FibroBiologics, Inc 10-Q for FY2025 Q2
FibroBiologics, Inc. (FBLG)
About this 10-Q
FibroBiologics, Inc filed this 10-Q on July 31, 2025, covering the quarter ended June 30, 2025 (FY2025 Q2).
Headline figures
Quarter ended June 30, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net loss
- $4.66M
- compared with net income of $898K a year earlier
- Diluted EPS
- -$0.12
- compared with $0.03 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One) |
|
|
|
|
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) |
|
|
|
|
|
|
or |
|
|
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) |
|
Commission File Number:
(Exact name of registrant as specified in its charter)
|
||
(State or other jurisdiction of |
|
(I.R.S. Employer |
|
|
|
|
||
(Address of principal executive offices) |
|
(Zip Code) |
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class: |
|
Trading symbol(s) |
|
Name of each exchange on which registered: |
|
|
The |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ |
Accelerated filer ☐ |
|
|
Smaller reporting company |
|
|
|
|
Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
On July 30, 2025,
FibroBiologics, Inc.
Quarterly Report on Form 10-Q
For the Quarter Ended June 30, 2025
Table of Contents
|
||
|
|
|
Item 1. |
4 |
|
|
|
|
|
Condensed Consolidated Balance Sheets as of June 30, 2025 (Unaudited) and December 31, 2024 |
4 |
|
|
|
|
5 |
|
|
|
|
|
6 |
|
|
|
|
|
7 |
|
|
|
|
|
Notes to the Unaudited Condensed Consolidated Financial Statements |
8 |
|
|
|
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
18 |
|
|
|
Item 3. |
26 |
|
|
|
|
Item 4. |
26 |
|
|
|
|
|
||
|
|
|
Item 1. |
27 |
|
|
|
|
Item 1A. |
27 |
|
|
|
|
Item 2. |
30 |
|
|
|
|
Item 3. |
31 |
|
|
|
|
Item 4. |
31 |
|
|
|
|
Item 5. |
31 |
|
|
|
|
Item 6. |
32 |
|
|
|
|
33 |
||
1
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This quarterly report on Form 10-Q, or Quarterly Report, and the documents incorporated by reference herein, if any, contain forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical facts contained in this Quarterly Report, including statements regarding our future results of operations and financial position, business strategy, prospective products, product approvals, research and development costs, future revenue, timing and likelihood of success, plans and objectives of management for future operations, future results of anticipated products and prospects, planned research programs, preclinical studies and clinical trials, and market opportunities are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would” or the negative of these terms or other similar expressions, although not all forward-looking statements contain these words. Forward-looking statements contained in this Quarterly Report include, but are not limited to, statements about:
We have based these forward-looking statements largely on our current expectations and projections about our business, the industry in which we operate and financial trends that we believe may affect our business, financial condition, results of operations and prospects, and these forward-looking statements are not guarantees of future performance or development. These forward-looking statements speak only as of the date of this Quarterly Report and are subject to a number of risks, uncertainties and assumptions described in the section titled “Risk Factors” and elsewhere in this Quarterly Report and in our Annual Report on Form 10-K for the year ended December 31, 2024, or the Annual Report. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. You should read this Quarterly Report, the documents that we reference in this Quarterly Report and the other documents that we file with the Securities and Exchange Commission, or the SEC, with the understanding that our actual future results may be materially different from any future results expressed or implied by these forward-looking statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein until after we distribute this Quarterly Report, whether as a result of any new information, future events or otherwise.
2
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and you are cautioned not to unduly rely upon these statements.
3
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
FibroBiologics, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except shares and per share data)
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2025 |
|
|
2024 |
|
||
|
|
(unaudited) |
|
|
|
|
||
Assets |
|
|
|
|
|
|
||
Current assets |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
||
Prepaid expenses |
|
|
|
|
|
|
||
Other current assets |
|
|
— |
|
|
|
|
|
Total current assets |
|
|
|
|
|
|
||
Property and equipment, net |
|
|
|
|
|
|
||
Operating lease right-of-use asset, net |
|
|
|
|
|
|
||
Other assets |
|
|
|
|
|
— |
|
|
Total assets |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Liabilities and stockholders’ equity |
|
|
|
|
|
|
||
Current liabilities |
|
|
|
|
|
|
||
Accounts payable and accrued expenses |
|
$ |
|
|
$ |
|
||
Operating lease liability, short-term |
|
|
|
|
|
|
||
SEPA put option liability |
|
|
|
|
|
|
||
Short-term convertible debt |
|
|
|
|
|
|
||
Total current liabilities |
|
|
|
|
|
|
||
Operating lease liability, long-term |
|
|
|
|
|
|
||
Total liabilities |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Stockholders’ equity |
|
|
|
|
|
|
||
Preferred Stock, $ |
|
|
|
|
|
|
||
Preferred Stock, $ |
|
|
|
|
|
|
||
Voting Common Stock, $ |
|
|
|
|
|
|
||
Additional paid-in capital |
|
|
|
|
|
|
||
Accumulated deficit |
|
|
( |
) |
|
|
( |
) |
Total stockholders’ equity |
|
|
|
|
|
|
||
Total liabilities and stockholders’ equity |
|
$ |
|
|
$ |
|
||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
FibroBiologics, Inc.
Condensed Consolidated Statements of Operations
(unaudited, in thousands, except shares and per share data)
|
|
For the Three Months Ended June 30, |
|
|
For the Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Research and development |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
General, administrative and other |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss from operations |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Other income/(expense): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Change in fair value of warrant liability |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Change in fair value of forward contract liability |
|
|
— |
|
|
|
(1,500 |
) |
|
|
— |
|
|
|
(1,500 |
) |
Change in fair value of SEPA put option liability |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Change in fair value of convertible debt |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Commitment fee expenses |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|||
Other income/(expense) |
|
|
) |
|
|
|
|
|
) |
|
|
|
||||
Interest income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Net income/(loss) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Net income/(loss) attributable to common stockholders |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
Net income/(loss) per share, basic and diluted |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
Weighted-average shares outstanding, basic and diluted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5
FibroBiologics, Inc.
Condensed Consolidated Statements of Changes in Stockholders’ Equity/(Deficit)
For the Three and Six Months Ended June 30, 2025 and 2024
(unaudited, in thousands, except shares)
|
Series A |
|
Series B |
|
Series B-1 |
|
Series C |
|
Non-voting |
|
Voting |
|
Additional |
|
Accumulated |
|
Total |
|
|||||||||||||||||||||||||||
|
Shares |
|
Amount |
|
Shares |
|
Amount |
|
Shares |
|
Amount |
|
Shares |
|
Amount |
|
Shares |
|
Amount |
|
Shares |
|
Amount |
|
Capital |
|
Deficit |
|
Equity |
|
|||||||||||||||
Balance – December 31, 2024 |
|
— |
|
$ |
— |
|
|
— |
|
$ |
— |
|
|
— |
|
$ |
— |
|
|
|
$ |
— |
|
|
— |
|
$ |
— |
|
|
|
$ |
— |
|
$ |
|
$ |
( |
) |
$ |
|
||||
Issuance of Voting Common Stock for commitment fee payable |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|||
Conversion of Short-term convertible debt into Voting Common Stock |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|||
Stock-based compensation expense |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
|
||
Net loss |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
( |
) |
Balance (Unaudited) – March 31, 2025 |
|
— |
|
$ |
— |
|
|
— |
|
$ |
— |
|
|
— |
|
$ |
— |
|
|
|
$ |
— |
|
|
— |
|
$ |
— |
|
|
|
$ |
— |
|
$ |
|
$ |
( |
) |
$ |
|
||||
Issuance of Voting Common Stock for commitment fee payable |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Conversion of Short-term convertible debt into Voting Common Stock |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|||
Stock-based compensation expense |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
|
||
Net loss |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
( |
) |
Balance (Unaudited) – June 30, 2025 |
|
— |
|
$ |
— |
|
|
— |
|
$ |
— |
|
|
— |
|
$ |
— |
|
|
|
$ |
— |
|
|
— |
|
$ |
— |
|
|
|
$ |
— |
|
$ |
|
$ |
( |
) |
$ |
|
||||
|
Series A |
|
Series B |
|
Series B-1 |
|
Series C |
|
Non-voting |
|
Voting |
|
Additional |
|
Accumulated |
|
Total |
|
|||||||||||||||||||||||||||
|
Shares |
|
Amount |
|
Shares |
|
Amount |
|
Shares |
|
Amount |
|
Shares |
|
Amount |
|
Shares |
|
Amount |
|
Shares |
|
Amount |
|
Capital |
|
Deficit |
|
Equity/(Deficit) |
|
|||||||||||||||
Balance – December 31, 2023 |
|
|
$ |
— |
|
|
|
$ |
— |
|
|
|
$ |
— |
|
|
— |
|
$ |
— |
|
|
|
$ |
|
|
— |
|
$ |
— |
|
$ |
|
$ |
( |
) |
$ |
|
|||||||
Issuance of Series C Preferred Stock |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
|
|||
Conversion of Series B Preferred Stock, Series B-1 Preferred Stock and Non-voting common stock to Voting Common Stock |
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
( |
) |
|
|
|
— |
|
|
|
|
— |
|
|
— |
|
||
Cancellation of Series A Preferred Stock upon Direct Listing |
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Sale of Voting Common Stock |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|||
Stock-based compensation expense |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
|
||
Net loss |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
( |
) |
Balance (Unaudited) – March 31, 2024 |
|
— |
|
$ |
— |
|
|
— |
|
$ |
— |
|
|
— |
|
$ |
— |
|
|
|
$ |
— |
|
|
— |
|
$ |
— |
|
|
|
$ |
— |
|
$ |
|
$ |
( |
) |
$ |
( |
) |
|||
Stock-based compensation expense |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
|
||
Net income |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
||
Balance (Unaudited) – June 30, 2024 |
|
— |
|
$ |
— |
|
|
— |
|
$ |
— |
|
|
— |
|
$ |
— |
|
|
|
$ |
— |
|
|
— |
|
$ |
— |
|
|
|
$ |
— |
|
$ |
|
$ |
( |
) |
$ |
( |
) |
|||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
6
FibroBiologics, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited, in thousands)
|
|
For the Six Months Ended June 30, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Cash flows from operating activities |
|
|
|
|
|
|
||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
||
Change in fair value of warrant liability |
|
|
|
|
|
( |
) |
|
Change in fair value of forward contract liability |
|
|
— |
|
|
|
1,500 |
|
Change in fair value of SEPA put option liability |
|
|
|
|
|
|
||
Change in fair value of convertible debt |
|
|
|
|
|
|
||
Non-cash original discount on convertible debt |
|
|
625 |
|
|
|
— |
|
Stock-based compensation expense |
|
|
|
|
|
|
||
Amortization of operating lease right-of-use asset |
|
|
|
|
|
|
||
Depreciation expense |
|
|
|
|
|
|
||
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Prepaid expenses |
|
|
( |
) |
|
|
( |
) |
Accounts payable and accrued expenses |
|
|
( |
) |
|
|
( |
) |
Commitment fee payable |
|
|
|
|
|
|
||
Other current assets |
|
|
|
|
|
( |
) |
|
Other assets |
|
|
( |
) |
|
|
|
|
Payable to Parent |
|
|
|
|
|
( |
) |
|
Operating lease liability |
|
|
( |
) |
|
|
( |
) |
Net cash used in operating activities |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
||
Cash flows from investing activities |
|
|
|
|
|
|
||
Purchases of property and equipment |
|
|
( |
) |
|
|
( |
) |
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
||
Cash flows from financing activities |
|
|
|
|
|
|
||
Proceeds from short-term convertible debt |
|
|
|
|
|
|
||
Repayments of short-term borrowing |
|
|
|
|
|
( |
) |
|
Proceeds from issuance of common stock, net of direct costs |
|
|
|
|
|
|
||
Net cash provided by financing activities |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Net increase/(decrease) in cash and cash equivalents |
|
|
( |
) |
|
|
( |
) |
Cash and cash equivalents, beginning of period |
|
|
|
|
|
|
||
Cash and cash equivalents, end of period |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
||
Cash paid for income taxes |
|
$ |
|
|
$ |
|
||
Cash paid for interest |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Supplemental disclosure of non-cash investing and financing activities: |
|
|
|
|
|
|
||
Right of use asset obtained in exchange for operating lease liability |
|
$ |
|
|
$ |
|
||
Issuance of Voting Common Stock for commitment fee payable |
|
$ |
|
|
$ |
|
||
Conversion of Short-term convertible debt into shares of common stock |
|
$ |
|
|
$ |
|
||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
7
FibroBiologics, Inc.
Notes to the Unaudited Condensed Consolidated Financial Statements
June 30, 2025
1. Organization, Description of Business, and Liquidity
Organization and Business
FibroBiologics, Inc. (the “Company” or “FibroBiologics”) was originally formed as a limited liability company under the laws of the State of Texas on April 8, 2021 (“Inception”) and then converted to a Delaware corporation on December 14, 2021. FibroBiologics is an early stage, cell therapy company headquartered in Houston, Texas, developing innovative treatments for chronic diseases using fibroblast cells. The Company’s primary focus is the initiation and progression of preclinical studies and clinical-stage U.S. Food and Drug Administration trials related to fibroblast treatments for wound healing, multiple sclerosis, degenerative disc disease, psoriasis and certain cancers, and potential human longevity applications including thymic involution reversal. Prior to Inception, preclinical research and development related to these disease pathways took place under the parent company, SpinalCyte, LLC (the “Parent”).
Direct Listing
On January 31, 2024, the Company completed a direct listing of its common stock, $
Formation of Wholly Owned Subsidiary
On June 12, 2025, the Company formed a wholly-owned subsidiary, FibroBiologics Australia Pty Ltd. This entity will act as the local sponsor for the Company's twelve-week Phase 1/2 clinical trial utilizing CYWC628 for treatment of diabetic foot ulcers in Australia.
Going Concern and Management’s Plan
The Company has incurred operating losses since Inception and expects such losses to continue in the future as it builds infrastructure, develops intellectual property, and conducts research and development activities. The Company has primarily relied on a combination of angel investors, private debt placements, convertible debt issuances, and sales of equity to fund its operations. As of June 30, 2025, the Company had an accumulated deficit of $
Segments
Operating segments are defined as components of an entity for which separate discrete financial information is made available and that is regularly evaluated by the chief operating decision maker (“CODM”) in making decisions regarding resource allocation and assessing performance. The Company is a clinical-stage cell therapy company with a limited number of employees working on fibroblast-based targets. The Company’s operations are organized and reported as a single reportable segment, which includes all activities related to the discovery, development, and commercialization of its products. The Company’s CODM, its , reviews operating results on an aggregate basis and manages the operations as a single operating segment.
The accounting policies of the Company’s single operating and reportable segment are the same as those described in the summary of significant accounting policies. The measure of segment assets is reported on the condensed consolidated balance sheets as total assets.
2. Summary of Significant Accounting Policies
Basis of Presentation
8
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). The accompanying unaudited condensed consolidated balance sheet as of June 30, 2025, unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2025 and 2024, unaudited condensed consolidated statements of changes in stockholders’ equity/(deficit) for the three and six months ended June 30, 2025 and 2024, and unaudited condensed consolidated statements of cash flows for the six months ended June 30, 2025 and 2024, are unaudited. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 as filed with the SEC on March 31, 2025, which contains the audited financial statements and notes thereto. The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments (consisting of normal recurring adjustments) necessary to state fairly the Company’s financial position as of June 30, 2025, the results of operations for the three and six months ended June 30, 2025 and 2024, the unaudited condensed consolidated statements of changes in stockholders’ equity/(deficit) for the three and six months ended June 30, 2025 and 2024, and the unaudited condensed consolidated statements of cash flows for the six months ended June 30, 2025 and 2024. The December 31, 2024, condensed consolidated balance sheet included herein was derived from the audited financial statements, but it does not include all disclosures or notes required by GAAP for complete financial statements.
The financial data and other information disclosed in these notes to the unaudited condensed consolidated financial statements related to the three and six months ended June 30, 2025, are unaudited. Interim results are not necessarily indicative of results for an entire year or for any future period.
Principles of Consolidation
The accompanying unaudited consolidated condensed financial statements, which include the accounts of the Company and its wholly-owned subsidiary, FibroBiologics Australia Pty Ltd, have been prepared in accordance with US GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. All significant intercompany balances and transactions are eliminated in consolidation. As of June 30, 2025, FibroBiologics Australia Pty Ltd has yet to initiate operating activity.
Use of Estimates
The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of expenses during the reporting periods. These estimates are based on information available as of the date of the unaudited condensed consolidated financial statements; therefore, actual results could differ from those estimates and assumptions. The most significant estimates include the liability classified instrument, warrant liability, fair value of forward contract liability, SEPA put option liability, fair value of the short-term convertible debt, and stock-based compensation.
Fair Value Option of Accounting
The Company has elected the option under Accounting Standards Codification ("ASC") 825-10, Financial Instruments (“ASC 825”), to measure its short-term convertible debt issued pursuant to the SEPA (see Note 7) at fair value. The fair value option may be elected on an instrument-by-instrument basis and is irrevocable unless a new election date occurs. When the fair value option is elected for an instrument, unrealized gains and losses for such instrument are reported in the condensed statements of operations at each subsequent reporting date. Up-front costs and fees related to items for which the fair value option is elected shall be recognized in earnings as incurred and not deferred. These amounts are included in other income/(expense) in the condensed statements of operations.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Company has significant cash balances at financial institutions, which, throughout the year, regularly exceed the federally insured limit of $
Risks and Uncertainties
The Company is subject to certain risks and uncertainties, including, but not limited to, changes in any of the following areas that the Company believes could have a material adverse effect on the future financial position or results of operations: the timing of, and the Company’s ability to advance its current and future product candidates into and through clinical development; costs and timelines associated with the manufacture of clinical supplies of the Company’s product candidates; regulatory approval and market acceptance of its product candidates; performance of third-party contract research organizations (“CROs”) and contract manufacturing organizations (“CMOs”); competition from pharmaceutical companies with greater financial resources or expertise; protection of the intellectual property, litigation or claims against the Company based on intellectual property, or other factors; the need to obtain additional funding; and its ability to attract and retain employees necessary to support its growth. Disruption from the operations of CROs, CMOs or suppliers would likely have a negative impact on the Company’s business, financial position, and results of operations.
Cash and Cash Equivalents
Cash and cash equivalents consist of unrestricted cash balances and short-term, liquid investments with an original maturity date of three months or less at the time of purchase. The Company had $
9
Property and Equipment
Property and equipment are stated at cost, net of accumulated depreciation. Depreciation of property and equipment is computed using the straight-line method over the estimated useful lives of the respective assets, generally to
Property and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or a significant adverse change that would indicate that the carrying amount of an asset or group of assets is not recoverable. For long-lived assets to be held and used, the Company will recognize an impairment loss only if the carrying amount is not recoverable through its undiscounted cash flows and measure any impairment loss based on the difference between the carrying amount and estimated fair value. There were
Leases
The Company determines if an arrangement is a lease at inception. An arrangement is or contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. If a lease is identified, classification is determined at lease commencement. Operating lease liabilities are recognized at the present value of the future lease payments at the lease commencement date. The Company’s leases do not provide an implicit interest rate and therefore the Company estimates its incremental borrowing rate to discount lease payments. The incremental borrowing rate reflects the interest rate that the Company would have to pay to borrow on a collateralized basis an amount equal to the lease payments in a similar economic environment over a similar term. Operating lease right-of-use (“ROU”) assets are based on the corresponding lease liability adjusted for any lease payments made at or before commencement, initial direct costs, and lease incentives. Renewals or early terminations are not accounted for unless the Company is reasonably certain to exercise these options. Operating lease expense is recognized and the ROU asset is amortized on a straight-line basis over the lease term.
Operating leases are included in operating lease right-of-use asset, operating lease liability, short-term, and operating lease liability, long-term on the Company’s unaudited condensed consolidated balance sheets.
The Company has elected in accordance with ASC 842-20-25-2 an accounting policy to not record short-term leases, defined as those with terms of 12 months or less, on the unaudited condensed consolidated balance sheets. Rent expense recorded under leases, for financial statement purposes, is recognized on a straight-line basis over the lease term based on the most recent contractual terms available.
Fair Value Measurements
ASC 820, Fair Value Measurement, establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the assets or liability and are developed based on the best information available in the circumstances. ASC 820 identifies fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a three-tiered value hierarchy that distinguishes between the following:
Level 1 - Quoted market prices in active markets for identical assets or liabilities.
Level 2 - Inputs other than Level 1 inputs that are either directly or indirectly observable, such as quoted market prices, interest rates, and yield curves.
Level 3 - Unobservable inputs for the asset or liability (i.e., supported by little or no market activity). Level 3 inputs include management’s own assumptions about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk).
Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
Derivatives
Derivative financial instruments are recorded at fair value on the unaudited condensed consolidated balance sheets. Liability classified derivatives are remeasured at their fair value at each reporting date, with decreases or increases in the fair value recognized as other gain or loss, respectively, within the unaudited condensed consolidated statements of operations. Equity classified derivatives are not remeasured at each reporting date. If a liability classified derivative becomes eligible for reclassification to an equity classified derivative, any gains or losses recognized up to the point of reclassification are not reversed.
Research and Development
Research and development costs are charged to expense as incurred. Research and development costs consist of costs incurred in performing research and development activities, including salaries and bonuses, scientist recruiting costs, employee benefits, facilities costs, laboratory supplies,
10
manufacturing expenses, preclinical expenses, research materials, and consulting and other contracted services. Costs for certain research and development activities are recognized based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the unaudited condensed consolidated financial statements as prepaid or accrued research and development.
Marketing and Advertising Costs
Marketing and advertising costs to promote the Company and its product candidates are expensed as incurred. Marketing and advertising expenses were $
Patent Costs
As the Company continues to incur costs to obtain market approval of patented technology, patent costs are expensed as incurred in general, administrative and other expense in the unaudited condensed consolidated statements of operations. Costs include fees to renew or extend the term of recognized intangible assets, patent defense costs, and patent application costs. Management will continue to expense such costs until market approval is obtained through regulatory approval by the appropriate governing body.
Income Taxes
The Company is a C corporation, and accounts for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to an amount that is more likely than not to be realized.
Under the provisions of ASC 740-10, Income Taxes, the Company evaluates uncertain tax positions by reviewing against applicable tax law all positions taken by the Company with respect to tax years for which the statute of limitations is still open. ASC 740-10 provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. The Company recognizes interest and penalties related to the liability for unrecognized tax benefits, if any, as a component of the income tax expense line in the accompanying unaudited condensed consolidated statements of operations.
Stock-Based Compensation
The Company recognizes compensation costs related to stock options granted to employees and nonemployees based on the estimated fair value of the awards on the date of grant and recognizes expense on a straight-line basis over the requisite service period, which is generally the vesting period of the award. Forfeitures are recognized as they occur. The fair value of stock options is estimated on the date of grant using a Black-Scholes option pricing model which requires management to apply judgment and make estimates, including:
Emerging Growth Company
The Company is an emerging growth company (“EGC”), as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”). Under the JOBS Act, an EGC can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised
11
accounting standards that have different effective dates for public and private companies; however, the Company may adopt new or revised accounting standards early if the standard allows for early adoption.
In addition, the Company will utilize other exemptions and reduced reporting requirements provided to EGCs by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, an EGC is not required to, among other things, (i) provide an auditor’s attestation report on the Company’s system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002, (ii) provide all of the compensation disclosure that may be required of non-EGC public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis), or (iv) disclose certain executive compensation-related items, such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to median employee compensation.
Recently Issued Accounting Pronouncements
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740) – Improvements to Income Tax Disclosures (“ASU 2023-09”), which is intended to improve the transparency of income tax disclosures by greater disaggregation of information in the rate reconciliation and income taxes paid disaggregated by jurisdiction. The standard is effective for public companies for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact that the adoption of ASU 2023-09 may have on its condensed financial statements.
In November 2024, the FASB issued ASU No. 2024-03, – Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40) – Disaggregation of Income Statement Expenses (“ASU 2024-03”), which is intended to require more detailed disclosures about specified categories of expenses (including employee compensation, depreciation, and amortization) included in certain expense captions presented on the face of the income statement. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to all prior periods presented in the financial statements. The Company is in the process of evaluating the impact of this new guidance on its condensed financial statements.
3. Net Income/(Loss) per Share Attributable to Common Stockholders
The following table summarizes the computation of basic and diluted net income/(loss) per share attributable to common stockholders of the Company:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
(in thousands, except share and per share amounts) |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income/(loss) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
Net income/(loss) attributable to common stockholders: |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average number of common shares outstanding, basic and diluted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income/(loss) per common share attributable to common stockholders, basic and diluted |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
The weighted average number of shares outstanding for the three and six months ended June 30, 2024 is based upon the shares of non-voting Common Stock issued on August 18, 2022, the conversion of all outstanding shares of non-voting Common Stock, Series B Preferred Stock and Series B-1 Preferred Stock into voting Common Stock upon completion of the Direct Listing on January 31, 2024, and the issuance of
As further described in Note 7, during the six months ended June 30, 2025, the Company issued
4. Property and Equipment
Property and equipment, net consist of the following:
|
|
June 30, |
|
|
December 31, |
|
||
(in thousands) |
|
2025 |
|
|
2024 |
|
||
Laboratory equipment |
|
$ |
|
|
$ |
|
||
Computer equipment, software, and other |
|
|
|
|
|
|
||
Total property and equipment at cost |
|
|
|
|
|
|
||
Less: Accumulated depreciation |
|
|
( |
) |
|
|
( |
) |
Property and equipment, net |
|
$ |
|
|
$ |
|
||
12
The useful life of laboratory equipment is
5. Fair Value of Financial Instruments
The following tables summarize the Company’s financial assets and liabilities measured at fair value on a recurring basis based on the three-tier fair value hierarchy:
|
|
Fair Value Measurement as of June 30, 2025 |
|
|||||||||||||
(in thousands) |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Total assets fair value |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
SEPA put option liability |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Short-term convertible debt |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total liabilities fair value |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
Fair Value Measurement as of December 31, 2024 |
|
|||||||||||||
(in thousands) |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Total assets fair value |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
SEPA put option liability |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Short-term convertible debt |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total liabilities fair value |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The following table summarizes the activity related to Level 3 financial liabilities for the six months ended June 30, 2025:
(in thousands) |
|
Short-term |
|
|
SEPA Put |
|
||
Fair value at December 31, 2024 |
|
$ |
|
|
$ |
|
||
Change in fair value of SEPA put option liability |
|
|
|
|
|
|
||
Addition of short-term convertible debt |
|
|
|
|
|
|
||
Conversions of convertible debt into shares of common stock |
|
|
( |
) |
|
|
|
|
Change in fair value of convertible debt |
|
|
|
|
|
|
||
Fair value at June 30, 2025 |
|
$ |
|
|
$ |
|
||
The following table summarizes the activity related to Level 3 financial liabilities for the six months ended June 30, 2024:
(in thousands) |
|
Liability Instrument |
|
|
Forward Contract Liability |
|
|
Warrant Liability |
|
|||
Fair value at December 31, 2023 |
|
$ |
7,236 |
|
|
$ |
— |
|
|
$ |
0 |
|
Bifurcation of the liability instrument upon Direct Listing |
|
|
(7,236 |
) |
|
|
— |
|
|
|
7,236 |
|
Increase in forward contract liability for Draw Down Notice on June 27, 2024 |
|
|
— |
|
|
|
1,500 |
|
|
|
— |
|
Increase in Warrant liability at issuance January 31, 2024 |
|
|
— |
|
|
|
— |
|
|
|
13,727 |
|
Change in fair value of Warrant liability |
|
|
— |
|
|
|
— |
|
|
|
(16,149 |
) |
Fair value at June 30, 2024 |
|
$ |
— |
|
|
$ |
1,500 |
|
|
$ |
4,814 |
|
As further described in Note 7, the Company issued short-term convertible debt on December 20, 2024 and December 30, 2024 with a total principal balance of $
13
volatility of
As further described in Note 7, the Company entered into the SEPA on December 20, 2024 and recorded a put option liability for the Company’s right to require the investor to purchase up to an additional $
The carrying amounts of cash, prepaid expenses, other current assets, accounts payable and accrued expenses approximate their fair values due to their short-term maturities.
There were no transfers in or out of Level 1, Level 2 or Level 3 assets and liabilities for the six months ended June 30, 2025 and for the year ended December 31, 2024.
6. Stockholders’ Equity/(Deficit)
Authorized Capital - As of June 30, 2025, the Company authorized
In January 2024, the Company issued
On January 31, 2024, the Company completed its Direct Listing, which qualified as an IPO transaction pursuant to the Company’s Amended and Restated Certificate of Incorporation. As a result of the Direct Listing, the outstanding shares of Series A Preferred Stock were canceled for no consideration and the outstanding shares of Series B Preferred Stock, Series B-1 Preferred Stock, and non-voting Common Stock were all converted 1:1 into shares of voting Common Stock.
In August 2024, the Company amended and restated its certificate of incorporation with the State of Delaware to eliminate its non-voting Common Stock, Series A Preferred Stock, Series B Preferred Stock, and Series B-1 Preferred Stock, and to reduce to
In June 2025, the Company amended and restated its certificate of incorporation with the State of Delaware to increase its authorized Common Stock, par value $
7. Standby Equity Purchase Agreement
On December 20, 2024, the Company entered into the SEPA. Pursuant to the SEPA, the investor will advance to the Company, subject to the satisfaction of certain conditions, a total principal amount of $
The Company received net proceeds of $
14
Below is a summary of conversions during the six months ended June 30, 2025.
Date |
|
Tranche |
|
Principal Amount |
|
|
Shares Issued |
|
|
Price Per Share |
|
|||
January 23, 2025 |
|
Second Note |
|
$ |
|
|
|
|
|
$ |
|
|||
January 27, 2025 |
|
Second Note |
|
$ |
|
|
|
|
|
$ |
|
|||
January 29, 2025 |
|
Second Note |
|
$ |
|
|
|
|
|
$ |
|
|||
February 7, 2025 |
|
Second Note |
|
$ |
|
|
|
|
|
$ |
|
|||
February 21, 2025 |
|
Second Note |
|
$ |
|
|
|
|
|
$ |
|
|||
March 4, 2025 |
|
Second Note |
|
$ |
|
|
|
|
|
$ |
|
|||
April 11, 2025 |
|
Second Note |
|
$ |
|
|
|
|
|
$ |
|
|||
April 15, 2025 |
|
Second Note |
|
$ |
|
|
|
|
|
$ |
|
|||
May 15, 2025 |
|
Second Note |
|
$ |
|
|
|
|
|
$ |
|
|||
June 2, 2025 |
|
Second Note |
|
$ |
|
|
|
|
|
$ |
|
|||
June 3, 2025 |
|
Second Note |
|
$ |
|
|
|
|
|
$ |
|
|||
June 20, 2025 |
|
Second Note |
|
$ |
|
|
|
|
|
$ |
|
|||
June 24, 2025 |
|
Second Note |
|
$ |
|
|
|
|
|
$ |
|
|||
June 26, 2026 |
|
Third Note |
|
$ |
|
|
|
|
|
$ |
|
|||
June 27, 2025 |
|
Third Note |
|
$ |
|
|
|
|
|
$ |
|
|||
Pursuant to the SEPA, and subject to certain conditions, the Company will have the right, from time to time, until December 20, 2026, to require the investor to purchase up to an additional $
The Company paid the investor a structuring fee of $
The SEPA was accounted for as a liability under ASC 815 because it includes an embedded put option and an embedded forward option. The put option was recognized at inception and the forward option will be recognized upon the issuance of a notice for the sale of the Company’s Common Stock. The fair value of the derivative liability related to the embedded put option was estimated at $
8. Income Taxes
The Company did
9. Leases, Commitments and Contingencies
In October 2022, the Company entered into a lease agreement for office space with a term of
In June 2023, the Company entered into a new lease for temporary lab and office space for its research operations. This lease had a term of
In March 2025, the Company executed a new lease for
15
Rent expense for the six months ended June 30, 2025 and 2024, was $
Maturities of operating lease liability as of June 30, 2025, were as follows:
(in thousands of dollars) |
|
|
|
|
2026 |
|
$ |
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
2030 |
|
|
|
|
Thereafter |
|
|
|
|
Total lease payments |
|
|
|
|
Less: Imputed interest |
|
|
( |
) |
Total lease liability |
|
|
|
|
Less: Current lease liability |
|
|
( |
) |
Total non-current lease liability |
|
$ |
|
|
10. Stock-Based Compensation
The Company adopted on August 10, 2022, and the stockholders approved on August 18, 2022, the 2022 Stock Plan (the “Plan”). The Plan provides for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, and other stock awards.
As of June 30, 2025 and December 31, 2024, respectively, there were
Stock-based compensation expense is recognized in the condensed consolidated statements of operations as follows:
|
|
For the Three Months Ended June 30, |
|
|
For the Six Months Ended June 30, |
|
||||||||||
(in thousands of dollars) |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Research and development |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
General and administrative |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total stock-based compensation expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
In addition to the $
Unrecognized stock-based compensation costs related to unvested awards and the weighted-average period over which the costs are expected to be recognized as of June 30, 2025, are as follows:
|
|
Stock Options |
|
|
Unrecognized stock-based compensation expense (in thousands) |
|
$ |
|
|
Expected weighted-average period compensation costs to be recognized (years) |
|
|
|
|
A summary of the Company’s stock option activity is as follows:
|
|
Stock Options |
|
|
Weighted-Average Exercise Price per Share |
|
|
Weighted-Average Remaining Contractual Life (years) |
|
|
Aggregate Intrinsic Value (in thousands) |
|
||||
Outstanding as of December 31, 2024 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Granted |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Exercised |
|
|
|
|
$ |
|
|
|
— |
|
|
$ |
— |
|
||
Forfeited/canceled |
|
|
( |
) |
|
$ |
|
|
|
— |
|
|
$ |
— |
|
|
Outstanding as of June 30, 2025 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Exercisable as of June 30, 2025 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
The fair value of stock options granted to employees, directors, and consultants was estimated on the date of grant using the Black-Scholes option pricing model using the following weighted-average assumptions:
16
Assumptions: |
|
Six Months Ended |
|
|
Six Months Ended |
|
||
Risk-free interest rate |
|
|
|
|
||||
Expected volatility |
|
|
|
|
||||
Expected term (years) |
|
|
|
|
|
|
||
Expected dividend |
|
|
|
|
||||
The weighted-average grant date fair value of the options granted during the six months ended June 30, 2025 and 2024 was $
11. Related Party Transactions
During the three months ended June 30, 2025, the Company paid an aggregate of $
12. Subsequent Events
On July 15, 2025, the investor converted $
On July 28, 2025, the investor converted $300,000 in principal amount of the Notes and the Company issued to the investor 493,258 shares of Common Stock at a $0.6471 conversion price per share.
The One Big Beautiful Bill Act (“OBBBA”) was enacted on July 4, 2025. The Company is in the process of assessing the impact of this legislation on its financial statements. The current expectation is that OBBBA will not have a material impact on the Company’s estimated annual effective tax or deferred taxes.
17
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited financial statements and related notes and other financial information appearing elsewhere in this Quarterly Report and with our audited financial statements and related notes and other financial information appearing in our Annual Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” section of this Quarterly Report and in the Annual Report, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Overview
We are a clinical-stage biotechnology company focused on developing and commercializing fibroblast-based therapies for patients suffering from chronic diseases with significant unmet medical needs, including wound healing, multiple sclerosis, degenerative disc disease, psoriasis and certain cancers, and potential human longevity applications including thymic involution reversal. Our most advanced product candidates are CYWC628, CYMS101 and CybroCell™.
We are in the late pre-clinical stages of developing CYWC628 as a topically administered allogeneic fibroblast cell-based therapy for wound healing. Our pre-clinical studies focused on utilizing single cell fibroblasts, fibroblast spheroids, and fibroblast-derived materials to treat wounds in diabetic mice. We completed pre-clinical studies investigating (i) multiple administrations of CYWC628 spheroids on a chemically induced chronic wound NONcNZO10/LtJ and BKS.Cg-Dock7m +/+ LepRdb/J mouse model, (ii) dose titration to provide information on the proposed dose range of CYWC628, and (iii) acute and chronic toxicity. The results of our studies have shown statistically significant acceleration in the rate of wound closure in comparison with both a marketed wound care product and control, and improved quality of healed wounds.
We are developing CYMS101 as an intravenously administered allogeneic fibroblast single cell, and fibroblast spheroid cell-based therapy to treat MS. After completing animal studies using CYMS101, we received approval from a U.S.-based IRB to conduct clinical investigations in Mexico using the fibroblast cell composition for patients with MS, and completed a Phase 1 study. The study was conducted in five participants. The primary objective of the study was to assess safety, and the secondary objective was to assess efficacy. The primary objective was achieved as we saw no adverse events related to the treatment - no adverse events during intravenous injection of the tolerogenic fibroblasts, no short or long-impact in complete blood count tests during the 16-week monitoring period, and no short or long impact in electrocardiogram results during the 16-week monitoring period. In addition, the study assessed clinical activity using a standard set of neurological assessments routinely used to assess MS. We are currently conducting further research to more fully characterize the mode of action of fibroblasts in oligodendrocyte expansion. We plan to file an IND application for a Phase 1/2 clinical trial relating to MS in the United States as funding allows. We expect to seek a strategic partner to collaborate with us on the development of CYMS101 either before initiating the Phase 1/2 study, or after its completion, if successful, and prior to commencing a potential Phase 3 clinical trial.
CybroCell™ is an investigational intradiscal administered allogeneic fibroblast cell-based therapy in development for degenerative disc disease and is being designed as an alternative method for repairing the cartilage of the intervertebral disc (or any other articular cartilage). We have completed two animal studies in rabbit models. The results from the studies were positive and supported our IND application to run a “first in human” trial. We received IND clearance from the FDA in 2018, conditional upon approval of our master cell bank, to evaluate this candidate in a planned clinical trial.
CYPS317 is our allogeneic intravenously administered fibroblast spheroid cell-based investigational therapeutic for the treatment of psoriasis. We have completed an early phase pre-clinical project utilizing a psoriasis mouse model to assess the potential use of intravenous administration of fibroblast spheroids for the treatment of psoriasis. We are in the process of continuing our potentially IND-enabling animal model studies, which include carrying out a dosage titration animal model study to determine optimal efficacious dose range, in addition to determining the durability of treatment for mild to moderate, and moderate to severe psoriasis, with a projected completion timeline of the fourth quarter of 2025.
We also have human longevity, certain cancer, and artificial pancreatic organoid research programs in the very early stages of research and development, and we plan to accelerate such programs as funding allows.
The manufacturing of our master cell bank and working cell bank for CYWC628 is now complete and both are certified as released by our CDMO. This CDMO will also manufacture CYWC628 for use in our twelve-week Phase 1/2 clinical trial for treatment of diabetic foot ulcers that we plan to conduct in Australia. If any of our product candidates receive marketing approval, we expect to evaluate the feasibility of building our own cGMP manufacturing facility or continuing to outsource manufacturing to a CDMO for clinical testing and commercial supply. We expect to rely on third parties for our cell therapy manufacturing process for the foreseeable future.
Since our spinoff from SpinalCyte, LLC, or FibroGenesis, in April 2021, our operations have included business planning, hiring personnel, raising capital, building our intellectual property portfolio, and performing research and development on our product candidates and our fibroblast technology, leveraging the clinical benefits of fibroblasts as the basis of our cell therapy platform.
We have incurred net losses since inception and expect to incur losses in the future as we continue our research and development activities. To date, we have funded our operations primarily through investment from FibroGenesis, the sale of $15.0 million of our convertible promissory notes, which were all subsequently converted to equity, the sale of $18.6 million of preferred stock, $10.4 million in proceeds from the sale of common stock, $0.00001 par value per shares, or the Common Stock, through the share purchase agreement, dated November 12, 2021, or the GEM SPA, with GEM Global Yield LLC SCS, or GEM Global, and GEM Yield Bahamas Limited, or GYBL, and together with GEM Global, GEM, and $13.1 million in proceeds from the issuance of additional convertible promissory notes.
18
As of June 30, 2025, we had cash and cash equivalents of $8.8 million. Since our inception, we have incurred significant operating losses. We incurred net losses of $9.6 million and $7.6 million for the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, we had an accumulated deficit of $45.1 million.
We expect to continue to incur significant losses for the foreseeable future, and we expect these losses to increase substantially if and as we:
Due to the numerous risks and uncertainties associated with biopharmaceutical product development and the economic and developmental uncertainty, we may be unable to accurately predict the timing or magnitude of all expenses. Our ability to ultimately generate revenue to achieve profitability will depend heavily on the development, approval, and subsequent commercialization of our product candidates. If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations. As a result, we will need substantial additional funding to support our long-term continuing operations and pursue our growth strategy. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through the sale of equity, debt financings or other capital sources, which may include collaborations with other companies or other strategic transactions. We may not be able to raise additional funds or enter into such other agreements or arrangements when needed on favorable terms, or at all. If we fail to raise capital or enter into such agreements as and when needed, we will have to significantly delay, reduce, or eliminate the development and commercialization of one or more of our product candidates or delay our pursuit of potential in-licenses or acquisitions.
General Trends and Outlook
Recent Developments
CYWC628
Based upon our progress to date, we expect to initiate our twelve-week Phase 1/2 clinical trial utilizing CYWC628 for treatment of diabetic foot ulcers in Australia in the first quarter of 2026 and we expect to complete the clinical trial in the third quarter of 2026. These timelines have been extended as we work to resolve process issues with the manufacturing training run and increase the number of test manufacturing runs needed to confirm no sterility issues before we begin the manufacture of CYWC628 for the clinical trial. Please see “Risk Factors – Risks Related to Manufacturing” in our Annual Report and “Item 1A. Risk Factors – Risks Related to Manufacturing” in this Quarterly Report.
CybroCell™
We carried out experiments that demonstrate the ability to use the CYWC628 master cell bank for the manufacturing of the CybroCell™ drug product. We are working to amend the IND clearance with the FDA for the planned Phase I clinical trial. A timeline for the trial will be determined in connection with discussions with the FDA.
Components of Results of Operations
Revenue
To date, we have not generated any revenue from product sales and do not expect to generate any revenue from the sale of products in the foreseeable future. If our development efforts for any of our product candidates are successful and result in regulatory approval, we may generate revenue in the future from product sales. We cannot predict if, when or to what extent we will generate revenue from the commercialization and sale of any of our product candidates. We may never succeed in obtaining regulatory approval for any of our product candidates and, even if we do, we may never generate revenue that is significant enough for us to achieve profitability.
19
Research and Development Expenses
Our research and development expenses consist of expenses incurred in connection with the development of our product candidates and include:
We expense research and development costs as incurred. Nonrefundable advance payments that we make for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses. The prepaid amounts are expensed as the related goods are delivered or the services are performed.
We expect our research and development expenses to increase substantially for the foreseeable future as we continue to invest in research and development activities related to developing our product candidates as they advance into later stages of clinical development and our other product candidates in preclinical development as they advance into clinical development. The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming, and the successful development of our product candidates is highly uncertain. As a result, we are unable to determine the duration and completion costs of our research and development projects or when and to what extent we will generate revenue from the commercialization and sale of any of our product candidates. This is due to the numerous risks and uncertainties associated with developing product candidates, including uncertainty related to:
A change in the outcome of any of these variables with respect to the development of any of our programs or any product candidate we develop would significantly change the costs, timing and viability associated with the development and/or regulatory approval of such programs or product candidates.
General, Administrative and Other Expenses
Our general, administrative, and other expenses consist primarily of personnel costs, allocated facilities costs, and other expenses for outside professional services, including legal, marketing, investor relations, human resources services, and accounting services. Personnel costs consist of salaries, benefits, and stock-based compensation for our general and administrative personnel. We expect to continue incurring additional expenses as a result of operating as a public company, including expenses related to compliance with the rules and regulations of the SEC and Nasdaq, insurance,
20
investor relations activities and other administrative and professional services. We also expect to increase the size of our administrative function to support the growth of our business.
Interest Expense
Our interest expense consists primarily of interest on short-term borrowing to finance D&O insurance premiums, and amortization of discount on our convertible notes.
Statements of Operations
Results of Operations
Comparison of Three Months Ended June 30, 2025 and 2024
The following tables set forth our results of operations for the three months ended June 30, 2025 and 2024.
|
|
Three Months Ended June 30, |
|
|
Change Amount |
|
||||||
|
|
2025 |
|
|
2024 |
|
|
|
|
|||
|
|
(unaudited, in thousands) |
|
|
|
|
||||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|||
Research and development |
|
$ |
2,041 |
|
|
$ |
975 |
|
|
$ |
1,066 |
|
General, administrative and other |
|
|
2,449 |
|
|
|
2,249 |
|
|
|
200 |
|
Total operating expenses |
|
|
4,490 |
|
|
|
3,224 |
|
|
|
1,266 |
|
Loss from operations |
|
|
(4,490 |
) |
|
|
(3,224 |
) |
|
|
(1,266 |
) |
Other income/(expense) |
|
|
|
|
|
|
|
|
|
|||
Change in fair value of warrant liability |
|
|
— |
|
|
|
5,527 |
|
|
|
(5,527 |
) |
Change in fair value of forward contract liability |
|
|
— |
|
|
|
(1,500 |
) |
|
|
1,500 |
|
Change in fair value of SEPA put option liability |
|
|
73 |
|
|
|
— |
|
|
|
73 |
|
Change in fair value of convertible debt |
|
|
334 |
|
|
|
— |
|
|
|
334 |
|
Other income/(expense) |
|
|
(625 |
) |
|
|
30 |
|
|
|
(655 |
) |
Interest income |
|
|
50 |
|
|
|
70 |
|
|
|
(20 |
) |
Interest expense |
|
|
— |
|
|
|
(5 |
) |
|
|
5 |
|
Net loss |
|
$ |
(4,658 |
) |
|
$ |
898 |
|
|
$ |
(5,556 |
) |
Research and Development Expenses
Research and development expenses were $2.0 million and $1.0 million for the three months ended June 30, 2025 and 2024, respectively. The increase of $1.1 million was primarily due to:
Research and development expenses are not tracked by product candidate.
General, Administrative and Other Expenses
General, administrative and other expenses were $2.4 million and $2.2 million for the three months ended June 30, 2025 and 2024, respectively. The increase of $0.2 million was primarily due to:
Change in fair value of warrant liability
Change in fair value of warrant liability was $0 and a gain of $5.5 million for the three months ended June 30, 2025 and 2024, respectively. The liability instrument to investors under the GEM SPA was comprised of the contingent warrant liability and contingent put option.
Change in fair value of forward contract liability
Change in fair value of forward contract liability was $0 and $1.5 million for the three months ended June 30, 2025 and 2024, respectively. We issued a Draw Down Notice to GEM under the Share Purchase Agreement on June 27, 2024, which created the forward contract liability to sell shares to the investor at 90% of the average daily closing price per share over the Draw Down Pricing Period. The $1.5 million loss during the three months ended
21
June 30, 2024 is based upon the estimated fair value of the forward contract liability for the Draw Down Notice issued, as remeasured at June 30, 2024, and was marked to market upon receipt of the Closing Notice from the investor.
Change in fair value of SEPA put option liability
On December 20, 2024, we entered into a Standby Equity Purchase Agreement (the “SEPA”) with a certain investor. Pursuant to the SEPA, and subject to certain conditions, we have the right, from time to time, until December 20, 2026, to require the investor to purchase up to $10.0 million of shares of Common Stock by delivering written notice to the investor. The SEPA was accounted for as a liability under ASC 815 because it includes an embedded put option and an embedded forward option. The SEPA put option liability was recognized at inception, and its fair value was estimated at $0.5 million and $0.5 million at June 30, 2025 and December 31, 2024, respectively. The change in fair value of the SEPA put option liability was a gain of $0.1 million during the three months ended June 30, 2025 and resulted primarily from changes in stock price and other assumptions used in the valuation model.
Change in fair value of convertible debt
We received advances in the form of convertible notes pursuant to the SEPA in December 2024 and June 2025 and elected to account for the short-term convertible notes under the fair value option. Under the fair value option, all costs associated with raising the funds were expensed immediately. The convertible notes were adjusted to their fair values at June 30, 2025 with a $0.3 million gain resulting from the increase in fair value.
Gain/(loss) on issuance of common stock in exchange for convertible debt, net
The investor converted $2.2 million of convertible debt into shares of Common Stock during the three months ended June 30, 2025. We recognized an approximate $0.2 million net loss on these conversions, which results from the difference between the quoted market price per share used to record the issuance of Common Stock and the conversion price per share.
Other income/(expense)
Other expense for the three months ended June 30, 2025 consists of $0.6 million of non-cash original discount on convertible debt and $30,000 in interest income for the three months ended June 30, 2024.
Interest income
Interest income was $0.1 million and $0.1 million for the three months ended June 30, 2025 and 2024, respectively. Interest income is comprised of interest income and unrealized gain/losses on cash equivalents.
Interest expense
Interest expense was $0 and $5,000 for the three months ended June 30, 2025 and 2024, respectively.
Income taxes
The effective income tax rate was 0.0% for all periods. Currently, we have recorded a full valuation allowance against our net deferred tax assets.
Comparison of Six Months Ended June 30, 2025 and 2024
The following tables set forth our results of operations for the six months ended June 30, 2025 and 2024.
|
|
Six Months Ended June 30, |
|
|
Change Amount |
|
||||||
|
|
2025 |
|
|
2024 |
|
|
|
|
|||
|
|
(unaudited, in thousands) |
|
|
|
|
||||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|||
Research and development |
|
$ |
3,821 |
|
|
$ |
1,935 |
|
|
$ |
1,886 |
|
General, administrative and other |
|
|
5,200 |
|
|
|
4,739 |
|
|
|
461 |
|
Total operating expenses |
|
|
9,021 |
|
|
|
6,674 |
|
|
|
2,347 |
|
Loss from operations |
|
|
(9,021 |
) |
|
|
(6,674 |
) |
|
|
(2,347 |
) |
Other income/(expense) |
|
|
|
|
|
|
|
|
|
|||
Change in fair value of warrant liability |
|
|
— |
|
|
|
2,422 |
|
|
|
(2,422 |
) |
Change in fair value of forward contract liability |
|
|
— |
|
|
|
(1,500 |
) |
|
|
1,500 |
|
Change in fair value of SEPA put option liability |
|
|
(10 |
) |
|
|
— |
|
|
|
(10 |
) |
Change in fair value of convertible debt |
|
|
(117 |
) |
|
|
— |
|
|
|
(117 |
) |
Commitment fee expense |
|
|
— |
|
|
|
(1,941 |
) |
|
|
1,941 |
|
Other income/(expense) |
|
|
(625 |
) |
|
|
30 |
|
|
|
(655 |
) |
Interest income |
|
|
149 |
|
|
|
110 |
|
|
|
39 |
|
Interest expense |
|
|
— |
|
|
|
(9 |
) |
|
|
9 |
|
Net loss |
|
$ |
(9,624 |
) |
|
$ |
(7,562 |
) |
|
$ |
(2,062 |
) |
22
Research and Development Expenses
Research and development expenses were $3.8 million and $1.9 million for the six months ended June 30, 2025 and 2024, respectively. The increase of $1.9 million was primarily due to:
Research and development expenses are not tracked by product candidate.
General, Administrative and Other Expenses
General, administrative and other expenses were $5.2 million and $4.7 million for the six months ended June 30, 2025 and 2024, respectively. The increase of $0.5 million was primarily due to:
Change in fair value of warrant liability
Change in fair value of warrant liability was $0 and $2.4 million for the six months ended June 30, 2025 and 2024, respectively. The liability instrument to investors under the GEM SPA was comprised of the contingent warrant liability and contingent put option.
Change in fair value of forward contract liability
Change in fair value of forward contract liability was $0 and $1.5 million for the six months ended June 30, 2025 and 2024, respectively. We issued a Draw Down Notice to GEM under the Share Purchase Agreement on June 27, 2024, which created the forward contract liability to sell shares to the investor at 90% of the average daily closing price per share over the Draw Down Pricing Period. The $1.5 million loss during the three months ended June 30, 2024 is based upon the estimated fair value of the forward contract liability for the Draw Down Notice issued, as remeasured at June 30, 2024, and was marked to market upon receipt of the Closing Notice from the investor.
Change in fair value of SEPA put option liability
The change in fair value of the SEPA put option liability was a loss of $0.0 million during the six months ended June 30, 2025 and resulted primarily from changes in stock price and other assumptions used in the valuation model.
Change in fair value of convertible debt
We received advances in the form of convertible notes pursuant to the SEPA in December 2024 and June 2025 and elected to account for the short-term convertible notes under the fair value option. Under the fair value option, all costs associated with raising the funds were expensed immediately. The convertible notes were adjusted to their fair values at June 30, 2025 with a $0.1 million loss resulting from the decrease in fair value.
Gain/(loss) on issuance of common stock in exchange for convertible debt, net
The investor converted $5.8 million of convertible debt into shares of Common Stock during the six months ended June 30, 2025. We recognized an approximate $0.4 million net loss on these conversions, which results from the difference between the quoted market price per share used to record the issuance of Common Stock and the conversion price per share.
Other income/(expense)
Other expense for the six months ended June 30, 2025 consists of $0.6 million of non-cash original discount on convertible debt and $30,000 in interest income for the six months ended June 30, 2024.
Commitment fee expense
Commitment fee expense was $0 and $1.9 million for the six months ended June 30, 2025 and 2024, respectively. A $2.0 million commitment fee pursuant to the GEM SPA became payable to GEM upon completion of the Direct Listing in January 2024. The commitment fee was payable to GEM as drawdown notices are issued, with any remaining balance payable one year after public listing. We sold $3.0 million of Common Stock to GEM under the GEM SPA during the six months ended June 30, 2024, which made $0.1 million of the commitment fee payable immediately. This $0.1
23
million portion of the commitment fee was netted against the proceeds received in additional paid-in capital. The remaining $1.9 million was expensed immediately because we were planning to raise funds through other sources and had no plans to issue further Draw Down Notices to GEM prior to the one-year anniversary of our public listing when this remaining amount would have been due.
Interest income
Interest income was $0.1 million for both the six months ended June 30, 2025 and 2024. Interest income is comprised of interest income and unrealized gain/losses on cash equivalents.
Interest expense
Interest expense was $0 and $9,000 for the six months ended June 30, 2025 and 2024, respectively.
Income taxes
The effective income tax rate was 0.0% for all periods. Currently, we have recorded a full valuation allowance against our net deferred tax assets.
Liquidity and Capital Resources
Overview
Through June 30, 2025, we have financed our operations primarily with investment from FibroGenesis, proceeds from borrowings under our convertible loan agreements, proceeds from the issuance of preferred stock, and proceeds from the sale of Common Stock through the GEM SPA and the SEPA. From inception through June 30, 2025, we have received aggregate proceeds of $15.0 million from sales of our convertible notes, $18.6 million from the sales of preferred stock, $10.4 million from the issuance of Common Stock and $13.1 million from the issuance of additional convertible promissory notes under the SEPA. As of June 30, 2025, we had cash and cash equivalents of $8.8 million and an accumulated deficit of $45.1 million. As of June 30, 2025, we had $9.2 million principal balance of outstanding debt with a fair value of $8.1 million.
Cash Flows
The following table sets forth a summary of our cash flows for the six months ended June 30, 2025 and 2024.
|
|
Six Months Ended June 30, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
|
|
(in thousands) |
|
|||||
Net cash used in operating activities |
|
$ |
(9,259 |
) |
|
$ |
(6,222 |
) |
Net cash used in investing activities |
|
|
(256 |
) |
|
|
(74 |
) |
Net cash provided by financing activities |
|
|
4,375 |
|
|
|
3,106 |
|
|
|
|
|
|
|
|
||
Net decrease in cash and cash equivalents |
|
$ |
(5,140 |
) |
|
$ |
(3,190 |
) |
Cash Flows from Operating Activities
Net cash used in operating activities was $9.3 million and $6.2 million for the six months ended June 30, 2025 and 2024, respectively, and consisted primarily of net losses of $9.6 million and $7.6 million, respectively. Noncash expenses consisting of change in fair value of convertible debt of $0.1 million, net loss on issuance of Common Stock in exchange for convertible debt of $0.2 million, stock-based compensation expense of $1.3 million, and amortization of operating lease right-of-use asset of $0.3 million partially offset the net loss, while a decrease in prepaid expenses of $1.1 million, a decrease in accounts payable and accrued expenses of $0.6 million, and a decrease in operating lease liability of $0.3 million added to the cash used in operations in the six months ended June 30, 2025. Noncash losses on change in fair value of forward contract liability of $1.5 million, stock-based compensation expense of $1.1 million, amortization of operating lease right-of-use asset of $0.2 million, and depreciation expense of $0.1 million and change in commitment fee payable of $1.5 million partially offset the net loss, while noncash gain on change in fair value of liability instrument of $2.4 million, an increase in prepaid expenses of $0.5 million, a decrease in accounts payable and accrued expenses of $0.2 million, a decrease in payable to Parent of $0.1 million, and a decrease in operating lease liability of $0.2 million added to the cash used in operations in the six months ended June 30, 2024.
Cash Flows from Investing Activities
Net cash used in investing activities was $0.3 million and $0.1 million for the six months ended June 30, 2025 and 2024, respectively, and consisted primarily of laboratory equipment purchases.
Cash Flows from Financing Activities
Net cash provided by financing activities was $4.4 million and $3.1 million for the six months ended June 30, 2025 and 2024, respectively. During the six months ended June 30, 2024, we entered into a $0.6 million short-term borrowing agreement to finance the D&O insurance policy premiums and repaid $0.3 million of the principal borrowed, and we raised $2.8 million of net proceeds from the sale of common stock under the GEM SPA.
Funding Requirements
24
We have incurred operating losses since our formation and expect such losses to continue in the future as we build infrastructure, develop intellectual property and conduct research and development activities. Moreover, we have incurred, and expect to continue to incur, additional costs associated with operating as a public company. We do not have any products approved for sale, and we have never generated any revenue from product sales. We have primarily relied on a combination of angel investors, private debt placements, convertible debt issuances, and sales of equity to fund our operations. As of June 30, 2025, we had an accumulated deficit of $45.1 million and cash and cash equivalents of $8.8 million. We do not expect to generate any meaningful revenue unless and until we obtain regulatory approval of and commercialize any of our current or future product candidates and we do not know when, or if, that will occur. Unless and until such time that revenue and net income are generated, we will need to continue to raise additional capital. These factors raise substantial doubt about our ability to continue as a going concern for one year from the issuance of the financial statements included in this Quarterly Report. The financial statements have been prepared as though we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business, and do not include any adjustments that might be necessary if we are unable to continue as a going concern.
Our ability to continue as a going concern is dependent on our ability to raise additional capital. We believe we will be able to obtain additional capital through equity financings or other arrangements to fund operations; however, there can be no assurance that such additional financing, if available, can be obtained on acceptable terms. If we are unable to obtain adequate financing when needed, we may have to delay, reduce the scope of, or suspend one or more of our preclinical studies, clinical trials, research and development programs or commercialization efforts. We may seek to raise any necessary additional capital through a combination of public or private equity offerings, debt financings, collaborations, and other licensing arrangements. If we raise additional capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends. If we raise additional capital through marketing and distribution arrangements or other collaborations, strategic alliances, or licensing arrangements with third parties, we may have to relinquish certain valuable rights to our product candidates, technologies, future revenue streams or research programs or grant licenses on terms that may not be favorable to us.
Our future funding requirements will depend on many factors, including, but not limited to:
We are subject to all the risks typically related to the development of new product candidates, and we may encounter unforeseen expenses, difficulties, complications, delays, and other unknown factors that may adversely affect our business. Further, our operating plan may change, and we may need additional funds to meet operational needs and capital requirements for clinical trials and other research and development expenditures.
Contractual Obligations and Commitments
We have material cash requirements and other contractual obligations related to our office and lab rent (as described in Note 9, “Leases, Commitments and Contingencies” to the financial statements in this Quarterly Report).
Critical Accounting Estimates
Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as of the dates of the balance sheets and the reported amounts of expenses during the reporting periods. In accordance with GAAP, we evaluate our estimates and judgments on an ongoing basis. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the
25
basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
We define our critical accounting estimates as those under GAAP that require us to make subjective estimates and judgments about matters that are uncertain and are likely to have a material impact on our financial condition and results of operations, as well as the specific manner in which we apply those principles. For a description of our critical accounting policies and estimates, please see the disclosures in Part II, Item 7 of the Annual Report.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and are not required to provide the information specified under this item.
Item 4. Controls and Procedures
We maintain disclosure controls and procedures (as defined in Exchange Act Rule 13a–15(e) and 15d-15(e)) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act, and the rules and regulations thereunder, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Evaluation of Disclosure Controls and Procedures
We have carried out an evaluation, under the supervision, and with the participation, of management, including our chief executive officer and chief financial officer, of our disclosure controls and procedures (as defined in Rule 13a-15(e)) of the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10–Q. During the preparation of our financial statements for the six months ended June 30, 2025, our management identified a material weakness in our internal control over financial reporting due to a lack of segregation of duties. A material weakness is defined as a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
Specifically, our management identified a material weakness in our internal controls within the financial reporting function that resulted from an ineffective design and implementation of controls over proper segregation of duties for the period of time covered by our financial statements prior to our then-Chief Financial Officer joining us in June 2022 when all financial functions were handled by a single individual, and afterward, through June 30, 2025, due to a limited number of individuals. Based upon such evaluation, and due to the material weakness identified, our principal executive officer and principal financial and accounting officer have concluded that our disclosure controls and procedures were not effective.
Remediation Plan for Material Weakness
With the addition of a chief financial officer and the changes made to our accounting and financial reporting processes and internal controls during the last half of fiscal year 2022 and through June 30, 2025, we have strengthened our internal controls and will continue to add staff, evaluate segregation of duties, and implement initiatives to improve our internal controls over financial reporting as we grow.
Changes in Internal Control over Financial Reporting
There has been no change in the Company’s internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) that occurred during the six months ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Limitations on the Effectiveness of Controls
A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within an organization have been detected. Accordingly, our disclosure controls and procedures and our internal control over financial reporting are designed to provide reasonable, not absolute, assurance that the objectives of the control system are met. We continue to implement, improve, and refine our disclosure controls and procedures and our internal control over financial reporting.
26
PART II — OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we may be involved in legal proceedings relating to intellectual property, commercial, employment and other matters arising in the ordinary course of business. Such matters are subject to uncertainty and there can be no assurance that such legal proceedings will not have a material adverse effect on our business, results of operations, financial position, or cash flows. We are not party to any legal proceedings at this time.
Item 1A. Risk Factors
Our business is subject to risks, uncertainties, and events that, if they occur, could adversely affect our financial condition and results of operations and the trading price of our securities. Except as set forth below, there have been no material changes from the risk factors previously described in “Part I, Item 1A. Risk Factors” of the Annual Report.
Risks Related to Our Financial Condition and Capital Requirements
There is substantial doubt about our ability to continue as a going concern.
We have incurred recurring operating losses and negative cash flows from operating activities since inception and expect to continue incurring operating losses and negative cash flows in the future. In connection with the preparation of our Quarterly Report, our management concluded that there is substantial doubt as to whether we can continue as a going concern for the twelve months following the issuance of the Quarterly Report. Our ability to continue as a going concern is dependent upon raising capital to maintain current operations and continue research and development efforts. We plan to raise additional capital to fund our operations through public or private equity offerings, debt financings, and/or potential collaborations and license arrangements or other sources. There is no assurance, however, that any additional financing or any revenue-generating collaboration will be available when needed or that we will be able to obtain financing or enter into a collaboration on terms acceptable to us.
These factors raise substantial doubt about our ability to continue as a going concern. Substantial doubt about our ability to continue as a going concern may materially and adversely affect the price per share of our Common Stock, and it may be more difficult for us to obtain financing. If existing or potential collaborators decline to do business with us or potential investors decline to participate in any future financings due to such concerns, our ability to increase our cash position may be limited. The perception that we may not be able to continue as a going concern may cause others to choose not to deal with us due to concerns about our ability to meet our contractual obligations. We have prepared our condensed consolidated financial statements on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. Our financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern. If we are unable to continue as a going concern, we will be forced to delay, reduce, or discontinue our research and development programs or consider other various strategic alternatives and you could lose all or part of your investment in us.
Risks Related to Manufacturing
Manufacturing cell therapy products is complex and subject to both human and systemic risks. Our third-party manufacturers or we may encounter difficulties in production and sourcing and may be subject to variations and supply constraints of critical components. If we or any of our third-party manufacturers encounter such difficulties, our ability to supply our product candidates for clinical trials or our products for patients, if approved, could be delayed or prevented.
The manufacture of biologic cell therapy product candidates, and products, if approved, is complex and requires significant expertise and capital investment, including developing advanced manufacturing techniques and process controls. Manufacturers of biologic products often encounter difficulties in production and sourcing, particularly in scaling up or out, validating the production process, and assuring high reliability of the manufacturing processes (including the absence of contamination), in light of variations and supply constraints of critical components. These problems include logistics and shipping, difficulties with production costs and yields, quality control, including consistency, stability, purity, and efficacy of the product, product testing, operator error, and availability of qualified personnel, as well as compliance with strictly enforced federal, state, and foreign regulations. For example, timelines for our planned twelve-week Phase 1/2 clinical trial utilizing CYWC628 for treatment of diabetic foot ulcers in Australia have been extended as we work with our CDMO to resolve process issues with the manufacturing training run and increase the number of test manufacturing runs needed to confirm no sterility issues before we begin the manufacture of CYWC628 for the clinical trial. Furthermore, if contaminants are discovered in our supply of our product candidates or in the manufacturing facilities, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination. We cannot assure you that any stability, purity, and efficacy failures, deficiencies, or other issues relating to manufacturing our product candidates will not occur in the future.
Additionally, our product candidates are derived from cells collected from humans. Such cells may vary in type and quality as the donors may vary in age, medical history, and many other factors. We have strict specifications for donor cell material and our product candidates. The donor cell material variability may exceed our manufacturing process capability or deviate from the specified ranges and result in failure in the production of the cell therapy product, lower quality batches, or even require adjustments to the specifications approved by authorities. The donor cell material may also be variable in factors that we currently may not be able to detect with the analytical methods used or may not know how to measure. We may also discover failures with the material after production. As a result, we may not be able to deliver the quality and consistency of our cell therapy products that we need or may need to re-collect cell material which can increase costs and/or cause delay, result in recalls, adversely impact patient outcomes and otherwise harm our clinical trials, reputation, business, and prospects.
We may fail to manage the logistics of collecting and shipping patient material to the manufacturing site, shipping the product candidate back to the relevant parties, and experiencing delays or shortages of certain clinical or commercial-grade supplies and components. Logistical and shipment delays
27
and problems caused by us, our vendors, or other factors not in our control, including business interruptions, global supply chain issues, and weather, could prevent or delay the delivery of product candidates to patients. Additionally, we have to maintain a complex chain of identity and chain of custody with respect to donor material as it moves to the manufacturing facility, through the manufacturing processes, and ultimately to a patient. Failure to maintain a chain of identity and chain of custody could result in patient death, loss of product, or regulatory action.
Our failure, or the failure of our third-party manufacturers, to comply with applicable regulations could result in sanctions being imposed on us, including clinical holds, fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, seizures or voluntary recalls of product candidates, operating restrictions, and criminal prosecutions, any of which could significantly affect supplies of our product candidates. The facilities used by our contract manufacturers to manufacture our product candidates must be evaluated by the FDA. We do not control the manufacturing process of, and are completely dependent on, our contract manufacturing partners for compliance with cGMPs. If our contract manufacturers cannot successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the FDA, the EMA, or other comparable regulatory authorities, we may not be able to secure and/or maintain regulatory approval for our product candidates manufactured at these facilities. In addition, we have no control over the ability of our contract manufacturers to maintain adequate quality control, quality assurance and qualified personnel. If the FDA finds deficiencies or a comparable foreign regulatory authority does not approve these facilities for the manufacture of our product candidates or if it withdraws any such approval in the future, we may need to find alternative manufacturing facilities, which would significantly impact our ability to develop, obtain regulatory approval for or market our product candidates, if approved. Contract manufacturers may face manufacturing or quality control problems causing drug substance production and shipment delays or a situation where the contractor may not be able to maintain compliance with the applicable cGMP requirements. Any failure to comply with cGMP requirements or other FDA, EMA and comparable foreign regulatory requirements could adversely affect our clinical research activities and our ability to develop our product candidates and market our products, if approved.
The production of our cell banks and product candidates by a contract development manufacturing organization may fail and result in delays, additional costs, or technical failure.
We have contracted with CDMOs for the production of our master cell banks and working cell banks for our fibroblast cell-based product candidates to enable clinical trials. If the CDMO is unable to produce our master cell banks, working cell banks and our fibroblast cell-based product candidates to enable clinical trials, we may encounter delays, additional costs, or technical failure of one or more of our product candidates. For example, timelines for our planned twelve-week Phase 1/2 clinical trial utilizing CYWC628 for treatment of diabetic foot ulcers in Australia have been extended as we work with our CDMO to resolve process issues with the manufacturing training run and increase the number of test manufacturing runs needed to confirm no sterility issues before we begin the manufacture of CYWC628 for the clinical trial.
Our reliance on third parties reduces our control over our product candidate development activities but does not relieve us of our responsibility to ensure compliance with all required legal, regulatory and industry standards. For example, the FDA and other regulatory authorities require that our product candidates and any products that we may eventually commercialize be manufactured according to cGMP requirements. Any failure by our third-party manufacturers to comply with cGMP or maintain a compliance status acceptable to the FDA or other regulatory authorities or failure to scale up manufacturing processes, including any failure to deliver sufficient quantities of product candidates in a timely manner, could lead to a delay in, or failure to obtain, regulatory approval of any of our product candidates.
If we were to need an alternate CDMO, we would incur added costs and delays in identifying and qualifying any such replacement. In addition, we expect to order drug product and services on a statement of work or purchase order basis and do not plan to enter into long-term dedicated capacity or minimum supply arrangements with any commercial manufacturer. We may not be able to timely secure needed supply arrangements on satisfactory terms, or at all. Our failure to secure these arrangements as needed could have a material adverse effect on our ability to complete the development of our product candidates or, to commercialize them, if approved. We may be unable to conclude agreements for commercial supply with third-party manufacturers or may be unable to do so on acceptable terms. There may be difficulties in scaling up to commercial quantities and formulation of our product candidates, and the costs of manufacturing could be prohibitive.
Changes in the methods of product candidate manufacturing or formulation may result in additional costs or delay.
As product candidates proceed through preclinical studies to late-stage clinical trials towards potential marketing approval and commercialization, it is common that various aspects of the development program, such as manufacturing methods, formulation, materials, and processes, are altered along the way in an effort to optimize processes and product characteristics. Such alterations can also occur due to changes in manufacturers. Such changes carry the risk that they will not achieve their intended objectives. Any such changes could cause our product candidates to perform differently and affect the results of planned clinical trials or other future clinical trials conducted with product candidates produced using the modified manufacturing methods, materials, and processes. Such changes may also require additional testing, FDA notification or FDA approval. This could delay the completion of clinical trials, require the conduct of bridging clinical trials or the repetition of one or more clinical trials beyond those we currently anticipate, increase clinical trial costs, delay approval of our product candidates and jeopardize our ability to commercialize our product candidates if approved. In addition, we may be required to make significant changes to our upstream and downstream processes across our pipeline, which could delay the development of future product candidates. For example, we encountered process issues with the manufacturing training run of CYWC628 and will need to increase the number of test manufacturing runs needed to confirm no sterility issues before we begin the manufacture of CYWC628 for the clinical trial. These issues have caused us to extend the timelines for the initiation and completion of our planned twelve-week Phase 1/2 clinical trial utilizing CYWC628 for treatment of diabetic foot ulcers in Australia. If changes are needed to the manufacturing methods for CYWC628 as a result of these issues, the timing for the initiation and completion of our clinical trial in Australia may be further delayed.
We rely on third parties for our manufacturing process and may, in the future, depend on third-party manufacturers for our product candidates, and this increases the risk related to the timely and sufficient production of our product candidates.
28
We do not have complete control over all aspects of the manufacturing process of, and are dependent on, our contract manufacturing partners for compliance with cGMP regulations for manufacturing our cell therapy product candidates. Third-party manufacturers may be unable to comply with cGMP regulations or similar regulatory requirements outside the United States. If our contract manufacturers cannot successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the FDA, the EMA, or other regulatory authorities, we will not be able to produce our product candidates. In addition, we do not have control over the ability of our contract manufacturers to maintain adequate quality control, quality assurance and qualified personnel. For example, we are currently working with our CDMO to resolve process issues with the manufacturing training run of CYWC628 and to complete additional test manufacturing runs needed to confirm no sterility issues before we begin the manufacture of CYWC628 for our planned twelve-week Phase 1/2 clinical trial utilizing CYWC628 for treatment of diabetic foot ulcers in Australia. If these issues are not resolved, we will be unable to manufacture CYWC628 for our planned clinical trial in a timely manner. If the FDA, the EMA, or a comparable foreign regulatory authority does not approve these facilities for the manufacture of our product candidates or if it withdraws any such approval in the future, we may need to find alternative manufacturing facilities, which would significantly impact our ability to develop, obtain marketing approval for or market our product candidates, if approved. Our failure, or the failure of our third-party manufacturers, to comply with applicable regulations could result in sanctions being imposed on us, including fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of product candidates, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect supplies of our product candidates and harm our business and results of operations. Furthermore, the raw materials for our product candidates may be sourced, in some cases, from a single-source supplier. If we were to experience an unexpected loss of supply of any of our product candidates or any of our future product candidates for any reason, whether as a result of manufacturing, supply, or storage issues or otherwise, we could experience delays, disruptions, suspensions, or terminations of, or be required to restart or repeat, any pending or ongoing clinical trials.
We currently rely on third-party manufacturers to produce our product candidates. In the event that we or any of our third-party manufacturers fail to comply with such requirements or to perform with certain requirements in relation to quality, timing, or otherwise, or if our supply of components or other materials becomes limited or interrupted for other reasons, we may be forced to enter into an agreement with another third party, which we may not be able to do on commercially reasonable terms, if at all. In particular, any replacement of our third-party manufacturers could require significant effort and expertise because there may be a limited number of qualified replacements. In some cases, the technical skills or technology required to manufacture our product candidates may be unique or proprietary to us or the third-party manufacturer. We may have difficulty transferring such skills or technology to another third party, and a feasible alternative may not exist. In addition, certain of our product candidates and our own proprietary methods have never been produced or implemented outside of our company. Therefore, we may experience delays in our development programs if we attempt to establish new third-party manufacturing arrangements for these product candidates or methods. These factors would increase our reliance on such manufacturers or require us to obtain a license from such manufacturers in order to have another third party manufacture our product candidates. If we are required to or voluntarily stop manufacturing our product candidates for any reason, we will be required to verify that the new manufacturer maintains facilities and procedures that comply with quality standards and with all applicable regulations and guidelines and that the product produced is equivalent to that produced in our facility. The delays associated with the verification of a new manufacturer and equivalent product could negatively affect our ability to develop product candidates in a timely manner or within budget.
Our or a third party’s failure to execute our manufacturing requirements, do so on commercially reasonable terms and timelines, and comply with cGMP requirements could adversely affect our business in a number of ways, including:
|
● |
inability to meet our product specifications and quality requirements consistently; |
|
● |
inability to initiate or continue clinical trials of our product candidates under development; |
|
● |
delays in submitting regulatory applications or receiving marketing approvals for our product candidates, if at all; |
|
● |
inability to commercialize any product candidates that receive marketing approval on a timely basis; |
|
● |
loss of the cooperation of future collaborators; |
|
● |
subjecting third-party manufacturing facilities or our manufacturing facilities to additional inspections by regulatory authorities; |
|
● |
requirements to cease development or to recall batches of our product candidates; and |
|
● |
in the event of approval to market and commercialize our product candidates, an inability to meet commercial demands for our product candidates or any future product candidates. |
Risks Related to Ownership of Our Common Stock
Failure to maintain compliance with the applicable Nasdaq continued listing requirements could result in our common stock being delisted, which could limit stockholders’ ability to trade our common stock.
As a listed company on Nasdaq, we are required to meet certain financial, public float, bid price and liquidity standards on an ongoing basis to continue the listing of our common stock. If we fail to meet these continued listing requirements, our common stock may be subject to delisting, which could materially impact the liquidity of our common stock making it more challenging to buy and sell shares of our common stock. On April 1, 2025, the listing of our common stock was moved from the Nasdaq Global Market to the Nasdaq Capital Market. We requested this move to allow us to satisfy less stringent financial, liquidity, and market capitalization requirements to continue the listing of our common stock. For example, the market value requirement of the Nasdaq Capital Market is $35 million versus $50 million for the Nasdaq Global Market and the stockholders’ equity requirement for the Nasdaq Capital Market is $2.5 million versus $10 million for the Nasdaq Global Market. Following the transfer, we remain subject to the $1
29
minimum bid price requirement and continued listing requirements for the Nasdaq Capital Market, and no assurance can be given that we will be able to satisfy these requirements. If we fail to meet any of these requirements after the transfer, our securities may be delisted from Nasdaq.
On July 1, 2025, we received a notification letter from the Nasdaq Listing Qualifications Staff notifying us that the closing bid price of our shares of common stock was below the minimum closing bid price of $1.00 per share during the previous 30 consecutive trading days, or the Notice, as required for continued listing on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2).
In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have been provided an initial period of 180 calendar days, or until December 29, 2025, to regain compliance with this requirement. To regain compliance, the closing bid price of our common stock must be $1.00 per share or more for a minimum of 10 consecutive business days at any time before December 29, 2025. If we do not regain compliance with Rule 5550(a)(2) by December 29, 2025, we may be eligible for an additional 180 calendar day compliance period. To qualify, we will be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for the Nasdaq Capital Market, except the bid price requirement, and will need to provide written notice to Nasdaq of our intention to cure the deficiency during the second compliance period. If it appears to the Staff that we will not be able to cure the deficiency, or if we are otherwise not eligible, Nasdaq will notify us that our securities will be subject to delisting. In the event of such notification, we may appeal the Staff’s determination to delist our securities, but there can be no assurance the Staff will grant our request for continued listing.
We continue to actively monitor our performance with respect to the listing standards and will consider available options to resolve any deficiency and maintain compliance with the Nasdaq rules. There can be no assurance that we will be able to maintain compliance or, if we fall out of compliance, regain compliance with any deficiency, or if we implement an option that regains our compliance, maintain compliance thereafter. If we fail to regain compliance with the Nasdaq continued listing standards, our common stock will be subject to delisting from Nasdaq.
Without a Nasdaq market listing, stockholders may have a difficult time getting a quote for the sale or purchase of our common stock, the sale or purchase of our common stock would likely be made more difficult and the trading volume and liquidity of our common stock could decline. Delisting from Nasdaq could also result in negative publicity and could also make it more difficult for us to raise additional capital. The absence of such a listing may adversely affect the acceptance of our common stock as currency or the value accorded by other parties. Further, if we are delisted, we would lose federal pre-emption of state securities laws as it relates to our securities and thus also incur additional costs under state blue sky laws in connection with any sales of our securities. These requirements could severely limit the market liquidity of our common stock and the ability of our stockholders to sell our common stock in the secondary market. If our common stock is delisted by Nasdaq, our common stock may be eligible to trade on an over-the-counter quotation system, such as the OTCQB market, where an investor may find it more difficult to sell our common stock or obtain accurate quotations as to the market value of our common stock. We cannot assure you that our common stock, if delisted from Nasdaq, will be listed on another national securities exchange or quoted on an over-the counter quotation system. If our common stock is delisted, it may come within the definition of “penny stock” as defined in the Exchange Act and would be covered by Rule 15g-9 of the Exchange Act. Rule 15g-9 imposes additional sales practice requirements on broker-dealers who sell securities to persons other than established customers and accredited investors. For transactions covered by Rule 15g-9, the broker-dealer must make a special suitability determination for the purchaser and receive the purchaser’s written agreement to the transaction prior to the sale. Consequently, Rule 15g-9, if it were to become applicable, would affect the ability or willingness of broker-dealers to sell our securities, and accordingly would affect the ability of stockholders to sell their securities in the public market. These additional procedures could also limit our ability to raise additional capital in the future.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The following sets forth information regarding all unregistered securities we sold during the six months ended June 30, 2025. Unless stated otherwise, the sales of the securities listed below were deemed to be exempt from registration pursuant to Section 4(a)(2) of the Securities Act, as transactions by an issuer not involving a public offering.
On January 7, 2025, we satisfied the commitment fee due under the SEPA with YA II PN, LTD., or the Investor, by issuing 118,991 shares of our Common Stock to the Investor at a $2.1010 price per share.
Below is a summary of conversions during the six months ended June 30, 2025 by the Investor of short-term convertible notes issued to the Investor under the SEPA:
30
Date |
|
Tranche |
|
Principal Amount |
|
|
Shares Issued |
|
|
Price Per Share |
|
|||
January 23, 2025 |
|
Second Note |
|
$ |
900,000 |
|
|
|
552,113 |
|
|
$ |
1.6301 |
|
January 27, 2025 |
|
Second Note |
|
$ |
500,000 |
|
|
|
317,238 |
|
|
$ |
1.5761 |
|
January 29, 2025 |
|
Second Note |
|
$ |
500,000 |
|
|
|
334,336 |
|
|
$ |
1.4955 |
|
February 7, 2025 |
|
Second Note |
|
$ |
1,100,000 |
|
|
|
732,941 |
|
|
$ |
1.5008 |
|
February 21, 2025 |
|
Second Note |
|
$ |
250,000 |
|
|
|
232,169 |
|
|
$ |
1.0768 |
|
March 4, 2025 |
|
Second Note |
|
$ |
350,000 |
|
|
|
361,794 |
|
|
$ |
0.9674 |
|
April 11, 2025 |
|
Second Note |
|
$ |
200,000 |
|
|
|
263,643 |
|
|
$ |
0.7586 |
|
April 15, 2025 |
|
Second Note |
|
$ |
200,000 |
|
|
|
263,643 |
|
|
$ |
0.7586 |
|
May 15, 2025 |
|
Second Note |
|
$ |
300,000 |
|
|
|
388,450 |
|
|
$ |
0.7723 |
|
June 2, 2025 |
|
Second Note |
|
$ |
100,000 |
|
|
|
147,579 |
|
|
$ |
0.6776 |
|
June 3, 2025 |
|
Second Note |
|
$ |
300,000 |
|
|
|
442,739 |
|
|
$ |
0.6776 |
|
June 20, 2025 |
|
Second Note |
|
$ |
100,000 |
|
|
|
144,216 |
|
|
$ |
0.6934 |
|
June 24, 2025 |
|
Second Note |
|
$ |
200,000 |
|
|
|
295,377 |
|
|
$ |
0.6771 |
|
June 26, 2026 |
|
Third Note |
|
$ |
300,000 |
|
|
|
443,066 |
|
|
$ |
0.6771 |
|
June 27, 2025 |
|
Third Note |
|
$ |
500,000 |
|
|
|
738,443 |
|
|
$ |
0.6771 |
|
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Director and Officer Trading Plans and Arrangements
None of our directors or “officers,” as defined in Rule 16a-1(f) under the Securities Exchange Act of 1934,
31
Item 6. Exhibits
|
|
|
|
Incorporation By Reference |
||||||
Exhibit Number |
|
Exhibit Description |
|
Form |
|
SEC File No. |
|
Exhibit |
|
Filing Date |
|
|
|
|
|
|
|
|
|
|
|
3.1 |
|
Amended and Restated Certificate of Incorporation of the Registrant |
|
8-K |
|
001-41934 |
|
3.1 |
|
August 28, 2024 |
|
|
|
|
|
|
|
|
|
|
|
3.2 |
|
Amendment to Amended and Restated Certificate of Incorporation of FibroBiologics, Inc. |
|
8-K |
|
001-41934 |
|
3.1 |
|
June 13, 2025 |
|
|
|
|
|
|
|
|
|
|
|
3.3 |
|
|
8-K |
|
001-41934 |
|
3.1 |
|
June 27, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
10.1 |
|
Employment Agreement effective from June 9, 2025, between FibroBiologics, Inc. and Jason D. Davis. |
|
8-K
|
|
001-41934 |
|
10.1 |
|
June 9, 2025 |
|
|
|
|
|
|
|
|
|
|
|
10.2 |
|
Convertible Promissory Note, dated June 16, 2025, between FibroBiologics, Inc. and YA II PN, LTD. |
|
8-K
|
|
001-41934 |
|
10.1 |
|
June 16, 2025 |
|
|
|
|
|
|
|
|
|
|
|
10.3 |
|
Consulting Agreement, dated May 15, 2025, between FibroBiologics, Inc. and Robert E. Hoffman. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.INS |
|
Inline XBRL Instance Document- the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.SCH |
|
Inline XBRL Taxonomy Schema Document. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.CAL |
|
Inline XBRL Taxonomy Calculation Linkbase Document. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.DEF |
|
Inline XBRL Taxonomy Definition Linkbase Document. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.LAB |
|
Inline XBRL Taxonomy Label Linkbase Document. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.PRE |
|
Inline XBRL Taxonomy Presentation Linkbase Document. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
104 |
|
Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, and 101.PRE). |
|
|
|
|
|
|
|
|
* The certifications attached as Exhibit 32.1 accompany this Quarterly Report on Form 10-Q pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and shall not be deemed “filed” by the Registrant for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
32
SIGNATURE
Pursuant to the requirements 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.
|
FIBROBIOLOGICS, INC. |
|
|
|
|
Date: July 31, 2025 |
By: |
/s/ Jason D. Davis |
|
|
Jason D. Davis Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer) |
33
Exhibit 10.1
FIBROBIOLOGICS, INC.
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this “Agreement”) is made effective from June 9, 2025 (the “Effective Date”) by and among FIBROBIOLOGICS, INC. (the “Company”) and Jason D. Davis (“CFO”). The Company and CFO are hereinafter collectively referred to as the “Parties,” and individually referred to as a “Party”.
RECITALS
The Company desires to employ CFO, and CFO is willing to accept such employment by the Company, on the terms and subject to the conditions set forth in this Agreement.
AGREEMENT
In consideration of the foregoing Recitals and the mutual promises and covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties, intending to be legally bound, agree as follows:
1. EMPLOYMENT.
1.1 Title. Effective as of the Effective Date, CFO’s position shall be Chief Financial Officer of the Company, subject to the terms and conditions set forth in this Agreement.
1.2 Term. The term of CFO's employment under this Agreement shall begin on the Effective Date and shall continue until it is terminated pursuant to Section 4 herein (the “Term”).
1.3 Duties. CFO shall carry out and perform all services, acts and actions necessary or advisable to manage and conduct the business of the Company that are normally associated with the position of Chief Financial Officer of a business enterprise comparable to the Company. CFO shall report to the Chief Executive Officer of the Company (the " Chief Executive Officer").
1.4 Policies and Practices. The employment relationship between the Parties shall be governed by this Agreement and by the policies and practices established by the Company and/or the Board of Directors of the Company (the "Board"), or any designated committee thereof. In the event that the terms of this Agreement differ from, or are in conflict with, the Company’s policies or practices or the Company’s Employee Handbook, this Agreement shall control.
1.5 Location. Unless the Parties otherwise agree in writing, during the Term CFO shall perform the services CFO is required to perform pursuant to this Agreement at the Company’s offices in Houston, Texas, provided, however, that the Company may from time to time require CFO to travel temporarily to other locations in connection with the Company’s business.
2. LOYALTY; NONCOMPETITION; NONSOLICITATION.
2.1 Loyalty. During CFO’s employment with the Company, CFO shall devote CFO’s full business energies, interest, abilities, and productive time to the proper and efficient performance of CFO’s duties under this Agreement.
2.2 Agreement not to Participate in Company’s Competitors’ Businesses. During CFO’s employment with the Company, CFO agrees not to acquire, assume or participate in, directly or indirectly, any position, investment or interest known by CFO to be adverse or antagonistic to the Company, any of its Affiliates (as defined below), their businesses or prospects, financial or otherwise, or in any company, person, or entity that is, directly or indirectly, in competition with the business of the Company or any of its Affiliates. Ownership by CFO, in professionally managed funds over which CFO does not have control or discretion in investment decisions, or as a passive investment, of less than two percent (2%) of the outstanding shares of capital stock of any corporation with one or more classes of its capital stock listed on a national securities exchange or publicly traded on a national securities exchange or in the over-the-counter market shall not constitute a breach of this Section. For purposes of this Agreement, “Affiliate,”
- 1 -
means, with respect to any specific entity, any other entity that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such specified entity. For purposes of the preceding sentence, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any entity or organization, shall mean the possession, directly or indirectly, of the power (a) to vote more than fifty percent (50%) of the securities having ordinary voting power for the election of directors or comparable individuals of the controlled entity or organization, or (b) to direct or cause the direction of the management and policies of the controlled entity or organization, whether through the ownership of voting securities or by contract or otherwise.
2.3 Covenant not to Compete. During CFO’s employment with the Company, CFO shall not engage in competition with the Company and/or any of its Affiliates in any manner or capacity, as adviser, principal, agent, affiliate, promoter, partner, officer, director, employee, stockholder, owner, co-owner, consultant, in any phase of the business of developing, manufacturing and marketing of products or services that directly compete with the products or services of the Company, except with the prior written consent of the Board.
2.4 Nonsolicitation Covenant. During the Term and for the one (1) year period immediately following the end of the Term, CFO will not personally or through others recruit, solicit or induce any employee or consultant of the Company or its Affiliates to terminate his or her employment with, or service to, the Company or an Affiliate.
3. COMPENSATION OF CFO.
3.1 Base Salary. The Company shall pay CFO a base salary at the annualized rate of $350,000 (the “Base Salary”), less payroll deductions and all required withholdings, payable in regular periodic installments in accordance with the Company’s normal payroll practices. The Base Salary shall be prorated for any partial year of employment on the basis of a 365-day fiscal year. A signing bonus of $15,000 will be paid upon, or shortly thereafter, the agreed “start date” of CFO’s employment.
3.2 Discretionary Bonus. At the sole discretion of the Board and Chief Executive Officer, promptly following each calendar year of employment during the Term CFO shall be eligible to receive a discretionary cash bonus of up to 40% of CFO’s then-current Base Salary (the “Bonus”), based on CFO’s achievement of certain performance goals (“Performance Goals”) to be established by the Chief Executive Officer in writing in a manner reasonably consistent with the Company’s priorities. The determination of whether CFO has met the Performance Goals for any given year, and if so, the amount of any Bonus that will be paid for such year (if any), shall be determined by the Board and Chief Executive Officer in their sole and absolute discretion. In order to be eligible to earn or receive any Bonus, CFO must remain employed by the Company through and including the date of payment of such Bonus. For the first calendar year of CFO’s employment with Company, the Bonus payable shall be pro-rated in accordance with the percentage of the calendar year that the CFO is employed by the Company.
3.3 Relocation. Reserved.
3.4 Stock Option. As soon as practicable following the Effective Date, CFO will be granted an option to purchase up to 450,000 shares of the Company’s Common Stock (the “Base Option”) pursuant to the terms of the Company’s 2022 Stock Plan, as amended from time to time (the “Plan”). The Base Option shall be subject to vesting such that, subject to CFO’s continued employment with the Company, 1/4 of the shares subject to the Base Option shall vest as of the first anniversary of the Effective Date and 1/48th of the shares subject to the Base Option shall vest in equal monthly installments on the monthly anniversary of the Effective Date of each month for the 36 months thereafter. The exercise price per share of the Base Option will be equal to the fair market value of a single share of Common Stock on the date the Base Option is granted, as determined under the terms of the Plan in good faith by the Board. The Base Option will be governed by the Plan and shall be granted pursuant to a separate stock option grant notice and stock option agreement. The Compensation Committee of the Board will review executive compensation annually which includes Base Salary, bonus and equity compensation.
3.5 Expense Reimbursements. The Company will reimburse CFO for all reasonable business expenses CFO incurs in conducting his duties hereunder, pursuant to the Company’s usual expense reimbursement policies; provided that CFO supplies the appropriate substantiation for such expenses no later than the end of the calendar month following the month in which such expenses were incurred by CFO.
- 2 -
3.6 Changes to Compensation. CFO’s compensation will be reviewed annually and may be changed from time to time in the Board’s sole discretion.
3.7 Employment Taxes. All of CFO’s compensation shall be subject to customary withholding taxes and any other employment taxes as are required to be collected or withheld by the Company.
3.8 Benefits. CFO shall, in accordance with Company policy and the terms of the applicable plan documents, be eligible to participate in benefits under any benefit plan or arrangement that may be in effect from time to time and made available to the Company’s senior management employees.
3.9 Holidays and Vacation. CFO shall be eligible for paid holiday and vacation time in accordance with Company policy as in effect from time to time.
4. TERMINATION.
4.1 Termination by the Company. CFO’s employment with the Company is at will and may be terminated by the Company at any time and for any reason, or for no reason, including, but not limited to, under the following conditions:
4.1.1 Termination by the Company for Cause. The Company may terminate CFO’s employment under this Agreement for “Cause” (as defined below) by delivery of written notice to CFO. Any notice of termination given pursuant to this section shall affect such termination as of the date of the notice, or as of such other date specified in the notice.
4.1.2 Termination by the Company without Cause. The Company may terminate CFO’s employment under this Agreement without Cause at any time and for any reason, or for no reason. Such termination shall be effective on the date CFO is so informed, or as otherwise specified by the Company.
4.2 Termination by CFO. CFO may terminate his employment with the Company at any time and for any reason, or for no reason, upon thirty (30) days written notice to the Company.
4.3 Termination for Death or Disability. CFO’s employment with the Company shall automatically terminate effective upon the date of CFO’s death or Disability (as defined in the Plan).
4.4 Termination by Mutual Agreement of the Parties. CFO’s employment with the Company may be terminated at any time upon a mutual agreement in writing of the Parties. Any such termination of employment shall be effective as of the date and have the consequences specified in such agreement.
4.5 Compensation upon Termination.
4.5.1 Death or Disability. If CFO’s employment is terminated by death or Disability, the Company shall pay to CFO, or in the case of CFO’s death to CFO’s surviving spouse or estate as determined by the Company, CFO’s accrued and unpaid portion of the Base Salary, and accrued and unused vacation benefits, earned through the date of termination, at the rate in effect at the time of termination, less required deductions and withholdings. The Company shall thereafter have no further obligations to CFO and/or CFO’s estate or heirs under this Agreement.
4.5.2 Termination For Cause. If the Company terminates CFO’s employment for Cause, then the Company shall pay CFO’s accrued and unpaid portion of the Base Salary, and accrued and unused vacation benefits, earned through the date of termination, at the rate in effect at the time of termination, less required deductions and withholdings. The Company shall thereafter have no further obligations to CFO under this Agreement.
4.5.3 Termination by Company Without Cause or by CFO for Good Reason Not In Connection with a Change in Control. If the Company terminates CFO’s employment without Cause or if CFO resigns his employment for Good Reason, in either case at any time other than upon the occurrence of, or within the 13 months immediately following, the effective date of a Change in Control, the Company shall pay CFO’s accrued
- 3 -
and unpaid portion of the Base Salary, and accrued and unused vacation benefits, earned through the date of termination, at the rate in effect at the time of termination, less required deductions and withholdings. In addition to the above, if CFO furnishes to the Company an executed waiver and release of claims in the form attached hereto as Exhibit A (or in such other form as may be specified by the Company) (the “Release”) within the time period specified therein, but in no event later than 45 days following the date CFO’s employment terminates, and if CFO allows such Release to become effective in accordance with its terms and does not revoke such Release, then (i) CFO shall be entitled to severance payable by the Company in an amount equal to one-twelfth of the amount of the Base Salary in effect at the time of termination or, if applicable, immediately prior to the event giving rise to the Good Reason (the “Severance Payments”), for a period of nine (9) months following the termination date (the “Severance Period”), and (ii) the Company will reimburse CFO for the monthly premium CFO timely pays during the Severance Period or until he obtains new employment, whichever comes first, for COBRA continuation coverage timely elected by CFO for CFO and CFO’s family (the “COBRA Coverage”). The Severance Payments will be subject to required payroll deductions and withholdings and will be made in installments and paid during a month on the Company’s regular payroll cycle as if installments were payments of the Base Salary, provided, however, that those Severance Payments otherwise scheduled to be made prior to the date the Release becomes non-revocable by CFO shall accrue and be paid in the first payroll period that follows such date. The Company will reimburse CFO for a COBRA Coverage premium payment within 30 days after the date CFO timely makes such premium payment provided that CFO provides the Company proof of such payment at the time CFO makes the payment. The Company shall thereafter have no further obligations to CFO under this Agreement. For purposes of this Agreement, the term "Change in Control" has the meaning set forth in the Plan. If the Release is found to be unenforceable by a court of competent jurisdiction or an arbitrator in connection with any action involving CFO, then CFO shall forfeit his right to any additional Severance Payments and COBRA Coverage under this Agreement after such determination is made and CFO shall repay to the Company the entire amount of the Severance Payments and the value of the COBRA Coverage benefits previously paid and/or received by him or such lesser amount as determined by the Company.
4.5.4 Termination by Company Without Cause or by CFO for Good Reason In Connection with a Change in Control. If the Company terminates CFO’s employment without Cause or if CFO resigns his employment for Good Reason, in either case upon the occurrence of, or within the 3 months prior or 13 months immediately following, the effective date of a Change in Control, the Company shall pay CFO’s accrued and unpaid portion of the Base Salary, and accrued and unused vacation benefits, earned through the date of termination, at the rate in effect at the time of termination, less required deductions and withholdings. In addition, if CFO furnishes to the Company an executed Release within the time period specified therein, but in no event later than 45 days following the date CFO’s employment terminates, and if CFO allows such Release to become effective in accordance with its terms and does not revoke such Release, then CFO shall be entitled to: (1) the Severance Payments and COBRA Coverage on the same basis described in Section 4.5.3 above and (2) accelerated vesting of any unvested portion of the Base Option such that CFO shall become vested in 100% of the shares subject to such Base Option on the date the Release becomes non-revocable by CFO. The Company shall thereafter have no further obligations to CFO under this Agreement.
4.6 Definitions. For purposes of this Agreement, the following terms shall have the following meanings:
4.6.1 “Cause” shall mean the occurrence of any one or more of the following: (i) CFO’s commission of any crime involving fraud, dishonesty or moral turpitude; (ii) CFO’s attempted commission of or participation in a fraud or act of dishonesty against the Company or its Affiliates that results in (or might have reasonably resulted in) harm to the business of the Company or its Affiliates; (iii) CFO’s intentional, material violation of any contract or agreement between CFO and the Company or any statutory duty CFO owes to the Company; or (iv) CFO’s conduct that constitutes gross insubordination, incompetence or habitual neglect of duties and that results in (or might have reasonably resulted in) harm to the business of the Company or its Affiliates; provided, however, that the action or conduct described in clauses (iii) and (iv) above will constitute “Cause” only if such action or conduct continues after the Company has provided CFO with written notice thereof and thirty (30) days to cure, or otherwise remedy to the extent possible under direct control of the CFO, the same. An occurrence of “Cause” as set forth in the preceding sentence shall be based upon a good faith determination by the Board. CFO’s Disability shall not constitute Cause as set forth herein. The determination that a termination is for Cause shall be by the Board in its sole and exclusive judgment and discretion.
- 4 -
4.6.2 “Good Reason” shall mean any of the following actions: (i) the assignment to CFO of any duties or responsibilities that results in a material diminution in CFO’s function (for Section 4.5.4, as in effect immediately prior to the effective date of the Change in Control); provided, however, that a change in CFO’s title or reporting relationships shall not provide the basis for a voluntary termination with Good Reason; (ii) a material reduction by the Company in CFO’s annual Base Salary (for Section 4.5.4, as in effect on the effective date of the Change in Control); provided, however, that Good Reason shall not be deemed to have occurred in the event of a reduction in CFO’s annual base salary that is pursuant to a salary reduction program affecting substantially all of the employees and/or executives of the Company and that does not adversely affect CFO to a greater extent than other similarly situated employees and/or executives; or (iii) a relocation of CFO’s primary business office to a location more than 50 miles from the location of CFO’s primary business office provided in Section 1.5 and which increases the CFO’s commute (for Section 4.5.4, as of the effective date of the Change in Control), except for required travel by CFO on the Company’s business to an extent substantially consistent with CFO’s business travel obligations; provided, that CFO may not resign for Good Reason without first providing the Company with written notice within ninety (90) days of the date of the initial existence of the condition that CFO believes constitutes Good Reason specifically identifying the acts or omissions constituting the grounds for Good Reason and allowing the Company a reasonable cure period of not less than thirty (30) days and not more than ninety (90) days following the date of such notice, and if such acts or omissions constituting the grounds for Good Reason are not so timely cured CFO must resign for Good Reason within the thirty (30) days immediately following the last day of the applicable cure period.
4.7 Parachute Payment. If any payment or benefit CFO would receive pursuant to this Agreement (“Payment”) would (i) constitute a “Parachute Payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment shall be equal to the Reduced Amount. The “Reduced Amount” shall be either (x) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax or (y) the largest portion, up to and including the total of the Payment, whichever amount, after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in CFO’s receipt, on an after-tax basis, of the greatest economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting Parachute Payments is necessary so that the Payment equals the Reduced Amount, reduction shall occur in the manner that results in the greatest economic benefit for CFO. If more than one method of reduction will result in the same economic benefit, the items so reduced will be reduced pro rata.
In the event it is subsequently determined by the Internal Revenue Service that some portion of the Reduced Amount (as determined pursuant to clause (x) in the preceding paragraph) is subject to the Excise Tax, CFO agrees to promptly return to the Company a sufficient amount of the Payment so that no portion of the Reduced Amount is subject to the Excise Tax. For the avoidance of doubt, if the Reduced Amount is determined in accordance with clause (y) in the preceding paragraph, CFO will have no obligation to return any portion of the Payment pursuant to the preceding sentence.
Unless CFO and the Company agree on an alternative accounting or law firm, the accounting firm then engaged by the Company for general tax compliance purposes shall perform the foregoing calculations. If the accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, the Company shall appoint a nationally recognized accounting, law or consulting firm to make the determinations required hereunder. The Company shall bear all expenses with respect to the determinations by such accounting, law or consulting firm required to be made hereunder.
The Company shall use commercially reasonable efforts such that the accounting, law or consulting firm engaged to make the determinations hereunder shall provide its calculations, together with detailed supporting documentation, to CFO and the Company within 15 calendar days after the date on which CFO’s right to a Payment is triggered (if requested at that time by CFO or the Company) or such other time as requested by CFO or the Company.
4.8 Application of Internal Revenue Code Section 409A. It is intended that the payments and benefits provided under Section 4 of this Agreement (the “Severance Benefits”) satisfy, to the greatest extent possible, the exemptions from the application of Section 409A of the Code and the regulations and other guidance thereunder and any state law of similar effect (collectively “Section 409A”) provided under Treasury Regulation §§1.409A-1(b)(4) (regarding short-term deferrals) and 1.409A-1(b)(9)(iii) (involuntary separation pay). Notwithstanding anything to
- 5 -
the contrary set forth herein, any Severance Benefits that constitute “deferred compensation” within the meaning of Section 409A shall not commence in connection with CFO’s termination of employment unless and until CFO has also incurred a “separation from service” (as such term is defined in Treasury Regulation §1.409A-1(h) (“Separation From Service”)), unless the Company reasonably determines that such amounts may be provided to CFO without causing CFO to incur the additional taxes and/or interest under Section 409A. If the Company (or, if applicable, the successor entity thereto) determines that the Severance Benefits, or any portion thereof, constitute “deferred compensation” under Section 409A and CFO is, on the date of his Separation From Service, a “specified employee” of the Company or any successor entity thereto, as such term is defined in Section 409A(a)(2)(B)(i) of the Code, then, solely to the extent necessary to avoid the incurrence of the adverse personal tax consequences under Section 409A, the timing of the Severance Benefit payments shall be delayed until the earlier to occur of: (i) the date that is six months and one day after CFO’s Separation From Service, or (ii) the date of CFO’s death (such applicable date, the “Specified Employee Initial Payment Date”), and the Company (or the successor entity thereto, as applicable) shall (A) pay to CFO a lump sum amount equal to the sum of the Severance Benefit payments that CFO would otherwise have received through the Specified Employee Initial Payment Date if the commencement of the payment of the Severance Benefits had not been so delayed pursuant to this Section and (B) commence paying the balance of the Severance Benefits in accordance with the applicable payment schedule set forth in this Agreement.
It is intended that each installment of the Severance Benefits payments provided for in this Agreement is a separate “payment” for purposes of Treasury Regulation §1.409A-2(b)(2)(i).
Notwithstanding anything to the contrary set forth herein, CFO shall receive the Severance Benefits described above, if and only if CFO duly executes and returns to the Company within the applicable time period set forth therein, but in no event more than forty-five days following the date of his Separation From Service, the Release and permits the Release to become effective and non-revocable in accordance with its terms. Notwithstanding any other payment schedule or other provision set forth in this Agreement, none of the Severance Benefits will be paid or otherwise provided to CFO prior to the date the Release is effective and non-revocable. Except to the extent that payments may be delayed until the Specified Employee Initial Payment Date pursuant to the preceding provisions, on the first regular payroll pay day following the date the Release is effective and non-revocable, the Company will pay CFO the Severance Benefits CFO would otherwise have received under the Agreement on or prior to such date but for the delay in payment related to the Release, with the balance of the Severance Benefits being paid as originally scheduled. All amounts payable under the Agreement will be subject to any required payroll taxes and deductions.
5. CONFIDENTIAL AND PROPRIETARY INFORMATION. CFO has already executed, as a condition of CFO’s employment with the Company, the Company’s standard form of Proprietary Information and Inventions Assignment Agreement (the “PIIAA”). The PIIAA remains in full force and effect.
5.1. INTELLECTUAL PROPERTY RIGHTS.
5.1.1. CFO agrees that any and all ideas, inventions, technologies, discoveries, improvements, know-how and techniques that the CFO conceives, reduces to practice or develops during the term of his employment with the Company, alone or in conjunction with others, as a result of performing services for the Company under this Agreement (collectively, the “Inventions”) shall be the sole and exclusive property of the Company.
5.1.2. CFO hereby assigns to the Company his entire right, title, and interest in and to all Inventions. Upon Company’s reasonable request and at Company’s expense, CFO will perform other activities necessary to affect the intent of this Section 5.1
5.1.3. CFO further agrees to cooperate and provide reasonable assistance to the Company to obtain and from time to time enforce United States and foreign patents, copyrights, and other rights and protections claiming, covering or relating to the Inventions in any and all countries.
5.1.4. CFO agrees to submit to the Company any proposed publication that contains Proprietary Information, Inventions or work performed by CFO for the Company hereunder. CFO further agrees that no such publication shall be made without the prior written consent of the Company, which consent shall not be unreasonably withheld.
- 6 -
6. ASSIGNMENT AND BINDING EFFECT. This Agreement shall be binding upon and inure to the benefit of CFO and CFO’s heirs, executors, personal representatives, assigns, administrators and legal representatives. Because of the unique and personal nature of CFO’s duties under this Agreement, neither this Agreement nor any rights or obligations under this Agreement shall be assignable by CFO. This Agreement shall be binding upon and inure to the benefit of the Company and its successors, assigns and legal representatives. Any such successor of the Company will be deemed substituted for the Company under the terms of this Agreement for all purposes. For this purpose, “successor” means any person, firm, corporation or other business entity which at any time, whether by purchase, merger or otherwise, directly or indirectly acquires all or substantially all of the assets or business of the Company.
7. NOTICES. All notices or demands of any kind required or permitted to be given by the Company or CFO under this Agreement shall be given in writing and shall be personally delivered (and receipted for) or faxed during normal business hours or mailed by certified mail, return receipt requested, postage prepaid, addressed as follows:
|
|
|
|
|
If to the Company: |
|
|
|
|
|
FibroBiologics, Inc. 455 E. Medical Center Blvd. Suite 300 Houston, Texas 77598
Attention: Chief Executive Officer
Fax Number: _____________ |
|
|
|
|
|
If to CFO: |
|
|
|
|
|
Jason D. Davis *** *** |
|
|
|
|
|
|
|
Fax Number: _____________ |
|
|
|
|
Any such written notice shall be deemed given on the earlier of the date on which such notice is personally delivered or three days after its deposit in the United States mail as specified above, or if the written notice is sent by fax upon confirmation of receipt. Either Party may change its address for notices by giving notice to the other Party in the manner specified in this Section.
8. CHOICE OF LAW. This Agreement shall be construed and interpreted in accordance with the internal laws of the State of Texas without regard to its conflict of laws principles.
9. INTEGRATION. This Agreement, including Exhibit A, and the documents referenced herein, including the PIIAA and the Plan, contain the complete, final and exclusive agreement of the Parties relating to the terms and conditions of CFO’s employment and the termination of CFO’s employment, and supersedes any and all prior and/or contemporaneous oral and written employment agreements or arrangements between the Parties.
10. AMENDMENT. This Agreement cannot be amended or modified except by a written agreement signed by CFO and by an officer of the Company other than CFO.
11. WAIVER. No term, covenant or condition of this Agreement or any breach thereof shall be deemed waived, except with the written consent of the Party against whom the wavier is claimed, and any waiver or any such term, covenant, condition or breach shall not be deemed to be a waiver of any preceding or succeeding breach of the same or any other term, covenant, condition or breach.
- 7 -
12. SEVERABILITY. The finding by a court of competent jurisdiction or arbitrator of the unenforceability, invalidity or illegality of any provision of this Agreement shall not render any other provision of this Agreement unenforceable, invalid or illegal. Such court or arbitrator shall have the authority to modify or replace the invalid or unenforceable term or provision with a valid and enforceable term or provision, which most accurately represents the Parties’ intention with respect to the invalid or unenforceable term, or provision.
13. INTERPRETATION; CONSTRUCTION. The headings set forth in this Agreement are for convenience of reference only and shall not be used in interpreting this Agreement. This Agreement has been drafted by legal counsel representing the Company, but CFO has been encouraged to consult with, and has consulted with, CFO’s own independent counsel and tax advisors with respect to the terms of this Agreement. The Parties acknowledge that each Party and its counsel has reviewed and revised, or had an opportunity to review and revise, this Agreement, and any rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement.
14. REPRESENTATIONS AND WARRANTIES. CFO represents and warrants that CFO is not restricted or prohibited, contractually or otherwise, from entering into and performing each of the terms and covenants contained in this Agreement, and that CFO’s execution and performance of this Agreement will not violate or breach any other agreements between CFO and any other person or entity.
15. COUNTERPARTS. This Agreement may be executed in two counterparts, each of which shall be deemed an original, all of which together shall contribute one and the same instrument.
16. ARBITRATION. To ensure the rapid and economical resolution of disputes that may arise in connection with CFO’s employment with the Company, CFO and the Company agree that any and all disputes, claims, or causes of action, in law or equity, arising from or relating to CFO’s employment, or the termination of that employment, will be resolved, to the fullest extent permitted by law, by final, binding and confidential arbitration pursuant to both the substantive and procedural provisions of the Federal Arbitration Act in Houston, Texas conducted by the Judicial Arbitration and Mediation Services/Endispute, LLC (“JAMS”), or its successors, under the then current rules of JAMS for employment disputes; provided that the arbitrator shall: (a) have the authority to compel adequate discovery for the resolution of the dispute and to award such relief as would otherwise be permitted by law; and (b) issue a written arbitration decision including the arbitrator’s essential findings and conclusions and a statement of the award. Accordingly, CFO and the Company hereby waive any right to a jury trial. Both CFO and the Company shall be entitled to all rights and remedies that either CFO or the Company would be entitled to pursue in a court of law. The Company shall pay any JAMS filing fee and shall pay the arbitrator’s fee. Nothing in this Agreement is intended to prevent either CFO or the Company from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration. Notwithstanding the foregoing, CFO and the Company each have the right to resolve any issue or dispute involving confidential, proprietary or trade secret information, or intellectual property rights, by court action instead of arbitration.
17. TRADE SECRETS OF OTHERS. It is the understanding of both the Company and CFO that CFO shall not divulge to the Company and/or its subsidiaries or other Affiliates any confidential information or trade secrets belonging to others, including CFO’s former employers, nor shall the Company and/or its Affiliates seek to elicit from CFO any such information. Consistent with the foregoing, CFO shall not provide to the Company and/or its Affiliates, and the Company and/or its Affiliates shall not request, any documents or copies of documents containing such information.
18. ADVERTISING WAIVER. CFO agrees to permit the Company, and persons or other organizations authorized by the Company, to use, publish and distribute advertising or sales promotional literature concerning the products and/or services of the Company, or the machinery and equipment used in the provision thereof, in which CFO’s name and/or pictures of CFO taken in the course of CFO’s provision of services to the Company appear. CFO hereby waives and releases any claim or right CFO may otherwise have arising out of such use, publication or distribution.
- 8 -
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the dates below.
|
|
|
FIBROBIOLOGICS, INC. |
||
|
|
|
By: |
|
/s/ Pete O’Heeron |
Its: |
|
President and CEO |
|
|
|
Dated: |
|
June 9, 2025 |
|
|
|
|
|
|
|
|
|
CFO: |
|
|
|
||
|
||
/s/ Jason Davis Jason D. Davis |
||
|
|
|
Dated: |
|
June 9, 2025 |
- 9 -
EXHIBIT A
RELEASE AND WAIVER OF CLAIMS
TO BE SIGNED AFTER TERMINATION OF EMPLOYMENT
In consideration of the payments and other benefits described in my Employment Agreement effective June 9, 2025 (the "Employment Agreement"), with FIBROBIOLOGICS, INC. (the “Company”), I, Jason D. Davis, hereby furnish the Company with the following release and waiver (“Release and Waiver”).
In exchange for the consideration provided to me by the Company under Section 4.5 of the Employment Agreement that I am not otherwise entitled to receive, I hereby and forever completely release, waive and discharge the Company and all of its current and former directors, officers, employees, stockholders, partners, agents, attorneys, predecessors, successors, parent and subsidiary entities, insurers, affiliates, and assigns (collectively, the “Released Parties”) from and against any and all claims, demands, damages, causes of action, liabilities and obligations, both known and unknown, if any, of every type and character, whether at law, in equity, or administrative, that I may have, do have, or hereafter acquire, against any of the Released Parties that arise out of, or are in any way related to, events, acts, conduct, or omissions occurring prior to the time that I sign this Release and Waiver (collectively, the “Released Claims”). The Released Claims include, but are not limited to: (a) all claims arising out of or in any way related to my employment with the Company, or the termination of that employment; (b) all claims related to my compensation or benefits from the Company including salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership interests in the Company; (c) all claims for breach of oral or written, express or implied, contract, including claims under any employment agreement or offer letter, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (d) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (e) all federal, state, and local statutory claims, including claims for discrimination, harassment, retaliation, misclassification, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990, the federal Age Discrimination in Employment Act of 1967 (as amended) (the “ADEA”), the Texas Labor Code, and the Texas Fair Employment and Housing Act (as amended). Notwithstanding the foregoing, the following are not included in the Released Claims (the “Excluded Claims”): (a) any rights or claims for indemnification I may have pursuant to the charter or bylaws of the Company or under applicable law; (b) any rights or claims to unemployment compensation or any pending workers’ compensation claim (however I acknowledge that I have no unfiled workers’ compensation claim or unreported injury), any vested rights to benefits that I have under any benefit plan of the Company whether or not governed by the Employee Retirement Income Security Act of 1974, as amended, or any vested equity incentives; (c) any rights that are not waivable as a matter of law; or (d) the rights to the Severance Payments and COBRA Coverage as provided under the terms of the Employment Agreement. I hereby represent and warrant that, other than the Excluded Claims, I am not aware of any claims I have or might have against any of the Released Parties that are not included in the Released Claims. To the extent any claim is not waivable by law, I assign any such claims to the Company and understand and acknowledge that the Company has no obligation to pursue such claims.
This Release and Waiver is intended to be as broad as permissible under applicable law
I agree not to file a lawsuit to assert any such released claims and I agree not to accept any monetary damages or other personal relief (including legal or equitable relief) in connection with any administrative claim or lawsuit filed by any person or entity or governmental agency.
I acknowledge that, among other rights, I am waiving and releasing any rights I may have under ADEA, that this Release and Waiver is knowing and voluntary, and that the consideration given for this Release and Waiver is in addition to anything of value to which I was already entitled as an executive of the Company. I further acknowledge that I have been advised, as required by the Older Workers Benefit Protection Act, that: (a) the release and waiver granted herein does not relate to claims under the ADEA which may arise after this Release and Waiver is executed; (b) I should consult with an attorney prior to executing this Release and Waiver; and (c) if I am age 40 or older at the time of execution of this release, I have at least 21 days (and may have 45 days) from the date of termination of my employment with the Company in which to consider this Release and Waiver (although I may choose voluntarily to execute this Release and Waiver earlier); and (d) if I am age 40 or older at the time of execution of this release, I have seven days following the execution of this Release and Waiver to revoke my execution of this Release and Waiver.
Any notice of revocation should be sent by a method of delivery, which provides a receipt of delivery and should be addressed to the Company’s Chief Executive Officer at the principal business office of the Company.
I acknowledge that neither this Release and Waiver nor any other agreement or policy of the Company prevents me from providing information to or filing a report, charge, or complaint, including a challenge to the validity of Release and Waiver, with the Equal Employment Opportunity Commission, Department of Labor, National Labor Relations Board, Securities and Exchange Commission (“SEC”) or any other governmental agency, or from participating in any investigation or proceeding conducted by any governmental agency. This Release and Waiver does not impose any condition precedent (such as prior notice to the Company), any penalty, or any other restriction or limitation adversely affecting my rights regarding any governmental agency disclosure, report, claim, or investigation. I hereby waive any right to recover any monetary relief or other personal remedies in any governmental agency or other action brought against the Company on my behalf. However, this Release and Waiver does not limit or waive my right to receive an award for information provided under any SEC program.
I agree not to disparage the Company and its officers, directors, employees, shareholders and/or agents, in any manner likely to be harmful to them or their business, business reputations or personal reputations; provided that I may respond accurately and fully to any question, inquiry or request for information when required by legal process (e.g., a valid subpoena or other similar compulsion of law) or as part of a government investigation.
I acknowledge my continuing obligations under my Proprietary Information and Inventions Agreement. Pursuant to the Proprietary Information and Inventions Agreement I understand that among other things, I must not use or disclose any confidential or proprietary information of the Company and I must immediately return all Company property and documents (including all embodiments of proprietary information) and all copies thereof in my possession or control. I understand and agree that my right to the Severance Payments and COBRA Coverage as provided under the terms of the Employment Agreement that I am receiving in exchange for my agreement to the terms of this Release and Waiver is contingent upon my continued compliance with my Proprietary Information and Inventions Agreement.
I acknowledge that I am not relying on any promise or representation by the Company that is not expressly stated herein or in the Employment Agreement.
I acknowledge that delivery of an executed signature page to this Release and Waiver by facsimile or in electronic (i.e., “pdf” or “tiff”) format shall be effective as delivery of an executed original of this Release and Waiver.
MY SIGNATURE BELOW MEANS THAT I HAVE READ THIS RELEASE AND WAIVER AND AGREE AND CONSENT TO ALL THE TERMS AND CONDITIONS CONTAINED HEREIN.
|
|
|
|
|
|
|
Date: |
|
|
|
By: |
|
|
|
|
|
|
|
|
Jason D. Davis |
Exhibit 10.3
FIBROBIOLOGICS, INC.
CONSULTING AGREEMENT
This Consulting Agreement, along with its exhibits and Statements of Work (collectively, the “Agreement”), effective as of May 15, 2025 (the “Effective Date”) is between Robert E. Hoffman, with an address of *** (the “Consultant”), and FibroBiologics, Inc., a Delaware corporation, with offices located at 455 E. Medical Center Blvd., Suite 300, Houston, Texas 77598 (the “Company”) (each herein referred to individually as a “Party,” or collectively as the “Parties”).
The Company desires to retain Consultant as an independent contractor to perform consulting services for the Company, and Consultant is willing to perform such services, on the terms described below. In consideration of the mutual promises contained herein, the Parties agree as follows:
-2-
-3-
-4-
-5-
-6-
-7-
-8-
-9-
-10-
[Signature Page Follows]
-11-
The Parties have executed this Agreement on the respective dates set forth below.
FibroBiologics, Inc.:
__/s/ Ruben Garcia______________
By: Ruben Garcia
Title: General Counsel
Address: 455 E. Medical Center Blvd.
Suite 300
Houston, Texas 77598
Attention: Legal Department
***
Date: 5/15/2025
Consultant:
_Robert E. Hoffman_________
Consultant Name (PRINT)
/s/ Robert E. Hoffman
Signature
Title
Address: ******
Date: 5/15/2025
EXHIBIT A
STATEMENT OF WORK to
CONSULTING AGREEMENT between
Robert E. Hoffman and FibroBiologics, Inc.
This Statement of Work (the “SOW”) is effective as of May 15, 2025 (“SOW Effective Date”) and is entered into pursuant to the Consulting Agreement (the “Agreement”) between FibroBiologics, Inc. (the “Company”) and Robert E. Hoffman (the “Consultant”), effective May 15, 2025. Any capitalized term not defined in this SOW shall have the meaning given to it in the Agreement.
1. Services. The Services provided by Consultant to the Company under this SOW shall consist of the following:
• Assist the Company’s Chief Executive Officer and his delegates with finance and accounting matters, including capital raising activities.
2. Payment. The Company (or its designee) shall pay Consultant for the Services under this SOW as follows:
$*** per hour.
3. Invoices. Consultant shall submit to the Company (or its designee) a written invoice within thirty (30) days of completing the Services in accordance with this SOW, and such invoice shall be subject to the approval of the Company (or its designee). Consultant shall ensure that any invoices it submits to the Company (or its designee) comply with Section 2 of the Agreement, provide a reasonably detailed description of the Services rendered, include adequate details to enable the Company (or its designee) to verify the amounts payable by the Company (or its designee) under the invoice, and are submitted to the address provided by the Company (or its designee).
4. Term and Termination. The term of this SOW shall commence on May 15, 2025 and shall terminate on August 15, 2025, provided, however, that the Company may terminate this SOW in accordance with the terms of the Agreement.
5. Incorporation by Reference; Conflict. The provisions of this SOW are hereby expressly incorporated by reference into and made a part of the Agreement. In the event of a conflict between the terms and conditions of this SOW and those of the Agreement, the terms of the Agreement shall take precedence and control over those of this SOW.
6. Expenses. Company (or its designee) will reimburse Consultant, pursuant to Company’s Travel and Expense Policy for reasonable travel, lodging and out-of-pocket expenses incurred in connection with performance of the Services; provided, however that all travel will be according to guidelines established by Company.
7. Additional terms of, amendments to terms of and/or Company policies applicable to, the Consulting Agreement. (none, if not filled in or marked “None”)
• None
IN WITNESS WHEREOF, the Parties have caused this SOW to be duly executed as of the SOW Effective Date above.
CONSULTANT FibroBiologics, Inc.
By: /s/ Robert E. Hoffman By: /s/ Ruben Garcia
Name: Robert E. Hoffman Name: Ruben Garcia
Title: General Counsel
-2-
Exhibit 31.1
CERTIFICATION
I, Pete O’Heeron, certify that:
Date: July 31, 2025 |
|
|
|
|
/s/ Pete O’Heeron |
|
Pete O’Heeron |
|
Chief Executive Officer Principal Executive Officer |
Exhibit 31.2
CERTIFICATION
I, Jason D. Davis, certify that:
Date: July 31, 2025 |
|
|
|
|
/s/ Jason D. Davis |
|
Jason D. Davis |
|
Chief Financial Officer Principal Financial Officer |
Exhibit 32.1
STATEMENT PURSUANT TO 18 U.S.C. SECTION 1350
With reference to the Quarterly Report of FibroBiologics, Inc. (the “Company”), on Form 10-Q for the period ended June 30, 2025, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Pete O’Heeron, Chief Executive Officer of the Company, and Jason D. Davis, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ Pete O’Heeron |
Pete O’Heeron |
Chief Executive Officer |
|
/s/ Jason D. Davis |
Jason D. Davis |
Chief Financial Officer |
|
Date: July 31, 2025 |