OS Therapies Inc
For the period ended Mar 31, 2025. Filed May 15, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 15, 2025
OSTX$1.00+2.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-15.
0001213900-24-098760
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-15.
0001213900-25-044336
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 101 previous paragraphs and 99 current paragraphs.
44 unchanged; 27 reworded; 28 added; 25 removed; 5 previous and 0 current paragraphs rearranged.
Tables are not compared: 13 previous and 20 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (28)
Current report
Recent Developments
Current report
PIPE Financing
Current report
On December 24, 2024, we entered into a Securities Purchase Agreement (the “PIPE Purchase Agreement”) with certain institutional and accredited investors (collectively, the “Purchasers”), substantially all of whom are existing stockholders of our company, pursuant to which we agreed to issue and sell to the Purchasers immediately separable units (the “Units”), with each Unit being comprised of (i) one share of Series A Senior Convertible Preferred Stock, par value $0.001 per share (the “Series A Preferred Stock”), and (ii) a warrant to purchase one share of common stock (each, a “Series A Warrant” and such shares, the “Warrant Shares”), at a price per Unit of $4.00, for aggregate gross proceeds of not less than $6 million and not more than $10 million (the “PIPE Financing”). At two closings occurring on December 31, 2024 and January 14, 2025, we issued to the PIPE investors an aggregate of (i) 1,775,750 shares of Series A Preferred Stock and (ii) Series A Warrants initially exercisable into 1,775,750 shares of common stock. The gross proceeds from the Private Placement, before deducting transaction fees and other estimated Private Placement expenses, were approximately $7,103,000.
Current report
The PIPE Purchase Agreement required us to seek stockholder approval for any transactions contemplated by the PIPE Purchase Agreement and the related documents for which the rules of the NYSE American require stockholder approval (“Stockholder Approval”) and to hold a special meeting of stockholders for the purpose of obtaining Stockholder Approval not later than April 9, 2025.
Current report
On April 9, 2025, we convened a Special Meeting of Stockholders (the “Special Meeting”) for the Stockholder Approval, in accordance with NYSE American LLC Company Guide Section 713(a), of the issuance of shares of our common stock upon (i) the conversion of 1,775,750 shares of Series A Preferred Stock, (ii) the exercise of the Series A Warrants, and (iii) the exercise of the Agent Warrants in connection with our PIPE Financing, in each case without regard to any limits on conversion or exercise therein and in amounts collectively equal to or exceeding 20% of our common stock outstanding as of December 24, 2024 (including upon the operation of applicable price reset and anti-dilution provisions and/or the reduction of conversion prices and exercise prices) (the “Issuance Proposal”). The Issuance Proposal was approved by the affirmative vote of a majority of the votes cast by our stockholders at the Special Meeting.
Current report
The PIPE Purchase Agreement restricts us from issuing additional shares of common stock, or securities convertible into or exercisable or exchangeable for shares of common stock during the period beginning from the closing until the later of (x) six months from the closing and (y) April 9, 2025, and restricts us from entering into variable rate transactions at any time the Purchasers hold Series A Warrants, subject to certain exceptions.
Current report
In connection with the PIPE Financing, we entered into a Registration Rights Agreement, dated December 31, 2024, with the Purchasers, pursuant to which we agreed to use reasonable best efforts to, by no later than January 31, 2025, submit to the SEC a registration statement covering the resale of a number of shares of common stock underlying the Series A Preferred Stock and the Series A Warrants issued pursuant to the PIPE Purchase Agreement equal to 300% of the shares of common stock initially issuable thereunder, and to use commercially reasonable efforts to cause such registration statement to be declared effective by the SEC within 45 days thereafter.
Current report
Brookline Capital Markets, a division of Arcadia Securities, LLC (“Brookline”), acted as exclusive placement agent for the issuance and sale of the securities in the PIPE Financing. Pursuant to the terms of a letter agreement, dated December 27, 2024, between the Company and Brookline (the “Placement Agency Agreement”), the Company agreed to pay Brookline an aggregate cash fee (the “Cash Fee”) equal to (i) 7% of the gross proceeds received by the Company from the sale of the securities in the PIPE Financing to Purchasers other than certain Purchasers identified on a schedule thereto (“Reduced Fee Purchasers”) plus (ii) 3% of the gross proceeds received by the Company from the sale of the securities in the PIPE Financing to Reduced Fee Purchasers, plus expenses; provided that Ceros Financial Services, Inc., Brookline’s selected dealer for the PIPE Financing (“Ceros”) is entitled to up to 33.3% of the Cash Fee.
Current report
In addition, the Company agreed to pay Brookline or its designee a fee in the form of warrants to purchase shares of common stock (the “Agent Warrants”). The Agent Warrants are initially exercisable into a number of shares of common stock equal to (i) 7% of the number of shares of common stock initially issuable pursuant to the shares of Series A Preferred Stock issued to Purchasers other than Reduced Fee Purchasers in the PIPE Financing plus (ii) 3% of the number of shares of common stock initially issuable pursuant to the shares of Series A Preferred Stock issued Reduced Fee Purchasers in the PIPE Financing; provided that, Ceros is entitled to up to 33.3% of the Agent Warrants. The terms of the Agent Warrants are substantially similar to the terms of the Series A Warrants. At two closings occurring on December 31, 2024 and January 14, 2025, (i) Brookline received an aggregate cash fee of $159,685 and the right to receive Agent Warrants initially exercisable for an aggregate of 39,918 shares of common stock, and (ii) Ceros received an aggregate cash fee of $79,723 and the right to receive Agent Warrants initially exercisable for an aggregate of 19,930 shares of common stock. Shortly following the second closing, we issued Brookline’s Agent Warrants and Ceros’ Agent Warrants to their respective designees in accordance with their instructions. Each of the holders of the Agent Warrants is affiliated with a broker-dealer regulated by the Financial Industry Regulatory Authority, Inc. These selling stockholders acquired their respective securities in the ordinary course of such selling stockholder’s business and, at the time of the acquisition of the shares to be resold pursuant to this prospectus, the selling stockholders had no agreements or understandings, directly or indirectly, with any person to distribute them.
Current report
Our Acquisition of HER2 andLm-Related Assets
Current report
On April 9, 2025, pursuant to the terms of an Asset Purchase Agreement, dated as of January 28, 2025 (the “HER2 Purchase Agreement”), between us and Ayala Pharmaceuticals, Inc., a Delaware corporation formerly known as Advaxis, Inc. (“Ayala”), we completed the previously announced acquisition of theLm-based immune-oncology programs and related intellectual property assets (the “HER2 Assets”) from Ayala. The HER2 Assets include two investigational new drug (IND) filings with the FDA: (i) ADXS-503 for non-small cell lung cancer; and (ii) ADXS-504 for prostate cancer.
Current report
In consideration for the purchase of the HER2 Assets, we agreed to assume certain specified liabilities and to pay an aggregate purchase price of $8,000,000, which was paid as follows: (i) $400,000 to Ayala ($150,000 of which was transferred upon signing of the HER2 Purchase Agreement and the remainder on the closing date); (ii) $100,000 to a third party on behalf of Ayala on the closing date; and (iii) $7,500,000 worth of shares of the our common stock, or 4,774,637 shares based on the volume-weighted average price of the Company’s common stock over the 30 trading days immediately preceding the closing date (the “Ayala Consideration Shares”).
Current report
Because the issuance of the Ayala Consideration Shares would require us to issue more than 19.99% of our outstanding common stock immediately prior to such issuance (the “NYSE Ownership Limitation”), we issued to Ayala (i) 2,164,215 shares of common stock (the “Ayala Initial Shares”), and (ii) a warrant to purchase 2,166,381 shares of common stock (the “Ayala Warrant” and the shares of common stock issuable thereunder, the “Ayala Warrant Shares”). Once we obtain stockholder approval in accordance with NYSE American LLC Company Guide Section 713, we will subsequently issue to Ayala the remaining 444,041 shares of common stock (the “Ayala Additional Consideration Shares”), except that, if at that time, the number of shares of common stock beneficially owned by Ayala would exceed 9.99% of the number of shares of our common stock then outstanding, Ayala has the right to require us to issue, in lieu of such shares, a warrant to purchase 444,041 on substantially the same terms of the Ayala Warrant.
Current report
In connection with the issuance of the Ayala Consideration Shares (including the Ayala Warrant Shares and the Ayala Additional Consideration Shares), we entered into a registration rights agreement with Ayala, requiring us to file one or more registration statements, as necessary, to register under the Securities Act the resale of such shares no later than 75 days after the closing of the transaction.
Current report
Ayala entered into a lock-up agreement, pursuant to which, and subject to the terms and conditions set forth therein, Ayala has agreed not to trade or transfer, subject to certain customary exceptions, any of the Ayala Consideration Shares (including the Ayala Warrant Shares) for a period of 180 days following the closing of the transaction.
Current report
Critical Accounting Policies and Estimates
Current report
Warrant Liability
Current report
We do not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. We evaluate all of our financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and FASB ASC Topic 815, “Derivatives and Hedging” (“ASC 815”). The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.
Current report
The Series A Warrants issued in connection with the Purchase Agreement are recognized as a derivative liability in accordance with ASC 815. We recognize the warrant instruments as a liability at fair value and adjust the instruments to fair value at each reporting period. The liability is subject to re-measurement at each balance sheet date until exercised or reclassified, and any change in fair value is recognized in our consolidated statements of operations. The fair value of the Series A Warrants was measured using a Binomial simulation model. The determination of the fair value of the warrant liability may be subject to change as more current information becomes available, and, accordingly, the actual results could differ significantly. The revaluation would result in material changes in fair value on a period by period basis. We have determined that the fair value of the warrant liability was a critical accounting estimate.
Current report
For years ended December 31, 2024 and December 31, 2023, we had federal net operating loss (“NOLs”) of $22,236,580 and $16,269,893, respectively. The 2019 NOL carryforward of $292,144 will expire in tax years up through 2037. The NOLs generated in tax years 2020 and beyond will carry forward indefinitely, but the deductibility of such federal NOLs is limited. We have provided a valuation allowance to offset the deferred tax assets due to the uncertainty of realizing the benefits of the net deferred tax asset.
Current report
Our issuances of common stock have resulted in ownership changes as defined by Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”) ; however, we have not conducted a Section 382 study to date. It is likely that a future analysis may result in the conclusion that a substantial portion, or perhaps substantially all, of our NOL carryforwards and R&D tax credit carryforwards will expire due to the limitations of Sections 382 and 383 of the Code. As a result, the utilization of the carryforwards may be limited, and a portion of the carryforwards may expire unused. We are subject to U.S. federal tax examinations by tax authorities for the year 2021 due to the fact that NOL carryforwards exist going back to 2019 that may be utilized on a current or future year tax return.
Current report
The Series A preferred stock coupon dividend requirement of $31,250 for the three months ended March 31, 2024 represents an expense that terminated during the period ended March 31, 2024 upon the conversion of our old Series A preferred shares into shares of our common stock. We issued Series A convertible preferred stock and detachable warrants on December 31, 2024 and January 14, 2025. The adjustment of the fair value of the warrant liability was $1.1 million and $0 million for the three months ended March 31, 2025 and 2024, respectively.
Current report
PIPE Financing
Current report
On December 24, 2024, we entered into the PIPE Purchase Agreement with the selling stockholders, substantially all of whom were existing stockholders of the Company, pursuant to which we agreed to issue and sell to the selling stockholders the Units for aggregate gross proceeds of not less than $6 million and not more than $10 million. At two closings occurring on December 31, 2024 and January 14, 2025, we issued to the selling stockholders an aggregate of (i) 1,775,750 shares of Series A Preferred Stock and (ii) Series A Warrants initially exercisable into 1,775,750 shares of common stock. The gross proceeds from the closing of the PIPE Financing, before deducting transaction fees and other estimated PIPE Financing expenses, were approximately $7,103,000. The Purchase Agreement requires us to seek stockholder approval for any transactions contemplated by the Purchase Agreement and the related documents for which the rules of the NYSE American require stockholder approval (“Stockholder Approval”) and to hold a special meeting of stockholders for the purpose of obtaining Stockholder Approval not later than April 10, 2025. In the event Stockholder Approval is not obtained at the first meeting, we are required to call a meeting every four months seeking Stockholder Approval until Stockholder Approval is obtained.
Current report
On April 9, 2025, we convened the Special Meeting for the Stockholder Approval, in accordance with NYSE American LLC Company Guide Section 713(a), of the issuance of shares of our common stock upon (i) the conversion of 1,775,750 shares of Series A Preferred Stock, (ii) the exercise of the Series A Warrants, and (iii) the exercise of the Agent Warrants in connection with our PIPE Financing, in each case without regard to any limits on conversion or exercise therein and in amounts collectively equal to or exceeding 20% of our common stock outstanding as of December 24, 2024 (including upon the operation of applicable price reset and anti-dilution provisions and/or the reduction of conversion prices and exercise prices). The Issuance Proposal was approved by the affirmative vote of a majority of the votes cast by our stockholders at the Special Meeting.
Current report
Brookline acted as exclusive placement agent for the issuance and sale of the securities in the PIPE Financing. Pursuant to the terms of the Placement Agency Agreement, we agreed to pay Brookline an aggregate cash fee (the “Cash Fee”) equal to (i) 7% of the gross proceeds received by the Company from the sale of the securities in the PIPE Financing to selling stockholders other than certain selling stockholders identified on a schedule thereto (“Reduced Fee Purchasers”) plus (ii) 3% of the gross proceeds received by the Company from the sale of the securities in the PIPE Financing to Reduced Fee Purchasers, plus expenses; provided that Ceros is entitled to 33.3% of the Cash Fee.
Current report
In addition, we agreed to pay Brookline or its designees a fee in the form of the Agent Warrants. The Agent Warrants are initially exercisable into a number of shares of common stock equal to (i) 7% of the number of shares of common stock initially issuable pursuant to the shares of Series A Preferred Stock issued to Purchasers other than Reduced Fee Purchasers in the PIPE Financing plus (ii) 3% of the number of shares of common stock initially issuable pursuant to the shares of Series A Preferred Stock issued Reduced Fee Purchasers in the PIPE Financing; provided that, Ceros is entitled to up to 33.3% of the Agent Warrants. The terms of the Agent Warrants are substantially similar to the terms of the Series A Warrants. At two closings occurring on December 31, 2024 and January 14, 2025, (i) Brookline received an aggregate cash fee of $159,685 and 39,918 Agent Warrants, and (ii) Ceros received an aggregate cash fee of $79,723 and 19,930 Agent Warrants.
Current report
On April 9, 2025, we acquired from Ayala the HER2 Assets. Pursuant to the terms of the HER2 Purchase Agreement, the amended and restated development, license and supply agreement with Advaxis terminated, and we agreed to a change in milestone payments and royalty consideration owed as it relates to the OST-HER2 program as follows:
Removed paragraphs (25)
Previous report
Critical Accounting Policies and Significant Judgments and Estimates
Previous report
Debt Discount and Redemption Premium
Previous report
The initial fair value of the redemption value relating to the convertible debt instruments are capitalized and amortized over the term of the related debt using the straight-line method, which approximates the interest method. If a loan is paid in full, any unamortized financing costs will be removed from the related accounts and charged to operations. Amortization of debt discount is recorded as a component of interest expense. In accordance with ASU 2015-03, Interest — Imputation of Interest, the unamortized debt discount is presented in the accompanying balance sheet as a direct deduction from the carrying amount of the related debt.
Previous report
The fair value of the redemption liability is calculated under Level 3 of the fair value hierarchy and is determined based upon a Probability-Weighted of Expected Returns Model (“PWERM”). This PWERM was determined to be the most appropriate method of estimating the value of possible redemption or conversion outcomes over time. The fair value of the redemption liability is calculated using the initial value of the Convertible Notes less the debt discount rate of 12.5% in Group A, 20% in Groups B and C, and 50% in Groups D, E and F. The redemption liability is then amortized over the remaining life of the note, utilizing the interest rates of 10% and 6% for the groups, respectively. The life of each note in Group A is for a set period of three years and is variable in Groups B, C, D, E and F, with a range of 12 months to three years. We retain the option to negotiate an extended maturity date for Groups B, C, D, E and F. The new embedded redemption values were $0 and $1,541,250 for the periods ended September 30, 2024 and December 31, 2023, respectively.
Previous report
The fees associated with the convertible debt raise are legal and investment fees associated with the issuance of the Convertible Notes for Groups A, B, C, D, E and F. There were no related parties who received these fees. The fees are amortized over the life of the Convertible Notes utilizing an interest rate of 10% for Group A and 6% for Groups B, C, D, E and F.
Previous report
Our convertible debt raises and all associated accounts were closed out to stockholders’ equity on August 2, 2024, which was the date on which we consummated our initial public offering and all outstanding convertible notes automatically converted into shares of common stock.
Previous report
As of December 31, 2023, we had U.S. federal net operating loss carry forwards of approximately $16.3 million, which may be available to offset future taxable income. The federal net operating loss carry forward indefinitely but may only be used to offset 80% of annual taxable income. As of December 31, 2023, we also had federal and state general business tax credit carry forwards of $1.4 million available to offset future tax liabilities and expire at various dates beginning in January 1, 2022. We have R&D credits that we opted to convert and use toward payroll taxes in amounts equal to $0.3 million as of December 31, 2023. As of December 31, 2023, we also had a federal and state research and development tax credit carry forwards of approximately $0.3 million, which may be available to offset future tax liabilities and expire at various dates beginning January 1, 2024 and January 1, 2023, respectively.
Previous report
***Licensing Costs.***We did not have any licensing costs for the three months ended September 30, 2024 and 2023.
Previous report
Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023
Previous report
***Licensing Costs.***We did not have any licensing costs for the nine months ended September 30, 2024 and 2023.
Previous report
***Interest Expense.***Interest expense for the nine months ended September 30, 2024 was approximately $2.0 million compared to $3.1 million for the nine months ended September 30, 2023. The amounts of interest are comprised of accretion of debt discount being amortized in 2024 and 2023 from associated discounts related to convertible notes and placement agent warrants, together with interest expenses from the issuances of convertible notes.
Previous report
We consummated our initial public offering on August 2, 2024, converting all our outstanding Convertible Notes into common stock and raising $6.4 million in gross proceeds on the sale of 1.6 million shares of our common stock. Net proceeds from our initial public offering were used to pay off accounts payable and fund continuing losses through September 30, 2024.
Previous report
Convertible Notes
Previous report
Information with respect to the seven separate private financings of convertible notes — A, B, C, D, E, F and BlinkBio — are indicated in the table below.
Previous report
The total accrued interest on the convertible notes listed in the table above was approximately $0.0 million and $2.0 million as of September 30, 2024 and December 31, 2023, respectively. The carrying amount and face amount of such convertible notes differ because of the unamortized debt issuance costs and the debt discount (which are amortized over the original term of the instrument) — see accounting policy discussion below. The material terms of each group of Convertible Notes are described below. The Convertible Notes, including interest accrued thereon, automatically converted into common stock upon consummation of our initial public offering on August 2, 2024.
Previous report
***Group A Convertible Notes.***From July 2018 through November 2021, we issued convertible notes in an aggregate principal amount of $1,154,000 (the “Group A Convertible Notes”) to accredited investors, including related parties. Interest on the unpaid principal balance on the Group A Convertible Notes accrued at a rate of 10% per annum, computed on the basis of the actual number of days elapsed and a year of 365 days. Unless earlier converted into shares of Equity Securities, the principal and accrued interest on the Group A Convertible Notes were due and payable by us on demand by the holders of such convertible notes at any time after the earlier of (i) the Maturity Date and (ii) the closing of the Next Equity Financing (which was our initial public offering). In general, the stated Maturity Date varied from the date of issuance of two to four years and was extended in October 2023, under the same terms, until October 31, 2024.
Previous report
The Group A Convertible Notes automatically converted into shares of our common stock upon the consummation of our initial public offering. The number of shares of our common stock issued upon the automatic conversion was equal to the quotient obtained by dividing the outstanding principal and unpaid accrued interest due on the Group A Convertible Note on the date of conversion by a percentage between 80% to 87.5%, as applicable, of the initial public offering price per share in such offering. The Group A Convertible Notes had conversion capitalization ceilings that ranged from $5 million to $25 million, which limited the price a noteholder must pay in a convertible note-to-common stock conversion occurrence. The Group A Convertible Notes had a conversion price that ranged from $0.39 to $1.97 per share, depending on the applicable valuation ceiling of each note (based on the initial public offering price of $4.00 per share).
Previous report
***Group B Convertible Notes.***From April 2020 through June 2021, we issued convertible notes in an aggregate principal amount of $5,154,000 (the “Group B Convertible Notes”) to accredited investors. Interest on the unpaid principal balance of the Group B Convertible Notes accrued at a rate of 6% per annum, computed on the basis of the actual number of days elapsed and a year of 365 days. Unless earlier converted into shares of Equity Securities, the principal and accrued interest were due and payable by us on demand by the convertible holders of such notes at any time after the earlier of (i) the Maturity Date and (ii) the closing of the Next Equity Financing (which was our initial public offering). In general, the stated Maturity Date was March 31, 2022 but was extended in October 2023, under the same terms, until October 31, 2024.
Previous report
The Group B Convertible Notes automatically converted into shares of our common stock upon the consummation of our initial public offering. The number of shares of our common stock issued upon the automatic conversion was equal to the quotient obtained by dividing the outstanding principal and unpaid accrued interest due on the Group B Convertible Note on the date of conversion by 80% of the initial public offering price per share in such offering. The Group B Convertible Notes had a conversion capitalization ceiling of $19 million, which limited the price a noteholder must pay in a convertible note-to-common stock conversion occurrence. As a result of the valuation ceiling, the Group B Convertible Notes had a conversion price of $1.31 per share (based on the initial public offering price of $4.00 per share).
Previous report
***Group C Convertible Notes.***From June 2021 through January 2023, we issued convertible notes in an aggregate principal amount of $3,945,020 (the “Group C Convertible Notes”) to accredited investors. Interest on the unpaid principal balance of the Group C Convertible Notes accrued at a rate of 6% per annum, computed on the basis of the actual number of days elapsed and a year of 365 days. Unless earlier converted into shares of Equity Securities, the principal and accrued interest were due and payable by us on demand by the holders of such convertible notes at any time after the earlier of (i) the Maturity Date and (ii) the closing of the Next Equity Financing (which was our initial public offering). In general, the stated Maturity Date was May 31, 2024 but was extended in October 2023, under the same terms, until October 31, 2024.
Previous report
The Group C Convertible Notes automatically converted into shares of our common stock upon the consummation of our initial public offering. The number of shares of our common stock issued upon the automatic conversion was equal to the quotient obtained by dividing the outstanding principal and unpaid accrued interest due on the Group C Convertible Note on the date of conversion by 80% of the initial public offering price per share in such offering. The Group C Convertible Notes had a conversion capitalization ceiling of $50 million, except that one note was subject to a valuation ceiling of $19 million, which limited the price a noteholder must pay in a convertible note-to-common stock conversion occurrence. As a result of the applicable valuation ceiling, the Group C Convertible Notes had a conversion price of $1.31 or $2.59 per share, as applicable (based on the initial public offering price of $4.00 per share).
Previous report
***Bridge Notes (Groups D, E and F).***In November 2022, we issued convertible notes in an aggregate principal amount of $2,000,000 (the “Group D Convertible Notes”) to accredited investors. From February to June 2023, we issued convertible notes in an aggregate principal amount of $1,100,000 (the “Group E Convertible Notes”) to accredited investors. From June 2023 to April 2024, we issued convertible notes in an aggregate principal amount of $3,433,500 (the “Group F Convertible Notes” and, collectively with the Group D Convertible Notes and Group E Convertible Notes, the “Bridge Notes”) to accredited investors, of which an aggregate of $750,000 was issued in April 2024. Interest on the unpaid principal balance of the Bridge Notes accrued at a rate of 6% per annum, computed on the basis of the actual number of days elapsed and a year of 365 days. Unless earlier converted into shares of Equity Securities, the principal and accrued interest was due and payable by us on demand by the holders of such convertible notes at any time after the earlier of (i) the Maturity Date and (ii) the closing of the Next Equity Financing (which was our initial public offering). In general, the stated Maturity Date was October 31, 2024.
Previous report
The Bridge Notes automatically converted into shares of our common stock upon the consummation of our initial public offering. The number of shares of our common stock issued upon the automatic conversion was equal to the quotient obtained by dividing the outstanding principal and unpaid accrued interest due on a Bridge Note on the date of conversion by 50% of the initial public offering price per share in such offering. The Bridge Notes had a conversion capitalization ceiling of $50 million, which limited the price a noteholder must pay in a convertible note-to-common stock conversion occurrence. As a result of the valuation ceiling, the Bridge Notes had a conversion price of $2.00 per share (based on the initial public offering price of $4.00 per share).
Previous report
All milestone payments are non-creditable and non-refundable and are due and payable upon the achievement of the milestone, regardless of any failure by us to provide notice to Advaxis of such achievement.
Previous report
In addition to the payments upon achievement of the milestones listed in the above payment schedule, we are required to pay to Advaxis (i) a percentage in the high single digits to low double digits of (a) upfront sublicense fees or (b) clinical or regulatory milestone payment amounts, paid by a sublicensee to us in consideration of a sublicense grant to such sublicensee, and (ii) a quarterly royalty of a percentage in the high single digits to low double digits of net sales of our products containing the ADXS-HER2 constructs.
Reworded paragraphs (27)
Previous wording
This report contains “forward-looking statements” (within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), which may include information concerning our beliefs, plans, objectives, goals, expectations, strategies, anticipations, assumptions, estimates, intentions, future events, future revenues or performance, capital expenditures and other information that is not historical information. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. When used in this report, the words “seek,” “estimate,” “expect,” “anticipate,” “project,” “plan,” “contemplate,” “plan,” “continue,” “intend,” “believe” and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements are based upon our current expectations and various assumptions. We believe there is a reasonable basis for its expectations and beliefs, but there can be no assurance that we will realize its expectations or that its beliefs will prove to be correct.
Current wording
This report contains “forward-looking statements” (within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), which may include information concerning our beliefs, plans, objectives, goals, expectations, strategies, anticipations, assumptions, estimates, intentions, future events, future revenues or performance, capital expenditures and other information that is not historical information. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. When used in this report, the words “seek,” “estimate,” “expect,” “anticipate,” “project,” “plan,” “contemplate,” “plan,” “continue,” “intend,” “believe” and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements are based upon our current expectations and various assumptions. We believe there is a reasonable basis for our expectations and beliefs, but there can be no assurance that we will realize our expectations or that our beliefs will prove to be correct.
Previous wording
There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements contained in this report. Examples of risks and uncertainties that could cause actual results to differ materially from historical performance and any forward-looking statements include, but are not limited to, the risks described under the section below titled “Risk Factors” of our Registration Statements on Form S-1 initially filed with the Securities and Exchange Commission (the “SEC”) on May 30, 2024 and November 12, 2024, as well as any subsequent filings with the SEC.
Current wording
There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements contained in this report. Examples of risks and uncertainties that could cause actual results to differ materially from historical performance and any forward-looking statements include, but are not limited to, the risks described under the section below titled “Risk Factors” and in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 31, 2025, as well as any subsequent filings with the SEC.
Previous wording
There may be other factors of which we are currently unaware or which it currently deems immaterial that may cause its actual results to differ materially from the forward-looking statements. All forward-looking statements attributable to us or persons acting on our behalf apply only as of the date they are made and are expressly qualified in their entirety by the cautionary statements included in this report. Except as may be required by law, we undertake no obligation to publicly update or revise any forward-looking statement to reflect events or circumstances occurring after the date they were made or to reflect the occurrence of unanticipated events, or otherwise.
Current wording
There may be other factors of which we are currently unaware or which we currently deem immaterial that may cause our actual results to differ materially from the forward-looking statements. All forward-looking statements attributable to us or persons acting on our behalf apply only as of the date they are made and are expressly qualified in their entirety by the cautionary statements included in this report. Except as may be required by law, we undertake no obligation to publicly update or revise any forward-looking statement to reflect events or circumstances occurring after the date they were made or to reflect the occurrence of unanticipated events, or otherwise.
Previous wording
We make available through its Internet website, free of charge, its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to such reports and other filings made by us with the SEC, as soon as practicable after we electronically file such reports and filings with the SEC. Our website address is www.ostherapies.com. The information contained on our website is not incorporated by reference into this report.
Current wording
We make available through our Internet website, free of charge, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to such reports and other filings made by us with the SEC, as soon as practicable after we electronically file such reports and filings with the SEC. Our website address is www.ostherapies.com. The information contained on our website is not incorporated by reference into this report.
Previous wording
We are a clinical stage biopharmaceutical company focused on the identification, development and commercialization of treatments for Osteosarcoma (OS) and other solid tumors. Our mission is to address the significant need for new treatments in cancers of the bone in children and young adults. Osteosarcoma is an extremely challenging and often aggressive cancer that has particular treatment challenges due to its location, changing genotypes and high metastases rates. We are currently seeking to answer the call for new treatments that will prevent metastasis and the recurrence of metastases with our lead core product candidate OST-HER2 (also known as OST31-164), a cancer immunotherapy product candidate that produces a cellular immune response against the cancer antigen HER2. In 2021, we opened a clinical study to produce data for the U.S. Food and Drug Administration (FDA) to evaluate the safety and efficacy of OST-HER2 in patients after resection of recurrent Osteosarcoma, which achieved full enrollment of 41 patients in October 2023. We expect topline results from all 41 patients enrolled in the fourth quarter of 2024 and, if successful, intend to seek regulatory approval for OST-HER2 for the prevention of metastases in Osteosarcoma in 2025. Upon success in gaining regulatory approval from the FDA with OST-HER2 in Osteosarcoma, we intend to evaluate OST-HER2’s potential use, both alone and in combination with HER2 targeting antibodies such as Herceptin®, in other solid tumors including breast, esophageal and lung cancers. OST-HER2 has potential uses in both the prevention of metastases in solid tumors, and therapeutically against HER2-expressing solid tumors treated with HER targeting antibodies.
Current wording
We are a clinical stage biopharmaceutical company focused on the identification, development and commercialization of treatments for Osteosarcoma (OS) and other solid tumors. Our mission is to address the significant need for new treatments in cancers of the bone in children and young adults. Osteosarcoma is an extremely challenging and often aggressive cancer that has particular treatment challenges due to its location, changing genotypes and high metastases rates. We are currently seeking to answer the call for new treatments that will prevent metastasis and the recurrence of metastases with our lead core product candidate OST-HER2 (also known as OST31-164), a cancer immunotherapy product candidate that produces a cellular immune response against the cancer antigen HER2. In 2021, we opened a clinical study to produce data for the U.S. Food and Drug Administration (FDA) to evaluate the safety and efficacy of OST-HER2 in patients after resection of recurrent Osteosarcoma, which achieved full enrollment of 41 patients in October 2023. In the first quarter of 2025, we announced that our Phase IIb clinical trial achieved its primary endpoint with statistical significance. We believe the efficacy results, combined with the favorable safety profile and the unmet clinical need, support the potential for regulatory approval. We plan to request a Type B or Type C FDA meeting in the second quarter of 2025 to discuss the data and the path to a Biologics License Application (BLA). Subject to positive FDA feedback, we plan to submit a BLA with the FDA for approval to market the drug candidate shortly thereafter. Upon success in gaining regulatory approval from the FDA with OST-HER2 in Osteosarcoma, we intend to evaluate OST-HER2’s potential use, both alone and in combination with HER2 targeting antibodies such as Herceptin®, in other solid tumors including breast, esophageal and lung cancers. OST-HER2 has potential uses in both the prevention of metastases in solid tumors, and therapeutically against HER2-expressing solid tumors treated with HER targeting antibodies.
Previous wording
Critical accounting policies are those that, in management’s view, are most important to the portrayal of a company’s financial condition and results of operations and most demanding on their calls on judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. While our significant accounting policies are described in more detail in Note 2 to our financial statements appearing elsewhere in this report, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our financial statements.
Current wording
Critical accounting policies are those that, in management’s view, are most important to the portrayal of a company’s financial condition and results of operations and most demanding on their calls on judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. While our significant accounting policies are described in more detail in Note 2 to our financial statements appearing elsewhere in this annual report, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our financial statements.
Previous wording
***Revenue.***We did not recognize revenues for the nine months ended September 30, 2024 or the year ended December 31, 2023.
Current wording
***Revenue.***We did not recognize revenues for the three months ended March 31, 2025 and 2024.
Previous wording
We expect that our research and development expenses will increase substantially as we advance OST-HER2 and OST-tADC into clinical development and expand our discovery, research and preclinical activities in the near term and in the future.
Current wording
We expect that our research and development expenses will increase substantially as we advance OST-HER2 and OST-tADC into clinical development and expand our discovery, research and preclinical activities.
Previous wording
***Interest Expense.***We evaluated the Convertible Notes in accordance with ASC 480, Distinguishing Liabilities from Equity (“ASC 480”), and determined the Convertible Notes are considered share-settled debt and should be recorded as a liability. This conclusion was determined based on the debt providing the holder with a variable number of shares at settlement with an aggregate fair value equal to the debt instrument’s outstanding principal. The general measurement guidance in ASC 480 requires obligations that can be settled in shares with a fixed monetary value at settlement (e.g., share-settled debt) to be carried at fair value unless other accounting guidance specifies another measurement attribute. It has been determined that the appropriate guidance for share-settled debt is ASC 835. As a result, the Convertible Notes were recorded at the amortized cost.
Current wording
***Interest Expense.***We evaluated the convertible notes issued by us from July 2018 to April 2024 in accordance with ASC 480, Distinguishing Liabilities from Equity (“ASC 480”), and determined the convertible notes are considered share-settled debt and should be recorded as a liability. This conclusion was determined based on the debt providing the holder with a variable number of shares at settlement with an aggregate fair value equal to the debt instrument’s outstanding principal. The general measurement guidance in ASC 480 requires obligations that can be settled in shares with a fixed monetary value at settlement (e.g., share-settled debt) to be carried at fair value unless other accounting guidance specifies another measurement attribute. It has been determined that the appropriate guidance for share-settled debt is ASC 835. As a result, the convertible notes were recorded at the amortized cost.
Previous wording
***Cumulative Series A Preferred Stock Dividend.***The Series A preferred stock dividend requirement represents the coupon dividends on our preferred stock and is identified as a separate component of our statement of operations to compute net income (loss) available to common shareholders. The coupon dividends are computed at 5% of the principal per annum and are recorded monthly. The cumulative accrued dividend at September 30, 2024 and 2023 was $375,000 and $312,500, respectively. The Series A preferred stock was converted into common stock on a 1:1 basis in February 2024, and the last coupon dividend was issued in the quarter ended March 31, 2024.
Current wording
***Cumulative Series A Preferred Stock Dividend.***The Series A preferred stock dividend requirement represents the coupon dividends on our preferred stock that has since been converted and is identified as a separate component of our statement of operations to compute net income (loss) available to common stockholders. The coupon dividends are computed at 5% of the principal per annum and are recorded monthly. The cumulative accrued dividend as of March 31, 2025 and December 31, 2024 were $375,000 and $375,000, respectively. The Series A preferred stock was converted into common stock on a 1:1 basis in February 2024, and the last coupon dividend was issued in the quarter ended March 31, 2024.
Previous wording
***Research and Development Expenses.***Research and development expenses were approximately $1.2 million for the three months ended September 30, 2024 compared to approximately $0.5 million for the three months ended September 30, 2023. This decrease was primarily due to a decrease in vendor expenses associated with our Phase IIb clinical trial and a decrease in vendor expenses associated with out OST-tADC platform technology. The following table summarizes our research and development expenses for the three months ended September 30, 2024 and 2023:
Current wording
***Research and Development Expenses.***Research and development expenses were approximately $1.3 million for the three months ended March 31, 2025 compared to approximately $0.4 million for the three months ended March 31, 2024. This increase was primarily due to an increase in vendor expenses associated with our Phase IIb clinical trial and a decrease in vendor expenses associated with out OST-tADC platform technology. The following table summarizes our research and development expenses for the three months ended March 31, 2025 and 2024:
Previous wording
For the three months ended September 30, 2024 and 2023, the direct research and development expenses related to OST-HER2 were primarily lab fees, vendor expenses and staff payroll fees. In 2024, such expenses were primarily lab fees and related clinical support of approximately $1.0 million attributed to our Phase IIb clinical trial preparation and CRO costs as we completed IND-enabling studies. OST-tADC related direct research and development expenses were approximately $0.0 million and $0.0 million for the three months ended September 30, 2024 and 2023, respectively.
Current wording
For the three months ended March 31, 2025 and 2024, the direct research and development expenses related to OST-HER2 were primarily lab fees, vendor expenses and staff payroll fees. In 2025, such expenses were primarily lab fees and related clinical support of approximately $0.5 million attributed to our Phase IIb clinical trial preparation, advisor fees of $0.3 million, and legal costs of $0.1 million as we completed IND-enabling studies. OST-tADC related direct research and development expenses were approximately $0.04 million and $0.13 million for the three months ended March 31, 2025 and 2024, respectively.
Previous wording
***General and Administrative Expenses.***General and administrative expenses for the three months ended September 30, 2024 were approximately $1.2 million compared to $0.2 million for the three months ended September 30, 2023. These expenses were primarily attributed to marketing costs and accounting fees to consultants.
Current wording
***General and Administrative Expenses.***General and administrative expenses for the three months ended March 31, 2025 were approximately $3.7 million compared to $0.3 million for the three months ended March 31, 2024. These expenses were primarily attributed to marketing costs and advisory fees associated with the PIPE Financing and equity line of credit.
Previous wording
***Interest Expense.***Interest expense for the three months ended September 30, 2024 was approximately $0.4 million compared to $1.4 million for the three months ended September 30, 2023. The amounts of interest are comprised of accretion of debt discount being amortized in 2024 and 2023 from associated discounts related to convertible notes and placement agent warrants, together with interest expenses from the issuances of convertible notes.
Current wording
***Interest Expense.***Interest expense for the three months ended March 31, 2025 was approximately $0 million compared to $0.8 million for the three months ended March 31, 2024.
Previous wording
Since our inception, we have incurred significant operating losses. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of our product candidates. For the nine months ended September 30, 2024 and 2023, we reported a net loss of approximately $5.9 million and $6.4 million, respectively, and had an accumulated deficit of approximately $35.4 million and $28.0 million, respectively. We expect to incur significant expenses at an increasing rate and increasing operating losses for the foreseeable future.
Current wording
Since our inception, we have incurred significant operating losses. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of our product candidates. For the three months ended March 31, 2025 and 2024, we reported a net loss of approximately $2.7 million and $1.5 million, respectively, and had an accumulated deficit of approximately $41 million and $38 million, respectively. We expect to incur significant expenses at an increasing rate and increasing operating losses for the foreseeable future.
Previous wording
As of September 30, 2024 and 2023, we had cash of approximately $1.9 million and $0.02 million, respectively. We have funded our operations to date primarily from the sale of our convertible notes in our private placements, which have provided total gross proceeds of $19.2 million as of July 31, 2024. We believe that the net proceeds from our private placements, together with our existing cash, will enable us to fund our operating expenses and capital expenditure requirements for the next three to nine months.
Current wording
As of March 31, 2025 and December 31, 2024, we had cash of approximately $3.0 million and $5.5 million, respectively. We have funded our operations to date primarily from the sale of our convertible notes and Series A securities in our private placements, as well as the sale of our common stock in our initial public offering, which have provided total gross proceeds of $34.6 million as of March 31, 2025. We believe that the net proceeds from our private placements and initial public offering, together with our existing cash, will enable us to fund our operating expenses and capital expenditure requirements for the next nine to 12 months.
Previous wording
During the nine months ended September 30, 2024 and 2023, operating activities used approximately $4.9 million and $2.1 million of cash, respectively, resulting from our net loss of approximately $5.9 million and $6.3 million, respectively, offset by net non-cash charges of approximately $1.4 million and $2.6 million, respectively, partially offset by net cash provided by changes in our operating assets and liabilities of approximately $(0.4) million and $1.6 million, respectively.
Current wording
During the three months ended March 31, 2025 and 2024, operating activities used approximately $3.4 million and $.6 million of cash, respectively, resulting from our net loss of approximately $3.9 million and $1.5 million, respectively, offset by net non-cash charges of approximately $0.7 million and $0.6 million, respectively, partially offset by net cash (used in) provided by changes in our operating assets and liabilities of approximately $(0.3) million and $0.2 million, respectively.
Previous wording
Net cash provided by changes in our operating assets and liabilities for the nine months ended September 30, 2024 and 2023 consisted primarily of an increase (decrease) in accounts payable of approximately $(0.9) million and $1.1 million, respectively, an increase in accrued interest of approximately $0.6 million and $0.7 million, respectively, and a change in accrued payroll of approximately $(0.1) million and $(0.1) million, respectively.
Current wording
Net cash provided by changes in our operating assets and liabilities for the three ended March 31, 2025 and 2024 consisted primarily of an increase (decrease) in accounts payable of approximately $(0.05) million and $0.04 million, respectively, an increase (decrease) in accrued interest of approximately $0 million and $0.25 million, respectively, and a change in accrued payroll of approximately $(0.1) million and $(0.05) million, respectively. The change in accrued expenses of approximately $(0.15) million and $(0.0) million was a significant portion of the use.
Previous wording
Non-cash charges for the nine months ended September 30, 2024 and 2023 were primarily the result of the amortization of debt discount on our convertible debt of approximately $1.4 million and $2.4 million, respectively. Changes in accounts payable, accrued expenses and other current liabilities and prepaid expenses and other current assets in all periods were generally due to growth in our business, the advancement of our research programs and the timing of vendor invoicing and payments.
Current wording
Non-cash charges for the three months ended March 31, 2025 and 2024 were primarily the result of the changes in the fair value of our warrant liability combined with our common stock shares issued for service and our stock-based compensation of approximately $0.7 million and $0.6 million, respectively. Changes in accounts payable, accrued expenses and other current liabilities and prepaid expenses and other current assets in all periods were generally due to growth in our business, the advancement of our research programs and the timing of vendor invoicing and payments.
Previous wording
During the nine months ended September 30, 2024 and 2023, net cash provided by investing activities was approximately $0.0 million and $0.0 million, respectively.
Current wording
During the three months ended March 31, 2025 and 2024, net cash used by investing activities was approximately $0.2 million and $0 million, respectively.
Previous wording
During the nine months ended September 30, 2024 and 2023, net cash provided by financing activities was approximately $6.7 million and $2.0 million, respectively. The net cash provided by financing activities for the nine months ended September 30, 2024 and 2023 consisted of net proceeds from sales of convertible notes and our initial public offering, reduced by capitalized deferred offering costs.
Current wording
For the three months ended March 31, 2025 and 2024, net cash provided by financing activities was approximately $1.1 million and $0.7 million, respectively.
Previous wording
We have completed seven separate private financing transactions from July 2018 to April 2024 in which we issued the Convertible Notes and raised total gross proceeds of $19,186,520 from accredited investors.
Current wording
***Convertible Notes.***We completed seven separate private financing transactions from July 2018 to April 2024 in which we issued convertible notes and raised total gross proceeds of $19,426,449 from accredited investors. All of the convertible notes were automatically converted into shares of our common stock at the closing of our initial public offering.
Previous wording
As of August 14, 2024, we have repaid the demand notes in full.
Current wording
As of August 14, 2024, we repaid the demand notes in full.
Previous wording
***BlinkBio.***On August 19, 2020, we issued a convertible note with a principal amount of $2,400,000 (the “BlinkBio Convertible Note”) to BlinkBio, Inc., which is a related party based on Dr. Goddard being our Chairman and as the Chairman and Chief Executive Officer of BlinkBio, in exchange for the entry into the license agreement. On March 15, 2021, the principal and unpaid accrued interest of $100,000 of the BlinkBio Convertible Note converted into 1,302,082 shares of our Series A preferred stock and then distributed to BlinkBio stockholders. The BlinkBio Convertible Note had a conversion capitalization ceiling of $19.2 million, which limited the price a noteholder must pay in a convertible note-to-common stock conversion occurrence. On February 9, 2024, the 1,302,082 shares of our Series A preferred stock were converted into 651,041 shares of common stock (on a post-split basis).
Current wording
***BlinkBio.***On August 19, 2020, we issued a convertible note with a principal amount of $2,400,000 (the “BlinkBio Convertible Note”) to BlinkBio, Inc., which was a related party because our former Chairman, Colin Goddard, Ph.D., is the Chairman and Chief Executive Officer of BlinkBio, in exchange for the entry into the license agreement. On March 15, 2021, the principal and unpaid accrued interest of $100,000 of the BlinkBio Convertible Note converted into 1,302,082 shares of our Series A preferred stock and then distributed to BlinkBio stockholders. The BlinkBio Convertible Note had a conversion capitalization ceiling of $19.2 million, which limited the price a noteholder must pay in a convertible note-to-common stock conversion occurrence. On February 9, 2024, the 1,302,082 shares of our Series A preferred stock were converted into 651,041 shares of common stock (on a post-split basis).
Previous wording
Payments towards the License Commencement Payment have been recorded as licensing expenses in our Statement of Operations and Comprehensive Loss for the year ended December 31, 2022. We expect to achieve Milestone 3 in March 2025. The payment schedule for milestones and corresponding payment amounts is set forth below.
Current wording
Payments towards the License Commencement Payment have been recorded as licensing expenses in our Statements of Operations and Comprehensive Loss for the year ended December 31, 2022. We expect to achieve Milestone 3 in 2025. The payment schedule for milestones and corresponding payment amounts is set forth below.
Previous wording
***George Clinical.***In June 2020, we entered into a services agreement, as amended, with George Clinical, Inc., a clinical contract research organization. Pursuant to this agreement, we engaged George Clinical to use its clinical research services for our study entitled “An Open Label, Phase 2 Study of Maintenance Therapy with OST-HER2 after Resection of Recurrent Osteosarcoma.” Under the terms of the agreement, we are required to pay to George Clinical certain fees described in the fee schedule below. The total new budget under the agreement is approximately $2,436,928. For the nine months ended September 30, 2024 and year ended December 31, 2023, we paid $345,836 and $921,300, respectively, to George Clinical. These payments have been recorded as research and development expenses in our Statement of Operations and Comprehensive Loss. The fee schedule for certain fees and corresponding payment amounts is set forth below.
Current wording
***George Clinical.***In June 2020, we entered into a services agreement, as amended, with George Clinical, Inc., a clinical contract research organization. Pursuant to this agreement, we engaged George Clinical to use its clinical research services for our study entitled “An Open Label, Phase 2 Study of Maintenance Therapy with OST-HER2 after Resection of Recurrent Osteosarcoma.” Under the terms of the agreement, we are required to pay to George Clinical certain fees described in the fee schedule below. The total new budget under the agreement is approximately $2,436,928. For the three months ended March 31, 2025 and 2024, we paid $0 and $86,687, respectively, to George Clinical. These payments have been recorded as research and development expenses in our Statement of Operations and Comprehensive Loss. The fee schedule for certain fees and corresponding payment amounts is set forth below.
Previous wording
George Clinical tracks and invoices us for the number of task units completed and pass-through costs are invoiced each month in arrears based on actual costs without mark-up. The PTC Fee Advance will be used to offset the first few months of invoices payable. As of September 30, 2024, the balance due to George Clinical was $295,082.
Current wording
George Clinical tracks and invoices us for the number of task units completed and pass-through costs are invoiced each month in arrears based on actual costs without mark-up. The PTC Fee Advance will be used to offset the first few months of invoices payable. As of March 31, 2025, the balance due to George Clinical was $148,587.
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
We evaluated the Group A Convertible Notes, the Group B Convertible Notes, the Group C Convertible Notes and the Bridge Notes (collectively, the “Convertible Notes”) in accordance with ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and determined that the Convertible Notes are considered share-settled debt and should be recorded as a liability. This conclusion was determined based on the debt providing the holder with a variable number of shares at settlement with an aggregate fair value equal to the debt instrument’s outstanding principal. The general measurement guidance in ASC 480 requires obligations that can be settled in shares with a fixed monetary value at settlement (e.g., share-settled debt) to be carried at fair value unless other accounting guidance specifies another measurement attribute. It has been determined that the appropriate guidance for share-settled debt is ASC 835. As a result, the Convertible Notes will be recorded at the amortized cost.
Previous report — wording carried elsewhere
The following table summarizes our results of operations for the nine months ended September 30, 2024 and 2023:
Previous report — wording carried elsewhere
***Research and Development Expenses.***Research and development expenses were approximately $1.9 million for the nine months ended September 30, 2024 compared to approximately $2.2 million for the nine months ended September 30, 2023. This decrease was primarily due to a decrease in vendor expenses associated with our Phase IIb clinical trial and a decrease in vendor expenses associated with out OST-tADC platform technology. The following table summarizes our research and development expenses for the nine months ended September 30, 2024 and 2023:
Previous report — wording carried elsewhere
For the nine months ended September 30, 2024 and 2023, the direct research and development expenses related to OST-HER2 were primarily lab fees, vendor expenses and staff payroll fees. In 2024, such expenses were primarily lab fees and related clinical support of approximately $1.6 million attributed to our Phase IIb clinical trial preparation and CRO costs as we completed IND-enabling studies. OST-tADC related direct research and development expenses were approximately $0.0 million and $0.2 million for the nine months ended September 30, 2024 and 2023, respectively.
Previous report — wording carried elsewhere
***General and Administrative Expenses.***General and administrative expenses for the nine months ended September 30, 2024 were approximately $1.9 million compared to $1.0 million for the nine months ended September 30, 2023. These expenses were primarily attributed to marketing costs and accounting fees to consultants.