UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K10-K/A
(Amendment No. 1)
(Mark One)
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2022
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 001-38326
COHBAR, INC.
(Exact name of registrant as specified in its charter)
Delaware | 26-1299952 | |
(State or other jurisdiction of
| (I.R.S. Employer
|
1455 Adams Drive, Suite 2050
1308
Menlo Park, CA 94025
(Address of principal executive offices, including zip code)
(650) 446-7888
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Common Stock, par value $0.001 per share | CWBR | Nasdaq Capital Market |
Securities registered pursuant to Section 12(g) of the Act: N/A
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
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. Yes ☒ No ☐
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). Yes ☒ No ☐
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 | ☐ |
Non-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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
The aggregate market value of voting and non-voting common equity held by non-affiliates as of the last business day of the Registrant’s most recently completed second fiscal quarter (June 30, 2022) was $14,064,722 based upon the last price of the Registrant’s common stock as reported on The Nasdaq Capital Market on such date. As of March 6, 2023, the registrant had 2,906,926 shares of common stock outstanding.
Documents Incorporated by Reference
Auditor Name: | Auditor Location: | Auditor Firm ID: |
Marcum LLP | New York, NY | 688 |
The registrant has incorporated by reference into Part III of this Form 10-K portions of its Proxy Statement for its 2023 Annual Meeting of Stockholders. Such Proxy Statement will be filed with the Securities and Exchange Commission within 120 days of the registrant’s fiscal year ended December 31, 2022.
Explanatory Note
This Amendment No. 1 on Form 10-K/A (this “Amendment”) amends the Annual Report on Form 10-K of CohBar, Inc. (“CohBar,” “we,” “us,” “our,” “its” or the “Company”) for the year ended December 31, 2022, filed with the Securities and Exchange Commission (“SEC”) on March 9, 2023 (the “Original Form 10-K”) solely to:
● | disclose the information omitted from Part III, Items 10, 11, 12, 13 and 14 of the Original Form 10-K in reliance on Form 10-K General Instruction G(3); |
● | delete the reference on the cover page of the Original Form 10-K to the incorporation by reference of portions of the proxy statement into Part III of the Original Form 10-K; and |
● | file new certifications of our principal executive officer and principal financial officer as exhibits to this Amendment under Item 15 of Part IV hereof, pursuant to Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). |
This Amendment is being filed for the purpose of providing the information required by Items 10 through 14 of Part III of the Annual Report on Form 10-K. This information was previously omitted from the Original Form 10-K in reliance on General Instruction G(3) to the Annual Report on Form 10-K, which permits the above-referenced Items to be incorporated in the Annual Report on Form 10-K by reference from a definitive proxy statement, if such definitive proxy statement is filed no later than 120 days after December 31, 2022. At this time, we are filing this Amendment to include Part III information in our Annual Report on Form 10-K because we do not intend to file our definitive proxy statement within 120 days of December 31, 2022.
In accordance with Rule 12b-15 under the Exchange Act, Items 10 through 14 of Part III of the Original Form 10-K are hereby amended and restated in their entirety. In addition, this Amendment amends and restates in its entirety Item 15 of Part IV of the Original Form 10-K to include new certifications by our principal executive officer and principal financial and accounting officer under Section 302 of the Sarbanes-Oxley Act of 2002, pursuant to Rule 12b-15 under the Exchange Act. Because no financial statements have been included in this Amendment and this Amendment does not contain or amend any disclosure with respect to Items 307 and 308 of Regulation S-K, paragraphs 3, 4 and 5 of such certifications have been omitted. We are not including the certifications under Section 906 of the Sarbanes-Oxley Act of 2002 as no financial statements are being filed with this Amendment.
Except as described above, no other changes have been made to the Original Form 10-K. Except as otherwise indicated herein, this Amendment speaks as of the date of the Original Form 10-K and does not reflect other events that may have occurred after the date of the Original Form 10-K or modify or update any disclosures that may have been affected by subsequent events. The disclosures contained in the Original Form 10-K and in the documents incorporated therein by reference are provided as of the date of such disclosures.
COHBAR, INC.
2022 ANNUAL REPORT ON FORM 10-K
Table of Contents
i
PART I
This Annual Report on Form 10-K, including without limitation, the sections entitled “Business,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For this purpose, any statements contained herein that are not statements of historical fact, including without limitation, statements regarding future events and our future results, our current expectations, estimates, forecasts and projections about our business, our results of operations, our future expenses and financing needs, the industry in which we operate and the beliefs and assumptions of our management, may be deemed to be forward-looking statements. Without limiting the foregoing, words such as “may,” “will,” “should,” “could,” “anticipate,” “believe,” “expect,” “intend,” “plan,” “potential,” “continue,” “might,” “anticipate,” “estimate,” “goal,” “project,” “strategy” and “future,” and similar expressions are intended to identify these forward-looking statements. Examples of such forward-looking statements include statements regarding:
These statements reflect our current beliefs and are based on information currently available to us. Forward-looking statements involve significant risks and uncertainties, including without limitation, those listed in the “Risk Factors” section. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements including, but not limited to, changes in general macroeconomic, geopolitical and market conditions and the risk factors disclosed under “Risk Factors.” Although the forward-looking statements contained in this report are based upon what we believe to be reasonable assumptions, we cannot assure you that actual results will be consistent with these forward-looking statements. Investors should not place undue reliance on forward-looking statements. These forward-looking statements are made as of the date hereof, and we assume no obligation to update or revise them to reflect new events or circumstances, except as required by applicable law.III
Item 1. Business
OVERVIEW
CohBar (“CohBar,” “we,” “us,” “our,” “its” or the “Company”) is a clinical stage biotechnology company leveraging the power of the mitochondria10. Directors, Executive Officers and the peptides encoded in its genome to develop potential breakthrough therapeutics targeting chronic and age-related diseases. Our novel approach is built on the key insights of the Company’s founders that certain mitochondrially encoded peptides produce effects that are not limited to local regulation within the mitochondria and may have important roles to play in critical systemic biological pathways. Many of these effects are quite distinct from what has been thought of as energy production and metabolism, involving diverse processes including inflammation, fibrosis and cell signaling.
Through our exploration of the mitochondrial genome and its utility for the development of novel therapeutics, we have developed a world-renowned expertise in mitochondrial biology and a broad intellectual property estate with 6 issued patents and approximately 30 pending patent applications. Our proprietary processes of identifying nucleic acid sequences encoding native peptides in the mitochondrial genome, developing and optimizing novel analogs of these natural mitochondrial derived peptides (“MDPs”), as well as developing and conducting proprietary screens to identify and characterize the activities of these peptides are referred to as our technology platform. We are exploring development and/or partnership opportunities within the Company’s peptide library and technology platform.
We believe that the proprietary capabilities of our technology platform, combined with our scientific expertise and intellectual property portfolio, provide a competitive advantage in our mission to treat chronic and age-related diseases through the advancement of a new class of transformative drugs. Our peptide optimization process is designed to discover numerous potential drug candidate opportunities. These drug candidates may be internally developed by CohBar or advanced through strategic partnerships with larger biopharmaceutical companies.
OUR PIPELINE
Our research efforts have historically been focused on utilizing our technology platform to identify, assess and optimize novel analogs of native peptides found in the mitochondrial genome and advancing those candidates with the greatest therapeutic and commercial potential.Corporate Governance
CB4211Information about our Executive Officers and Directors
Our most advanced clinical candidate, CB4211, is a first-in-class therapeutic forAs of the treatmentdate of nonalcoholic steatohepatitis (“NASH”)this report, our directors and obesity. CB4211 demonstrated positive effects on reducing biomarkers of liver injury and improving metabolic homeostasis in a Phase 1a/1b clinical study in obese subjects with nonalcoholic fatty liver disease (“NAFLD”). CB4211 is a novel and improved analog of MOTS-c, a naturally occurring MDP. MOTS-c was discovered in 2012 by CohBar founder Dr. Pinchas Cohen and his academic collaborators and has been shown to play a significant role in the regulation of metabolism in animal models. Compared to other assets under development for the treatment of NASH, CB4211 has a unique mechanism of action, which we believe offers a differentiated approach to treating NASH and obesity,executive officers are as well as the potential to exhibit an enhanced safety profile due to its natural origin. Furthermore, we believe the positive clinical data from our CB4211 trial is an important validation of our overall approach to drug discovery, serving as a proof point that novel analogs of peptides encoded in the mitochondrial genome can impact systemic biological pathways in humans.follows:
Name | Age | Position | ||||
Dr. Joseph J. Sarret | 55 | President, Chief Executive Officer and Director | ||||
Jeffrey F. Biunno | 56 | Chief Financial Officer, Treasurer and Secretary | ||||
David Greenwood(1)(2) | 71 | Chairman of the Board of Directors | ||||
Albion J. Fitzgerald(1)(2)(3) | 74 | Director | ||||
Carol Nast(3) | 77 | Director | ||||
Misha Petkevich(1)(2) | 74 | Director | ||||
Stephanie Tozzo | 61 | Director | ||||
Joanne Yun(2)(3) | 52 | Director |
(1) | Member of the Audit Committee |
(2) | Member of the Compensation Committee |
(3) | Member of the Governance and Nominating Committee |
In August 2021, we released positive topline data from our Phase 1a/1b clinical study of CB4211. The Phase 1a stage of the study was designed to assess the safety, tolerability,Our business and pharmacokinetics of CB4211 following single and multiple-ascending doses in healthy subjects. Subjects in the Phase 1a study experienced mild, but persistent injection site reactions, which were generally seen as painless bumps at the injection site that can be feltaffairs are managed under the skin. We modifieddirection of our Board of Directors (“Board”), which currently consists of seven members. Our entire Board of Directors stands for election at each annual meeting of stockholders. Each director holds office for a one-year term or until the formulation for CB4211 partway throughelection and qualification of their respective successor or until the Phase 1a studyearlier of their death, resignation or removal. Our Board elects all of our executive officers, who hold office until their respective successors are elected and did not observe any persistent injection site bumps with the modified formulation. The subsequent Phase 1b stage was designed to assess the safety, tolerability, and activity of CB4211 in obese subjects with NAFLD. The study met its primary endpoint as CB4211 was well-tolerated and appeared safe with no serious adverse events. The evaluation of the exploratory endpoints in the Phase 1b portion of the trial showed significant reductions from baseline in key biomarkers of liver damage, ALT and AST, and in glucose levels in the CB4211 group compared to placebo after four weeks of treatment, with a trend towards lower body weight.qualified.
We do not believe that the formulation of CB4211 used in the Phase 1b stageThe following is a biographical summary of the trial is suitable for further development. Efforts to develop an improved formulation have not been successful to dateexperience of our executive officers and there can be no assurances that we will be able to develop such a formulation.directors:
CB5138 AnalogsExecutive Officers
Our CB5138 Analogs are potential first-in-class therapeuticsDr. Joseph J. Sarret joined CohBar as Chief Executive Officer and a member of our Board in May 2021. From April 2015 to June 2019, Dr. Sarret served as Chief Business Officer of Corium International, Inc., a commercial-stage biopharmaceutical company. Prior to that, have demonstrated significant anti-fibrotic properties inDr. Sarret served as Senior Vice President, Strategic Accounts at Solazyme, Inc., a varietyrenewable oils company, from March 2014 to December 2014. From June 2013 to December 2013, Dr. Sarret served as Chief Executive Officer and a member of preclinical models. Recent results suggest that these effects may be mediated through impacts on the Wnt/Frizzled pathway, which is known to play an important role in fibrosis. In 2021, we nominated CB5138-3 as our second clinical candidates based on its efficacy in mouse models of idiopathic pulmonary fibrosis; however, in December 2022, we announced suspension of further Investigational New Drug (“IND”) enabling activities for this peptide due to challenges in identifying a suitable formulation for clinical development. Any future development of other CB5138 Analogs may face similar formulation challenges.
Recent Developments
We have retained Ladenburg Thalmann & Co. Inc. as a financial advisor to assist the Company in exploring strategic alternatives. Potential strategic alternatives that may be explored or evaluated as part of this process include a merger, business combination, investment into the Company, asset sale or other strategic transaction. Our board of directors has not setof Sevident, Inc., a timetablebiotechnology company. From August 2005 to August 2012, Dr. Sarret served in various roles at Codexis, Inc., a biotechnology company, including as Senior Vice President, Chief Business Officer, and President, Pharmaceutical Services and Enzyme Products. Prior to Codexis, Dr. Sarret practiced corporate and transactional law with Latham & Watkins, LLP, and served as Attending Physician and Acting Medical Director for the conclusion of this review, nor has it made any definitive decisions related to taking any further actions or potential strategic optionsHIV Clinic at this time or at all. There can be no assurance that this process will result in any such transaction and the Company does not intend to disclose additional details unless and until it has entered into a specific transaction. See also “Risk Factors—Risks Related to Strategic Alternative Process and Potential Strategic Transaction.”
EMPLOYEES AND HUMAN CAPITAL RESOURCES
As of December 31, 2022, we had ten employees, nine full-time and one part-time. Additionally, from time to time we have engaged subject-matter experts on a consulting basis in specific areas of our research and development efforts. None of our employees are represented by a labor union or covered by a collective bargaining agreement. We have not experienced any work stoppages and we consider our relations with our employees to be good.
Our human capital resources objectives include, as applicable, retaining and incentivizing our existing employees. The principal purposes of our equity incentive plans are to attract, retain and motivate selected employees, consultants and directors through the granting of stock-based compensation awards and cash-based performance bonus awards.
RESEARCH AND DEVELOPMENT
Research and development activities have historically been central to our business model. Our research programs have included activities related to discovery of novel MDPs, investigational research to evaluate the potential therapeutic effects of certain discovered natural sequences in in vitro and preclinical studies, engineering novel, improved analogs of certain discovered natural sequences with characteristics suitable for further development as potential drug candidates and advancing our identified candidates through clinical studies. Depending on factors of capability, cost, efficiency and intellectual property rights, we have conducted various aspects of our research programs either independently at our laboratory facility or under contractual arrangements with third party contract research organizations (“CROs”).
INTELLECTUAL PROPERTY
Patents
Our commercial success depends in part on our ability to obtain and maintain proprietary protection for our novel biological discoveries and therapeutic methods, to operate without infringing on the proprietary rights of others and to prevent others from infringing our proprietary rights. We seek to protect our proprietary position by, among other methods, licensing and/or filing patent applications related to our proprietary technology, inventions and improvements that are important to the development and implementation of our business.
Our intellectual property and patent strategy is focused on our MDPs and our novel analogs of these natural peptides. Our strategy is generally to seek patent protection in the United States and, where applicable, in those international jurisdictions we identify as holding significant potential market opportunity for any drug we may develop and in which patent protection is available. We also rely on trade secrets, know-how, continuing technological innovation and potential in-licensing opportunities to develop and maintain our proprietary position. With respect to new biologically active MDPs that we identify within the mitochondrial genome, we typically file provisional patent applications and seek composition-of-matter and method-of-treatment patents for our MDPs, and/or their novel analogs, and prospective novel drug candidates as well as methods of use based on research and preclinical evaluation of therapeutic potential.
As of December 31, 2022, we are the owners of 6 issued patents and approximately 30 pending patent applications, with claims predominantly directed to composition of matter and methods of use of novel MDPs and their novel analogs. Our patent applications include filings in the United States, Europe and a number of other foreign countries, with projected expiration dates ranging from 2037 to 2041. Additionally, we are the exclusive worldwide licensee from the Regents of the University of California, (the “Regents”)San Francisco Medical Center. Dr. Sarret received his bachelor’s degree from Stanford University, his M.D. from the University of 15 issued patentsCalifornia, San Francisco School of Medicine, and a J.D. from Stanford Law School. We believe that will expire between 2028 and 2034. However, following the termination of one of our licensesDr. Sarret’s industry experience provides him with the Regentsqualifications and skills to serve on April 6, 2023, the Company will be exclusive licensee of 11 issued patents worldwide.our Board.
Terms for individual patents extend for varying periodsJeffrey F. Biunno joined our Company in October 2013 as Chief Financial Officer and was appointed secretary and treasurer in September 2014. Prior to joining CohBar, Mr. Biunno served as chief financial officer, secretary and treasurer of time generally dependingManageIQ, Inc., a provider of global cloud IT systems management solutions, from March 2012 until its acquisition by Red Hat, Inc. in December 2012. From February 2009 until March 2012, Mr. Biunno served as vice president and worldwide controller of Dialogic Inc., a provider of mobile telecommunications network software and hardware enterprise solutions then listed on the dateNasdaq. Mr. Biunno founded Scalable Financial Solutions, LLC, a financial consulting firm, and operated it from March 2008 to January 2009. From February 2005 to March 2008, Mr. Biunno worked at Geller & Company, a financial services consulting firm. From 1997 to 2004, Mr. Biunno served as vice president and corporate controller of filingNovadigm, Inc., an international provider of the patent applicationIT systems management solutions to Fortune 500 companies and the legal term of patentsgovernment agencies. Mr. Biunno received a B.S. in the countriesaccounting and an M.B.A. in which they are obtained. Generally, patents issuedfinance from applications filed in the United States are effective for twenty years from the earliest non-provisional filing date. In addition, in certain instances,Montclair State University. Mr. Biunno is a patent term can be extended to recapture a portion of the term effectively lost as a result of the FDA regulatory review period; however, the restoration period cannot be longer than five years and the total patent term, including the restoration period, must not exceed fourteen years following FDA approval. The duration of foreign patents varies in accordance with provisions of applicable local law, but typically is also twenty years from the earliest international filing date. In certain instances, extension of patent term due to regulatory approval activities is available in foreign countries.
National and international patent laws concerning peptide therapeutics remain highly unsettled. Policies regarding the patent eligibility or breadth of claims allowed in such patents are currently in flux in the United States and other countries. Changes in either the patent laws or in interpretations of patent laws in the United States and other countries can diminish our ability to protect our inventions and enforce our intellectual property rights. Accordingly, we cannot predict the breadth or enforceability of claims that may be granted in our patents or in third-party patents. The biopharmaceutical industry is characterized by extensive litigation regarding patents and other intellectual property rights. Our ability to maintain and solidify our proprietary position for our drugs and technology will depend on our success in obtaining effective claims and enforcing those claims once granted. We do not know whether any of the patent applications that we may file or license from third parties will result in the issuance of any patents. The issued patents that we own, license, or may license or own in the future, may be challenged, invalidated or circumvented, and the rights granted under any issued patents may not provide us with sufficient protection or competitive advantages against competitors with similar technology. Furthermore, our competitors may be able to independently develop and commercialize similar drugs or duplicate our technology, business model or strategy without infringing our patents. Because of the extensive time required for clinical development and regulatory review of a drug we may develop, it is possible that, before any of our drugs can be commercialized, any related patent may expire or remain in force for only a short period following commercialization, thereby reducing any advantage of any such patent.certified public accountant.
Trade SecretsNon-employee Directors
In addition to patents, we have relied upon unpatented trade secrets and know-how to maintain our competitive position. We seek to protect our proprietary information, in part, using confidentiality agreements with our commercial partners, collaborators, employees and consultants and invention assignment agreements with our employees. These agreements are designed to protect our proprietary information and, in the case of the invention assignment agreements, to grant us ownership of technologies that are developed through a relationship with a third party. These agreements may be breached, and we may not have adequate remedies for any breach. In addition, our trade secrets may otherwise become known or be independently discovered by competitors. To the extent that our commercial partners, collaborators, employees and consultants use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions.
TrademarksDavid Greenwood joined our Board in April 2019 and was appointed as chairman in April 2021. Mr. Greenwood served on the board of directors of Corium International, Inc. (“Corium”), a commercial biopharmaceutical company, from December 2010 to November 2018. He also served as chairman of Corium’s board of directors from December 2014 to November 2018, and as the executive chairman of its board of directors from June 2012 to December 2016. He is the former president, chief executive officer, chief financial officer and director of Geron Corporation, a biotechnology company in the fields of regenerative medicine and cancer, where he worked from 1995 until December 2011. He was previously chairman of the board of directors of Geron’s wholly-owned subsidiary, Geron Bio-Med Limited, chairman of the board of directors of Geron’s majority-owned subsidiary, TA Therapeutics, Ltd., and on the board of directors of ViaGen, Inc., Clone International and Parnell Pharmaceuticals Holdings Ltd. He also served on the Board of Regents for Pacific Lutheran University. From 1979 to 1995, Mr. Greenwood held various positions with J.P. Morgan Chase & Co., an international banking firm. Mr. Greenwood received his bachelor’s degree from Pacific Lutheran University and his M.B.A. from Harvard Business School. We believe that Mr. Greenwood’s financial and business expertise in the biopharmaceutical industry provides him with the qualifications and skills to serve on our Board.
Albion J. Fitzgerald has served as a member of our Board of Directors since May 2014 and served as chairman from July 2014 to April 2021. Mr. Fitzgerald previously served as chief executive officer and chairman of the board of directors of ManageIQ, Inc., a provider of global cloud IT systems management solutions. Mr. Fitzgerald was appointed as a director of ManageIQ in 2007 and served as strategic consultant to the Company from 2007 until April 2012 and as chief executive officer and chairman of the board of directors from April 2012 until its acquisition by Red Hat, Inc. in December 2012. In 1992 Mr. Fitzgerald co-founded Novadigm, Inc., an international provider of IT systems management solutions to Fortune 500 companies and government agencies with customers in 26 countries, where he invented a cybernetic genome translated from biological models for the autonomic management of global-scale IT networks. He served as its chairman and chief technology officer from 1992 and chief executive officer from 1995 until its acquisition by Hewlett Packard in 2004. Prior to Novadigm, Mr. Fitzgerald founded and served as chief executive officer of Telemetrix, Inc., a provider of enterprise IT systems and network management solutions to Fortune 500 companies. From 1980 to 1989, Mr. Fitzgerald was a strategic technology consultant to New York University responsible for architecting, building and managing the university’s computer center and campus-wide multi-media network. Mr. Fitzgerald began his technology career at IBM in 1966. We believe that Mr. Fitzgerald’s extensive experience in founding, funding and building emerging technology companies, the depth of his technology and business expertise, and his relevant experience as a director and officer of a publicly-traded enterprise software company provide him with the qualifications and skills to serve on our Board.
COHBAR®
Carol Nast joined our Board in August 2021. Ms. Nast founded Enterprise Catalyst Group, Inc., a consulting company that services the medical industry, in January 2004 and has since served as its President from 2004 to June 2019 and from June 2021 to December 2022. Ms. Nast previously served as Chief Operating Officer of Mind Medicine, Inc., a company advancing psychedelic inspired medicines, from June 2019 to May 2021 and, prior to that, was Chief Operating Officer at NuGen Technologies, Inc., a genomics company, from 2001 to 2003. She also served as Vice President, Device Manufacturing at Nektar Therapeutics (previously, Inhale Therapeutics, Inc.) from 1999 to 2002, as Director of Operations of Syva (a division of Syntex Pharmaceuticals) from 1989 to 1996, and as Director of Operations of BioRad Laboratories, Inc. from 1985 to 1989. Ms. Nast received her bachelor’s degree in biochemistry and medical technology from Texas Christian University. We believe that Ms. Nast’s commercial and operational expertise provide her with the qualifications and skills to serve on our Board.
Misha Petkevich joined our Board in October 2019. Mr. Petkevich has more than 30 years of financial and investment experience in biotechnology and investment banking. Since 2015, Mr. Petkevich has been registered by the United States Patent & Trademark Office.
ENVIRONMENTAL AND OTHER REGULATORY MATTERS
Government Regulation
Chief Investment Officer of V2M Capital, an investment firm funding life science companies. He currently serves as chairman of HingeBio, Inc., a biotechnology company developing bispecific and multispecific antibodies. In 2005, he co-founded BladeRock Capital, LLC, an investment firm specializing in life science companies. Prior to founding BladeRock Capital, Mr. Petkevich founded The preclinical studiesPetkevich Group, a biotechnology advisory firm, where he was Chairman and clinical testing, manufacture, labeling, storage, record keeping, advertising, promotion, export, marketingChief Executive Officer from 1998 to 2005. Between 1989 and sales, among other things, of our therapeutic candidates and future products, are subject to extensive regulation by governmental authorities in the United States and other countries. In the United States, pharmaceutical products are regulated by the Food and Drug Administration (the “FDA”) under the Federal Food, Drug, and Cosmetic Act (the “FDCA”) and other laws. Biologics are subject to regulation by the FDA under the FDCA, the Public Health Service Act, and related regulations, and other federal, state and local statutes and regulations. Biological products include, among other things, viruses, therapeutic serums, vaccines and most protein products. Product development and approval within these regulatory frameworks takes a number of years and involves the expenditure of substantial resources.
Regulatory approval will be required in all major markets in which we, or our licensees, seek to test any future products. At a minimum, such approval requires evaluation of data relating to quality, safety and efficacy of a product for its proposed use. The specific types of data required and the regulations relating to these data differ depending on the territory, the drug involved, the proposed indication and the stage of development.
In general, new chemical entities are tested in animal models to determine whether the product is reasonably safe for initial human testing. Additional preclinical testing continues during the clinical development stage. Clinical trials for new products are typically conducted in three sequential phases that may overlap. Phase 1 trials typically involve the initial introduction of the pharmaceutical into healthy human volunteers and focus on testing for safety, dosage tolerance, metabolism, distribution, excretion and clinical pharmacology. In the case of serious or life-threatening diseases, such1997, Mr. Petkevich served as cancer, initial Phase 1 trials are often conducted in patients directly, with preliminary exploration of potential efficacy. Phase 2 trials involve clinical trials to evaluate the effectiveness of the drug for a particular disease indication or indications in patients with the disease or condition under study and to determine appropriate dosages and dose regimens and the common short-term side effects and risks associated with the drug. Phase 2 trials are typically closely monitored and conducted in a relatively small number of patients, usually involving no more than several hundred subjects. Phase 3 trials are generally expanded, well-controlled clinical trials. They are performed after preliminary evidence suggesting effectiveness,Managing Director, as well as Head of Healthcare and Investment Banking at Robertson Stephens & Co. Mr. Petkevich began his career at Hambrecht & Quist, an investment bank, where he served as a Principal, Head of Healthcare Banking and as a biotechnology analyst covering Genentech, Chiron and others. Mr. Petkevich received his bachelor’s degree from Harvard University and his DPhil from the appropriate doseUniversity of Oxford. We believe that Mr. Petkevich’s industry, investment and dose ranges offinancial advisory experience provides him with the drug, have been obtained,qualifications and are intendedskills to gather the additional information about effectiveness and safety that is needed to evaluate the overall benefit-risk relationship of the drug and to provide an adequate basis for product labeling.
In the United States, specific research and preclinical data, chemical data and a proposed clinical study protocol, as described above, must be submitted to the FDA as part of an Investigational New Drug application, or IND, which, unless the FDA objects, will become effective 30 days following receipt by the FDA. Phase 1 trials may commence only after the IND application becomes effective. Following completion of Phase 1 trials, further submissions to regulatory authorities are necessary in relation to Phase 2 and 3 trials to update the existing IND. Authorities may require additional data before allowing the trials to commence and could demand discontinuation of studies at any time if there are significant safety issues. In addition to regulatory review, a clinical trial involving human subjects has to be approved by an independent body. The exact composition and responsibilities of this body differ from country to country. In the United States, for example, each clinical trial is conducted under the auspices of an Institutional Review Board for any institution at which the clinical trial is conducted. This board considers among other factors, the design of the clinical trial, ethical factors, the safety of the human subjects and the possible liability risk for the institution.
Information generated in this process is susceptible to varying interpretations that could delay, limit, or prevent regulatory approval at any stage of the approval process. Failure to demonstrate adequately the quality, safety and efficacy of a therapeutic drug under development would delay or prevent regulatory approval of the product.
In order to gain marketing approval, we must submit a new drug application, or NDA, for review by the FDA. The NDA must include a substantial amount of data and other information concerning safety and effectiveness of the drug compound from laboratory, animal and clinical testing, as well as data and informationserve on manufacturing, product stability, and proposed product labeling.
There can be no assurance that if clinical trials are completed that we or any future collaborative partners will submit an NDA or similar applications outside of the United States for required authorizations to manufacture or market potential products, or that any such applications will be reviewed or approved in a timely manner. Approval of an NDA, if granted at all, can take several months to several years, and the approval process can be affected by a number of factors. Additional studies or clinical trials may be requested during the review and may delay marketing approval and involve unbudgeted costs. Regulatory authorities may conduct inspections of relevant facilities and review manufacturing procedures, operating systems and personnel qualifications. In addition to obtaining approval for each product, in many cases each drug manufacturing facility must be approved. Further, inspections may occur over the life of the product. An inspection of the clinical investigation sites by a competent authority may be required as part of the regulatory approval procedure. As a condition of marketing approval, the regulatory agency may require post-marketing surveillance to monitor adverse effects, or other additional studies as deemed appropriate. After approval for the initial disease indication, further clinical studies are usually necessary to gain approval for additional indications. The terms of any approval, including labeling content, may be more restrictive than expected and could affect product marketability.our Board.
AVAILABLE INFORMATION
The internet address of our corporate website is http://www.cohbar.com.
We file annual reports, quarterly reports, current reports, proxy statements and other information with the Securities and Exchange Commission (the “SEC”) under the Securities Exchange Act of 1934, as amended. Our filings with the SEC, including any amendments to our filings, are available free of charge on the SEC’s website at www.sec.gov and on our website under the “Investors” tab as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
The contents of our corporate website are not incorporated into, or otherwise to be regarded as part of, this Annual Report on Form 10-K.
Item 1A. Risk Factors
Summary of Risk Factors
Investing in our common stock involves significant risks. You should carefully consider the risks and uncertainties described below, together with all of the other information in this Annual Report on Form 10-K, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited financial statements and related notes, and other filings we have made and make in the future with the Securities and Exchange Commission. If any of the following risks are realized, our business, financial condition, results of operations and prospects could be materially and adversely affected. In such case, the trading price of our common stock would likely decline, and you may lose all or part of your investment. Below is a summary of some of the risks we face:
We operate in an environment that involves a number of risks and uncertainties. The risks and uncertainties described in this Annual Report on Form 10-K are not the only risks and uncertainties that we face. Additional risks and uncertainties that presently are not considered material or are not known to us, and therefore are not mentioned herein, may impair our business operations. If any of the risks described in this Annual Report on Form 10-K actually occur, our business, operating results and financial position could be adversely affected.
Risks Related to Strategic Alternative Process and Potential Strategic Transaction
We may not be successful in identifying and implementing any strategic alternatives, including a potential merger, business combination, investment into the Company, asset sale or other strategic transaction, and any such strategic transaction that we may consummate in the future could have negative consequences.
On November 17, 2022, we announced our retention of Ladenburg Thalmann & Co. Inc. as a financial advisor to assist us in exploring strategic alternatives. Potential strategic alternatives that may be explored or evaluated as part of this process include a merger, business combination, investment into the Company, asset sale or other strategic transaction. Our board of directors has not set a timetable for the conclusion of this review, nor has it made any definitive decisions related to taking any further actions or potential strategic options at this time or at all.
The process of continuing to evaluate these strategic alternatives may be very costly, time-consuming and complex and we have incurred, and may in the future incur, significant costs related to this continued evaluation, such as legal and accounting fees and expenses and other related charges. We may also incur additional unanticipated expenses in connection with this process. A considerable portion of these costs will be incurred regardless of whether any such course of action is implemented or transaction is completed. Any such expenses will decrease the remaining cash available for use in our business.
Potential counterparties in a strategic transaction involving our Company may place minimal or no value on our assets. Further, the development and any potential commercialization of our product candidates will require substantial additional cash to fund the costs associated with conducting the necessary preclinical and clinical testing and obtaining regulatory approval. Consequently, any potential counterparty in a strategic transaction involving our Company may choose not to spend additional resources and continue to utilize the Company’s peptide library and technology platform and may attribute little or no value, in such a transaction, to those product assets.
There can be no assurance that any particular course of action, business arrangement or transaction, or series of transactions, will be pursued, successfully consummated, lead to increased stockholder value, or achieve the anticipated results. If we are unable to consummate a strategic transaction, our board of directors may decide to pursue a dissolution and liquidation.
If we are successful in completing a strategic alternative, we may be exposed to other operational and financial risks.
Although there can be no assurance thatDr. Stephanie Tozzo, Ph.D. joined our Board in September 2021. Dr. Tozzo is currently Chief Scientific Officer at Avilar Therapeutics, a strategic alternative will resultbiotechnology company creating a broad and diverse pipeline of extracellular protein degraders as first-in-class medicines for the treatment of serious diseases. As a leader in drug discovery, translational sciences and medicine, Dr. Tozzo has over 26 years of experience in leadership roles in biotech/startups and large pharma organizations. She has initiated and progressed discovery programs to the clinic by building and effectively leading teams in preclinical biology, chemistry, pharmacology, DMPK, safety and biomarker studies in various disease indications. Over the past 8 years, Dr. Tozzo served at Cellarity (a Flagship Pioneering company) as Senior Vice President, Drug Development and Head of R&D and as Senior Vice President, Translational Sciences at Mitobridge (acquired by Astellas), building teams and strong program pipelines, scientifically leading financing campaigns and pharma partnerships and supporting clinical teams through Phase 1 and clinical proof of concept studies. Earlier in her career, Dr. Tozzo held leading positions at Merck, Roche, BMS, Millennium, Chiron and ErgoScience. She received her Ph.D. in Molecular and Cellular Endocrinology from the process we have undertakenUniversity XI in Paris, France, completed her post-doctoral training in the Endocrine Division at Beth Israel/Harvard Medical School in Boston and has authored over 40 peer-reviewed publications and patents. We believe that Dr. Tozzo’s industry experience provide her with the qualifications and skills to identify and evaluate strategic alternatives, the negotiation and consummation of any such transaction will require significant time on the part of our management, and the diversion of management’s attention may disrupt our business.
The negotiation and consummation of any such transaction may also require more time or greater cash resources than we anticipate and expose us to other operational and financial risks, including:
Any of the foregoing risks could have a material adverse effectserve on our business, financial condition and prospects.
Our ability to consummate a strategic alternative depends on our ability to retain our employees required to consummate such transaction.
Our ability to consummate a strategic alternative depends upon our ability to retain our employees required to consummate such a transaction, the loss of whose services may adversely impact the ability to consummate such transaction. If we are unable to successfully retain these employees, we are at risk of a disruption to our exploration and consummation of a strategic alternative as well as business operations.Board.
We may become involvedDr. Joanne Yun, Ph.D. joined our Board in securities litigation that could divert management’s attentionSeptember 2021. Dr. Yun currently serves as a partner at Egon Zehnder International, a leadership advisory firm, and harmis currently a member of the Company’s business,firm’s Health Practice, where she leads their Research & Development segment. Prior to joining Egon Zehnder in June 2007, Dr. Yun served as a director in the Global Oncology Business Unit for Bayer HealthCare Pharmaceuticals from April 2001 to April 2007, with responsibility for oncology program management and insurance coverage may not be sufficient to cover all costsnew product planning. Dr. Yun started her career in February 1998 with Bayer AG and damages.
Incontinued there until March 2001 in various research management roles. Dr. Yun earned a bachelor’s degree in chemistry and French from Amherst College and a Ph.D. in chemistry from the past, securities litigation has often followed certain significant business transactions, such asMassachusetts Institute of Technology. She was a National Institutes of Health Postdoctoral Fellow at The Scripps Research Institute and is a member of the saleAmerican Society of a company or announcementClinical Oncology, the American Society of any other strategic transaction, or the announcement of negative events, such as negative results from clinical trials. We may be exposed to such litigation even if no wrongdoing occurred. Litigation is usually expensive and diverts management’s attention and resources, which could adversely affect our business and cash resources and our ability to consummate a potential strategic alternative or the ultimate value our stockholders receive in any such transaction.
If we decide to dissolve and liquidate our Company, the amount of cash that may be available for distribution to our stockholders is uncertain.
If our board of directors decides to pursue a dissolution and liquidation of our Company, the amount of cash that may be available for distribution to our stockholders is uncertain. This amount will depend on the resolution of our financial commitments and contingent liabilitiesHematology, and the timing ofAmerican Chemical Society. We believe that Dr. Yun’s industry experience and large network provide her with the decisionqualifications and skills to liquidate. Our financial commitments and contingent liabilities include: (i) personnel costs, including severance; (ii) contractual obligations to vendors and clinical study sites; and (iii) non-cancelable lease obligations.
Risks Related to Our Financial Position and Need for Additional Capital
We have had a history of losses and no revenue.
We have generated substantial accumulated losses sinceserve on our inception. We have not generated any revenues from our operations to date and do not expect to generate any revenue in the near future. As a result, our management expects the business to continue to experience negative cash flow for the foreseeable future. We can offer no assurance that we will ever operate profitably or that we will generate positive cash flow in the future.
Until we can generate significant revenues, if ever, we expect to satisfy our future cash needs through equity or debt financing or one or more strategic alternatives (as discussed above). We will need to raise additional funds, and such funds may not be available on commercially acceptable terms, if at all. If we are unable to raise funds on acceptable terms, we may not be able to execute our business plan, take advantage of future opportunities, or respond to competitive pressures or unanticipated requirements. This may seriously harm our business, financial condition and results of operations. In the event we are not able to continue operations, investors will likely suffer a complete loss of their investments in our securities.Board.
We are an early-stage biotechnology company and may never be able to successfully develop marketable products or generate any revenue. We have a limited relevant operating history upon which an evaluation of our performance and prospects can be made. There is no assurance that our future operations will result in profits. If we cannot generate sufficient revenues, we may suspend or cease operations.Family Relationships
We are an early-stage company. Our operations to date have been limited to organizing and staffing our Company, business planning, raising capital, identifying MDPs for further research, developing our intellectual property portfolio, performing research on identified MDPs and our novel analogs and progressing our most advanced drug candidate into and through clinical studies. We have not generatedNo family relationships exist among any revenues to date. All of our novel peptide analogs are in the concept, research or early clinical stages. We have not been able to identify suitable formulations for our CB4211 or CB5138-3 product candidates and there can be no assurances that we will be able to develop suitable formulations for any future product candidates. Moreover, we cannot be certain that any research and development efforts that we may undertake in the future will be successful or, if successful, that our novel peptide analogs will ever be approved by the FDA. We have no relevant operating history upon which an evaluation of our performance and prospects can be made. We are subject to all of the business risks associated withdirectors or executive officers. No arrangement or understanding exists between any director or executive officer and any other person pursuant to which any such director or executive officer was selected as a new enterprise, including, but not limited to, risksdirector or executive officer of unforeseen capital requirements, evaluating and implementing a strategic alternative (as discussed above), failure of potential drug candidates either in research, preclinical testing or in clinical trials, and failure to establish business relationships and competitive advantages against other companies. If we fail to become profitable, we may be forced to suspend or cease operations.CohBar, respectively.
If we fail to demonstrate efficacy or safety in any future researchCode of Ethics and clinical trials, our future business prospects, financial condition and operating results will be materially adversely affected.Business Conduct
The successBoard of any future researchDirectors encourages and development efforts will greatly dependpromotes a culture of ethical business conduct through communication and supervision as part of their overall stewardship responsibility. Our Board of Directors adopted a code of ethics and business conduct applicable to all of our employees, including our executive officers and directors, and those employees responsible for financial reporting. Our code of ethics and business conduct establishes procedures that allow our directors, officers and employees to confidentially submit their concerns regarding questionable ethical, moral, accounting or auditing matters, without fear of retaliation. The code of business conduct and ethics is available on our abilitywebsite at www.cohbar.com. We expect that, to demonstrate efficacythe extent required by law, any amendments to the code, or any waivers of our novel peptide analogs in non-clinical studies, as well as in clinical trials. Non-clinical studies involve testing potential drug candidates in appropriate non-human disease models to demonstrate efficacy and safety. Regulatory agencies evaluate these data carefully before theyits requirements, will approve clinical testing in humans. If certain non-clinical data reveals potential safety issues or the results are inconsistent with an expectation of the potential drug’s efficacy in humans, the program may be discontinued or the regulatory agencies may require additional testing before allowing human clinical trials. This additional testing will increase program expenses and extend timelines. We may decide to suspend further testingdisclosed on our potential drugs if, in the judgment of our management and advisors, the non-clinical test results do not support further development. For example, in December 2022, we announced that we had suspended further IND-enabling activities for our CB5138-3 product candidate due to challenges in identifying a suitable formulation for clinical development.
Moreover, success in future research, preclinical testing and early clinical trials does not ensure that later clinical trials will be successful, and we cannot be sure that the results of later clinical trials will replicate the results of prior clinical trials and non-clinical testing. Any future clinical trial process may fail to demonstrate that our potential drug candidates are safe for humans and effective for indicated uses. This failure would cause us to abandon a drug candidate and may delay development of other potential drug candidates. Any delay in, or termination of, future non-clinical testing or clinical trials will delay the filing of any future investigational new drug application and new drug application with the FDA or the equivalent applications with pharmaceutical regulatory authorities outside the United States and, ultimately, our ability to commercialize any potential drugs and generate product revenues. In addition, our Phase 1a/1b trial of CB4211, our most advanced drug candidate, involved, and we expect that any future early clinical trials that we may conduct will involve, small patient populations. Because of these small sample sizes, the results of these early clinical trials, including the topline data from our CB4211 Phase 1a/1b trial, may not be indicative of future results.
Risks Related to Discovery, Development and Commercialization
If any future clinical trials are delayed, suspended or terminated, we may be unable to develop future product candidates on a timely basis, which would adversely affect our ability to obtain regulatory approvals, increase our development costs and delay or prevent commercialization of any approved products.
We cannot predict whether we will encounter problems with our future clinical trials that will cause regulatory agencies, institutional review boards, or us to suspend or delay a trial. We have experienced delays in both our CB4211 and CB5138-3 programs. Our Phase 1a/1b clinical trial for CB4211 was suspended in November 2018 in order to address injection site reactions, and was delayed again in March 2020 due to impacts of the COVID-19 pandemic. Our planned IND filing for our CB5138-3 product candidate was delayed from the second half of 2022 to the second half of 2023 due to the observation of injection site reactions in our preclinical toxicology studies. Ultimately, our efforts to mitigate these injection site reactions by improving the formulation for this product candidate were unsuccessfulwebsite and in December 2022, we announced that we had suspended further IND-enabling activities for this peptide.
Clinical trials and clinical data collection protocols can be delayed for a variety of reasons, including:
In addition, a future clinical trial or development program may be suspended or terminated by us, institutional review boards, the FDA or other responsible bodies due to a number of factors, including:
If the results of our future clinical trials are not available when we expect or if we encounter any delay in the analysis of data from our future clinical trials, we may be unable to conduct additional clinical trials on the schedule we anticipate. Many of the factors that cause, or lead to, a delay in the commencement or completion of future clinical trials may also ultimately lead to the denial of regulatory approval of a future product candidate. Any delays in completing a clinical trial could increase our development costs, delay or prevent the availability of topline data expected to be available from the trial, delay product development and regulatory submission process or make it difficult to raise additional capital.
If we do not achieve any future projected development goals in the time frames we announce and expect, the commercialization of any such future products may be delayed and, as a result, our stock price may decline.
From time to time, we have estimated the timing of the anticipated accomplishment of various scientific, clinical, regulatory and other product development goals, which we sometimes refer to as milestones. These milestones may include the commencement or completion of scientific studies and clinical trials and the submission of regulatorymandatory filings. From time to time, we have publicly announced and may in the future publicly announce the expected timing of some of these milestones. All of these milestones have been and will be based on numerous assumptions, including timely performance by our CROs and other vendors, positive clinical and preclinical results, our ability to develop commercially viable formulations for our product candidates, and sufficient funding from partnering and general fundraising. The actual timing of these milestones have varied dramatically compared to our estimates, in some cases for reasons beyond our control. For example, we initially projected that we would have topline results from our 1a/1b clinical trial for CB4211 trial in early 2019. The trial was substantially delayed and we did not release topline results for this study until August of 2021. For our CB5138-3 product candidate, we initially projected that we would file an IND for this program in the second half of 2022. We later revised this estimate to the second half of 2023 and, in December 2022, we announced the suspension of IND-enabling activities for this program due to challenges in identifying a suitable formulation for clinical development. The delays in each of these programs resulted in declines in our stock price. If we fail to meet future milestones as publicly announced, or at all, our revenue may be lower than expected, the commercialization of our products may be delayed or never achieved and, as a result, our stock price may decline.
Our future success depends on key members of our management team.
We are highly dependent on our key management team, including our Chief Executive Officer and Chief Financial Officer who are employed “at will,” meaning they may terminate the employment relationship at any time. We do not maintain “key person” insurance for any of the key members of our team. We have in the past and may in the future continue to experience changes in our executive management team resulting from the departure of executives or subsequent hiring of new executives. The loss of the services of our Chief Executive Officer or Chief Financial Officer could impede our ongoing exploration of strategic alternatives, as discussed above.
We may seek to establish developmentAudit Committee and commercialization collaborations, and, if we are not able to establish them on commercially reasonable terms, we may have to alter our development and commercialization plans.Audit Committee Financial Expert
We have a separately-designated standing Audit Committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. Our potential future drug development programsAudit Committee currently consists of Misha Petkevich, Albion J. Fitzgerald and David Greenwood. Mr. Petkevich currently serves as the potential commercializationchairperson of our future drug candidates will require substantial additional cash to fund expenses. We may decide to collaborate with biopharmaceutical companies in connection with the development or commercialization of our potential future drug candidates.Audit Committee.
We face significant competition in seeking appropriate collaborators. Whether we reach a definitive collaboration agreement will depend, among other things, uponOur Board evaluated the independence and qualification of our assessmentcurrent directors to serve on our Audit Committee based on applicable rules of the collaborator’s resourcesSEC and expertise, the termsNasdaq Capital Market, and conditionsdetermined that Messrs. Petkevich, Fitzgerald and Greenwood are each independent as defined by the standards applicable to audit committee members. Our Board of Directors has also determined that each of the proposed collaborationcommittee members meets the requirements of financial literacy under SEC rules and the proposed collaborator’s evaluation of a number of factors. Those factors may include the expected efficacy, safety and tolerabilityrequirements of the subject product candidate,Nasdaq Capital Market, and that Mr. Petkevich meets the design or results of clinical trials, the likelihood of approval by the FDA or similar regulatory authorities outside the United States, the potential marketrequirements for the subject product candidate, the costs and complexities of manufacturing and delivering such product candidate to patients, the potential reimbursement rates for such product candidates, the potential of competing products, the strength of our data supporting the mechanism of action of the subject product candidate, the existence of uncertainty with respect to our ownership of technology, which can exist if there is a challenge to such ownership without regard to the merits of the challenge, and industry and market conditions generally. The collaborator may also consider alternative product candidates or technologies for similar disease indications on which to collaborate, and whether such alternative collaboration project could be more attractive than one with us for our product candidate.designation as an “audit committee financial expert,” as defined under SEC rules.
Item 11. Executive Compensation
There are a limited number of large biopharmaceutical companies with whom we could potentially collaborate, and collaborations are complex and time-consuming to negotiate and document. We may not be able to negotiate collaborations on a timely basis, on acceptable termsOur named executive officers, or at all. If we are unable to do so, we may have to curtail the development of the product candidateNEOs, for 2022, which we are seeking to collaborate, reduce or delay its development program or one or moreconsist of our other development programs, delay its potential commercialization or reduce the scope of any sales or marketing activities, or increase our expendituresprincipal executive officer, principal financial officer and undertake development or commercialization activities at our own expense. If we elect to increase our expenditures to fund future development or commercialization activities on our own, we may need to obtain additional capital, which may not be available to us on acceptable terms or at all. If we do not have sufficient funds, we may not be able to further develop future product candidates or bring them to market and generate product revenue.
We may not be successful in our efforts to identify or discover potential drug development candidates.
A key element of our strategy has been to identify and test MDPs and novel analogs that play a role in cellular processes underlying our targeted disease indications. Our drug discovery efforts may not be successful in identifying novel peptide analogs that are useful in treating disease. Our research programs may initially show promise in identifying potential drug development candidates, yet fail to yield candidates for preclinical and clinical development. For example, in December 2022, we announced that we had suspended further IND-enabling activities for our CB5138-3 product candidate due to challenges in identifying a suitable formulation for clinical development. Similarly, we have not been able to identify a formulation for CB4211 that would be suitable to move it forward to the next stage of clinical development. There are a number of reasons why any future research efforts may not yield appropriate development candidates, including:former scientific officer, are:
● | Dr. Joseph J. Sarret, our President and Chief Executive Officer; | |
● | Jeffrey F. Biunno, our Chief Financial Officer, Treasurer and Secretary; and | |
● | Kenneth Cundy, our former Chief Scientific Officer. |
SUMMARY COMPENSATION TABLE
The following table summarizes the compensation earned by, awarded to or paid to our named executive officers in the years ended December 31, 2022 and 2021:
Name and Principal Position | Fiscal Year | Salary ($) | Bonus ($) | Option | All Other Compensation ($) | Total ($) | ||||||||||||||||||
Dr. Joseph J. Sarret(1)(2) | 2022 | 459,000 | 114,750 | — | 9,150 | 582,900 | ||||||||||||||||||
Chief Executive Officer | 2021 | 294,231 | 150,000 | 2,768,350 | (5) | 1,558 | 3,214,138 | |||||||||||||||||
Jeffrey F. Biunno(2) | 2022 | 345,000 | 72,450 | — | 9,150 | 426,600 | ||||||||||||||||||
Chief Financial Officer | 2021 | 291,500 | 87,450 | 435,750 | 8,700 | 823,400 | ||||||||||||||||||
Kenneth C. Cundy(4) | 2022 | 103,205 | — | — | 198,611 | 301,816 | ||||||||||||||||||
Former Chief Scientific Officer | 2021 | 350,000 | 105,000 | 208,200 | 8,700 | 695,502 |
(1) | Dr. Sarret was appointed as our Chief Executive Officer effective May 3, 2021. |
(2) | All Other Compensation in 2022 and 2021 includes 401(k) contributions paid by us. |
(3) | Option Awards granted in 2021 reflect the |
(4) | Dr. Cundy resigned as our Chief Scientific Officer effective March 31, 2022. All Other Compensation in 2022 includes (i) 175,000 of severance paid over a six-month period from Dr. Cundy’s resignation; (ii) $17,365 of COBRA premiums paid; and (iii) $6,246 of 401K Contributions paid by us. |
(5) | For the performance-based stock option awards, we computed the grant date fair value of the performance-based stock option awards based on the achievement of the performance-based stock option awards’ performance conditions at 100% of target. The aggregate grant date fair value for the performance-based stock option awards granted to Dr. Sarret is $124,150. |
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth certain information regarding outstanding stock options held by our NEOs as of December 31, 2022.
Option Awards | ||||||||||||||||||||||
Name | Grant Date(1) | Number of Securities Underlying Unexercised Options | Option Exercise Price ($) | Option Expiration Date | ||||||||||||||||||
Exercisable (#) | Unexercisable (#) | Unearned (#) | ||||||||||||||||||||
Joseph J. Sarret | 05/03/2021(2) | 55,973 | 52,362 | -- | 40.50 | 05/02/2031 | ||||||||||||||||
Jeffrey F. Biunno | 04/09/2014 | 10,480 | -- | -- | 7.80 | 04/09/2024 | ||||||||||||||||
01/29/2017 | 834 | -- | -- | 72.00 | 01/29/2027 | |||||||||||||||||
03/25/2018 | 4,167 | -- | -- | 159.00 | 03/25/2028 | |||||||||||||||||
04/26/2021(3) | 9,723 | 3,612 | -- | 41.40 | 04/26/2031 | |||||||||||||||||
12/29/2021(4) | 625 | 1,875 | -- | 10.20 | 12/29/2031 | |||||||||||||||||
Kenneth C. Cundy | 11/20/2014 | 25,000 | -- | -- | 21.90 | 3/31/2023 | ||||||||||||||||
01/29/2017 | 16,667 | -- | -- | 72.00 | 3/31/2023 | |||||||||||||||||
04/26/2021 | 3,612 | -- | -- | 41.40 | 3/31/2023 |
(1) |
(2) |
(3) | Options vest in 48 equal monthly installments beginning January 1, 2020. |
(4) | Options vest in 48 equal monthly installments beginning December 29, 2021. |
We have not been successful to date in our efforts to develop commercially viable formulations for our product candidates.Employment Agreements
Our product candidates are comprisedJoseph J. Sarret. We entered into an Executive Employment Agreement with Dr. Sarret, effective May 3, 2021, which sets forth conditions of novel peptide analogs. We expect thatDr. Sarret’s employment as our product candidates will needChief Executive Officer. Dr. Sarret also executed the Company’s standard form of Proprietary Information and Inventions Assignment Agreement. Dr. Sarret’s Executive Employment Agreement entitles him to be delivered via subcutaneous injectionan initial base salary of $450,000 annually, and may cause local injection site reactions (“ISRs”), whichhe is eligible to receive an annual bonus of fifty percent of his annual salary, payable at the discretion of the Board of Directors upon achievement of performance targets established by the Board of Directors from time to time. In addition, and as an inducement for Dr. Sarret to become our Chief Executive Officer, Dr. Sarret was granted a common finding in peptide therapeutic product candidates. While not necessarily adversestock option to patients’ health, ISRs could substantially limit the commercial appealpurchase 86,667 shares of our product candidates,common stock, which will become vested and we may decide or be requiredexercisable in installments with respect to perform additional preclinical studies ortwenty-five percent of the shares on the one-year anniversary of the vesting commencement date and in thirty-six equal monthly installments thereafter, subject to halt or delay further clinical developmentDr. Sarret’s continued service to our Company on each applicable vesting date. Likewise, Dr. Sarret was granted a stock option to purchase 43,334 shares of our product candidates. To date, we have not been ablecommon stock, which was subject to identify suitable formulationsvesting over two years based on the achievement of certain performance criteria determined by the Board (the “Performance Option”). In December 2021, the Compensation Committee of the Board determined that Dr. Sarret had met the performance criteria as to 50% of the Performance Option, which portion vested immediately. In December 2022, Dr. Sarret provided the Company with notice that he had forfeited his right to the remaining 50% of the Performance Option. In January 2022, Dr. Sarret’s base salary was increased to $459,000. The details of Dr. Sarret’s compensation for our CB4211 or CB5138-3 product candidates. It is possible that other product candidates that we may identify will also resultthe years ended December 31, 2022 and 2021 are included above in ISRs. Our approach to address these ISRs is to develop novel formulations that decrease or eliminate these reactions. If we are unable to successfully develop such formulations, we may decide to abandon those drug candidates as we have done with CB5138-3. Any efforts to identify alternate drug candidates that do not cause ISRs would take additional time and expense and may not be successful.
Our future research and development plans will require substantial additional funding which could impact our operational and financial condition. Without the required additional funds, we will likely cease operations.Summary Compensation Table.
It will take several years before we are ableThe Executive Employment Agreement entitles Dr. Sarret to develop potentially marketable products, if at all. Our future research and development plans will require substantial additional capital to:
Our future operating and capital needs will depend on many factors, including:
We base our outlook regarding the need for funds on many uncertain variables. Such uncertainties include the initiation and success of any future research and development initiatives, regulatory approvals, the timing of events outside our direct control such as negotiations with potential strategic partners, and other factors. Any of these uncertain events can significantly change our cash requirements as they determine such one-time events as the receipt or payment of major milestones and other payments.
Additional funds will be required to support our operations, and if we are unable to obtain them on favorable terms or at all, we may be required to cease or reduce future research and development of our drug product programs, sell or abandon some or all of our intellectual property, merge with another entity or cease operations.
Even if we are able to develop future potential drug candidates, we may not be able to obtain regulatory approval, or if approved, we may not be able to generate significant revenues or successfully commercialize our products, which will adversely affect our financial results and financial condition, and we will have to delay or terminate some or all of our research and development plans, which may force us to cease operations.
All of our future potential drug candidates will require extensive additional research and development, including preclinical testing and clinical trials, as well as regulatory approvals, before we can market them. We cannot predict if or when any future potential drug candidate will be approved for marketing. There are many reasons that we may fail in our efforts to develop our future potential drug candidates. These include:
If we fail to develop future potential drug candidates, our financial results and financial condition will be adversely affected, we will have to delay or terminate some or all of our research and development plans and may be forced to cease operations.
Risks Related to Our Reliance on Third Parties
If we do not maintain the support of qualified scientific collaborators, our revenue, growth and profitability will likely be limited, which would have a material adverse effect on our business.
We will need to maintain our existing relationships with leading scientists and/or establish new relationships with scientific collaborators. We believe that such relationships are pivotal to establishing products using our technologies as a standard of care for various disease indications. There is no assurance that our founders, scientific advisors or research partners will continue to work with us or that we will be able to attract additional research partners. If we are not able to establish scientific relationships to assist in future research and development, we may not be able to successfully develop potential drug candidates in the future. If this happens, our business will be adversely affected.
We expect to rely on third parties to conduct any future clinical trials and some aspects of any future research and preclinical testing. These third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials, research or preclinical testing.
We expect to rely on third parties to conduct some aspects of our future research and expect to rely on third parties to conduct additional aspects of our future research and preclinical testing, as well as any future clinical trials. Any of these third parties may terminate their engagements with us at any time. If we need to enter into alternative arrangements, it would delay our future product research and development activities.
Our reliance on these third parties for future research and development activities will reduce our control over these activities but will not relieve us of our responsibilities. For example, we will remain responsible for ensuring that each of our clinical trials is conducted in accordance with the general investigational plan and protocols for the trial. Moreover, the FDA requires us to comply with standards, commonly referred to as Good Clinical Practices, for conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of trial participants are protected. We also are required to register ongoing clinical trials and post the results of completed clinical trials on a government-sponsored database, ClinicalTrials.gov, within certain timeframes. Failure to do so can result in fines, adverse publicity and civil and criminal sanctions.
Furthermore, these third parties may also have relationships with other entities, some of which may be our competitors. If these third parties do not successfully carry out their contractual duties, meet expected deadlines or conduct our clinical trials in accordance with regulatory requirements or our stated protocols, we will not be able to obtain, or may be delayed in obtaining, marketing approvals for our future drug candidates and will not be able to, or may be delayed in our efforts to, successfully commercialize our medicines. For example, we experienced delays in receiving the data from our third-party CRO conducting our CB4211 Phase 1b study, which delayed our analysis and release of topline data.
We expect to rely on other third parties to store and distribute drug supplies for our future clinical trials. Any performance failure on the part of our distributors could delay clinical development or marketing approval of our future drug candidates or commercialization of any future products, producing additional losses and depriving us of potential product revenue.
Risks Related to Product Development and Regulatory Approval
Even if we are successful in developing future drug candidates, we may not be able to market or generate sales of such future products to the extent anticipated. Our business may fail, and investors could lose all of their investment in our Company.
Assuming that we are successful in developing any future potential drug candidates and receiving regulatory clearances to market our potential products, our ability to successfully penetrate the market and generate sales of such future products may be limited by a number of factors, including the following:
If any of these occur, our business could be adversely affected.
Interim and preliminary or topline data from our future clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.
From time to time, we may publish interim topline or preliminary data from our future clinical trials. Interim data from future clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available. Preliminary or topline data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary or topline data we previously published. As a result, interim and preliminary data should be viewed with caution until the final data are available. Adverse differences between interim or preliminary or topline data and final data could significantly harm our reputation and business prospects.
Any future product candidate we are able to develop and commercialize would compete in the marketplace with existing therapies and new therapies that may become available in the future. These competitive therapies may be more effective, safer, better tolerated, less costly, more easily administered or offer other advantages over any product we seek to market.
There are numerous therapies currently marketed to treat IPF, diabetes, cancer, and other diseases for which our future potential product candidates may be indicated. These therapies are varied in their design, therapeutic application and mechanism of action and may provide significant competition for any of our future product candidates for which we obtain market approval. New products may also become available that provide efficacy, safety, tolerability, convenienceseverance payments and other benefits that are not providedif his employment is terminated by currently marketed therapies. Asus without “cause,” or upon his resignation for “good reason,” each as defined in the Executive Employment Agreement. Upon any such termination of Dr. Sarret’s employment, he would be entitled to receive a result, they may provide significant competitionseverance payment equal to one-hundred percent of his base salary, a prorated amount of his target bonus for the then-current fiscal year, and reimbursement for COBRA coverage elected by Dr. Sarret for himself and the members of his immediate family through the earlier of (i) one year following the termination and (ii) the date Dr. Sarret and the members of his immediate family become eligible for coverage under another employer’s plans. If Dr. Sarret’s termination without “cause” or resignation for “good reason” occurs within twelve months following a change in control of the Company, then he would be entitled to receive a severance payment equal to one-hundred percent of his then current base salary plus one-hundred percent of his target bonus for the then-current fiscal year, reimbursement for any COBRA coverage elected by Dr. Sarret for himself and his covered dependents through the earlier of our future product candidates(i) twelve months following such termination and (ii) the date Dr. Sarret and his covered dependents become eligible for which we obtain market approval. Our commercial opportunity couldcoverage under another employer’s plans, and one-hundred percent vesting acceleration of then-unvested and outstanding equity awards, provided that the vesting acceleration of any then-unvested and outstanding performance-based equity awards shall be reduced or eliminated if our competitors develop and commercialize products that are safer, better tolerated, more effective, have fewer or less severe side effects, are more conveniently administered (i.e., are administered via methods other than subcutaneous injection) or stored or are less expensive than any products that we may develop. Our competitors also may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for ours, which could resultdeemed achieved at “target” unless provided otherwise in our competitors establishing a strong market position before we are able to enter the market. In addition, our ability to compete may be affected in many cases by insurers’ or other third-party payers’ reimbursement polices seeking to encourage the use of existing products that are generic or are otherwise less expensive to provide.applicable award agreement.
Jeffrey F. Biunno. We entered into an Executive Employment Agreement with Mr. Biunno, dated November 27, 2013, which, as amended on July 11, 2016, sets forth certain conditions of Mr. Biunno’s at-will employment with the Company. Mr. Biunno also executed the Company’s standard form of Proprietary Information and Inventions Assignment Agreement. The useExecutive Employment Agreement includes his initial base salary, discretionary annual incentive bonus opportunity, certain initial equity incentive awards and standard employee benefit plan participation. The details of any of our future products in clinical trials,Mr. Biunno’s compensation for the years ended December 31, 2022 and the results of those trials, may expose us to liability claims, which may cost us significant amounts of money to defend against or pay out, causing our business to suffer.
The nature of our business exposes us to potential liability risks inherent2021 are included above in the testing, manufacturingSummary Compensation Table. In January 2022, Mr. Biunno’s base salary was increased to $345,000 per annum and marketingMr. Biunno’s target bonus was increased to thirty-five percent of our potential products. If any of our future drug candidates are used in clinical trials, or if any of our future drug candidates become marketed products, they could potentially harm people or allegedly harm people, possibly subjecting us to costly and damaging product liability claims. Some of the patients who participate in clinical trials are already ill when they enter a trial or may intentionally or unintentionally fail to meet the exclusion criteria. The waivers we obtain may not be enforceable and may not protect us from liability or the costs of product liability litigation. Although we obtained product liability insurance, which we believe is adequate, we are subject to the risk that our insurance will not be sufficient to cover claims. We anticipate that we will need to increase our insurance coverage if we successfully commercialize any product candidate. The insurance costs along with the defense or payment of liabilities above the amount of coverage could cost us significant amounts of money and management distraction from other elements of the business, decrease demand for any product candidates that we may develop, injure our reputation and attract significant negative media attention, and lead to the withdrawal of clinical trial participants, causing our business to suffer. We may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise.his base salary.
Compliance with lawsThe Executive Employment Agreement entitles Mr. Biunno to certain severance payments and regulations pertainingother benefits if his employment is terminated by us without “cause,” or upon his resignation for “good reason,” each as defined in the Executive Employment Agreement. Upon any such termination of Mr. Biunno’s employment, he would be entitled to the privacya severance payment in an aggregate gross amount equal to fifty percent of his then current base salary, and security of health information may be time consuming, difficult and costly, particularly in light of increased focus on privacy issues in countries around the world, including the United Statesreimbursement for any COBRA coverage elected by Mr. Biunno for himself and the EU.
We are subject to various domestic and international privacy and security regulations. The confidentiality, collection, use and disclosuremembers of personal data, including clinical trial patient-specific information, are subject to governmental regulation generally in the country that the personal data were collected or used. In the United States, we are subject, or expect to be subject, to various state and federal privacy and data security regulations, including but not limited to the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), as amended by the Health Information Technology for Economic and Clinical Health Act of 2009. HIPAA mandates, among other things, the adoption of uniform standards for the electronic exchange of information in common health care transactions, as well as standards relating to the privacy and security of individually identifiable health information, which require the adoption of administrative, physical and technical safeguards to protect such information. In the EU, personal data includes any information that relates to an identified or identifiable natural person with health information carrying additional obligations, including obtaining the explicit consent from the individual for collection, use or disclosure of the information. In addition, the protection of and cross-border transfers of such data out of the EU has become more stringent with the EU’s General Data Protection Regulation which came into effect in May 2018. Furthermore, the legislative and regulatory landscape for privacy and data protection continues to evolve, and there has been an increasing amount of focus on privacy and data protection issues. The United States and the EU and its member states continue to issue new privacy and data protection rules and regulations that relate to personal data and health information. Compliance with these laws may be time consuming, difficult and costly. If we fail to comply with applicable laws, regulations or duties relating to the use, privacy or security of personal data, we could be subject to the imposition of significant civil and criminal penalties, be forced to alter our business practices and suffer reputational harm.
We may not be able to obtain agreement with regulatory authorities regarding an acceptable development plan for our future product candidates, the outcome of our future clinical trials may not be favorable or, even if favorable, regulatory authorities may not find the results of our future clinical trials to be sufficient for marketing approval.
In the United States, the FDA generally requires two adequate and well-controlled pivotal clinical trials to approve a new drug application (“NDA”). Furthermore, for full approval of an NDA, the FDA requires a demonstration of efficacy based on a clinical benefit endpoint. The FDA may grant accelerated approval based on a surrogate endpoint reasonably likely to predict clinical benefit. Even if any future pivotal clinical trialshis immediate family for a specific indication were to achieve their primary endpointsperiod of six months following such termination. Additionally, any options that would have vested during the twelve-month period immediately following his termination date would vest and may be reasonably believed by us to be likely to predict clinical benefit, the FDA may not accept the results of such trials or approve our future product candidates on an accelerated basis, or at all. It is also possible that the FDA may refuse to accept for filing and review any regulatory application we submit for regulatory approval in the United States. Even if our regulatory application is accepted for review, there may be delays in the FDA’s review process and the FDA may determine that such regulatory application does not contain adequate clinical or other data or support the approval of our future product candidate. In such a case, the FDA may issue a complete response letter that may require that we conduct and/or complete additional clinical trials and preclinical studies or provide additional information or data before it will reconsider an application for approval. Any such requirements may be substantial, expensive and time-consuming, and there is no guarantee that we will continue to pursue such application or that the FDA will ultimately decide that any such application supports the approval of our future product candidate. Furthermore, the FDA may also refer any regulatory application to an advisory committee for review and recommendation as to whether, and under what conditions, the application should be approved. While the FDA is not bound by the recommendation of an advisory committee, it considers such recommendations carefully when making decisions. Delay or failure to obtain, or unexpected costs in obtaining, the regulatory approval necessary to bring a potential product to market could decrease our ability to generate sufficient revenue to maintain our business.become exercisable immediately.
Kenneth C. Cundy. We entered into an Executive Employment Agreement with Dr. Cundy, dated November 17, 2014, which set forth certain conditions of Dr. Cundy’s at-will employment with the Company as the Company’s Chief Scientific Officer. Dr. Cundy also executed the Company’s standard form of Proprietary Information and Inventions Assignment Agreement. The regulatory approval processExecutive Employment Agreement included his initial base salary, discretionary annual incentive bonus opportunity, certain initial equity incentive awards and standard employee benefit plan participation. The details of Dr. Cundy’s compensation for the years ended December 31, 2022 and 2021 are included above in the Summary Compensation Table.
The Executive Employment Agreement entitled Dr. Cundy to certain severance payments and other benefits if his employment was terminated by us without “cause,” or upon his resignation for “good reason,” each as defined in the Executive Employment Agreement. Dr. Cundy’s employment ended on March 31, 2022. Prior to his final day of employment and in consideration of his transitional services, Dr. Cundy continued to receive his regular base salary. Upon the termination of Dr. Cundy’s employment, in exchange for a release and waiver of claims and in lieu of the severance payments and benefits set forth in his Executive Employment Agreement, he received (i) severance payments paid in consecutive installments totaling $175,000, which is lengthy, expensiveequal to six months of his base salary, (ii) payment for six months of COBRA premiums, paid in consecutive installments by the Company, for Dr. Cundy and uncertain,his eligible dependents, (iii) acceleration of Dr. Cundy’s stock option, granted on April 26, 2021 as if Dr. Cundy had remained in service for an additional twelve months and we may be unable(iv) an extension of the exercise period of Dr. Cundy’s outstanding options to obtain regulatory approval for our future product candidates under applicable regulatory requirements. The denial or delaya period of any such approval would delay commercializationtwelve months following his final date of our future product candidatesemployment.
Perquisites and adversely impact our ability to generate revenue, our business and our results of operations.Other Benefits
The development, research, testing, manufacturing, labeling, approval, selling, import, export, marketing, promotionHistorically, we have not provided significant perquisites or other personal benefits to our executive officers. Our executive officers are eligible to participate in our medical, dental, vision, 401(k), life, and distribution of drug products aredisability plans and programs on substantially the same terms as eligible non-executive employees, subject to extensive and evolving regulation by federal, state and local governmental authorities inlegal limits on the United States, principally the FDA, and by foreign regulatory authorities, which regulations differ from countryamounts that may be contributed or paid to country. Neither we nor any future collaborator is permittedexecutive officers under these plans. We do not have a pension plan that provides for payments to market any of our product candidatesexecutives at, following, or in connection with retirement and do not plan to establish one in the United States untilnear future. In 2022, the Company made safe harbor contributions to our executive officers’ 401(k) accounts. We may provide perquisites or other personal benefits in limited circumstances, such as where we receive regulatory approvalbelieve it is appropriate to assist an individual executive officer in the performance of an NDA from the FDA.
Obtaining regulatory approval of an NDA canhis or her duties, to make our executive officers more efficient and effective, and for recruitment, motivation or retention purposes. We do not expect that these perquisites or other personal benefits will be a lengthy, expensive and uncertain process. Priorsignificant aspect of our executive compensation program. All future practices with respect to obtaining approval to commercialize our future product candidate in the United States or abroad, we or our collaborators must demonstrate with substantial evidence from well-controlled clinical trials, and to the satisfaction of the FDAperquisites or other foreign regulatory authorities, that such product candidates are safe and effective for their intended uses. The number of nonclinical studies and clinical trials thatpersonal benefits will be required for regulatory approval varies depending on the product candidate, the disease or condition that the product candidate is designedapproved and subject to address, and the regulations applicable to any particular product candidate.
Results from nonclinical studies and clinical trials can be interpreted in different ways. Even if we believe the nonclinical or clinical data for our future product candidates are promising, such data may not be sufficient to support approvalperiodic review by the FDA and other regulatory authorities. Administering product candidates to humans may produce undesirable side effects, which could interrupt, delay or halt clinical trials and result in the FDA or other regulatory authorities denying approval of a product candidate for any or all indications. The FDA may also require us to conduct additional studies or trials for our product candidates either prior to or post-approval, such as additional clinical pharmacology studies or safety or efficacy studies or trials, or it may object to elements of our clinical development program such as the primary endpoints or the number of subjects in our clinical trials.Compensation Committee.
The FDA or any foreign regulatory bodies can delay, limit or deny approval of our product candidates or require us to conduct additional nonclinical or clinical testing or abandon a program for many reasons, including:Director Compensation
Of the large number of drugs in development, only a small percentage successfully complete the FDA or other regulatory approval processes and are commercialized. The lengthy development and approval process as well as the unpredictability of future clinical trial results may result in our failing to obtain regulatory approval to market our future product candidates, which would significantly harm our business, financial condition, results of operations and prospects.
Any future product candidate for which we obtain marketing approval will be subject to extensive post-marketing regulatory requirements and could be subject to post-marketing restrictions or withdrawal from the market, and we may be subject to penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with our future product candidates, when and if any of them are approved.Director Compensation Policy
Our future product candidatesBeginning October 1, 2022, all non-employee directors received annual cash retainers of $40,000, except for Mr. Greenwood, the Chairman of the Board, who received an annual cash retainer of $70,000. In addition, each member of the Audit, Compensation and Governance and Nominating Committees received an annual cash retainer in the activities associatedamount of $7,500, $5,000 and $4,000, respectively. Prior to October 1, 2022, all non-employee directors received annual cash retainers of $60,000, except for Mr. Greenwood, the Chairman of the Board, who received an annual cash retainer of $180,000. In addition, each member of the Audit, Compensation and Governance and Nominating Committees received an annual cash retainer in the amount of $5,000, $3,000 and $1,500, respectively.
In connection with their development and potential commercialization, including their testing, manufacturing, recordkeeping, labeling, storage, approval, advertising, promotion, sale and distribution, areher appointment to the Board, Ms. Tozzo received an award of options to purchase 6,667 shares of the Company’s common stock, subject to comprehensive regulation byvesting over a four-year period. This is consistent with the FDA and other U.S. and international regulatory authorities. These requirements include submissionsCompany’s current general practice to provide newly appointed directors with a stock option award to purchase up to 6,667 shares of safety and other post-marketing information and reports, registration and listing requirements, requirements relatingcommon stock, which vests monthly over a four-year period.
All directors are entitled to manufacturing, including current cGMP, quality control, quality assurance and corresponding maintenancereimbursement of records and documents, including periodic inspections by the FDA and other regulatory authorities and requirements regarding the distributionordinary expenses incurred in connection with attendance at meetings of samples to providers and recordkeeping.our Board.
2022 Director Compensation
The FDA may also impose requirements for costly post-marketing studies or clinical trials and surveillance to monitor the safety or efficacy of any approved product. The FDA closely regulates the post-approval marketing and promotion of drugs and biologics to ensure drugs and biologics are marketed onlyfollowing table sets forth information for the approved disease indicationsyear ended December 31, 2022 regarding the compensation awarded to, earned by or paid to our non-employee directors. Dr. Sarret, our current CEO and director, is not included in accordance with the provisions oftable below, as he was an employee and received no compensation for his service as a director. The compensation received by Dr. Sarret as an employee is shown in the approved labeling. The FDA imposes stringent restrictions on manufacturers’ communications regarding use of their products. If we promote our future product candidates in a manner inconsistent with FDA-approved labeling or otherwise not in compliance with FDA regulations, we may be subject to enforcement action. Violations of the Food, Drug, and Cosmetic Act relating to the promotion of prescription drugs may lead to investigations alleging violations of federal and state healthcare fraud and abuse laws, as well as state consumer protection laws and similar laws in international jurisdictions.“Executive Compensation—Summary Compensation Table” above.
In addition, later discovery of previously unknown adverse events or other problems with our future product candidates, manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may yield various results, including:
Name | Total Fees Paid in Cash($) | Grant Date Fair Value of Stock Option | Total Fees from Awards or Paid in Cash($) | |||||||||
David Greenwood | 171,875 | -- | 171,875 | |||||||||
Albion J. Fitzgerald | 66,250 | -- | 66,250 | |||||||||
Phyllis Gardner (1) | 32,000 | -- | 32,000 | |||||||||
Carol Nast | 65,750 | -- | 65,750 | |||||||||
Misha Petkevich | 73,500 | -- | 73,500 | |||||||||
Stephanie Tozzo | 27,137 | 30,400 | 57,537 | |||||||||
Joanne Yun | 58,125 | -- | 58,125 |
(1) |
Non-compliance with European requirements regarding safety monitoring or pharmacovigilance, and with requirements related to the development of products for the pediatric population, can also result in significant financial penalties. Similarly, failure to comply with the EU’s requirements regarding the protection of personal information can also lead to significant penalties and sanctions.
The patent positions of biopharmaceutical products are complex and uncertain, and we may not be able to protect our patented or other intellectual property. If we cannot protect this property, we may be prevented from using it, or our competitors may use it, and our business could suffer significant harm. Also, the time and money we spend on acquiring and enforcing patents and other intellectual property will reduce the time and money we have available for our business.Outstanding Equity Awards
We own or exclusively license patents and patent applications related toThe following table sets forth certain information regarding outstanding stock options held by our MDPs and potential drug candidates compriseddirectors (excluding our NEOs) as of novel analogs. However, neither patents nor patent applications ensure the protection of our intellectual property for a number of reasons, including the following:December 31, 2022.
Name | Outstanding(1) | Vested(1) | ||||||
David Greenwood | 23,334 | 13,056 | ||||||
Albion Fitzgerald | 25,000 | 21,112 | ||||||
Carol Nast | 6,667 | 2,292 | ||||||
Misha Petkevich | 13,334 | 8,056 | ||||||
Stephanie Tozzo | 6,667 | 695 | ||||||
Joanne Yun | 6,667 | 2,153 | ||||||
Phyllis Gardner | -- | -- |
(1) |
It is also unclear whether our trade secrets are adequately protected. While we use reasonable efforts to protect our trade secrets, our employees or consultants may unintentionally or willfully disclose our information to competitors. Enforcing a claim that someone illegally obtained and is using our trade secrets is expensive and time consuming, and the outcome is unpredictable. In addition, courts outside the United States are sometimes less willing to protect trade secrets. Our competitors may independently develop equivalent knowledge, methods and know-how. We may also support and collaborate in research conducted by government organizations, hospitals, universities or other educational institutions. These research partners may be unable or unwilling to grant us exclusive rights to technology or products derived from these collaborations prior to entering into the relationship.
If we do not obtain required intellectual property rights, we could encounter delays in any future drug development efforts while we attempt to design around other patents or even be prohibited from developing, manufacturing or selling potential drug candidates requiring these rights or licenses. There is also a risk that disputes may arise as to the rights to technology or potential drug candidates developed in collaboration with other parties.
General Risk Factors
If we fail to establish and maintain proper and effective internal control over financial reporting in the future, our ability to produce accurate and timely financial statements could be impaired, which could harm our operating results, investors’ views of us and, as a result, the value of our common stock.
The Sarbanes-Oxley Act requires, among other things, that we maintain effective internal controls for financial reporting and disclosure controls and procedures and that we furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting. This assessment needs to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting that results in more than a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected on a timely basis. Section 404 of the Sarbanes-Oxley Act also generally requires an attestation from our independent registered public accounting firm on the effectiveness of our internal control over financial reporting. However, for as long as we are not an accelerated filer or large accelerated filer, we intend to take advantage of the exemption permitting us not to comply with the independent registered public accounting firm attestation requirement.
Our compliance with Section 404 will require us to document and evaluate our internal control over financial reporting, which is both costly and challenging. In this regard, we will need to continue to dedicate internal resources, potentially engage outside consultants and adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue taking steps to improve control processes as appropriate, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting. Despite our efforts, there is a risk that we will not be able to conclude that our internal control over financial reporting is effective as required by Section 404. If we identify one or more material weaknesses, it could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements. In addition, if we are not able to continue to meet these requirements, we may not be able to remain listed on The Nasdaq Capital Market (“Nasdaq”). If material weaknesses or deficiencies in our internal controls exist and go undetected or unremedied, our financial statements could contain material misstatements that, when discovered in the future, could cause us to fail to meet our future reporting obligations and cause the price of our common stock to decline.
Significant disruptions of information technology systems or security breaches could adversely affect our business.
We are increasingly dependent upon information technology systems, infrastructure and data to operate our business. In the ordinary course of business, we collect, store and transmit large amounts of confidential information (including, among other things, trade secrets or other intellectual property, proprietary business information and personal information). It is critical that we do so in a secure manner to maintain the confidentiality and integrity of such confidential information. We also have outsourced elements of our operations to third parties, and as a result we have managed, and may in the future continue to manage, a number of third-party vendors who may or could have access to our confidential information. Attacks on information technology systems are increasing in their frequency, levels of persistence, sophistication and intensity, and they are being conducted by increasingly sophisticated and organized groups and individuals with a wide range of motives and expertise. The size and complexity of our information technology systems, and those of third-party vendors with whom we contract, and the large amounts of confidential information potentially stored on those systems, make such systems vulnerable to service interruptions or to security breaches from inadvertent or intentional actions by our employees, third-party vendors, and/or business partners, or from cyber-attacks by malicious third parties. Cyber-attacks could include the deployment of harmful malware, ransomware, denial-of-service attacks, social engineering and other means to affect service reliability and threaten the confidentiality, integrity and availability of information.
Significant disruptions of our information technology systems, or those of our third-party vendors, or security breaches could adversely affect our business operations and/or result in the loss, misappropriation and/or unauthorized access, use or disclosure of, or the prevention of access to, confidential information, including, among other things, trade secrets or other intellectual property, proprietary business information and personal information, and could result in financial, legal, business and reputational harm to us.
Any failure or perceived failure by us or any third-party collaborators, service providers, contractors or consultants to comply with our privacy, confidentiality, data security or similar obligations to third parties, or any data security incidents or other security breaches that result in the unauthorized access, release or transfer of sensitive information, including personally identifiable information, may result in governmental investigations, enforcement actions, regulatory fines, litigation or public statements against us, could cause third parties to lose trust in us or could result in claims by third parties asserting that we have breached our privacy, confidentiality, data security or similar obligations, any of which could have a material adverse effect on our reputation, business, financial condition or results of operations. Moreover, data security incidents and other security breaches can be difficult to detect, and any delay in identifying them may lead to increased harm. While we have implemented data security measures intended to protect our information technology systems and infrastructure, there can be no assurance that such measures will successfully prevent service interruptions or data security incidents.
Public health crises such as pandemics or similar outbreaks could adversely impact our business.
Public health crises such as pandemics or similar outbreaks could adversely impact our business.
The trading prices for our common stock and other biopharmaceutical companies have been highly volatile as a result of the COVID-19 pandemic and the resulting impact on the macroeconomic environment, including rising interest rates, inflation and recessionary fears. Future public health crises, including pandemics or similar outbreaks such as COVID-19, may adversely impact our business, strategy and financial condition. The extent to which any public health crises impacts our business, strategy or financial condition will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the emergence of novel variants, the impact of vaccinations and vaccination rates, travel restrictions and actions to contain new outbreaks or resurgences or treat its impact, such as social distancing and quarantines or lock-downs in the United States and other countries, business closures or business disruptions and the effectiveness of actions taken in the United States and other countries to contain and treat resurgences or novel variants.
If securities or industry analysts do not publish or cease publishing research or reports about us, our business or our market, or if they change their recommendations regarding our stock adversely, our stock price and trading volume could decline.
The trading market for our common stock will be influenced by the research and reports that industry or securities analysts may publish about us, our business, our market or our competitors. If any of the analysts who may cover us change their recommendation regarding our stock adversely, or provide more favorable relative recommendations about our competitors, our stock price would likely decline. If any analysts who may cover us were to cease coverage of our Company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.
The price of our common stock may be volatile and fluctuate substantially, which could result in substantial losses for holders of our common stock.
The market price of our common stock has been and is likely to continue to be volatile. The stock market in general, and the market for biotechnology companies in particular has experienced extreme volatility that can be unrelated to the operating performance of particular companies. The market price for our common stock may be influenced by many factors, including:
If we are not able to comply with the applicable continued listing requirements or standards of Nasdaq, our common stock could be delisted.
Our common stock is currently listed on Nasdaq. To maintain this listing, we must satisfy continued listing requirements and standards. There can be no assurances that we will be able to comply with the applicable listing requirements and standards. For example, in November 2021, we received a notice from the Nasdaq Listing Qualifications Department notifying us that for 30 consecutive trading days, the bid price of our common stock had closed below the minimum $1.00 per share requirement. In accordance with Nasdaq’s listing rules, we were afforded a grace period of 180 calendar days, or until May 9, 2022, to regain compliance with the bid price requirement. In order to regain compliance, the bid price of our common stock had to close at a price of at least $1.00 per share for a minimum of 10 consecutive trading days.
On May 10, 2022, Nasdaq notified us that we had not regained compliance by May 9, 2022, but that Nasdaq had granted us an additional 180 day period to regain compliance because we met the continued listing requirement for market value of publicly held shares and all other applicable Nasdaq listing requirements (other than the minimum closing bid price requirement) and we provided written notice to Nasdaq of our intention to cure the deficiency during the second compliance period, by effecting a reverse stock split, if necessary. On September 23, 2022, we executed a reverse stock split of our common stock at a ratio of 1-for-30. In response to their non-compliance notification on May 10, 2022, and as a result of the reverse stock split, we received notification from The Nasdaq Stock Market Listing Qualifications Staff on October 7, 2022, that we were in compliance with its minimum bid price requirement and the matter was closed.
If our common stock is delisted from Nasdaq and is not eligible for quotation or listing on another market or exchange, including as a result of our failure to meet the bid price requirement, trading of our shares of common stock could be conducted only in the over-the-counter market or on an electronic bulletin board established for unlisted securities. In such event, it would likely become more difficult to dispose of, or obtain accurate price quotations for, shares of our common stock.
Our business could be negatively affected as a result of significant stockholders or potential stockholders attempting to effect changes or acquire control over the Company, which could cause us to incur significant expense, hinder execution of our business strategy and impact the trading value of our securities.
Our stockholders may from time-to-time attempt to effect changes, engage in proxy solicitations or advance stockholder proposals. Responding to proxy contests and other actions by activist shareholders can be costly and time-consuming, disrupting our operations and diverting the attention of our board of directors and senior management from the pursuit of business strategies. Any of these impacts could materially and adversely affect our business and operating results. Further, the market price of our common stock, which has been trading below book value, could be subject to significant fluctuation or otherwise be adversely affected by the events, risks and uncertainties described above.
The requirements of being a public company may strain our resources, divert management’s attention and require us to disclose information that is helpful to competitors, make us more attractive to potential litigants and make it more difficult to attract and retain qualified personnel.
As a public company, we are subject to the reporting requirements of the Securities Act of 1933, as amended, the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, and applicable Canadian securities rules and regulations. Despite reforms made possible by the JOBS Act, compliance with these rules and regulations creates significant legal and financial compliance costs and makes some activities difficult, time-consuming or costly. The Exchange Act and applicable Canadian provincial securities legislation require, among other things, that we file annual, quarterly and current reports with respect to our business and operating results.
Additionally, the Sarbanes-Oxley Act and the related rules and regulations of the SEC and Nasdaq require us to implement particular corporate governance practices and adhere to a variety of reporting requirements and complex accounting rules. Among other things, we are subject to rules regarding the independence of the members of our board of directors and committees of the board and their experience in finance and accounting matters, rules regarding the diversity of our board of directors and certain of our executive officers are required to provide certifications in connection with our quarterly and annual reports filed with the SEC. The perceived personal risk associated with these rules may deter qualified individuals from accepting these positions. Accordingly, we may be unable to attract and retain qualified officers and directors. If we are unable to attract and retain qualified officers and directors, our business and our ability to maintain the listing of our shares of common stock on Nasdaq or another stock exchange could be adversely affected.
Changes in U.S. federal income and other tax laws could adversely affect us.
New U.S. legislation or regulations that could affect our tax burden could be enacted by the U.S. government. We cannot predict the timing or extent of such tax-related developments that could have a negative impact on our financial results. Additionally, we use our best judgment in attempting to quantify and reserve for these tax obligations. However, a challenge by a taxing authority, our ability to utilize tax benefits such as carryforwards or tax credits, or a deviation from other tax-related assumptions could have a material adverse effect on our business, results of operations, or financial condition.
Unfavorable global macroeconomic conditions and geopolitical uncertainty could adversely affect our business, financial condition or results of operations.
Our results of operations could be adversely affected by general conditions in the global economy, such as the inflationary environment and recessionary fears, in the global financial markets and due to geopolitical uncertainty, such as the ongoing conflict in Ukraine and rising tensions between China and Taiwan. For example, the global financial crisis caused extreme volatility and disruptions in the capital and credit markets and the recent and ongoing armed conflict in Ukraine had similar impacts on the global financial markets. A severe or prolonged economic downturn, such as a global financial crisis, could result in a variety of risks to our business, including, weakened demand for our product candidates and our weakened ability to raise additional capital when needed on acceptable terms, if at all. A weak or declining economy could also strain our future suppliers, possibly resulting in supply disruptions. Any of the foregoing could harm our business, and we cannot anticipate all of the ways in which the current macroeconomic climate, geopolitical uncertainty and financial market conditions could adversely impact our business.
We or the future third parties upon whom we may depend may be adversely affected by natural disasters, and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster.
Natural disasters could severely disrupt our operations and have a material adverse effect on our business, results of operations, financial condition and prospects. For example, our corporate headquarters are located in the San Francisco Bay Area, which has experienced both severe earthquakes and the effects of wildfires. We do not carry earthquake insurance. In addition, the long-term effects of climate change on general economic conditions and the biopharmaceutical industry in particular are unclear, and may heighten or intensify existing risk of natural disasters. If an earthquake, wildfire, other natural disaster, power outage or other event occurred that prevented us from using all or a significant portion of our headquarters, that damaged critical infrastructure or that otherwise disrupted operations, it may be difficult or, in certain cases, impossible for us to continue our business for a substantial period of time. The disaster recovery and business continuity plans we have in place may prove inadequate in the event of a serious disaster or similar event. We may incur substantial expenses as a result of the limited nature of our disaster recovery and business continuity plans, which could have a material adverse effect on our business.
Our employees, directors, and potential future principal investigators, CROs and consultants may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements and insider trading.
We are exposed to the risk of fraud or other misconduct by our employees, directors, and potential future principal investigators, consultants and commercial partners. Misconduct by these parties could include intentional failures to comply with the regulations of FDA and non-U.S. regulators, provide accurate information to the FDA and non-U.S. regulators, comply with healthcare fraud and abuse laws and regulations in the United States and abroad, report financial information or data accurately or disclose unauthorized activities to us. In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. Such misconduct could also involve the improper use of information obtained in the course of clinical studies, which could result in regulatory sanctions and cause serious harm to our reputation. We have adopted a code of ethics, but it is not always possible to identify and deter employee or director misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant fines or other sanctions.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
We are a party to a lease agreement for laboratory space leased on a month-to month basis that is part of a shared facility in Menlo Park, California. In September 2022, we renewed our lease for office space in Fairfield, New Jersey for an additional year at the same annual cost of $13,080 per annum.
Item 3. Legal Proceedings
From time to time, we may be subject to legal proceedings and claims in the ordinary course of business. We are not currently a party to any material legal proceedings, and to our knowledge none is threatened. There can be no assurance that future legal proceedings arising in the ordinary course of business or otherwise will not have a material adverse effect on our financial position, results of operations or cash flows.
Item 4. Mine Safety Disclosures
Not applicable.
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market for our Common Stock
Our common stock has been trading on The Nasdaq Capital Market under the symbol “CWBR” since December 15, 2017.
Holders of Common Stock
As of March 6, 2023, there were 2.9 million shares of our common stock outstanding held by approximately 10 holders of record. A substantially greater number of holders of our common stock are “street name” or beneficial holders, whose shares of record are held by banks, brokers, and other financial institutions.
Dividends
We have not declared or paid a cash dividend on our capital stock and do not intend to pay cash dividends for the foreseeable future. All dividends are subject to the approval of our board of directors. Any future determinations to pay dividends on our capital stock would depend on our results of operations, our financial condition and liquidity requirements, restrictions that may be imposed by applicable laws or our contracts, and any other factors that our board of directors in its sole discretion may consider relevant in declaring a dividend.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
None.
Recent Sales of Unregistered Securities
None.
Item 6. [Reserved]
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
We are a clinical stage biotechnology company leveraging the power of the mitochondria and the peptides encoded in its genome to develop potential breakthrough therapeutics targeting chronic and age-related diseases. Our novel approach is built on the key insights of our founders that certain mitochondrially encoded peptides produce effects that are not limited to local regulation within the mitochondria and may have important roles to play in critical systemic biological pathways. Many of these effects are quite distinct from what has traditionally been thought of as mitochondrial function.
Through our exploration of the mitochondrial genome and its utility for the development of novel therapeutics, we have developed a world-renowned expertise in mitochondrial biology and a broad intellectual property estate with 6 issued patents and approximately 30 pending patent applications. Our proprietary processes of identifying nucleic acid sequences encoding native peptides in the mitochondrial genome, developing and optimizing novel analogs of these natural mitochondrial derived peptides (“MDPs”), as well as developing and conducting proprietary screens to identify and characterize the activities of these peptides are referred to as our technology platform. We are exploring development and/or partnership opportunities within the Company’s peptide library and technology platform.
Historically, we have financed our operations primarily with proceeds from sales of our equity securities, including our initial public offering, private placements of our securities, a debt offering, public sales of our securities and the exercise of outstanding warrants and stock options. Since our inception through December 31, 2022, our operations have been funded with an aggregate of approximately $97.3 million from the sale and issuance of equity instruments and debt, including the proceeds from the exercise of warrants and stock options.
Since inception, we have incurred significant operating losses. Our net losses were $12.2 million and $15.5 million for the years ended December 31, 2022 and 2021, respectively. We incurred $1.8 million and $2.7 million in non-cash expenses during the years ended December 31, 2022 and 2021, respectively. As of December 31, 2022, we had an accumulated deficit of $96.9 million. Dependent upon our ultimate determination of whether or not to pursue any potential strategic alternative selected by the Company, significant expenses and operating losses over the next several years may continue to occur. Our net losses may fluctuate significantly from quarter to quarter and from year to year.
Recent Developments
We have retained Ladenburg Thalmann & Co. Inc. as a financial advisor to assist the Company in exploring strategic alternatives. Potential strategic alternatives that may be explored or evaluated as part of this process include a merger, business combination, investment into the Company, asset sale or other strategic transaction. Our board of directors has not set a timetable for the conclusion of this review, nor has it made any definitive decisions related to taking any further actions or potential strategic options at this time or at all. There can be no assurance that this process will result in any such transaction and the Company does not intend to disclose additional details unless and until it has entered into a specific transaction. See also “Risk Factors—Risks Related to Strategic Alternative Process and Potential Strategic Transaction”.
Financial Operations Review
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 near future.
Research and Development Expenses
Research and development expenses consist primarily of costs incurred for our research activities, including our drug discovery efforts, and the development of our product candidates, which include:
We record all research and development expenses as incurred.
Our Research Programs
Our research and development programs have historically included activities in support of the clinical development of our most advanced program, CB4211, as well as the operation of our platform technology related to the discovery and development of novel therapeutics, evaluation of newly discovered natural sequences, design of novel improved analogs, evaluation of their therapeutic potential and optimization of their characteristics as potential drug development candidates. Depending on factors of capability, cost, efficiency and intellectual property rights, we have conducted our research programs at our laboratory facility, or externally, pursuant to contractual arrangements with CROs or under collaborative arrangements with academic institutions.
The success of our research programs and the timing of those programs and the possible development of research peptides into drug candidates is highly uncertain. As such, at this time, we cannot reasonably estimate or know the nature, timing or estimated costs of the efforts that will be necessary to complete research and development of a commercial drug. We are also unable to predict when, if ever, we will receive material net cash inflows from our operations. This is due to the numerous risks and uncertainties associated with developing medicines, including the uncertainty of:
A change in the outcome of any of these variables with respect to the development of any of our product candidates would significantly change the costs and timing associated with the development of that product candidate.
Research and development activities have historically been central to our business model and have primarily focused on potential drug candidates in early stages of investigational research. Candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect research and development costs to decrease in the next several quarters due to the recent suspension of our CB5138-3 program and as we evaluate potential strategic alternatives. As such, we do not believe that it is possible at this time to accurately project our research and development costs. There are numerous factors associated with the successful commercialization of a product candidate, including future trial design, various regulatory requirements and future commercial and regulatory factors beyond our control, many of which cannot be determined with accuracy at this time.
General and Administrative Expenses
General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, for personnel in executive, finance and administrative functions. Other significant costs include legal fees relating to patent and corporate matters and fees for accounting and consulting services and directors’ and officers’ insurance. We anticipate that our general and administrative expenses will increase in the year ending December 31, 2023, including with respect to costs associated with our evaluation of potential strategic alternatives.
Results of Operations
The following tables set forth our results of operations for the periods presented. The year-to-year comparison of financial results is not necessarily indicative of financial results to be achieved in future periods, particularly in light of our decisions to suspend IND-enabling work on pre-clinical candidate CB5138-3 and to explore strategic alternatives.
For The Years Ended December 31, | Change | |||||||||||||||
2022 | 2021 | $ | % | |||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | $ | 5,935,718 | $ | 7,705,090 | $ | (1,769,372 | ) | -23 | % | |||||||
General and administrative | 6,452,579 | 7,703,065 | (1,250,486 | ) | -16 | % | ||||||||||
Total operating expenses | $ | 12,388,297 | $ | 15,408,155 | $ | (3,019,858 | ) | -20 | % |
Comparison of Fiscal Years Ended December 31, 2022 and 2021
Operating Expenses
Research and development expenses were $5.9 million in the year ended December 31, 2022 compared to $7.7 million in the prior year, a $1.8 million or 23% decrease. The decrease in research and development expenses in the year ended December 31, 2022, was primarily due to a decrease of $1.0 million in clinical trial related costs due to the conclusion of the trial and the timing of those expenses and a decrease of approximately $0.8 million associated with our research programs focused on continuing the development of our peptides.
General and administrative expenses were $6.5 million in the year ended December 31, 2022 compared to $7.7 million in the prior year, a $1.3 million or 16% decrease. The decrease in general and administrative expenses was due to lower compensation costs of approximately $1.1 million primarily related to lower stock-based compensation costs of $0.7 million due to the amount recognized in the prior year related to the departure of our former CEO and $0.4 million in one-time charges incurred in the previous year related to the departure of our former CEO.
Liquidity and Capital Resources
As of December 31, 2022, we had $15.7 million in cash, cash equivalents and investments. As of December 31, 2021, we had $26.2 million in cash and cash equivalents. We maintain our cash in a checking and a savings account on deposit with a banking institution in the United States. Our cash equivalent balance as of December 31, 2022 and 2021 included $3.9 million and $0.7 million, respectively, of U.S. Treasury Bills that had maturity dates of less than three months at the date of purchase. As of December 31, 2022, we had working capital and stockholders’ equity of $15.2 million and $15.3 million, respectively, and we incurred a net loss of $12.2 million for the year ended December 31, 2022.
In November 2021, we completed an underwritten public offering of our securities (the “2021 Public Offering”) pursuant to which we sold 20.8 million shares of our common stock and warrants to purchase 0.7 million shares of common stock for proceeds of $13.8 million, net of commissions and professional fees of approximately $1.2 million. The warrants issued in the 2021 Public Offering were immediately exercisable and have a term of five years and a per share exercise price of $21.60.
On May 27, 2020, we entered into an At-the-Market Offering Sales Agreement (“ATM”) with Virtu Americas, LLC, as sales agent, pursuant to which we may sell shares of common stock with an aggregate offering price of up to $20 million. During the year ended December 31, 2022, we sold 23.4 thousand shares of our common stock under the ATM program for proceeds of $0.2 million, net of commissions. During the year ended December 31, 2021, we sold 55.2 thousand shares of our common stock under the ATM program for proceeds of $2.9 million, net of commissions and incurred professional fees of approximately $21,000. As of December 31, 2022, we had $5.0 million available in our ATM program but are limited in the amount we can utilize due to restrictions under the “baby shelf rule” limitations of our Registration Statement on Form S-3 filed with the SEC on January 22, 2021 Baby Shelf Rules.
As reflected in the financial statements, we had an accumulated deficit as of December 31, 2022 and 2021, as well as recurring losses and negative cash flows from operating activities from inception. These factors raised substantial doubt about our ability to continue as a going concern for at least one year from the issuance of these financial statements. However, based on current budget assumptions, projected cash burn and our latitude to manage that cash burn, the cash and investments on hand as of December 31, 2022 and a planned decrease in our research and development expenses due to the suspension of the IND-enabling work for pre-clinical candidate CB5138-3 and a focus on evaluating potential strategic alternatives, we believe that we have sufficient capital to meet our operating expenses and obligations for the next twelve months from the date of this filing. However, if unanticipated difficulties or circumstances arise and, depending on the ultimate outcome of our evaluation of strategic alternatives, we may require additional capital sooner to support our operations. If we are unable to raise additional capital whenever necessary, we may be forced to further decelerate or curtail our operations until such time as additional capital becomes available, which could have a material adverse effect on the Company and its financial statements. There can be no assurance that such a plan would be successful. There is no assurance that additional financing will be available when needed or that we will be able to obtain such financing on reasonable terms.
Cash Flows from Operating Activities
Net cash used in operating activities for the years ended December 31, 2022 and 2021 was $10.4 million and $14.4 million, respectively. Cash used in operating activities for the year ended December 31, 2022 primarily reflected our net loss of $12.2 million, which was partially offset by $1.7 million in stock based-compensation expenses. Cash used in operating activities for the year ended December 31, 2021 primarily reflected our net loss of $15.5 million and a $0.9 million decrease in accrued liabilities due to the timing of those expenses partially offset by $2.5 million of stock based-compensation.
Cash Flows from Investing Activities
Net cash provided by investing activities for the year ended December 31, 2022 was $11.5 million and net cash used in investing activities for the year ended December 31, 2021 was $3.1 million. The net cash provided by investing activities for the year ended December 31, 2022 primarily reflected the timing of the purchases and maturities of our investments. The cash used in investing activities for the year ended December 31, 2021 primarily reflected the timing of the purchases and maturities of our investments.
Cash Flows from Financing Activities
Net cash used in financing activities for the year ended December 31, 2022 was $0.1 million, and primarily reflected the repayment of a promissory note having a principal balance of $0.4 million, which was partially offset by proceeds from the Company’s ATM and ESPP programs, which totaled $0.2 million. Net cash provided by financing activities for the year ended December 31, 2021 was $19.7 million, and primarily reflected net proceeds of $13.8 million from our underwritten public offering, $2.9 million from our ATM program, $2.1 million from the exercise of warrants and $1.2 million from the exercise of employee stock options.
Operating Leases
We are a party to a lease agreement for laboratory space leased on a month-to month basis that is part of a shared facility in Menlo Park, California. In September 2022, we renewed our lease for office space in Fairfield, New Jersey for an additional year at the same annual cost of $13,080 per annum.
Rent expense amounted to $0.4 million in each of the years ended December 31, 2022 and 2021.
Recent Accounting Pronouncements
See Note 3 “Summary of Significant Account Policies – Recent Accounting Pronouncements” to our Financial Statements for the year ended December 31, 2022, for a summary of the relevant recent accounting pronouncements.
Other recent accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s financial statements upon adoption.
Critical Accounting Estimates
Our management’s discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). U.S. GAAP requires us to make certain estimates and judgments that can affect the reported amounts of assets and liabilities as of the dates of the financial statements, the disclosure of contingencies as of the dates of the financial statements, and the reported amounts of revenue and expenses during the periods presented. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. If actual results or events differ materially from those contemplated by us in making these estimates, our reported financial condition and results of operations for future periods could be materially affected. See the section entitled “Risk Factors” above for certain matters that may affect our future financial condition or results of operations. An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are uncertain at the time the estimate is made, if different estimates reasonably could have been used, or if the changes in the estimate that are reasonably likely to occur could materially impact the financial statements. Our management has discussed the development, selection and disclosure of these estimates with the audit committee of our board of directors.
The following critical accounting estimates reflect significant judgments and estimates used in the preparation of our financial statements:
Fair Value of Financial Instruments
We measure the fair value of financial assets and liabilities based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. We utilize three levels of inputs that may be used to measure fair value:
The carrying amounts of cash, accounts payable, accrued liabilities and debt approximate fair value due to the short-term nature of these instruments.
Share-based Payments
We account for share-based payments using the fair value method. For employees and directors, the fair value of the award is measured on the grant date. For non-employees, fair value is generally measured based on the fair value of the services provided or the fair value of the common stock on the measurement date, whichever is more readily determinable. We have historically granted stock options at exercise prices no less than the fair market value as determined by the board of directors, with input from management.
See Note 3 “Summary of Significant Account Policies – Share-Based Payments” to our Financial Statements for the years ended December 31, 2022 and 2021 for the specific assumptions used with respect to stock-based compensation for the periods presented.
Valuation of Deferred Tax Assets
We recognize deferred tax assets and liabilities for the expected future tax consequences of items that have been included or excluded in the financial statements or tax returns. Deferred tax assets and liabilities are determined on the basis of the difference between the tax basis of assets and liabilities and their respective financial reporting amounts (“temporary differences”) at enacted tax rates in effect for the years in which the temporary differences are expected to reverse.
The benefit of tax positions taken or expected to be taken in income tax returns are recognized in the financial statements if such positions are more likely than not of being sustained. We have evaluated and concluded that there were no material uncertain tax positions requiring recognition in the Company’s financial statements as of December 31, 2022 and 2021. The Company does not expect any significant changes in the unrecognized tax benefits within twelve months of the reporting date.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
As a smaller reporting company, we are not required to provide the information requested by this item pursuant to Item 305(e) of Regulation S-K.
Item 8. Financial Statements and Supplementary Data
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors of
CohBar, Inc.
Opinion on the Financial Statements
We have audited the accompanying balance sheets of CohBar, Inc. (the “Company”) as of December 31, 2022 and 2021, the related statements of operations, Statements of Changes in stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2022 and 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2022 and 2021, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.
/s/ Marcum llp
Marcum llp
We have served as the Company’s auditor since 2014.
New York, NY
March 9, 2023
CohBar, Inc.
Balance Sheets
As of | ||||||||
December 31, 2022 | December 31, 2021 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 5,930,731 | $ | 4,992,145 | ||||
Investments | 9,806,591 | 21,253,866 | ||||||
Vendor receivable | 27,500 | 173,499 | ||||||
Prepaid expenses and other current assets | 453,681 | 527,380 | ||||||
Total current assets | 16,218,503 | 26,946,890 | ||||||
Property and equipment, net | 65,509 | 260,612 | ||||||
Intangible assets, net | 18,083 | 19,309 | ||||||
Other assets | 63,572 | 69,620 | ||||||
Total assets | $ | 16,365,667 | $ | 27,296,431 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 180,104 | $ | 371,993 | ||||
Accrued liabilities | 327,868 | 196,020 | ||||||
Accrued payroll and other compensation | 525,666 | 754,314 | ||||||
Note payable, net of debt discount and offering costs of $0 and $8,723 as of December 31, 2022 and December 31, 2021, respectively | - | 366,277 | ||||||
Total liabilities | 1,033,638 | 1,688,604 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ equity: | ||||||||
Preferred stock, $0.001 par value, Authorized 5,000,000 shares; | ||||||||
No shares issued and outstanding as of December 31, 2022 and December 31, 2021, respectively | - | - | ||||||
Common stock, $0.001 par value, Authorized 12,000,000 shares; | ||||||||
Issued and outstanding 2,906,926 shares as of December 31, 2022 and 2,877,985 as of December 31, 2021 | 2,907 | 2,878 | ||||||
Additional paid-in capital | 112,238,392 | 110,339,011 | ||||||
Accumulated deficit | (96,909,270 | ) | (84,734,062 | ) | ||||
Total stockholders’ equity | 15,332,029 | 25,607,827 | ||||||
Total liabilities and stockholders’ equity | $ | 16,365,667 | $ | 27,296,431 |
The accompanying notes are an integral part of these financial statements.
CohBar, Inc.
Statements of Operations
For The Years ended December 31, | ||||||||
2022 | 2021 | |||||||
Revenues | $ | - | $ | - | ||||
Operating expenses: | ||||||||
Research and development | 5,935,718 | 7,705,090 | ||||||
General and administrative | 6,452,579 | 7,703,065 | ||||||
Total operating expenses | 12,388,297 | 15,408,155 | ||||||
Operating loss | (12,388,297 | ) | (15,408,155 | ) | ||||
Other income (expense): | ||||||||
Interest income | 223,291 | 5,578 | ||||||
Interest expense | (1,479 | ) | (40,108 | ) | ||||
Amortization of debt discount and offering costs | (8,723 | ) | (33,091 | ) | ||||
Total other income (expense) | 213,089 | (67,621 | ) | |||||
Net loss | $ | (12,175,208 | ) | $ | (15,475,776 | ) | ||
Basic and diluted net loss per share | $ | (4.20 | ) | $ | (6.97 | ) | ||
Weighted average common shares outstanding - basic and diluted | 2,900,202 | 2,220,981 |
The accompanying notes are an integral part of these financial statements.
CohBar, Inc.
Statements of Changes in Stockholders' Equity
For the Years Ended December 31, 2022 and 2021
Additional | Total | |||||||||||||||||||
Common Stock | Paid-in- | Accumulated | Stockholders' | |||||||||||||||||
Number | Amount | Capital | Deficit | Equity | ||||||||||||||||
Balance, December 31, 2020 | 2,037,250 | $ | 2,038 | $ | 87,743,403 | $ | (69,258,286 | ) | $ | 18,487,155 | ||||||||||
Stock-based compensation | - | - | 2,543,712 | - | 2,543,712 | |||||||||||||||
Issuance of common stock for ESPP plan | 589 | 1 | 16,813 | - | 16,814 | |||||||||||||||
Exercise of employee stock options | 42,072 | 42 | 1,240,448 | - | 1,240,490 | |||||||||||||||
Exercise of warrants | 48,367 | 48 | 2,089,428 | - | 2,089,476 | |||||||||||||||
Sale of common stock in ATM, net | 55,263 | 55 | 2,884,731 | - | 2,884,786 | |||||||||||||||
Sale of common stock in CMPO, net | 694,444 | 694 | 13,820,476 | - | 13,821,170 | |||||||||||||||
Net loss | - | - | - | (15,475,776 | ) | (15,475,776 | ) | |||||||||||||
Balance, December 31, 2021 | 2,877,985 | 2,878 | 110,339,011 | $ | (84,734,062 | ) | $ | 25,607,827 | ||||||||||||
Stock-based compensation | - | - | 1,663,911 | - | 1,663,911 | |||||||||||||||
Sale of common stock in ATM, net | 23,353 | 23 | 210,519 | - | 210,542 | |||||||||||||||
Issuance of common stock for ESPP plan | 5,604 | 6 | 25,019 | - | 25,025 | |||||||||||||||
Payout for fractional shares retired as a result of reverse stock split 1:30 | (16 | ) | - | (68 | ) | - | (68 | ) | ||||||||||||
Net loss | - | - | - | (12,175,208 | ) | (12,175,208 | ) | |||||||||||||
Balance, December 31, 2022 | 2,906,926 | $ | 2,907 | $ | 112,238,392 | $ | (96,909,270 | ) | $ | 15,332,029 |
The accompanying notes are an integral part of these financial statements.
CohBar, Inc.
Statements of Cash Flows
For The Years Ended December 31, | ||||||||
2022 | 2021 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (12,175,208 | ) | $ | (15,475,776 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation and amortization | 99,247 | 140,914 | ||||||
Gain on disposal of assets | (6,449 | ) | - | |||||
Stock-based compensation | 1,663,911 | 2,543,712 | ||||||
Amortization of debt discount | 8,350 | 31,687 | ||||||
Amortization of debt issuance costs | 373 | 1,405 | ||||||
Discount on investments | 32,275 | (1,600 | ) | |||||
Changes in operating assets and liabilities: | ||||||||
Vendor receivable | 145,999 | (173,499 | ) | |||||
Prepaid expenses and other current assets | 73,699 | (113,688 | ) | |||||
Accounts payable | (191,889 | ) | (355,606 | ) | ||||
Accrued liabilities | 131,848 | (945,721 | ) | |||||
Accrued payroll and other compensation | (228,648 | ) | (99,021 | ) | ||||
Net cash used in operating activities | (10,446,492 | ) | (14,447,193 | ) | ||||
Cash flows from investing activities: | ||||||||
Purchases of property and equipment | - | (6,397 | ) | |||||
Net proceeds from the sale of property and equipment | 103,531 | - | ||||||
Payment for security deposit | 6,048 | (2,217 | ) | |||||
Patent costs | - | (2,359 | ) | |||||
Purchases of investments | (56,650,000 | ) | (43,601,000 | ) | ||||
Proceeds from redemptions of investments | 68,065,000 | 40,469,000 | ||||||
Net cash provided by (used in) investing activities | 11,524,579 | (3,142,973 | ) | |||||
Cash flows from financing activities: | ||||||||
Proceeds from ESPP plan | 25,025 | 16,814 | ||||||
Proceeds from public offering | - | 15,000,000 | ||||||
Costs of public offering | - | (1,178,830 | ) | |||||
Proceeds from the At-the-Market Offering | 216,393 | 2,980,595 | ||||||
Costs of the At-the-Market Offering | (5,851 | ) | (95,809 | ) | ||||
Proceeds from exercise of warrants | - | 2,089,476 | ||||||
Repayment of promissory notes | (375,000 | ) | (365,000 | ) | ||||
Proceeds from exercise of employee stock options | - | 1,240,490 | ||||||
Reverse stock split fractional share payment | (68 | ) | - | |||||
Net cash (used in) provided by financing activities | (139,501 | ) | 19,687,736 | |||||
Net increase in cash and cash equivalents | 938,586 | 2,097,570 | ||||||
Cash and cash equivalents at beginning of period | 4,992,145 | 2,894,575 | ||||||
Cash and cash equivalents at end of period | $ | 5,930,731 | $ | 4,992,145 | ||||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid for income taxes | $ | 1,332 | $ | 1,332 | ||||
Cash paid for interest | $ | 114,411 | $ | 89,908 |
The accompanying notes are an integral part of these financial statements.
CohBar, Inc.
Notes to Financial Statements
Note 1 - Business Organization and Nature of Operations
CohBar, Inc. (“CohBar,” “its” or the “Company”) is a clinical stage biotechnology company leveraging the power of the mitochondria and the peptides encoded in its genome to develop potential breakthrough therapeutics targeting chronic and age-related diseases.
The Company’s primary historical activities have included utilizing its technology platform to identify and develop novel peptide analogs, the research and development of its pipeline, securing intellectual property protection for its discoveries and assets, managing collaborations and clinical trials with contract research organizations (“CROs”) and raising capital to fund the Company’s operations. To date, the Company has not generated any revenues from operations and does not expect to generate any revenues in the near future. The Company has financed its operations primarily with proceeds from sales of its equity securities, private placements, the exercise of outstanding warrants and stock options and the issuance of debt instruments.
The Company has suspended IND-enabling work on pre-clinical candidate CB5138-3, which the Company had been developing as a potential treatment of idiopathic pulmonary fibrosis and other fibrotic diseases. The decision to suspend IND-enabling work follows recently completed non-clinical formulation studies seeking to identify a formulation suitable for clinical development. In connection with the decision to suspend IND-enabling work for this candidate, the Company intends to explore development and/or partnership opportunities within the Company’s peptide library and technology platform, while simultaneously exploring other strategic alternatives. In addition, the Company does not believe that the formulation of CB4211 used in the Phase 1b stage of the trial is suitable for further development. Efforts to develop an improved formulation have not been successful to date and there can be no assurances that the Company will be able to develop such a formulation.
The Company has retained Ladenburg Thalmann & Co. Inc. as a financial advisor to assist the Company in exploring strategic alternatives. Potential strategic alternatives that may be explored or evaluated as part of this process include a merger, business combination, investment into the Company, asset sale or other strategic transaction. The board of directors of the Company has not set a timetable for the conclusion of this review, nor has it made any definitive decisions related to taking any further actions or potential strategic options at this time or at all. There can be no assurance that this process will result in any such transaction and the Company does not intend to disclose additional details unless and until it has entered into a specific transaction.
In response to the COVID-19 pandemic, the Company took steps to mitigate the potential impacts on its business, including modifying its business practices by restricting nonessential travel, implementing a partial work from home policy for its employees and instituting new safety protocols for its lab to enable essential on-site work to continue. The extent to which the pandemic or future pandemics may impact the Company’s business or future preclinical studies and clinical trials will depend on future developments, which are highly uncertain and cannot be predicted with confidence. The Company expects to continue to take actions that are in the best interests of its employees and business partners.
CohBar, Inc.
Notes to Financial Statements
Note 2 – Liquidity and Management’s Plans
As of December 31, 2022, the Company had a cash, cash equivalents and investments balance of $15.7 million and working capital and stockholders’ equity of $15.2 million and $15.3 million, respectively. During the year ended December 31, 2022, the Company incurred a net loss of $12.2 million. As reflected in the financial statements, the Company had an accumulated deficit as of December 31, 2022 and 2021, as well as recurring losses and negative cash flows from operating activities from inception. These factors raised substantial doubt about the Company’s ability to continue as a going concern for at least one year from the issuance of these financial statements. However, based on managements’ plans, which include a planned decrease in research and development expenses due to the suspension of the IND enabling work for pre-clinical candidate CB5138-3 and a focus on evaluating potential strategic alternatives, the Company believes that it has sufficient capital to meet its operating expenses and obligations for the next twelve months from the date of this filing. However, if unanticipated difficulties or circumstances arise and, depending on the outcome of the Company’s evaluation of strategic alternatives, the Company may require additional capital sooner to support its operations. If the Company is unable to raise additional capital whenever necessary, it may be forced to further decelerate or curtail its operations until such time as additional capital becomes available, which could have a material adverse effect on the Company and it financial statements. There can be no assurance that such a plan would be successful. There is no assurance that additional financing will be available when needed or that the Company will be able to obtain such financing on reasonable terms.
Note 3 - Summary of Significant Accounting Policies
Basis of Presentation
All amounts are presented in U.S. Dollars.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at dates of the financial statements and the reported amounts of revenue and expenses during the periods. Actual results could differ from these estimates. The Company’s significant estimates and assumptions include the fair value of financial instruments, stock-based compensation and the valuation allowance relating to the Company’s deferred tax assets.
Reverse Stock Split
During the year ended December 31, 2022, the Company effected a reverse stock split of its common stock at a ratio of 1-for-30. No fractional shares were issued in connection with the reverse stock split. Stockholders of record who would have otherwise been entitled to receive a fractional share received a cash payment in lieu thereof. All information presented in the accompanying financial statements, unless otherwise indicated herein, reflects the 1-for-30 reverse stock split of the Company’s outstanding shares of common stock, and unless otherwise indicated, all such amounts and corresponding conversion price or exercise price data set forth herein have been adjusted to give effect to such reverse stock split.
Concentrations of Credit Risk
The Company maintains deposits in a financial institution which is insured by the Federal Deposit Insurance Corporation (“FDIC”). At various times, the Company has deposits in this financial institution in excess of the amount insured by the FDIC. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk.
CohBar, Inc.
Notes to Financial Statements
Note 3 - Summary of Significant Accounting Policies – (continued)
Investments
Investments as of December 31, 2022 and 2021 consist of U.S. Treasury Bills, which are classified as held-to-maturity, and Certificates of Deposit totaling $9.8 million and $21.3 million as of December 31, 2022 and 2021, respectively. The Company determines the appropriate balance sheet classification of its investments at the time of purchase and evaluates the classification at each balance sheet date. All of the Company’s U.S. Treasury Bills mature within the subsequent twelve months from the date of purchase. Unrealized gains and losses were de minimus. As of December 31, 2022, the carrying value of the Company’s U.S. Treasury Bills approximates their fair value due to their short-term maturities.
Cash Equivalents
The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. As of December 31, 2022 and 2021, the Company invested $3.9 million and $0.7 million, respectively, in Treasury Bills that are considered cash equivalents due to their maturity date being less than three months from the date of purchase.
Property and Equipment, net
Property and equipment are stated at cost less accumulated depreciation. Depreciation of computer and lab equipment is computed by use of the straight-line method based on the estimated useful lives of the assets, which range from three to five years. Expenditures for maintenance and repairs that do not improve or extend the expected lives of the assets are expensed to operations, while expenditures for major upgrades to existing items are capitalized. Upon retirement or other disposition of these assets, the costs and accumulated depreciation are removed from the accounts and resulting gains or losses are reflected in the results of operations.
Fair Value of Financial Instruments
The Company measures the fair value of financial assets and liabilities based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company utilizes three levels of inputs that may be used to measure fair value:
Level 1 - quoted prices in active markets for identical assets or liabilities.
Level 2 - quoted prices for similar assets and liabilities in active markets or inputs that are observable.
Level 3 - inputs that are unobservable (for example, cash flow modeling inputs based on assumptions).
The carrying amounts of cash, investments and accounts payable approximate fair value due to the short-term nature of these instruments. The amount of debt included in the accompanying balance sheets approximates its fair value because the interest rate of the notes approximates the current market interest rate.
CohBar, Inc.
Notes to Financial Statements
Note 3 - Summary Of Significant Accounting Policies – (continued)
Common Stock Purchase Warrants
The Company classifies as equity any contracts that (i) require physical settlement or net-share settlement or (ii) provides the Company with a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement) providing that such contracts are indexed to the Company’s own stock. The Company classifies as assets or liabilities any contracts that (i) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the Company’s control), or (ii) gives the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). The Company assesses classification of its common stock purchase warrants and other free-standing derivatives at each reporting date to determine whether a change in classification between assets, liabilities and equity is required. The Company’s free-standing derivatives consist of warrants to purchase common stock that were issued in connection with its notes payable and public and private offerings. The Company evaluated these warrants to assess their proper classification using the applicable criteria enumerated under U.S. GAAP and determined that the common stock purchase warrants meet the criteria for equity classification in the accompanying balance sheets as of December 31, 2022 and 2021.
Income Taxes
The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of items that have been included or excluded in the financial statements or tax returns. Deferred tax assets and liabilities are determined on the basis of the difference between the tax basis of assets and liabilities and their respective financial reporting amounts (“temporary differences”) at enacted tax rates in effect for the years in which the temporary differences are expected to reverse.
The benefit of tax positions taken or expected to be taken in income tax returns are recognized in the financial statements if such positions are more likely than not of being sustained. Management has evaluated and concluded that there were no material uncertain tax positions requiring recognition in the Company’s financial statements as of December 31, 2022 and 2021. The Company does not expect any significant changes in the unrecognized tax benefits within twelve months of the reporting date.
The Company classifies interest expense and any related penalties related to income tax uncertainties as a component of income tax expense. No interest or penalties have been recognized during the years ended December 31, 2022 and 2021.
Research and Development Expenses
The Company expenses all research and development expenses as incurred. These costs include payroll, employee benefits, supplies, contracted for lab services, depreciation and other personnel-related costs associated with product development.
Share-Based Payments
The Company accounts for share-based payments using the fair value method. For employees and directors, the fair value of the award is measured, as discussed below, on the grant date. For non-employees, fair value is generally valued based on the fair value of the services provided or the fair value of the equity instruments on the measurement date, whichever is more readily determinable. The Company has granted stock options at exercise prices equal to the closing price of the Company’s common stock as reported by Nasdaq, with input from management on the date of grant. Upon exercise of an option or warrant, the Company issues new shares of common stock out of its authorized shares.
CohBar, Inc.
Notes to Financial Statements
Note 3 - Summary of Significant Accounting Policies (continued)
The weighted-average fair value of options and warrants has been estimated on the grant date or measurement date using the Black-Scholes pricing model. The fair value of each instrument is estimated on the grant date or measurement date utilizing certain assumptions for a risk-free interest rate, volatility and expected remaining lives of the awards. The risk-free interest rate used is the United States Treasury rate for the day of the grant having a term equal to the life of the equity instrument. Volatility was derived from the Company’s historical share prices. The assumptions used in calculating the fair value of share-based payment awards represent management’s best estimates, but these estimates involve inherent uncertainties and the application of management judgment.
The Black-Scholes assumptions are as follows:
For the Years Ended December 31, | ||||
2022 | 2021 | |||
Expected life | 6 years | 6 years | ||
Risk free interest rate | 1.47-3.055% | 0.90 - 1.38% | ||
Expected volatility | 91-92% | 91 - 92% | ||
Expected dividend yield | 0% | 0% |
As of December 31, 2022, total unrecognized stock compensation expense was $4.2 million, which will be recognized as those options vest over a period of approximately four years. The amount of future stock option compensation expense could be affected by any future option grants or by any option holders leaving the Company before their grants are fully vested.
Net Loss Per Share of Common Stock
Basic net loss per share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net earnings per share reflects the potential dilution that could occur if securities or other instruments to issue common stock were exercised or converted into common stock. Potentially dilutive securities are excluded from the computation of diluted net loss per share as their inclusion would be anti-dilutive and consist of the following:
As of December 31, | ||||||||
2022 | 2021 | |||||||
Options | 317,857 | 366,412 | ||||||
Warrants | 1,178,169 | 1,187,803 | ||||||
Totals | 1,496,026 | 1,554,215 |
CohBar, Inc.
Notes to Financial Statements
Note 4 - Property and Equipment
Property and equipment consist of the following:
As of December 31, | ||||||||
2022 | 2021 | |||||||
Lab equipment | $ | 412,741 | $ | 860,433 | ||||
Computer and equipment | 72,064 | 72,062 | ||||||
Total property and equipment | $ | 484,805 | $ | 932,495 | ||||
Less: accumulated depreciation | (419,296 | ) | (671,883 | ) | ||||
Total property and equipment, net | $ | 65,509 | $ | 260,612 |
During the year December 31, 2022, the Company recognized a gain of approximately $6.0 thousand after selling unused equipment with a net book value of approximately $0.1 million for proceeds of $0.1 million net of selling expenses.
Depreciation expense related to property and equipment for the years ended December 31, 2022 and 2021 was $0.1 million and $0.1 million, respectively.
Note 5 – Intangible Assets
Intangible assets consist of the following:
As of December 31, | ||||||||
2022 | 2021 | |||||||
Intangible assets: patents | $ | 23,963 | $ | 23,963 | ||||
Less: amortization | (5,880 | ) | (4,654 | ) | ||||
Total intangible assets, net | $ | 18,083 | $ | 19,309 |
Amortization expense for each of the years ended December 31, 2022 and 2021 was $1,226 and $1,125, respectively.
The Company will recognize intangible amortization expense of $1,226 in each of the next five years. Thereafter, amortization expense will total approximately $12.0 thousand.
Note 6 – Accrued Liabilities
Accrued liabilities consist of the following:
As of December 31, | ||||||||
2022 | 2021 | |||||||
Lab services & supplies | $ | 160,482 | $ | 6,080 | ||||
Professional fees | 167,386 | 73,090 | ||||||
Interest | - | 112,932 | ||||||
Other | - | 3,918 | ||||||
Total accrued liabilities | $ | 327,868 | $ | 196,020 |
CohBar, Inc.
Notes to Financial Statements
Note 7 - Notes Payable – Related Party
During the year ended December 31, 2022, the Company repaid a promissory note, held by a director of the Company, totaling $0.4 million in principal and $0.1 million in interest.
During the year ended December 31, 2021, the Company paid $0.5 million in principal and interest for two promissory notes that matured.
Note 8 - Commitments and Contingencies
Litigations, Claims and Assessments
The Company may from time to time be a party to litigation and subject to claims incident to the ordinary course of business. In the future, the Company may become a party to an increasing number of litigation matters and claims. The outcome of litigation and claims cannot be predicted with certainty, and the resolution of these matters could materially affect the Company’s future results of operations, cash flows or financial position. The Company is not currently a party to any material legal proceedings.
Licensing Agreements
The Company is a party to an Exclusive License Agreement (the “2011 Exclusive Agreement”) with the Regents of the University of California (“the Regents” or “Licensors”) which remains in effect for the life of the last-to-expire patent or last to be abandoned patent application, whichever is later. The Company agreed to pay the Licensors specified development milestone payments aggregating up to $765,000 for the first product sold under the license. Milestone payments for additional products developed and sold under the license are reduced by 50%. The Company is also required to pay annual maintenance fees to the Licensors. Aggregate maintenance fees for the first five years following execution of the agreement were $80,000. Thereafter, the Company is required to pay maintenance fees of $50,000 annually until the first sale of a licensed product. In addition, for the duration of the 2011 Exclusive Agreement, the Company is required to pay the Licensors royalties equal to 2% of its worldwide net sales of drugs, therapies or other products developed from claims covered by the licensed patents, subject to a minimum royalty payment of $75,000 annually, beginning after the first commercial sale of a licensed product. The Company is required to pay royalties ranging from 8% of worldwide sublicense sales of covered products (if the sublicense is entered after commencement of Phase II clinical trials) to 12% of worldwide sublicense sales (if the sublicense is entered prior to commencement of Phase I clinical trials). The agreement also requires the Company to meet certain diligence and development milestones, including filing of an Investigational New Drug (“IND”) Application for a product covered by the agreement on or before the seventh anniversary of the agreement date. In October 2021, the Regents accepted the Company’s payment for an additional year of license maintenance. Through December 31, 2022, no royalties have been incurred under the agreement. All maintenance fees due and payable have been paid. The Company has terminated the 2011 Exclusive Agreement, effective as of April 6, 2023.
The Company is also a party to an Exclusive License Agreement (the “2013 Exclusive Agreement”) with the Regents whereby the Regents granted to the Company an exclusive license for the use of certain other patents. The 2013 Exclusive Agreement remains in effect for the life of the last-to-expire patent or last to be abandoned patent application, whichever is later. The Company paid the Regents an initial license issue fee of $10,000 for these other patents. The Company is also required to pay annual maintenance fees to the Licensors. Aggregate maintenance fees for the first three years following execution of the agreement were $7,500. Thereafter, the Company is required to pay maintenance fees of $5,000 annually until the first sale of a licensed product.
CohBar, Inc.
Notes to Financial Statements
Note 8 - Commitments and Contingencies (continued)
The Company agreed to pay the Regents specified development milestone payments aggregating up to $765,000 for the first product sold under the 2013 Exclusive Agreement. Milestone payments for additional products developed and sold under the 2013 Exclusive Agreement are reduced by 50%. In addition, for the duration of the 2013 Exclusive Agreement, the Company is required to pay the Regents royalties equal to 2% of the Company’s worldwide net sales of drugs, therapies or other products developed from claims covered by the licensed patent, subject to a minimum royalty payment of $75,000 annually, beginning after the first commercial sale of a licensed product. The Company is required to pay the Regents royalties ranging from 8% of worldwide sublicense sales of covered products (if the sublicense is entered after commencement of Phase II clinical trials) to 12% of worldwide sublicense sales (if the sublicense is entered prior to commencement of Phase I clinical trials). The agreement also requires the Company to meet certain diligence and development milestones, including filing of an IND Application for a product covered by the agreement on or before the seventh anniversary of the agreement date. Through December 31, 2022, no royalties have been incurred under the agreement. All maintenance fees due and payable have been paid.
Operating Leases
The Company is a party to a lease agreement for laboratory space leased on a month-to-month basis that is part of a shared facility in Menlo Park, California. In September 2022, the Company renewed its lease for office space in Fairfield, New Jersey for an additional year at the same annual cost of $13,080 per annum.
Rent expense amounted to $0.4 million in each of the years ended December 31, 2022 and 2021.
Note 9 - Income Taxes
The tax effects of temporary differences that give rise to deferred tax assets are as follows:
As of December 31, | ||||||||
2022 | 2021 | |||||||
Current: | ||||||||
Accrued expenses | $ | 133,591 | $ | 144,077 | ||||
Stock compensation | 354,274 | 1,800,762 | ||||||
Net operating loss carryforward | 20,980,803 | 19,481,137 | ||||||
Research and development credit carry forward | 1,340,317 | 252,536 | ||||||
Capitalized research and development | 1,419,818 | - | ||||||
Total deferred tax assets | 24,228,803 | 21,678,512 | ||||||
Valuation allowance | (24,228,803 | ) | (21,678,512 | ) | ||||
Deferred tax asset, net of valuation allowance | $ | - | $ | - |
CohBar, Inc.
Notes to Financial Statements
Note 9 - Income Taxes – (continued)
A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate is as follows:
For the Years Ended December 31, | ||||||||
2022 | 2021 | |||||||
U.S. statutory federal rate | 21.0 | % | 21.0 | % | ||||
State income taxes, net of federal tax | 7.1 | % | 7.0 | % | ||||
Permanent differences | 0.1 | % | (2.5 | )% | ||||
Prior year true-ups | (10.9 | )% | (2.7 | )% | ||||
R&D tax credit | 3.7 | % | 0.1 | % | ||||
Change in valuation allowance | (21.0 | )% | (22.9 | )% | ||||
Income tax provision (benefit) | - | % | - | % |
The income tax provision consists of the following:
For the Years Ended December 31, | ||||||||
2022 | 2021 | |||||||
Federal | ||||||||
Current | $ | - | $ | - | ||||
Deferred | (1,909,246 | ) | (2,723,112 | ) | ||||
State and local | ||||||||
Current | - | - | ||||||
Deferred | (641,044 | ) | (905,577 | ) | ||||
Change in valuation allowance | 2,550,290 | 3,628,689 | ||||||
Income tax provision (benefit) | $ | - | $ | - |
The Company assesses the likelihood that deferred tax assets will be realized. To the extent that realization is not more-likely-than-not, a valuation allowance is established. Based upon the Company’s losses since inception, management believes that it is more-likely-than-not that future benefits of deferred tax assets will not be realized. Therefore, the Company established a full valuation allowance as of December 31, 2022 and 2021. As of December 31, 2022 and 2021, the change in valuation allowance was $2.6 million and $3.6 million, respectively.
The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions, principally California, Florida, and New Jersey. The Company is subject to examination by the various taxing authorities. The Company’s federal and state income tax returns for tax years beginning in 2019 remain subject to examination.
At December 31, 2022 and 2021, the Company had approximately $74.8 million and $70.0 million, respectively, of federal and state net operating loss (“NOLs”) carryovers that may be available to offset future taxable income. The Company’s 2017 and prior federal and state net operating loss carry forwards, if not utilized, will begin to expire from 2029 to 2037. Beginning with 2018, and for subsequent years, the Company’s NOLs will have indefinite lives for federal tax purposes. In addition, net operating losses arising from prior years are also subject to examination at the time they are utilized in future years. In accordance with Section 382 of the Internal Revenue Code (the “Code”), the usage of the Company’s net operating loss carryforward could be limited in the event of a change in ownership. At this time, the Company has not completed a full study to assess whether an ownership change under Section 382 of the Code occurred due to the costs and complexities associated with such a study.
The Company’s gross R&D tax credits were approximately $1.3 million as of December 31, 2022 and 2021. These R&D tax credits will begin to expire from 2033 to 2042, respectively.
The Inflation Reduction Act of 2022 (the “IRA”) was enacted on August 16, 2022. This bill contains a number of tax-related provisions that are effective after December 31, 2022, including (1) the imposition of a 15% minimum tax on book income for corporations with a 3-year average adjusted book income over $1 billion, and (2) the creation of a 1% excise tax on the value of stock repurchases (net of the value of stock issuances) during the taxable year. Upon initial evaluation, the Company does not expect the IRA to have a material impact on the Company’s financial statements
CohBar, Inc.
Notes to Financial Statements
Note 10 - Stockholders’ Equity
Authorized Capital
The Company has authorized the issuance and sale of up to 17 million shares of stock, consisting of 12 million shares of common stock having a par value of $0.001 and 5 million shares of Preferred Stock having a par value of $0.001 per share. As of December 31, 2022 and 2021, there were no shares of Preferred Stock outstanding and there were no declared but unpaid dividends or undeclared dividend arrearages on any shares of the Company’s capital stock.
At-the-Market Offering
During the year ended December 31, 2020, the Company entered into an At-the-Market Offering Sales Agreement (“ATM”) with Virtu Americas, LLC, as sales agent. During the year ended December 31, 2022, the Company sold 23.4 thousand shares of its common stock under the ATM program for proceeds of $0.2 million, net of commissions. During the year ended December 31, 2021, the Company sold 55.3 thousand shares of its common stock under the ATM program for proceeds of $2.9 million, net of commissions. During the year ended December 31, 2021, the Company incurred professional fees of $21.3 thousand related to the ATM and recognized those costs as a reduction to additional paid-in capital in the accompanying condensed balance sheets. As of December 31, 2022, the Company had approximately $5.0 million available in its ATM program.
Underwritten Public Offerings
During the year ended December 31, 2021, the Company completed an underwritten public offering of its securities (the “Public Offering”) pursuant to which it sold 0.7 million shares of its common stock and warrants to purchase up to 0.7 million shares of common stock for proceeds of $13.8 million, net of commissions and professional fees of approximately $1.2 million. The warrants issued in the Public Offering were immediately exercisable and have a term of five years and a per share exercise price of $21.60.
Stock Options
The Company has an incentive stock plan, the Amended and Restated 2011 Equity Incentive Plan (the “2011 Plan”), and has granted stock options to employees, non-employee directors and consultants from the 2011 Plan. Options granted under the 2011 Plan may be Incentive Stock Options or Non-statutory Stock Options, as determined by the Administrator at the time of grant. During the year ended December 31, 2020, the Company’s stockholders approved an amendment to the 2011 Plan to increase the number of shares authorized for issuance under the 2011 Plan to a total of approximately 0.5 million. As of December 31, 2022, there were 0.2 million shares remaining available for issuance under the 2011 Plan.
During the year ended December 31, 2022, stock options to purchase 19.4 thousand shares of common stock were granted at a weighted average exercise price of $10.42 per share. The stock options have a term of ten years and are subject to vesting based on continuous service of the awardee over a period of four years. The stock options have an aggregate grant date fair value of $0.2 million.
CohBar, Inc.
Notes to Financial Statements
Note 10 - Stockholders’ Equity (continued)
During the year ended December 31, 2022, stock options to purchase 67.9 thousand shares of common stock were cancelled and returned to the option pool for future issuance.
During the year ended December 31, 2021, the Company granted stock options to employees to purchase 0.2 million shares of the Company’s common stock, including certain time and performance-based inducement awards, with grant date prices that ranged between $10.20 to $41.40 per share. The stock options have terms of ten years and are subject to vesting based on continuous service of the awardee over periods ranging from three to four years. The stock options have an aggregate grant date fair value of $5.8 million.
In connection with the appointment of Joseph Sarret as the Company’s Chief Executive Officer, the Company entered into an Inducement Stock Option Agreement with Dr. Sarret on May 3, 2021. Pursuant to such agreement, the Company granted Dr. Sarret (1) a time-based inducement nonqualified stock option and (2) a performance-based inducement nonqualified stock option to purchase approximately 0.1 million shares of common stock. The options have an exercise price of $40.50 and the time-based grant will vest as to 25% of the shares on the one-year anniversary of the grant date, May 3, 2021, with the remaining shares subject to the option vesting in 36 equal monthly installments. The time-based inducement award has an aggregate grant date fair value of $2.2 million. As of December 31, 2021, Dr. Sarret satisfied a portion of the performance conditions and 21.6 thousand shares of the 43.3 thousand shares possible under the performance-based award vested. The performance-based award had a fair value of $0.1 million. During the year ended December 31, 2022, Dr. Sarret forfeited his right to the unvested balance of the performance-based stock options, and stock options to purchase 21.6 thousand shares of the Company’s common stock were returned to the option pool.
During the year ended December 31, 2021, stock options to purchase 42.1 thousand shares of common stock were exercised for cash proceeds of $1.2 million.
During the year ended December 31, 2021, stock options to purchase 51.0 thousand shares of common stock were cancelled and returned to the option pool for future issuance.
The Company recorded stock-based compensation expense as follows:
For the Years Ended December 31, | ||||||||
2022 | 2021 | |||||||
Research and development | $ | 81,706 | $ | 223,476 | ||||
General and administrative | 1,582,205 | 2,320,236 | ||||||
Total | $ | 1,663,911 | $ | 2,543,712 |
CohBar, Inc.
Notes to Financial Statements
Note 10 - Stockholders’ Equity (continued)
The following table represents stock option activity for the years ended December 31, 2022 and 2021:
Weighted Average | Aggregate | |||||||||||||||||||||||||||
Stock Options | Exercise Price | Fair Value | Contractual | Intrinsic | ||||||||||||||||||||||||
Outstanding | Exercisable | Outstanding | Exercisable | Vested | Life (Years) | Value | ||||||||||||||||||||||
Balance – January 1, 2021 | 248,997 | 179,682 | $ | 61.80 | $ | 50.40 | $ | 50.40 | 6.27 | $ | - | |||||||||||||||||
Granted | 210,467 | 42,181 | 39.72 | 40.73 | 17.95 | 6.27 | - | |||||||||||||||||||||
Exercised | (42,072 | ) | - | - | - | - | - | - | ||||||||||||||||||||
Cancelled | (50,981 | ) | - | - | - | - | - | - | ||||||||||||||||||||
Balance – December 31, 2021 | 366,411 | 204,230 | $ | 51.30 | $ | 47.40 | $ | 47.40 | 6.27 | $ | - | |||||||||||||||||
Granted | 19,367 | 694 | 10.42 | 10.42 | 4.53 | 6.27 | - | |||||||||||||||||||||
Exercised | - | - | - | - | - | - | - | |||||||||||||||||||||
Cancelled | (67,921 | ) | - | - | - | - | - | - | ||||||||||||||||||||
Balance – December 31, 2022 | 317,857 | 194,853 | $ | 45.38 | $ | 38.65 | $ | 38.65 | 6.27 | $ | - |
The following table summarizes information on stock options outstanding and exercisable as of December 31, 2022:
Grant Price | Weighted Average | Total | Number | Weighted Average | ||||||||||||||||
From | To | Exercise Price | Outstanding | Exercisable | Remaining Contractual Term | |||||||||||||||
$ | 6.00 | $ | 60.60 | $ | 34.32 | 268,357 | 147,218 | 7.20 years | ||||||||||||
$ | 63.00 | $ | 138.00 | $ | 78.22 | 38,066 | 36,201 | 5.01 years | ||||||||||||
$ | 159.00 | $ | 265.80 | $ | 172.14 | 11,434 | 11,434 | 5.32 years | ||||||||||||
Totals | 317,857 | 194,853 |
Warrants
During the year ended December 31, 2022, warrants to purchase 9.6 thousand shares of common stock expired and were cancelled.
During the year ended December 31, 2021, the Company granted warrants to two service providers to purchase a total of 2.0 thousand shares of its common stock with an exercise price of $41.40 per share. 1.7 thousand of these warrants were valued using the Black-Scholes option pricing model and the corresponding expense will be recognized over the service period of three years. 0.3 thousand of these warrants were performance based. During the year ended December 31, 2021, the performance criteria were met and the warrants were valued and expensed at the time the performance conditions were met. The warrants have terms that range from two to three years with vesting over a one-year period.
During the year ended December 31, 2021, warrants to purchase 48.4 thousand shares of common stock were exercised for cash proceeds of $2.1 million.
During the year ended December 31, 2021, warrants to purchase 106.0 thousand shares of common stock expired and were cancelled.
CohBar, Inc.
Notes to Financial Statements
Note 10 - Stockholders’ Equity (continued)
The following table represents warrant activity for the years ended December 31, 2022 and 2021:
Weighted Average | Aggregate | |||||||||||||||||||||||||||
Warrants | Exercise Price | Fair Value | Contractual | Intrinsic | ||||||||||||||||||||||||
Outstanding | Exercisable | Outstanding | Exercisable | Vested | Life (Years) | Value | ||||||||||||||||||||||
Balance – January 1, 2021 | 645,761 | 516,532 | $ | 48.60 | $ | 48.30 | $ | 24.30 | 4.07 | $ | - | |||||||||||||||||
Granted | 696,444 | - | - | - | - | - | - | |||||||||||||||||||||
Exercised | (48,368 | ) | - | - | - | - | - | - | ||||||||||||||||||||
Cancelled | (106,035 | ) | - | - | - | - | - | - | ||||||||||||||||||||
Balance – December 31, 2021 | 1,187,803 | 1,187,664 | $ | 31.20 | $ | 31.20 | $ | 15.90 | 4.38 | $ | - | |||||||||||||||||
Granted | - | - | - | - | - | - | - | |||||||||||||||||||||
Exercised | - | - | - | - | - | - | - | |||||||||||||||||||||
Cancelled | (9,634 | ) | - | - | - | - | - | - | ||||||||||||||||||||
Balance – December 31, 2022 | 1,178,169 | 1,178,169 | $ | 30.67 | $ | 30.67 | $ | 17.83 | 3.41 | $ | - |
Employee Stock Purchase Plan
The Company has an Employee Stock Purchase Plan (“ESPP”) in which it purchases shares with the amounts accumulated during the offering period from employee directed payroll deferrals. Purchases of the Company’s common stock are equal to 85% of the closing market price of its common stock on the first day or last day of the offering period, whichever is lower. During the year ended December 31, 2022, 5.6 thousand shares were issued under the ESPP for $25.0 thousand of employee compensation deferrals. As of December 31, 2022, 10.5 thousand shares are available for future issuance under the ESPP.
During the year ended December 31, 2021, 589 shares were issued under the ESPP for $16.8 thousand of employee compensation deferrals.
Note 11 – Non-Cash Expenses
The following table details the Company’s non-cash expenses included in the accompanying statements of operations:
For the Years Ended December 31, | ||||||||
2022 | 2021 | |||||||
Operating expenses: | ||||||||
Stock-based compensation | $ | 1,663,911 | $ | 2,543,712 | ||||
Depreciation & amortization | 99,247 | 140,914 | ||||||
Subtotal | $ | 1,763,158 | $ | 2,684,626 | ||||
Other expense: | ||||||||
Amortization of debt discount | 8,350 | 31,687 | ||||||
Subtotal | $ | 8,350 | $ | 31,687 | ||||
Total non-cash expenses | $ | 1,771,508 | $ | 2,716,313 |
Note 12 - Subsequent Events
Management has evaluated subsequent events to determine if events or transactions occurring through the date on which the financial statements were issued require adjustment or disclosure in the Company’s financial statements and has determined no such disclosure is required.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
An evaluation was conducted under the supervision and with the participation of our management, including Joseph Sarret, our Chief Executive Officer, and Jeff Biunno, our Chief Financial Officer (collectively, the “Certifying Officers”), of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2022, our disclosure controls and procedures were effective.
Management’s Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such terms are defined in Rules 13a-15(f) and 15(d)-15(f) under the Exchange Act. These rules define internal control over financial reporting as a process designed by, or under the supervision of, the Certifying Officers, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP. Our internal control over financial reporting includes those policies and procedures that:
Because of its inherent limitations, internal control over financial reporting may not prevent or detect all misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management's Assessment
Our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our internal control over financial reporting based on the criteria established in Internal Control - Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission. Our management, including our Chief Executive Officer and Chief Financial Officer, has concluded that, as of December 31, 2022, our internal control over financial reporting was effective.
We have limited capital resources and have given priority in the use of those resources to our research and development efforts. If we are unable to maintain effective internal control over financial reporting, we may not be able to report our financial results accurately, prevent fraud or file our periodic reports in a timely manner. We continue to evaluate the effectiveness of our internal controls and procedures on an on-going basis.
Auditor Attestation
This Annual Report on Form 10-K does not include an attestation of our registered public accounting firm regarding our internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to applicable rules of the SEC.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information
None.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
None.
PART III
Item 10. Directors, Executive Officers and Corporate Governance
Except as indicated below, the information required by this item is incorporated herein by reference to our Proxy Statement for our 2023 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the end of the fiscal year covered by this Annual Report on Form 10-K (the “Proxy Statement”), including under the headings “Election of Directors,” “Executive Officers,” “Committees of the Board” and “Delinquent Section 16(a) Reports,” if applicable.
We have adopted a Code of Ethics and Business Conduct (the “Code of Conduct”) that applies to all of our directors, officers and employees, including our principal executive, principal financial and principal accounting officers, or persons performing similar functions. Our Code of Conduct is posted on our website located at https://www.cohbar.com/investors under “Governance.” We intend to disclose future amendments to certain provisions of the Code of Conduct, and waivers of the Code of Conduct granted to executive officers and directors, on the website within four business days following the date of the amendment or waiver.
Item 11. Executive Compensation
The information required by this item is incorporated herein by reference to our Proxy Statement, including under the heading “Executive Officer Compensation.”
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
ExceptThe following table sets forth certain information with respect to holdings of our common stock by (i) stockholders who beneficially owned more than 5% of the outstanding shares of our common stock, and (ii) each of our directors (which includes all nominees), each of our named executive officers and all directors and executive officers as indicated below,a group. The number of shares beneficially owned by each stockholder is determined under rules issued by the information required by this item is incorporated herein by referenceSEC. Under these rules, beneficial ownership includes any shares as to our Proxy Statement, including under the heading “Security Ownership of Certain Beneficial Owners and Management.”which a person has sole or shared voting power or investment power.
Applicable percentage ownership is based on shares of common stock outstanding as of April 19, 2023. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of common stock subject to options, or other rights held by such person that are currently exercisable or will become exercisable within 60 days of April 19, 2023, are considered outstanding, although these shares are not considered outstanding for purposes of computing the percentage ownership of any other person.
We believe, based on information provided to us, that each of the stockholders listed below has sole voting and investment power with respect to the shares beneficially owned by the stockholder unless noted otherwise, subject to community property laws where applicable.
Name and Address of Beneficial Owner(1) | Number of Shares Beneficially Owned | Percentage of Shares Beneficially Owned | ||||||
Albion Fitzgerald(2) | 87,026 | 2.97 | % | |||||
David Greenwood(3) | 18,890 | * | ||||||
Jeffrey F. Biunno(4) | 25,701 | * | ||||||
Joseph Sarret(5) | 77,258 | 2.59 | % | |||||
Kenneth C. Cundy(6) | -- | * | ||||||
Joanne Yun(7) | 2,917 | * | ||||||
Misha Petkevich(8) | 28,157 | * | ||||||
Stephanie Tozzo(9) | 1,389 | * | ||||||
Carol Nast(10) | 2,500 | * | ||||||
Directors and executive officers as a group (8 people) | 243,838 | 7.96 | % | |||||
5% or Greater Shareholders | ||||||||
Pinchas Cohen(11) | 184,852 | 6.36 | % | |||||
Nir Barzilai (12) | 172,839 | 5.94 | % |
(1) | The address of each individual listed is c/o CohBar, Inc., 1455 Adams Drive, Suite 1308, Menlo Park, CA 94025. |
(2) | Shares beneficially owned includes (i) 205 shares of common stock subject to currently exercisable warrants, (ii) 22,224 shares of common stock subject to stock options exercisable within 60 days of April 19, 2023, (iii) 16,667 shares held by Mr. Fitzgerald’s spouse, and (iv) 16,667 shares held in a trust account over which Mr. Fitzgerald’s spouse has sole voting and dispositive authority. |
(3) | Shares beneficially owned includes (i) 16,389 shares of common stock subject to stock options exercisable within 60 days of April 19, 2023 and (ii) 1,167 shares of common stock subject to currently exercisable warrants. |
(4) | Shares beneficially owned includes (i) 23,258 shares of common stock subject to stock options exercisable within 60 days of April 19, 2023, (ii) 363 shares of common stock subject to currently exercisable warrants, and (iii) 167 shares of common stock held in an account of Mr. Biunno’s daughter. Mr. Biunno’s daughter has shared voting and investment power over the shares of common stock held in her account. |
(5) | Shares beneficially owned includes 72,223 shares of common stock subject to stock options exercisable within 60 days of April 19, 2023. |
(6) | Dr. Cundy is our former Chief Scientific Officer and does not beneficially own any shares of common stock. |
(7) | Shares beneficially owned includes 2,917 shares of common stock subject to stock options exercisable within 60 days of April 19, 2023. |
(8) | Shares beneficially owned includes (i) 9,445 shares of common stock subject to stock options exercisable within 60 days of April 19, 2023, (ii) 5,123 shares of common stock subject to currently exercisable warrants and (iii) 13,587 shares held by V2M Life Sciences L.P. (“V2M”), of which Mr. Petkevich is a General Partner. Mr. Petkevich has sole voting and dispositive power over the shares held by V2M, and disclaims beneficial ownership over such securities except to the extent of his pecuniary interest therein. |
(9) | Shares beneficially owned includes 1,389 shares of common stock subject to stock options exercisable within 60 days of April 19, 2023. |
(10) | Shares beneficially owned includes 2,500 shares of common stock subject to stock options exercisable within 60 days of April 19, 2023. |
(11) | Shares beneficially owned includes 2,778 shares of common stock subject to stock options exercisable within 60 days of April 19, 2023 and expire on June 30, 2023. |
(12) | Shares beneficially owned includes 2,778 shares of common stock subject to stock options exercisable within 60 days of April 19, 2023 and expire on June 30, 2023. |
* | less than 1.0% |
Equity Compensation Plan Information
The following table provides information about our equity compensation plan as of December 31, 2022:
Plan Category | Number of securities to be issued upon exercise of options warrants and rights (a) | Weighted-average exercise price of outstanding options warrants and rights (b) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) | Number of securities to be issued upon exercise of options, warrants and rights (a) | Weighted-average exercise price of outstanding options, warrants and rights (b) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) | ||||||||||||||||||
Equity compensation plans approved by stockholders | 221,207 | $ | 46.35 | 167,178 | 221,207 | $ | 46.35 | 161,178 | (1) | |||||||||||||||
Equity compensation plans not approved by stockholders | 125,758 | (1) | $ | 33.56 | - | 125,758 | (2) | $ | 33.56 | -- | ||||||||||||||
Total | 346,965 | $ | 41.71 | 167,178 | 346,965 | $ | 41.71 | 167,178 |
(1) |
Consists of securities for two equity compensation plans approved by the Company’s stockholders, (i) an incentive stock plan, the Amended and Restated 2011 Equity Incentive Plan, as amended (the “2011 Plan”), under which the Company has granted stock options to employees, non-employee directors and consultants; and (ii) an Employee Stock Purchase Plan, which allows employees of the Company to purchase shares through payroll deductions during set offering periods. |
(2) | Consists of inducement stock options granted to our Chief Executive Officer pursuant to an employment agreement, warrants issued to our former Chief Operating Officer pursuant to an employment agreement, warrants issued to four consultants pursuant to consulting agreements, and warrants issued to the Alzheimer’s Drug Discovery Foundation. |
Item 13. Certain Relationships and Related Transactions, and Director Independence
The informationfollowing is a summary of each transaction or series of similar transactions since January 1, 2021, to which we were a party in which:
● | the amount involved exceeds the lesser of $120,000 or one percent of the average of our total assets at year-end for the last two completed fiscal years; and |
● | any of our directors or executive officers or any beneficial owners of 5% of any class of our voting capital stock or affiliate or immediate family member thereof, had or will have a direct or indirect material interest, other than compensation and other arrangements that are described under the section titled “Executive Compensation” above. |
Beneficial ownership of securities is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to such securities.
Policies and Procedures for Related Person Transactions
Our Board of Directors has adopted a written policy stating that our executive officers, directors, nominees for election as a director, beneficial owners of more than 5% of any class of our common stock and any members of the immediate family of any of the foregoing persons are not permitted to enter into a related person transaction with us without the prior consent of the independent members of our Board of Directors. Under this policy, any request for us to enter into a transaction with an executive officer, director, nominee for election as a director, beneficial owner of more than 5% of our common stock or any member of the immediate family of any of the foregoing persons, in which the amount involved exceeds $120,000 and pursuant to which such person would have a direct or indirect interest must first be presented to the independent members of our Board of Directors for review, consideration and approval. In approving or rejecting any such proposal, the independent members of our Board of Directors are to consider the material facts of the transaction, including, but not limited to, whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related person’s interest in the transaction.
Related Person Transactions
In January 2022 we repaid principal and interest in the amount of $0.5 million to Albion Fitzgerald, one of our directors, as satisfaction of our obligations under a promissory note.
Our Third Amended and Restated Certificate of Incorporation, as amended, contains provisions limiting the liability of directors, and our Bylaws provide that we will indemnify each of our directors and officers, and may indemnify our employees and other agents, to the fullest extent permitted under Delaware law. In addition, we have entered into an indemnification agreement with each of our directors and our executive officers.
Director Independence
The Company’s Common Stock is listed on the Nasdaq Capital Market (“Nasdaq”) and the Company uses Nasdaq’s listing standards to determine director independence. Under Nasdaq’s listing standards and the Governance Guidelines, the Board must consist of a majority of independent directors, and the Audit, Governance, and Compensation Committees must consist solely of independent directors. Our Board of Directors has determined that David Greenwood, Albion Fitzgerald, Stephanie Tozzo, Misha Petkevich, Joanne Yun and Carol Nast each qualify as “independent” in accordance with the listing requirements of Nasdaq. In addition, the Board determined that Phyllis Gardner, who served as director until June 2022 was independent during the time she served as director. The Nasdaq independence definition includes a series of objective tests, including that the director is not, and has not been for at least three years, one of our employees and that neither the director nor any of his or her family members has engaged in various types of business dealings with us. In addition, as required by this item is incorporated hereinNasdaq rules, our Board of Directors has made a subjective determination as to each independent director that no relationships exist, which, in the opinion of our Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In making these determinations, our Board of Directors reviewed and discussed information provided by referencethe directors and us with regard to each director’s business and personal activities and relationships as they may relate to us and our Proxy Statement, including under the headings “Certain Relationships and Transactions with Related Persons” and “Corporate Governance.”management.
Item 14. Principal Accountant Fees and Services
The informationWe have employed Marcum LLP as our registered independent public accounting firm since 2014.
We understand the need for Marcum LLP to maintain objectivity and independence in its audit of our financial statements. To minimize relationships that could appear to impair the objectivity of Marcum LLP, the Audit Committee has restricted the non-audit services that Marcum LLP may provide. It is the policy of the Audit Committee to pre-approve all audit and permissible non-audit services provided by our independent auditors.
Under these policies, with Audit Committee pre-approval, we may use Marcum LLP for the following categories of non-audit services: merger and acquisition due diligence and audit services; tax services; internal control reviews; employee benefit plan audits; and reviews and procedures that we engage Marcum LLP to undertake to provide assurances on matters not required by this item is incorporated herein by reference to our Proxy Statement, including under the headings “Ratification of Appointment of Registered Independent Public Accounting Firm for 2023.”laws or regulations.
The aggregate fees and expenses billed, or expected to be billed, for professional services rendered by Marcum LLP for the years ended December 31, 2022 and 2021 were as follows:
Type | 2022 | 2021 | ||||||
Audit Fees (1) | $ | 116,493 | $ | 109,515 | ||||
Audit-Related Fees (2) | 13,382 | 49,146 | ||||||
Tax Fees (3) | 26,756 | 18,025 | ||||||
All Other Fees | - | - | ||||||
Total Fees | $ | 156,631 | $ | 176,686 |
(1) | Audit Fees consist of fees billed and expected to be billed for services rendered for the audits of our financial statements for the fiscal years ended December 31, 2022 and 2021 and reviews of interim financial statements. |
(2) | Audit-Related Fees include fees billed for services related to registration statements and filings with the SEC in 2022 and 2021. |
(3) | Tax Fees consist of fees billed for professional services related to preparation of our U.S. federal and state income tax returns, tax advice and use tax compliance services. |
Tax services in 2022 and 2021 were pre-approved by the Audit Committee of our Board of Directors. All future permitted audit, audit-related, tax and other services that the independent auditors may perform are expected to be pre-approved in accordance with pre-approval policies and procedures adopted by our Audit Committee pursuant to that committee’s charter, as amended or modified from time to time.
The Audit Committee believes that the foregoing expenditures are compatible with maintaining the independence of our independent registered public accounting firm.
PART IV
Item 15. Exhibits, Financial Statement Schedules
The following documents are filed as part of this Annual Report on Form 10-K:
(a) Financial Statements
(b) Financial Statement SchedulesThe response to this portion of Item 15 is set forth under Item 8 of the Original Form 10-K and the information incorporated by reference therein.
(b) | Financial Statement Schedules |
Financial statement schedules have been omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.
(c) Exhibits
(c) | Exhibits |
The following exhibits are filed herewith.
Exhibit Index
+ | Filed herewith. |
* | Indicates management contract, compensatory agreement or arrangement. |
** | Previously filed with the Original Form 10-K. |
Item 16. Form 10-K Summary
*** | Previously furnished with the Original Form 10-K. |
None.
SIGNATURESSignatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: | COHBAR, INC. | ||
By: | /s/ Jeffrey F. Biunno | ||
Jeffrey F. Biunno | |||
Chief Financial Officer | |||
(Principal Financial and Accounting Officer) |
POWER OF ATTORNEY
Each person whose signature appears below hereby authorizes and appoints Jeffrey F. Biunno and Joseph Sarret, and each of them, with full power of substitution and resubstitution and full power to act without the other, as his or her true and lawful attorney-in-fact and agent to act in his or her name, place and stead and to execute in the name and on behalf of each person, individually and in each capacity stated below, and to file any and all amendments to this report, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing, ratifying and confirming all that said attorneys-in-fact and agents or any of them or their or his substitute or substitutes may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
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