Bone Biologics Corp

Notes to Unaudited Condensed Consolidated Financial Statements

For the Nine Months ended September 30, 2026 and 2025

1. The Company

Bone Biologics Corporation (the “Company”) is a medical device company that is currently focused on bone regeneration in spinal fusion using the recombinant human protein known as NELL-1. NELL-1 in combination with DBM, demineralized bone matrix, is an osteopromotive recombinant protein that provides target specific control over bone regeneration. The NELL-1 technology platform has been licensed exclusively for worldwide applications to the Company through a technology transfer from the UCLA Technology Development Group on behalf of UC Regents (“UCLA TDG”). UCLA TDG and the Company received guidance from the U.S. Food and Drug Administration (“FDA”) that NELL-1/DBM will be classified as a device/drug combination product that will require an FDA-approved pre-market approval (“PMA”) application before it can be commercialized in the United States.

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

The Company’s success will depend in part on its ability to obtain patents and product license rights, maintain trade secrets, and operate without infringing on the proprietary rights of others, both in the United States and other countries. There can be no assurance that patents issued to or licensed by the Company will not be challenged, invalidated, rendered unenforceable, or circumvented, or that the rights granted thereunder will provide proprietary protection or competitive advantages to the Company.

Going Concern and Liquidity

The Company has no significant operating history and since inception to September 30, 2026, has incurred accumulated losses of approximately $90.3 million. The Company will continue to incur significant expenses for development activities for their lead product NELL-1/DBM. Operating expenditures for the next twelve months are estimated at $6.0 million. The accompanying consolidated financial statements for the nine months ended September 30, 2026 have been prepared assuming the Company will continue as a going concern. As reflected in the accompanying financial statements, the Company incurred a net loss of $2.2 million and used net cash in operating activities of $1.9 million during the nine months ended September 30, 2026. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. In addition, our independent registered public accounting firm, in its audit report on the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, included an explanatory paragraph regarding substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

At September 30, 2026, the Company had cash of $6.1 million.

Available cash is expected to fund the Company’s operations through the second quarter of 2027.

The Company will continue to attempt to raise additional debt and/or equity financing to fund future operations and to provide additional working capital. However, there is no assurance that such financing will be consummated or obtained in sufficient amounts necessary to meet the Company’s needs. If cash resources are insufficient to satisfy the Company’s on-going cash requirements, the Company will be required to scale back or discontinue its product development programs, or obtain funds if available (although there can be no certainties) through strategic alliances that may require the Company to relinquish rights to its technology, or substantially reduce or discontinue its operations entirely. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company.

The Company’s ability to raise additional capital is subject to certain restrictions under the securities purchase agreement entered into in connection with the July 2026 Private Placement (see Note 5). Until July 24, 2027, the Company may not enter into any variable rate transaction, including an equity line of credit or an at-the-market (“ATM”) offering facility, other than sales under an ATM facility with H.C. Wainwright & Co., LLC (“Wainwright”) serving as the sales agent. Until that date, the Company also may not effect a reverse stock split without the consent of the purchaser, unless the Board of Directors determines in good faith that a reverse stock split is required to maintain the listing of the Company’s common stock on Nasdaq. In addition, under its engagement agreement with Wainwright, Wainwright has a right of first refusal to act as the Company’s exclusive placement agent, underwriter or advisor for certain future financings through July 2027. Sales under the ATM facility are also limited by the amount the Company may sell under its shelf registration statement, which depends on the market value of its common stock held by non-affiliates. These restrictions may limit the Company’s ability to raise capital on acceptable terms or in the amounts needed. There can be no assurance that additional financing will be available when needed or on terms acceptable to the Company.

Reverse Stock Split

On June 5, 2025, the Company filed an amendment to its amended and restated certificate of incorporation, as amended, with the Secretary of State of the State of Delaware to effect a 1-for-6 reverse stock split of its outstanding common stock and warrants. The amendment was authorized by the Company’s stockholders on May 30, 2025, and was effective on June 10, 2025.

All share and per share amounts have been retroactively restated as if the reverse stock split occurred at the beginning of the earliest period presented.

2. Summary of Significant Accounting Policies

Basis of Presentation

The interim condensed consolidated financial statements included herein reflect all material adjustments (consisting of normal recurring adjustments and reclassifications) which, in the opinion of management, are necessary for a fair presentation of results for the interim periods. Certain information and footnote disclosures required under the accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The Company believes that the disclosures are adequate to make the information presented not misleading. The condensed consolidated balance sheet information as of December 31, 2025 was derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K filed with the SEC on March 2, 2026 (the “2025 Annual Report”). These condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2025 and notes thereto included in the 2025 Annual Report.

The results of operations for the nine months ended September 30, 2026 are not necessarily indicative of the results to be expected for the entire fiscal year ended December 31, 2026 or for any other period.

Segment Information

The Company operates and reports inone segment, which focuses on bone regeneration in spinal fusion using the recombinant human protein known as NELL-1. The Company’s operating segment is reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (the “CODM”), which is the Company’s Chief Executive Officer and President (the “CEO”).

The CODM uses consolidated net income (loss) as the sole measure of segment profit or loss. Significant segment expenses include research and development, salaries, insurance, and stock-based compensation. Other segment expenses include all remaining costs necessary to operate our business, which primarily include external professional services and other administrative expenses (see Note 8).

Use of Estimates

The preparation of the accompanying condensed consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of expenses during the reporting period.

Significant estimates include the assumptions used in the accounting for potential liabilities, the valuation of the warrant liability, the valuation of debt and equity instruments, the valuation of stock options and warrants issued for services, and the realizability of the Company’s deferred tax assets. Actual results could differ from those estimates.

Macroeconomic environment and geopolitical events

The Company is also subject to additional risks and uncertainties arising from changes to the macroeconomic environment and geopolitical events. U.S. and global financial markets have experienced volatility and disruption due to macroeconomic and geopolitical events such as the implementation of tariffs, inflation, the risk of a recession and ongoing conflicts in other countries. In addition, if equity and credit markets deteriorate, it may make any future debt or equity financing more difficult to obtain on favorable terms, and potentially more dilutive to existing stockholders. The Company cannot predict at this time to what extent it and its collaborators, employees, suppliers, contract manufacturers and/or vendors could potentially be negatively impacted by these events.

Cash

Cash primarily consists of bank demand deposits maintained by a major financial institution. At September 30, 2026, the Company holds $5.9 million in a flexible CD account at Bank of America. This CD has a maturity date of July 14, 2027, and funds can be withdrawn any time without penalty.

The Company’s policy is to maintain its cash balances with financial institutions with high credit ratings and in accounts insured by the Federal Deposit Insurance Corporation (the “FDIC”). The Company may periodically have cash balances in financial institutions in excess of the FDIC insurance limits of $250,000. The Company has not experienced any losses to date resulting from this policy.

Deferred Offering Costs

Deferred offering costs consist of legal, accounting and other fees directly attributable to the Company’s at-the-market (“ATM”) offering program. These costs are deferred and charged against additional paid-in capital in proportion to the proceeds received as shares are sold under the ATM. Any remaining deferred costs are expensed if the program is terminated or the related registration statement expires. As of September 30, 2026, deferred offering costs were $52,666.

Research and Development Costs

Research and development costs include, but are not limited to, payroll and other personnel expenses, consultants, expenses incurred under agreements with contract research and manufacturing organizations and animal clinical investigative sites and the cost to manufacture clinical trial materials. Research and development costs are generally charged to operations ratably over the life of the underlying contracts, unless the achievement of milestones, the completion of contracted work, the termination of an agreement, or other information indicates that a different expensing schedule is more appropriate. However, payments for research and development costs that are contractually defined as non-refundable are charged to operations as incurred.

Payments made pursuant to contracts are initially recorded as advances on research and development contract services in the Company’s consolidated balance sheet and are then charged to research and development costs in the Company’s consolidated statement of operations as those contract services are performed. Expenses incurred under contracts in excess of amounts advanced are recorded as research and development contract liabilities in the Company’s consolidated balance sheets, with a corresponding charge to research and development costs in the Company’s consolidated statements of operations. The Company reviews the status of its various clinical trial and research and development contracts on a quarterly basis.

Fair Value of Financial Instruments

Accounting standards require certain assets and liabilities be reported at fair value in the financial statements and provide a framework for establishing that fair value. The Company defines fair value as 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. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy is based on three levels of inputs that may be used to measure fair value, of which the first two are considered observable and the last is considered unobservable:

Level 1: Quoted prices in active markets for identical assets or liabilities.

Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities including liabilities resulting from embedded derivatives associated with certain warrants to purchase common stock.

The fair value of financial instruments measured on a recurring basis was as follows:

The following table provides a roll-forward of the warrant liability measured at fair value on a recurring basis using unobservable Level 3 inputs for the nine-month period ended September 30, 2026 as follows:

The Company believes the carrying amount of certain financial instruments, including cash and accounts payable approximate their fair values based on their short-term nature and are excluded from the fair value tables above.

Stock Based Compensation

Accounting Standards Codification (“ASC”) 718,Compensation – Stock Compensation, prescribes accounting and reporting standards for all share-based payment transactions to employees and non-employees. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the consolidated financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). Recognition of compensation expense for non-employees is in the same period and manner as if the Company had paid cash for the services.

Warrants

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480,Distinguishing Liabilities from Equity (“ASC 480”), and ASC 815,Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all of the criteria for equity classification, the warrants are required to be liability classified and recorded at their initial fair value on the date of issuance and remeasured at fair value at each balance sheet date thereafter. Changes in the estimated fair value of the warrants that are liability classified are recognized as a non-cash gain or loss in the statement of operations at each balance sheet date.

Net Loss per Common Share

Basic loss per share is computed by dividing the loss available to common shareholders by the weighted-average number of common shares outstanding during the period. Shares issuable upon exercise of pre-funded warrants are included in the weighted-average number of shares outstanding from the date of issuance, as the pre-funded warrants are exercisable for nominal consideration. Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Diluted loss per common share reflects the potential dilution that could occur if options and warrants were to be exercised or converted or otherwise resulted in the issuance of common stock that then shared in the earnings of the entity.

Since the effects of outstanding options and warrants are anti-dilutive, diluted net loss per share is the same as basic net loss per share for the three and nine months ended September 30, 2026 and 2025.

The following sets forth the number of shares of common stock underlying outstanding options and warrants as of September 30, 2026 and 2025:

The table above excludes pre-funded warrants to purchase 534,000 shares of common stock outstanding at September 30, 2026, which are included in basic weighted-average shares outstanding.

Concentrations

Research and development costs for the nine months ended September 30, 2026, include charges from three vendors and consultants representing 44%,25%, and 14%, respectively, of total research and development costs. Research and development costs for the nine months ended September 30, 2025, include charges from four vendors and consultants representing 27%,23%,19%, and 12%, respectively, of total research and development costs.

At September 30, 2026, accounts payable and accrued expenses include amounts due to two vendors representing 35% and 21%, respectively, of total accounts payable and accrued expenses. At December 31, 2025, accounts payable and accrued expenses include amounts due to two vendors representing 24% and 16%, respectively, of total accounts payable and accrued expenses.

New Accounting Standards

In November 2024, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2024-03 “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” This ASU requires public business entities to disclose, for interim and annual reporting periods, additional information about certain income statement expense categories. The requirements are effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027. Entities are permitted to apply either the prospective or retrospective transition methods. The Company is in the process of evaluating the adoption of this ASU to determine its impact on the Company’s disclosures.

In November 2024, the FASB issued ASU 2024-04 “Debt with Conversion and Other Options (Subtopic 470-20)”. This ASU clarifies the requirements related to accounting for the settlement of a debt instrument as an induced conversion. An induced conversion is when a company induces debt holders to convert their debt into equity shares under changed terms and involves additional consideration. The amendments in this ASU are effective for all entities for annual reporting periods beginning January 1, 2026, and interim reporting periods within those annual reporting periods. The adoption of this ASU has not had a material effect on the Company’s financial position, results of operations or cash flows.

In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which includes amendments to clarify interim reporting requirements and applicability of Topic 270 and codifies a principle requiring disclosure of material events and changes since the most recent annual reporting period. This guidance is effective for the Company for interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is in the process of evaluating the impact of adoption of this ASU on its Condensed Consolidated Financial Statements.

The Company’s management has evaluated all other recently issued, but not yet effective, accounting standards and guidance that have been issued or proposed by the FASB or other standards-setting bodies through the filing date of these financial statements and does not believe the future adoption of any such pronouncements will have a material effect on the Company’s financial position and results of operations.

3. Research and Development

The Company has developed a stand-alone platform technology through significant laboratory and small and large animal research over more than ten years to generate the current applications across broad fields of use, including the completion of two preclinical sheep studies that demonstrated our recombinant NELL-1 (“rhNELL-1”) growth factor effectively promotes bone formation in a phylogenetically advanced spine model.

During 2024, the Company announced the treatment of the first subjects in the multicenter, prospective, randomized pilot clinical study of our NB1 bone graft device. NB1 is NELL-1 protein combined with demineralized bone matrix (DBM) to provide rapid, specific and guided control over bone regeneration.

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

The Company has entered into various agreements with Contract Manufacturing Organizations (“CMOs”), Contract Research Organizations and other third parties related to our pilot clinical study. For the nine-month periods ended September 30, 2026 and 2025, research and development expenses were principally attributable to clinical trials conducted for the Company’s lead product candidate. At September 30, 2026, the estimated remaining commitment under these agreements is approximately $114,987.

Research and development costs are summarized below based on the respective geographical regions where such costs are incurred.

4. Warrant Liability

In October 2022, the Company issued warrants in connection with a public offering. Certain provisions of the warrants require liability classification under ASC 815. The warrants are remeasured at fair value using a Black-Scholes valuation model at each reporting date, with changes in fair value recognized in earnings.

The fair value of the warrant liability was $198 and $703 as of September 30, 2026 and December 31, 2025, respectively.

5. Stockholders’ Equity

Preferred Stock

The Company’s amended and restated certificate of incorporation authorizes the Company to issue a total of 20,000,000 shares of preferred stock. No shares have been issued.

Common Stock

The Company’s amended and restated certificate of incorporation authorizes the Company to issue a total of 100,000,000 shares of common stock. As of September 30, 2026 and December 31, 2025, the Company had an aggregate of 3,389,057 and 1,795,260 shares of common stock outstanding, respectively.

July 2026 Private Placement

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

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

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

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

The Company evaluated the pre-funded warrants, Series F warrants, Series G warrants and placement agent warrants under ASC 480 and ASC 815-40 and concluded that each is indexed to the Company’s own stock and meets the requirements for equity classification. The Series F, Series G and placement agent warrants provide the holder the right, upon certain fundamental transactions within the Company’s control, to receive cash equal to the Black-Scholes value, as defined, of the unexercised warrants.

At the Market (ATM) Offering Program

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

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

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

The Company did not sell any shares of common stock through the ATM facility during the three months ended September 30, 2025. During the nine months ended September 30, 2025, the Company sold 52,843 shares of common stock through the ATM Facility for net proceeds of $347,549, after deducting $13,029 in offering costs.

June 2025 Public Offering

On June 27, 2025, the Company issued investors 793,750 shares of its common stock and pre-funded warrants to purchase 456,250 shares of common stock at a public offering price of $4.00 per share and $3.999 per pre-funded warrant. The Company also received the $0.001 per share exercise price of the pre-funded warrants at closing. In addition, the Company issued investors Series D warrants to purchase 1,250,000 shares of its common stock (exercise price of $4.00 per share), expiring on June 30, 2030, and Series E warrants to purchase 1,250,000 shares of common stock (exercise price of $4.00 per share), expiring on December 30, 2026. The net proceeds received from the sale of common stock, pre-funded warrants and warrants, net of cash costs of $647,208, was $4,352,792.

In June 2025,346,250 shares of common stock were issued upon the exercise of 346,250 pre-funded warrants. During the three months ended September 30, 2025, the remaining 110,000 pre-funded warrants were exercised.

In addition, warrants to purchase 75,000 shares of common stock were issued to the placement agent. The placement agent warrants have an exercise price of $5.00 per share and were exercisable immediately upon issuance for a term offive years.

6.Common Stock Warrants

A summary of warrant activity for the nine months ended September 30, 2026 is presented below:

As of September 30, 2026, the Company had outstanding exercisable, but unexercised common stock warrants as follows:

Based on a fair market value of $0.50 per share on September 30, 2026, there were 534,399 exercisable but unexercised in-the-money common stock warrants on that date. Accordingly, the intrinsic value attributed to exercisable but unexercised common stock warrants at September 30, 2026 was $266,665.

7. Stock-based Compensation

2015 Equity Incentive Plan

The Company has 5,104,915 shares of common stock authorized and reserved for issuance under its 2015 Equity Incentive Plan, as amended (the “2015 Plan”). The reserve may be increased annually by the Board of Directors up to 5% of the Company’s outstanding common stock as of the immediately preceding December 31. The 2015 Plan also provides for customary anti-dilution adjustments in the event of stock splits or other changes in the Company’s capital structure.

Shares subject to awards that expire, are forfeited, canceled or repurchased become available for future grant under the 2015 Plan. However, shares withheld for tax withholding purposes and the gross number of shares issued upon the exercise of stock appreciation rights or options through net exercise or tender of previously owned shares are not returned to the share reserve.

The 2015 Plan permits the grant of incentive stock options to employees and non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, cash-based awards and other stock-based awards to employees, directors, consultants and certain affiliated service providers. The 2015 Plan is administered by the Compensation Committee of the Board of Directors, which has the authority to determine award recipients and the terms and conditions of awards, subject to the provisions of the plan.

A summary of stock option activity for the nine months ended September 30, 2026 is presented below:

As of September 30, 2026, the Company had outstanding stock options as follows:

Based on a fair value of $0.50 per share on September 30, 2026, there were no exercisable but unexercised in-the-money common stock options on that date.

During the nine months ended September 30, 2026 and 2025, the Company had stock-based compensation expense of $35,183 and $210,684, respectively, related to the vesting of stock options granted to the Company’s employees and directors and included in our reported net loss. Vesting of options differs based on the terms of each option. In addition, during the nine months ended September 30, 2026 and 2025, options exercisable into 25,003 and 13,529 shares of common stock, respectively, were issued to employees in settlement of previously accrued bonuses of $34,854 and $46,183, respectively. During the nine months ended September 30, 2026, options exercisable into 6,301 shares of common stock expired.

The Company utilized the Black-Scholes option-pricing model. The assumptions used for the nine months ended September 30, 2026 are as follows:

The expected volatility is a measure of the amount by which the Company stock price is expected to fluctuate during the expected term of options granted. The Company determines the expected volatility based upon the historical volatility of our common stock since listing on the Nasdaq Capital Market. The Company does not believe that the future volatility of its common stock over an option’s expected term is likely to differ significantly from the past. The risk-free interest rate used in the calculations is based on the implied yield available on U.S. Treasury issues with an equivalent term approximating the expected life of the options. The expected life of options granted was determined using the simplified method, under which the expected term is the average of the vesting period and the contractual term of the option. Stock-based compensation is a non-cash expense because the Company settles these obligations by issuing shares of its common stock from its authorized shares instead of settling such obligations with cash payments.

8. Segment information

The CODM has been identified as the CEO. The Company’s CODM evaluates performance and makes operating decisions about allocating resources based on financial data presented on a consolidated basis. Because the CODM evaluates financial performance on a consolidated basis, the Company has determined that it has a single operating segment composed of the consolidated financial results of Bone Biologics Corporation.

Significant segment expenses include research and development, salaries, insurance, and stock-based compensation. Other segment expenses include all remaining costs necessary to operate our business, which primarily include external professional services and other administrative expenses. The following table presents the significant segment expenses and other segment items regularly reviewed by our CODM:

9. Commitments and Contingencies

UCLA TDG Exclusive License Agreement

Effective April 9, 2019, the Company entered into an Amended and Restated Exclusive License Agreement (the “License Agreement”) with the University of California, Los Angeles Technology Development Group (“UCLA TDG”), which amended and restated the parties’ prior license agreement. Under the License Agreement, UCLA TDG granted the Company exclusive rights to develop and commercialize NELL-1 technology for spinal fusion, osteoporosis and trauma applications.

The Company is required to pay UCLA TDG an annual maintenance fee of $10,000, quarterly royalties equal to 3.0% of net sales of licensed products or methods, and minimum annual royalties ranging from $50,000 to $250,000 following the first commercial sale. Royalty obligations may be reduced for certain third-party royalty payments, and the Company is required to share a percentage of sublicense income with UCLA TDG.

The License Agreement also requires milestone payments of $100,000 upon enrollment of the first subject in a feasibility study, $250,000 upon enrollment of the first subject in a pivotal study, $500,000 upon regulatory approval of a licensed product or method, and $1,000,000 upon the first commercial sale. During 2024, the Company initiated its feasibility study for the NB1 bone graft device, triggering the initial $100,000 milestone payment.

In addition, the Company is obligated to pay aggregate diligence fees of up to $8.0 million based on specified cumulative net sales thresholds following the first commercial sale. The License Agreement also provides for a payment upon certain liquidity events equal to the greater of $500,000 or 2% of the related transaction proceeds.

The Company is required to use commercially reasonable efforts to develop and commercialize licensed products, reimburse UCLA TDG for patent-related costs, and indemnify UCLA TDG against certain third-party claims. UCLA TDG may terminate or convert the license to a non-exclusive license if specified diligence requirements are not met.

Payments to UCLA TDG under the Amended License Agreement for the nine months ended September 30, 2026 and 2025 were $16,080 and $17,388, respectively.

Contingencies

The Company is subject to claims and assessments from time to time in the ordinary course of business. The Company’s management does not believe that any such matters, individually or in the aggregate, will have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows.

10. Subsequent Events

The Company has evaluated subsequent events through the date which the consolidated financial statements were issued. There were no subsequent events noted that would require adjustment to or disclosure in these consolidated financial statements.