COHBAR, INC. 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
Since inception, we have incurred significant operating losses. Our net losses
were
Recent Developments
We have retained
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.
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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:
? employee-related expenses including salaries, benefits and stock-based
compensation expense;
? expenses incurred under agreements with third parties, including CROs that
conduct research and development and preclinical activities on our behalf and
the cost of consultants;
? the cost of laboratory equipment, supplies and manufacturing test materials;
and
? depreciation and other personnel-related costs associated with research and
product development.
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:
? developing appropriate manufacturing processes and formulations;
? establishing an appropriate safety profile with toxicology studies;
? obtaining appropriate regulatory approval for conducting clinical trials;
? successfully designing, enrolling and completing clinical trials;
? receiving marketing approvals from applicable regulatory authorities;
? establishing commercial manufacturing capabilities or making arrangements with
third-party manufacturers;
? obtaining and enforcing patent and trade secret protection for our product
candidates;
? launching commercial sales of the products, if and when approved, whether alone
or in collaboration with others; and
? maintaining an acceptable safety profile of the products following approval.
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.
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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
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
Operating Expenses
Research and development expenses were
General and administrative expenses were
Liquidity and Capital Resources
As of
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In
On
As reflected in the financial statements, we had an accumulated deficit as of
Cash Flows from Operating Activities
Net cash used in operating activities for the years ended
Cash Flows from Investing Activities
Net cash provided by investing activities for the year ended
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Cash Flows from Financing Activities
Net cash used in financing activities for the year ended
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
Rent expense amounted to
Recent Accounting Pronouncements
See Note 3 "Summary of Significant Account Policies - Recent Accounting
Pronouncements" to our Financial Statements for the year ended
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 following critical accounting estimates reflect significant judgments and estimates used in the preparation of our financial statements:
? fair value of financial instruments;
? going concern analysis; ? share-based payments; and
? valuation of deferred tax assets
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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:
? 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, 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
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
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