,187 )

Outstanding at December 31, 2022

Outstanding at December 31, 2023

There was no warrant activity during the year ended December 31, 2023.

Stock Purchase Plan

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Share-based Compensation

Amended and Restated Equity Incentive Plan

Apparatus Regenerative Technology Amended and Restated Equity Incentive Plan

Company maintains the Amended and Restated Equity Incentive Plan, or the Plan, for the benefit of certain officers, employees, non-employee

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be reissued under the Plan.

June 2020, the Company’s shareholders approved the Plan to, among other things, increase of the number of shares of the Company’s

common stock available for issuance pursuant thereto by 3,000,000 shares, which increased the total shares authorized to be issued under

the Plan to 5,098,000 .

There are 2,560,389 shares available for issuance as of December 31, 2022.

option activity under the Plan for the year ended December 31, 2022 was as follows:

of December 31, 2023, the Company’s Plan has 9,098,000

authorized shares to be issued under the Plan.

There are 5,034,760

shares available for issuance under the Plan as of December 31, 2023.

option activity under the Plan for the years ended December 31, 2022 and 2023 was as follows:

Schedule of Stock Option Activity

Weighted-average

Weighted-average contractual

Aggregate intrinsic value

(in thousands)

Outstanding at December 31, 2020

exercise price

Weighted-average contractual life (years)

Aggregate intrinsic value (in thousands)

Outstanding at January 1, 2022

Canceled / forfeited

Outstanding at December 31, 2022

Canceled / forfeited

Outstanding at December 31, 2023

Options exercisable at December 31, 2023

Options vested or

expected to vest

Options vested or expected to vest at December 31, 2023

Company’s outstanding stock options include 773,195 performance-based awards that have vesting provisions subject to the achievement

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have not yet been deemed probable for accounting purposes.

intrinsic value for outstanding options for the year ended December 31, 2022 was approximately $ 6.9 million is calculated as the difference

of the Company’s closing stock price of $ 5.50 per share as of December 30, 2022 and the weighted average exercise price of $ 3.95 .

As of December 31, 2022, unrecognized compensation cost related to unvested non-performance-based awards amounted to $ 1.1 million, which

will be recognized over a weighted-average period of 2.5 years.

intrinsic value for outstanding options for the year ended December 31, 2023 was approximately $ 5.7

million and calculated as the difference between the Company’s closing stock price of $ 4.99

per share as of December 29, 2023 and the weighted average exercise price of $ 4.64 .

As of December 31, 2023, unrecognized compensation cost related to unvested non-performance-based awards amounted to $ 3.9

million, which will be recognized over a weighted-average period of 2.2

weighted average assumptions for valuing the Company’s stock options granted were as follows:

Schedule of Weighted Average Assumptions

Ended December 31,

Year Ended December 31,

Risk-free interest rate

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compensation expense related to the Plan for the years ended December 31, 2023 and 2022 was allocated as follows:

Schedule of Share-based Compensation Expenses

Ended December 31,

of Share-based Compensation Expense

Years Ended December 31,

(in thousands)

Research and development

Selling, general and

administrative

Selling, general and administrative

Total stock-based compensation

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Schedule of Basic and Diluted Net Loss Per Share

Ended December 31,

(in thousands, except shares

and per share data)

Weighted-average shares outstanding

Net loss per share –

basic and diluted

Years Ended December 31,

(in thousands, except shares and per share data)

Preferred stock dividends

Net loss attributable to common stockholders

Basic and diluted weighted average common shares outstanding

Basic and diluted net loss per share attributable to common stockholders

Company’s potentially dilutive securities, which include stock options, unvested restricted common stock units and warrants, have

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for the years ended December 31, 2023 and 2022 because including them would have had an anti-dilutive effect:

Schedule of Antidilutive Securities Excluded From Computation

of Earnings Per Share

Ended December 31,

of Antidilutive Securities Excluded from Computation of Earnings per Share

Years Ended December 31,

Warrants to purchase common stock

Options to purchase

Options to purchase common stock

Series E convertible preferred stock

Segments and Geographical Information

Company’s chief operating decision maker is its Chief Executive Officer.

The Company’s chief operating decision maker evaluates

the operating results of the Company’s reportable segments based on revenues and net income (loss).

The Company has two operating and reportable segments:

i) Regenerative Biotech

focused on the development of regenerative medicine treatments with operations currently in the United States and ii) Longevity Products

relating to longevity products with operations currently in Asia.

The following table presents the Company’s reportable

segment results for the year ended 2023:

Schedule of Reportable Segments

Regenerative Biotech

Longevity Products

Subsequent Events

Company has performed an evaluation of subsequent events through the time of filing this Annual Report on Form 10-K with the Securities

Exchange Commission.

January 18, 2023, the Company issued 31,933 shares of common stock upon the conversion of 200 shares of Series E Convertible Preferred

Stock and accrued dividends.

In March 2024, the Company received cash deposits

in escrow of approximately $ 0.3 million from a group of prospective investors pertaining to a potential private placement transaction.

These funds remain the respective investor’s property and are being held by the Company in its bank account with Bank of America

until the execution of a common stock purchase agreement.

February 1, 2024, the Company entered into a loan arrangement with Junli He, the Chairman and Chief Executive Officer of the Company

(the “Lender”), pursuant to which the Lender has agreed to loan the Company an aggregate amount of $ 500,000 as evidenced

by a Bridge Note executed by the Company in favor of, and accepted by, the Lender (the “Bridge Note”).

Bridge Note accrues interest at an annual fixed rate of 8 % , and the principal amount thereof will be due and payable in full, together

with all accrued and unpaid interest thereon, on the earlier to occur of a) the closing date (or later date of capital being provided

pertaining to such continued offering that the following threshold is tripped) of the Company’s next capital raise that includes

gross proceeds of at least $ 5,000,000 or b) February 1, 2025.

The Bridge Note provides for optional conversion at the discretion of the

Lender, contains covenants, and provides for certain events of default including if the Company fails to pay when due any amount owed

thereunder, fails to comply with any agreement, covenant, condition, provision or term contained therein and other customary events of

Form 10-K Summary.

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previously filed document, such document is identified.

and Distribution Agreement between Biostage, Inc.

Separation and Distribution Agreement between Harvard Apparatus Regenerative Technology, Inc.

and Harvard Bioscience, Inc.

dated as of October 31, 2013 (previously filed as

an exhibit to the Company’s Current Report on Form 8-K, filed on November 6, 2013, and incorporated by reference thereto).

and Restated Certificate of Incorporation of Biostage, Inc.

(previously filed as an exhibit to the Company’s Registration Statement

on Form 10-12B, filed July 31, 2013, and incorporated by reference thereto).

of Amendment to Amended and Restated Certificate of Incorporation of Biostage, Inc.

dated March 30, 2016 (previously filed as an

exhibit to the Company’s Current Report on Form 8-K, filed on March 31, 2016, and incorporated by reference thereto).

of Amendment to Amended and Restated Certificate of Incorporation of Biostage, Inc.

dated May 26, 2016 (previously filed as an exhibit

to the Company’s Annual Report on Form 10-K, filed on March 17, 2017, and incorporated by reference thereto).

of Designations, Preferences and Rights of Series A Preferred Stock of Biostage, Inc.

classifying and designating the Series A Junior

Participating Cumulative Preferred Stock (previously filed as an exhibit to the Company’s Registration Statement on Form 8-A,

filed October 31, 2013, and incorporated by reference thereto).

of Designation of Series B Convertible Preferred Stock of Biostage, Inc.

classifying and designating the Series B Convertible Preferred

Stock (previously filed as an exhibit to the Company’s Current Report on Form 8-K, filed on February 12, 2015, and incorporated

by reference thereto).

of Amendment to Amended and Restated Certificate of Incorporation of Biostage, Inc.

dated April 26, 2017 (previously filed as an

exhibit to the Company’s Current Report on Form 8-K, filed on April 27, 2017, and incorporated by reference thereto).

of Designations, Preferences, Rights and Limitations of Series C Convertible Preferred Stock of Biostage, Inc.

classifying and designating

the Series C Convertible Preferred Stock (previously filed as an exhibit to the Company’s Current Report on Form 8-K, filed

on August 17, 2017, and incorporated by reference thereto).

of Elimination of Series A Junior Participating Cumulative Preferred Stock (previously filed as an exhibit to the Company’s

Current Report on Form 8-K, filed on August 17, 2017, and incorporated by reference thereto).

of Amendment to Amended and Restated Certificate of Incorporation of Biostage, Inc.

dated December 22, 2017 (previously filed as

an exhibit to the Company’s Current Report on Form 8-K, filed on December 22, 2017, and incorporated by reference thereto).

of Designations, Preferences, Rights and Limitations of Series D Convertible Preferred Stock of Biostage, Inc.

classifying and designating

the Series D Convertible Preferred Stock (previously filed as an exhibit to the Company’s Current Report on Form 8-K, filed

on January 3, 2018, and incorporated by reference thereto).

of Amendment to Amended and Restated Certificate of Incorporation of Biostage, Inc.

dated May 24, 2019 (previously filed as an exhibit

to the Company’s Current Report on Form 8-K, filed on May 28, 2019, and incorporated by reference thereto).

and Restated By-laws of the Biostage, Inc.

(previously filed as an exhibit to the Company’s Current Report on Form 8-K, filed

on March 31, 2016, and incorporated by reference thereto).

Stock Certificate evidencing shares of common stock (previously filed as an exhibit to the Company’s Registration Statement

on Form 10-12B, filed July 31, 2013, and incorporated by reference thereto).

Series B Convertible Preferred Stock Certificate (previously filed as an exhibit to the Company’s Annual Report on Form 10-K,

filed on March 27, 2015, and incorporated by reference thereto).

of Common Stock Purchase Warrant (previously filed as an exhibit to the Company’s Current Report on Form 8-K, filed on January

3, 2018, and incorporated by reference thereto).

of Amendment to Common Stock Purchase Warrant (previously filed as an exhibit to the Company’s Current Report on Form 8-K,

filed on December 18, 2019, and incorporated by reference thereto).

of Common Stock Purchase Warrant (previously filed as an exhibit to the Company’s Current Report on Form 8-K, filed on January

2, 2020, and incorporated by reference thereto).

of Common Stock Purchase Warrant (previously filed as an exhibit to the Company’s Current Report on Form 8 K, filed on June

22, 2021, and incorporated by reference thereto).

of Common Stock Purchase Warrant (previously filed as an exhibit to the Company’s Current Report on Form 8 K, filed on September

8, 2021, and incorporated by reference thereto).

of Common Stock Purchase Warrant (previously filed as an exhibit to the Company’s Current Report on Form 8 K, filed on November

30, 2021, and incorporated by reference thereto).

of Securities (previously filed as an exhibit to the Company’s Annual Report on Form 10 K, filed on March 27, 2020, and incorporated

by reference thereto).

of Common Stock Purchase Warrant (previously filed as an exhibit to the Company’s Current Report on Form 8-K, filed on May

13, 2022, and incorporated by reference thereto).

Property Matters Agreement between Biostage, Inc.

dated as of October 31, 2013 (previously filed as an exhibit to the Company’s Current Report on Form 8-K, filed on November 6, 2013, and incorporated by reference thereto).

Amended and Restated Certificate of Incorporation of Harvard Apparatus Regenerative Technology, Inc.

(previously filed as an exhibit to the Company’s Registration Statement on Form 10-12B, filed July 31, 2013, and incorporated by reference thereto).

Certificate of Amendment to Amended and Restated Certificate of Incorporation of Harvard Apparatus Regenerative Technology, Inc.

dated March 30, 2016 (previously filed as an exhibit to the Company’s Current Report on Form 8-K, filed on March 31, 2016, and incorporated by reference thereto).

Certificate of Amendment to Amended and Restated Certificate of Incorporation of Harvard Apparatus Regenerative Technology, Inc.

dated May 26, 2016 (previously filed as an exhibit to the Company’s Annual Report on Form 10-K, filed on March 17, 2017, and incorporated by reference thereto).

Certificate of Designations, Preferences and Rights of Series A Preferred Stock of Harvard Apparatus Regenerative Technology, Inc.

classifying and designating the Series A Junior Participating Cumulative Preferred Stock (previously filed as an exhibit to the Company’s Registration Statement on Form 8-A, filed October 31, 2013, and incorporated by reference thereto).

Certificate of Designation of Series B Convertible Preferred Stock of Harvard Apparatus Regenerative Technology, Inc.

classifying and designating the Series B Convertible Preferred Stock (previously filed as an exhibit to the Company’s Current Report on Form 8-K, filed on February 12, 2015, and incorporated by reference thereto).

Certificate of Amendment to Amended and Restated Certificate of Incorporation of Harvard Apparatus Regenerative Technology, Inc.

dated April 26, 2017 (previously filed as an exhibit to the Company’s Current Report on Form 8-K, filed on April 27, 2017, and incorporated by reference thereto).

Certificate of Designations, Preferences, Rights and Limitations of Series C Convertible Preferred Stock of Harvard Apparatus Regenerative Technology, Inc.

classifying and designating the Series C Convertible Preferred Stock (previously filed as an exhibit to the Company’s Current Report on Form 8-K, filed on August 17, 2017, and incorporated by reference thereto).

Certificate of Elimination of Series A Junior Participating Cumulative Preferred Stock (previously filed as an exhibit to the Company’s Current Report on Form 8-K, filed on August 17, 2017, and incorporated by reference thereto).

Certificate of Amendment to Amended and Restated Certificate of Incorporation of Harvard Apparatus Regenerative Technology, Inc.

dated December 22, 2017 (previously filed as an exhibit to the Company’s Current Report on Form 8-K, filed on December 22, 2017, and incorporated by reference thereto).

of Designations, Preferences, Rights and Limitations of Series D Convertible Preferred Stock of Harvard Apparatus Regenerative Technology,

classifying and designating the Series D Convertible Preferred Stock (previously filed as an exhibit to the Company’s

Current Report on Form 8-K, filed on January 3, 2018, and incorporated by reference thereto).

Certificate of Amendment to Amended and Restated Certificate of Incorporation of Harvard Apparatus Regenerative Technology, Inc.

dated May 24, 2019 (previously filed as an exhibit to the Company’s Current Report on Form 8-K, filed on May 28, 2019, and incorporated by reference thereto).

Amended and Restated By-laws of the Harvard Apparatus Regenerative Technology, Inc.

(previously filed as an exhibit to the Company’s Current Report on Form 8-K, filed on March 31, 2016, and incorporated by reference thereto).

Certificate of Amendment to Amended and Restated Certificate of Incorporation (previously filed as an exhibit to the Current Report on Form 8-K, filed on July 20, 2023, and incorporated herein by reference).

Third Amended and Restated Bylaws (previously filed as an exhibit to the Current Report on Form 8-K, filed on July 20, 2023, and incorporated herein by reference).

Specimen Stock Certificate evidencing shares of common stock (previously filed as an exhibit to the Company’s Registration Statement on Form 10-12B, filed July 31, 2013, and incorporated by reference thereto).

Specimen Series B Convertible Preferred Stock Certificate (previously filed as an exhibit to the Company’s Annual Report on Form 10-K, filed on March 27, 2015, and incorporated by reference thereto).

Form of Common Stock Purchase Warrant (previously filed as an exhibit to the Company’s Current Report on Form 8-K, filed on January 3, 2018, and incorporated by reference thereto).

Form of Amendment to Common Stock Purchase Warrant (previously filed as an exhibit to the Company’s Current Report on Form 8-K, filed on December 18, 2019, and incorporated by reference thereto).

Form of Common Stock Purchase Warrant (previously filed as an exhibit to the Company’s Current Report on Form 8-K, filed on January 2, 2020, and incorporated by reference thereto).

Form of Common Stock Purchase Warrant (previously filed as an exhibit to the Company’s Current Report on Form 8 K, filed on June 22, 2021, and incorporated by reference thereto).

Form of Common Stock Purchase Warrant (previously filed as an exhibit to the Company’s Current Report on Form 8 K, filed on September 8, 2021, and incorporated by reference thereto).

Form of Common Stock Purchase Warrant (previously filed as an exhibit to the Company’s Current Report on Form 8 K, filed on November 30, 2021, and incorporated by reference thereto).

Description of Securities (previously filed as an exhibit to the Company’s Annual Report on Form 10 K, filed on March 27, 2020, and incorporated by reference thereto).

Form of Common Stock Purchase Warrant (previously filed as an exhibit to the Company’s Current Report on Form 8-K, filed on May 13, 2022, and incorporated by reference thereto).

Intellectual Property Matters Agreement between Harvard Apparatus Regenerative Technology, Inc.

and Harvard Bioscience, Inc.

dated as of October 31, 2013 (previously filed as

an exhibit to the Company’s Current Report on Form 8-K, filed on November 6, 2013, and incorporated by reference thereto).

Distribution Agreement between Biostage, Inc.

dated as of October 31, 2013 (previously filed as an exhibit to the Company’s Current Report on Form 8-K, filed on November 6, 2013, and incorporated by reference thereto).

Product Distribution Agreement between Harvard Apparatus Regenerative Technology, Inc.

and Harvard Bioscience, Inc.

dated as of October 31, 2013 (previously filed as an exhibit

to the Company’s Current Report on Form 8-K, filed on November 6, 2013, and incorporated by reference thereto).

Sharing Agreement between Biostage, Inc.

dated as of October 31, 2013 (previously filed as an exhibit to the Company’s Current Report on Form 8-K, filed on November 6, 2013, and incorporated by reference thereto).

Tax Sharing Agreement between Harvard Apparatus Regenerative Technology, Inc.

and Harvard Bioscience, Inc.

dated as of October 31, 2013 (previously filed as an exhibit

to the Company’s Current Report on Form 8-K, filed on November 6, 2013, and incorporated by reference thereto).

by and between Biostage, Inc.

dated as of October 31, 2013 (previously filed as an exhibit to the Company’s Current Report on Form 8-K, filed on November 6, 2013, and incorporated by reference thereto).

Sublease by and between Harvard Apparatus Regenerative Technology, Inc.

and Harvard Bioscience, Inc.

dated as of October 31, 2013 (previously filed as an exhibit to the Company’s

Current Report on Form 8-K, filed on November 6, 2013, and incorporated by reference thereto).

of Indemnification Agreement for Officers and Directors (previously filed as an exhibit to the Company’s Registration Statement

on Form 10-12B, filed July 31, 2013, and incorporated by reference thereto).

and Restated Equity Incentive Plan (previously filed as an exhibit to the Company’s Definitive Proxy Statement on Schedule

14A, filed on April 28, 2020, and incorporated by reference thereto).

Stock Purchase Plan (previously filed as an exhibit to the Company’s Registration Statement on Form 10-12B, filed July 31,

2013, and incorporated by reference thereto).

of Incentive Stock Option Agreement (previously filed as an exhibit to the Company’s Registration Statement on Form 10-12B,

filed July 31, 2013, and incorporated by reference thereto).

of Non-Qualified Stock Option Agreement for executive officers (previously filed as an exhibit to the Company’s Registration

Statement on Form 10-12B, filed July 31, 2013, and incorporated by reference thereto).

of Non-Qualified Stock Option Agreement for directors (previously filed as an exhibit to the Company’s Registration Statement

on Form 10-12B, filed July 31, 2013, and incorporated by reference thereto).

of Deferred Stock Award Agreement (previously filed as an exhibit to the Company’s Registration Statement on Form 10-12B, filed

July 31, 2013, and incorporated by reference thereto).

Sublicense Agreement dated as of December 7, 2012 between Biostage, Inc.

dated as of October 31, 2013 (previously filed as an exhibit to the Company’s Current Report on Form 8-K, filed on November 6, 2013, and incorporated by reference thereto).

Form of Indemnification Agreement for Officers and Directors (previously filed as an exhibit to the Company’s Registration Statement on Form 10-12B, filed July 31, 2013, and incorporated by reference thereto).

Third Amended and Restated Equity Incentive Plan, as amended (previously filed as exhibit to the Company’s Quarterly Report on Form 10-Q, filed on November 13, 2023, and incorporated by reference thereto).

Employee Stock Purchase Plan (previously filed as an exhibit to the Company’s Registration Statement on Form 10-12B, filed July 31, 2013, and incorporated by reference thereto).

Form of Incentive Stock Option Agreement (previously filed as an exhibit to the Company’s Registration Statement on Form 10-12B, filed July 31, 2013, and incorporated by reference thereto).

Form of Non-Qualified Stock Option Agreement for executive officers (previously filed as an exhibit to the Company’s Registration Statement on Form 10-12B, filed July 31, 2013, and incorporated by reference thereto).

Form of Non-Qualified Stock Option Agreement for directors (previously filed as an exhibit to the Company’s Registration Statement on Form 10-12B, filed July 31, 2013, and incorporated by reference thereto).

Form of Deferred Stock Award Agreement (previously filed as an exhibit to the Company’s Registration Statement on Form 10-12B, filed July 31, 2013, and incorporated by reference thereto).

Sublicense Agreement dated as of December 7, 2012 between Harvard Apparatus Regenerative Technology, Inc.

and Harvard Bioscience, Inc., and related Trademark License Agreement, dated December 19, 2002, by and between Harvard Bioscience, Inc.

and President and Fellows of Harvard College (previously filed as an exhibit to the Company’s Current Report on Form 8-K, filed on March 7, 2023, and incorporated by reference thereto).

Rights Assignment dated December 21, 2012 between Biostage, Inc.

Paolo Macchiarini (previously filed as an exhibit to the

Company’s Registration Statement on Form 10-12B, filed July 31, 2013, and incorporated by reference thereto).

Surgery Agreement dated as of May 21, 2012 between Biostage, Inc.

and State Budget Institution of Public Health Department Regional

Clinical Hospital #1 and Vladimir Alekseevich Porhanov (previously filed as an exhibit to the Company’s Registration Statement

on Form 10-12B, filed July 31, 2013, and incorporated by reference thereto).

Novel Surgery Agreement dated as of May 24, 2012 between Biostage, Inc.

and OSF Healthcare System, owner and operator of Saint Francis Medical Center and Children’s Hospital of Illinois, and Mark Holterman, M.D.

(previously filed as an exhibit to the Company’s Registration Statement on Form 10-12B, filed July 31, 2013, and incorporated by reference thereto).

to Novel Surgery Agreement dated as of April 5, 2013 between Biostage, Inc.

and OSF Healthcare System, owner and operator of Saint

Francis Medical Center and Children’s Hospital of Illinois, and Mark Holterman, M.D.

(previously filed as an exhibit to the

Company’s Registration Statement on Form 10-12B, filed July 31, 2013, and incorporated by reference thereto).

to Novel Surgery Agreement dated as of June 26, 2013 between Biostage, Inc.

and State Budget Institution of Public Health Department

Regional Clinical Hospital #1 and Igor S.

Polyakov (previously filed as an exhibit to the Company’s Registration Statement

on Form 10-12B, filed July 31, 2013, and incorporated by reference thereto).

Letter, dated June 4, 2018, between Biostage, Inc.

and William Fodor, PhD (previously filed as an exhibit to the Company’s

Current Report on Form 8-K, filed on July 10, 2018, and incorporated by reference thereto).

and Release Agreement, dated June 14, 2019, between Biostage, Inc.

and Thomas McNaughton (previously filed as an exhibit to the Company’s

Current Report on Form 8-K, filed on June 17, 2019, and incorporated by reference thereto).

and Release Agreement, dated January 31, 2020, between Biostage, Inc.

and James McGorry (previously filed as an exhibit to the Company’s

Current Report on Form 8-K, filed on February 7, 2020, and incorporated by reference thereto).

Issuance Agreement (previously filed as an exhibit to the Company’s Current Report on Form 8-K, filed on April 28, 2022 and

incorporated herein by reference).

of Securities Purchase Agreement (previously filed as an exhibit to the Company’s Current Report on Form 8-K, filed on May

13, 2022 and incorporated herein by reference).

Agreement, dated August 8, 2022, between Biostage, Inc.

Patent Rights Assignment dated December 21, 2012 between Harvard Apparatus Regenerative Technology, Inc.

Paolo Macchiarini (previously filed as an exhibit to the Company’s Registration Statement on Form 10-12B, filed July 31, 2013, and incorporated by reference thereto).

Offer Letter, dated June 4, 2018, between Harvard Apparatus Regenerative Technology, Inc.

and William Fodor, PhD (previously filed as an exhibit to the Company’s Current Report on Form 8-K, filed on July 10, 2018, and incorporated by reference thereto).

Form of Securities Purchase Agreement (previously filed as an exhibit to the Company’s Current Report on Form 8-K, filed on April 6, 2023 and incorporated herein by reference).

Employment Agreement, dated August 8, 2022, between Harvard Apparatus Regenerative Technology, Inc.

and Joseph L.

(previously filed as an exhibit to the Company’s

Current Report on Form 8-K, filed on August 9, 2022 and incorporated by reference thereto).

and Restated Employment Agreement, dated January 11, 2023, between Biostage, Inc.

and David Green (previously filed as an exhibit

to the Company’s Current Report on Form 8-K, filed on January 12, 2023 and incorporated by reference thereto).

Subsidiaries of Biostage, Inc.

(previously filed as an exhibit to the Company’s Current Report on Form 8-K, filed on August 9, 2022 and incorporated by reference thereto).

Amended and Restated Employment Agreement, dated January 11, 2023, between Harvard Apparatus Regenerative Technology, Inc.

and David Green (previously filed as an exhibit to the Company’s Current Report on Form 8-K, filed on January 12, 2023 and incorporated by reference thereto).

Employment Agreement, effective as of March 1, 2023, by and between Harvard Apparatus Regenerative Technology, Inc.

and Junli He (previously filed as an exhibit to the Current Report on Form 8-K, filed on March 14, 2023, and incorporated herein by reference).

Amendment to Employment Agreement, dated as of July 10, 2023, by and between Harvard Apparatus Regenerative Technology, Inc.

and Junli He (previously filed as an exhibit to the Current Report on Form 8-K, filed on July 10, 2023, and incorporated herein by reference).

Subsidiaries of Harvard Apparatus Regenerative Technology, Inc.

Consent of Marcum LLP.

Consent of Wei, Wei & Co.

Certification of Chief Executive Officer of Biostage., pursuant to Rules 13a-15(e) and 15d-15(e), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Chief Financial Officer of Biostage, Inc., pursuant to Rules 13a-15(e) and 15d-15(e), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Chief Executive Officer of Biostage, Inc., pursuant to 18 U.S.C.

Certification of Chief Executive Officer of Harvard Apparatus Regenerative Technology, Inc., pursuant to Rules 13a-15(e) and 15d-15(e), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Chief Financial Officer of Harvard Apparatus Regenerative Technology, Inc., pursuant to Rules 13a-15(e) and 15d-15(e), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Chief Executive Officer of Harvard Apparatus Regenerative Technology, Inc., pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Certification of Chief Financial Officer of Biostage, Inc., pursuant to 18 U.S.C.

Certification of Chief Financial Officer of Harvard Apparatus Regenerative Technology, Inc., pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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Taxonomy Extension Calculation Linkbase Document.

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Taxonomy Extension Label Linkbase Document.

Taxonomy Extension Presentation Linkbase Document.

XBRL Instance Document.

XBRL Taxonomy Extension Schema Document.

XBRL Taxonomy Extension Calculation Linkbase Document.

XBRL Taxonomy Extension Definition Linkbase Document.

XBRL Taxonomy Extension Label Linkbase Document.

XBRL Taxonomy Extension Presentation Linkbase Document.

Page Interactive Data File (formatted in iXBRL and contained in Exhibit 101)

8 unchanged sentences

charge upon written request.

Certain identified information has been excluded from

the exhibit because it is both not material and is of the type that the registrant treats as private or confidential.

identified information has been excluded from the exhibit because it is both not material and is of the type that the registrant

treats as private or confidential.

to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed

on its behalf by the undersigned, thereunto duly authorized.

Apparatus Regenerative Technology, Inc.

March 28, 2024

Junli (Jerry) He

Executive Officer

1 unchanged sentence

registrant and in the capacities and on the dates indicated:

Junli (Jerry) He

Executive Officer, Director, and Chairman

executive officer)

March 28, 2024

Joseph Damasio Jr.

1 unchanged sentence

financial officer and principal accounting officer)

March 28, 2024

Jason Jing Chen

March 28, 2024

Ronald Packard

March 28, 2024

Herman Sanchez

March 28, 2024

James Shmerling

March 28, 2024

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 9A. Controls and Procedures