Bone Biologics Corp: Form 10-Q for the period ended Sep 30, 2026

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q and audited consolidated financial statements for the years ended December 31, 2025 and 2024 and the related notes included in our Annual Report on Form 10-K filed for the fiscal year ended December 31, 2025, with the SEC on March 2, 2026. This discussion contains forward-looking statements reflecting our current expectations that involve risks and uncertainties. See “Note On Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions associated with these statements. Actual results and the timing of events could differ materially from those discussed in our forward-looking statements as a result of many factors.

Company Overview

We are a medical device company that is currently focused on bone regeneration in spinal fusion using the recombinant human protein known as NELL-1. NELL-1 in combination with DBM, demineralized bone matrix, is an osteopromotive recombinant protein that provides target specific control over bone regeneration. The NELL-1 technology platform has been licensed exclusively for worldwide applications to us through a technology transfer from UCLA TDG. UCLA TDG and the Company received guidance from the FDA that NELL-1/DBM will be classified as a device/drug combination product that will require an FDA-approved PMA before it can be commercialized in the United States.

We were founded by University of California professors in collaboration with an Osaka University professor and a University of Southern California surgeon in 2004 as a privately-held company with proprietary, patented platform technology. Our platform technology has been validated in sheep and non-human primate models to facilitate bone growth. We believe our platform technology has application in delivering improved outcomes in the surgical specialties of spinal, orthopedic, general orthopedic, plastic reconstruction, neurosurgery, interventional radiology, and sports medicine. Lead product development and clinical studies are targeted on spinal fusion surgery, one of the larger segments in the orthopedic market.

We are a clinical-stage entity. The production and marketing of our products and ongoing research and development activities are subject to extensive regulation by numerous governmental authorities in the United States. Prior to marketing in the United States, any combination product developed by us must undergo rigorous preclinical (animal) and clinical (human) testing and an extensive regulatory approval process implemented by the FDA under the Federal Food, Drug, and Cosmetic Act. There can be no assurance that we will not encounter problems in clinical trials that will cause us or the FDA to delay or suspend clinical trials.

Our success will depend in part on our ability to obtain and retain patents and product license rights, maintain trade secrets, and operate without infringing on the proprietary rights of others, both in the United States and other countries. In the second quarter of 2025, we submitted a patent application with the United States Patent and Trademark Office (“USPTO”) regarding proprietary compositions of rhNELL-1 polypeptide for treating bone conditions. There can be no assurance that the USPTO will approve our patent application or that the patents issued to or licensed by us will not be challenged, invalidated, rendered unenforceable, or circumvented, or that the rights granted thereunder will provide proprietary protection or competitive advantages to us.

During 2024, we announced the treatment of the first subjects in the multicenter, prospective, randomized pilot clinical study of our NB1 bone graft device. NB1 is NELL-1 protein combined with demineralized bone matrix (DBM) to provide rapid, specific and guided control over bone regeneration. Six hospital sites in Australia are now under agreement to participate in the study.

The pilot clinical study will evaluate the safety and effectiveness, fusion success, pain, function improvement and adverse events of NB1 in up to 30 adult subjects who undergo transforaminal lumbar interbody fusion to treat degenerative disc disease (DDD). To be enrolled in the study, subjects must have DDD at one level from L2-S1 and may also have up to Grade 1 spondylolisthesis or Grade 1 retrolisthesis at the involved level. The study is being conducted in Australia. The study design was previously reviewed and agreed upon by the FDA’s Division of Orthopedic Devices in a Pre-submission to support progression to a pivotal clinical trial in the United States.

July 2026 Private Placement

On July 9, 2026, pursuant to a securities purchase agreement dated July 7, 2026 (the “July 2026 Private Placement”), the Company sold 2,112,677 units to an investor at a purchase price of $1.419 per unit. Each unit consisted of one pre-funded warrant, one Series F warrant and one Series G warrant, each to purchase one share of common stock. The Company received gross proceeds of $2,997,888, and net proceeds of $2,639,667 after deducting offering costs of $358,221. In connection with the July 2026 Private Placement, the Company also issued warrants to the placement agent to purchase 126,761 shares of common stock.

The pre-funded warrants have an exercise price of $0.001 per share, are immediately exercisable and do not expire. The Series F and Series G warrants each have an exercise price of $1.42 per share, while the placement agent warrants have an exercise price of $1.775 per share. These warrants became exercisable on September 28, 2026, following stockholder approval of the issuance of the underlying shares. The Series F and placement agent warrants expire on September 28, 2031, while the Series G warrants expire on March 28, 2028.

In addition to the placement agent warrants, the placement agent received compensation consisting of cash fee equal to 7.0% and a management fee equal to 1.0% of the aggregate gross proceeds from the private placement. We also reimbursed the placement agent for non-accountable expenses in an amount of $35,000, and its legal fees and expenses and other out-of-pocket expenses in the amount of $50,000.

During the three months ended September 30, 2026, the Company issued 1,578,677 shares of common stock upon the exercise of pre-funded warrants for proceeds of $1,579. As of September 30, 2026, 534,000 pre-funded warrants remained outstanding.

ATM Offering

In September 2024, we entered into an At The Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright & Co., LLC, establishing an at-the-market offering program (the “ATM Facility”) pursuant to which we may, from time to time, in its sole discretion, issue and sell shares of common stock through Wainwright. In September and December 2024, we filed prospectus supplements providing for the sale of up to $1,143,121 and $832,009, respectively, of common stock under the ATM Agreement. In March 2026, after selling approximately $1.7 million of shares of common stock pursuant to the ATM Facility, we filed a new prospectus supplement under our current shelf registration statement providing for the sale of up to $1,064,000 of common stock under the ATM Agreement.

Shares may be sold through the ATM Facility in transactions deemed to be “at the market” offerings under Rule 415 of the Securities Act. We pay Wainwright a commission of 3.0% of the gross sales price per share sold under the ATM Agreement.

During the three months ended September 30, 2026, we did not sell any shares of common stock through the ATM Facility. During the nine months ended September 30, 2026, we sold 15,120 shares of common stock through the ATM Facility for net proceeds of $20,180, after deducting $2,090 in offering costs.

Nasdaq Compliance

On September 10, 2026, we received a letter from the Listing Qualifications Staff (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that, based on the closing bid price of our common stock for 30 consecutive business days, we no longer meet Nasdaq Listing Rule 5550(a)(2), which requires listed companies to maintain a minimum bid price of at least $1 per share (the “Bid Price Rule”). The Nasdaq Listing Rules provide a compliance period of 180 calendar days, or until March 9, 2027, in which to regain compliance with the Bid Price Rule. If we evidence a closing bid price of at least $1 per share for a minimum of 10 consecutive business days during the 180-day compliance period, we will automatically regain compliance. If we fail to regain compliance with the Bid Price Rule, Nasdaq will provide notice that our common stock will be subject to delisting. We would then be entitled to appeal that determination to a Nasdaq hearings panel.

The notification has no immediate effect on the listing of our common stock on Nasdaq. At our 2026 annual meeting of stockholders, we received stockholder approval for a reverse stock split of our outstanding common stock in the range of not less than 1-for-2 and not more than 1-for-10, at the discretion of our Board of Directors. Accordingly, our Board of Directors may authorize a reverse stock split to attempt to increase the per share price of the common stock and regain compliance with the Nasdaq Listing Standards.

Results of Operations

Since our inception, we devoted substantially all of our efforts and funding to the development of the NELL-1 protein and raising capital. We have not yet generated revenues from our planned operations.

Three months ended September 30, 2026 compared to the Three months ended September 30, 2025

Research and Development

Our research and development expenditures increased from $187,808 for the three months ended September 30, 2025, to $242,569 for the same period in 2026, marking an increase of $54,761. The increase in costs can be attributed to our development activities to extend the shelf-life of our protein. We anticipate continued substantial investment in development activities for NELL-1 as we prepare for our pivotal clinical study in the future.

General and Administrative

Our general and administrative expenses decreased by $103,695, from $527,466 for the three months ended September 30, 2025, to $423,771 for the same period in 2026. The decrease was primarily due to the timing of director compensation expense recognition, which is tied to the annual meeting. The 2026 annual meeting was held in September, compared to May 2025, resulting in lower compensation expense recognized during the current quarter.

Change in fair value of warrant liability

The change in fair value of warrant liability represents the re-measurement of the outstanding warrants at September 30, 2026.

Nine months ended September 30, 2026 compared to the Nine months ended September 30, 2025

Research and Development

Our research and development expenditures decreased from $802,994 for the nine months ended September 30, 2025, to $692,914 for the same period in 2026, marking a decrease of $110,080. The decrease in costs can be attributed to timing of our clinical trial. We anticipate continued substantial investment in development activities for NELL-1 as we prepare for our pivotal clinical study in the future.

General and Administrative

Our general and administrative expenses decreased by $112,256, from $1,698,843 for the nine months ended September 30, 2025, to $1,586,587 for the same period in 2026. The decrease was primarily due to the timing of director compensation expense recognition, which is tied to the annual meeting. The 2026 annual meeting was held in September, compared to May 2025, resulting in lower compensation expense recognized during the current quarter.

Change in fair value of warrant liability

The change in fair value of warrant liability represents the re-measurement of the outstanding warrants at September 30, 2026.

Liquidity and Capital Resources

Going Concern and Liquidity

We have no significant operating history and since inception to September 30, 2026 have incurred accumulated losses of approximately $90.3 million. We will continue to incur significant expenses for development activities for our lead product NELL-1/DBM. Operating expenditures for the next twelve months are estimated at $6.0 million. The accompanying consolidated financial statements for the nine months ended September 30, 2026 have been prepared assuming we will continue as a going concern. As reflected in the financial statements, we incurred a net loss of $2.2 million and used net cash in operating activities of $1.9 million during the nine months ended September 30, 2026. These factors raise substantial doubt about our ability to continue as a going concern within a reasonable period of time, which is considered to be one year after the date that the financial statements are issued. In addition, our independent registered public accounting firm, in their report on the Company’s audited financial statements for the year ended December 31, 2025, included an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern. The consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

We will continue to attempt to raise additional debt and/or equity financing to fund future operations and to provide additional working capital. However, there is no assurance that such financing will be consummated or obtained in sufficient amounts necessary to meet our needs. If cash resources are insufficient to satisfy our on-going cash requirements, we will be required to scale back or discontinue our product development programs, or obtain funds if available (although there can be no certainties) through strategic alliances that may require us to relinquish rights to our technology or substantially reduce or discontinue our operations entirely. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to us. Even if we are able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders, in the case of equity financing.

The Company’s ability to raise additional capital is subject to certain restrictions under the securities purchase agreement entered into in connection with the July 2026 Private Placement. Until July 24, 2027, the Company may not enter into any variable rate transaction, including an equity line of credit or an at-the-market (“ATM”) offering facility, other than sales under an ATM facility with Wainwright serving as sales agent. Until that date, the Company also may not effect a reverse stock split without the consent of the purchaser, unless the Board of Directors determines in good faith that a reverse stock split is required to maintain the listing of the Company’s common stock on Nasdaq. In addition, under its engagement agreement with Wainwright, Wainwright has a right of first refusal to act as the Company’s exclusive placement agent, underwriter or advisor for certain future financings through July 2027. Sales under the ATM facility are also limited by the amount the Company may sell under its shelf registration statement, which depends on the market value of its common stock held by non-affiliates. These restrictions may limit the Company’s ability to raise capital on acceptable terms or in the amounts needed. There can be no assurance that additional financing will be available when needed or on terms acceptable to the Company.

At September 30, 2026 and December 31, 2025, we had cash of $6,088,085 and $5,334,322, respectively. On July 9, 2026, we completed the July 2026 Private Placement and after deducting cash costs of approximately $358,000, we received net proceeds of approximately $2.6 million from the offering.

Available cash is expected to fund our operations through the second quarter of 2027.

Cash Flows

Operating activities

For the nine months ended September 30, 2026 and 2025, cash used in operating activities totaled $1,854,997 and $1,976,388, respectively.

Financing activities

During the nine months ended September 30, 2026, cash provided by financing activities was $2,608,760 compared to $4,700,341 for the nine months ended September 30, 2025, primarily from the net proceeds of the ATM Facility, net proceeds of the July 2026 Private Placement and exercise of pre-funded warrants. During the nine months ended September 30, 2025, cash provided by financing activities was from the net proceeds of the ATM Facility, the net proceeds of a public offering completed in June 2025 and the exercise of pre-funded warrants.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Critical Accounting Policies and Use of Estimates

See our most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2025 for a discussion of our critical accounting policies and use of estimates. There have been no material changes to our critical accounting policies and use of estimates discussed in such report.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Financial Officer and Chief Executive Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of September 30, 2026. Based upon that evaluation, our Chief Financial Officer and Chief Executive Officer concluded that as of September 30, 2026, our disclosure controls and procedures were effective.

Changes in Internal Controls

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(d) and 15d-15(d) under the Exchange Act) that occurred during the quarter ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

For a discussion of the Company’s potential risks or uncertainties, please see “Part I—Item 1A—Risk Factors” and “Part II—Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC, and “Part I—Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations” herein. There have been no material changes from the risk factors as previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025 except as noted herein.

There can be no assurance that our shares will continue to be listed on the Nasdaq Capital Market (“Nasdaq”), which would affect our common stock’s liquidity and reduce our ability to raise capital.

On September 10, 2026, we received a letter from the Staff of Nasdaq indicating that, based upon the closing bid price of our common stock for the last 30 consecutive business days, we no longer meet the Bid Price Rule.

Nasdaq Listing Rule 5810(c)(3)(A) provides a compliance period of 180 calendar days, or until March 9, 2027, in which to regain compliance with the Bid Price Rule. If we evidence a closing bid price of at least $1 per share for a minimum of 10 consecutive business days during the 180-day compliance period, we will regain compliance. In the event we do not regain compliance with the Bid Price Rule by March 9, 2027, we may be eligible for consideration of a second 180-day compliance period if we meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for Nasdaq’s Capital Market, other than the Bid Price Rule, and notify Nasdaq of our intent to cure the minimum bid price deficiency.

If we fail to regain compliance with the Nasdaq continued listing standards, Nasdaq will provide notice that our common stock will be subject to delisting. We would then be entitled to appeal that determination to a Nasdaq hearings panel.

The notification has no immediate effect on the listing of our common stock on Nasdaq. We intend to monitor the closing bid price of our common stock and consider our available options in the event the closing bid price of our common stock remains below $1 per share. At our 2026 annual meeting of stockholders, we received stockholder approval for a reverse stock split of our outstanding common stock in the range of not less than 1-for-2 and not more than 1-for-10, at the discretion of our Board of Directors (the “Reverse Stock Split”). Accordingly, our Board of Directors may authorize a reverse stock split to attempt to increase the per share price of the common stock and regain compliance with the Nasdaq Listing Standards.

On July 22, 2026, the SEC approved a new continued listing requirement codified as Nasdaq Listing Rule 5550(a)(6) that requires companies to maintain a market value of listed securities of at least $5 million (the “MVLS Requirement”). On July 29, 2026, the SEC provided notice that the order approving the MVLS Requirement was stayed pending a petition for review of the action. On September 11, 2026, the SEC announced that the petitions for review of the approval of the MVLS Requirement were granted and that the implementation of the MVLS Requirement would remain stayed until the SEC orders otherwise. As of the date hereof, we are not in compliance with the MVLS Requirement if it were to come into effect. Under Nasdaq Listing Rule 5810(c)(1), if the MVLS Requirement comes into effect and we fail to meet the MVLS Requirement for 30 consecutive business days, our securities will be suspended and immediately delisted from the Nasdaq Capital Market, even if we are appealing a delisting determination to a Nasdaq Listing Qualifications Panel (the “Panel”), and the Panel will have limited discretion to reverse the delisting determination if it was issued in error or grant an exception for up to 180 days for us to demonstrate compliance with all requirements for initial listing on Nasdaq.

There can be no assurance that we will be able to regain compliance with the Bid Price Rule and maintain compliance with Nasdaq’s other continued listing standards. In addition, if the MVLS Requirement comes into effect, we cannot assure you that we will be able to regain compliance with the MVLS Requirement. Accordingly, our common stock could be delisted from Nasdaq. We and holders of our securities could be materially adversely impacted if our securities are delisted from Nasdaq. In particular:

• we may be unable to raise equity capital on acceptable terms or at all;
• we may lose the confidence of our business partners, which would jeopardize our ability to continue our business as currently conducted;
• the price of our common stock will likely decrease as a result of the loss of market efficiencies associated with Nasdaq and the loss of federal preemption of state securities laws;
• holders may be unable to sell or purchase our securities when they wish to do so;
• we may become subject to stockholder litigation;
• we may lose the interest of institutional investors in our common stock;
• we may lose media and analyst coverage;
• our common stock could be considered a “penny stock,” which would likely limit the level of trading activity in the secondary market for our common stock; and
• we would likely lose any active trading market for our common stock, as it may only be traded on one of the over-the-counter markets, if at all.

We cannot assure you that the Reverse Stock Split will increase the price of our common stock.

We may need to effect the Reverse Stock Split to regain compliance with the Bid Price Rule. We expect that the Reverse Stock Split, if effected, will increase the market price of our common stock. However, the effect of the Reverse Stock Split on the market price of our common stock cannot be predicted with any certainty, and the history of reverse stock splits for other companies of similar size to us is varied, particularly because investors may view a reverse stock split negatively. We have effected reverse stock splits in the past, however, the price of our common stock did not remain at the elevated price for an extended period of time following the reverse stock split. It is possible that the per share price of our common stock after the Reverse Stock Split will not increase in the same proportion as the reduction in the number of outstanding shares of common stock following the Reverse Stock Split, and the Reverse Stock Split may not result in a per share price that would attract investors who do not trade in lower-priced securities. In addition, we cannot assure you that our common stock will be more attractive to investors. Even if we implement the Reverse Stock Split, the market price of our common stock may decrease due to factors unrelated to the Reverse Stock Split, including our future performance, similar to our prior reverse stock split. If the Reverse Stock Split is consummated and the trading price of our common stock declines, the percentage decline as an absolute number and as a percentage of our overall market capitalization may be greater than would occur in the absence of the Reverse Stock Split.

The Reverse Stock Split may decrease the liquidity of our common stock and result in higher transaction costs.

The Reverse Stock Split, if effected, may decrease the liquidity of our common stock because fewer shares would be outstanding after the Reverse Stock Split. In addition, if the Board of Directors implements the Reverse Stock Split, more stockholders may own “odd lots” of fewer than 100 shares of common stock, which may be more difficult to sell. Brokerage commissions and other costs of transactions in odd lots are generally higher than the costs of transactions of more than 100 shares or multiples of 100 shares of common stock. Accordingly, the Reverse Stock Split may not achieve the desired results of increasing marketability of the common stock as described above.

If the Reverse Stock Split is effected, the resulting per-share market price may not attract institutional investors or investment funds and may not satisfy the investing guidelines of such investors and, consequently, the trading liquidity of our common stock may not improve.

While the Board of Directors believes that a higher stock price may help generate investor interest, there can be no assurance that the Reverse Stock Split will result in a per-share market price that will attract institutional investors or investment funds or that such share price will satisfy the investing guidelines of institutional investors or investment funds. As a result, the trading liquidity of our common stock may not necessarily improve.

A decline in the market price of our common stock after the Reverse Stock Split is effected may result in a greater percentage decline than would occur in the absence of the Reverse Stock Split.

If the Reverse Stock Split is effected and the market price of our common stock declines, the percentage decline may be greater than would occur in the absence of the Reverse Stock Split. The market price of our common stock will, however, also be based upon our performance and other factors, which are unrelated to the number of shares of common stock outstanding.