Forward-Looking Statements

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words "believes," "project," "expects," "anticipates," "estimates," "intends," "strategy," "plan," "may," "will," "would," "will be," "will continue," "will likely result," and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.





Overview

The company's major objective for 2022 remains to secure the required funding to finalize some additional requirements of the IND application and begin the clinical trials.

We estimated that the completion of the IND and the clinical trials would take approximately 12-18 months and cost in the range of $6.9 million once initial funding is in place. It is estimated that the cost to finalize the IND will be approximately 1.9 million, and the cost to complete Phase 1/2 of the clinical trial will be approximately 5.0 million. In addition to the completion of the IND, the only other significant gating item to entering the clinical trials is funding for this process.





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As previously reported, our goal in obtaining this funding has been to minimize shareholders' dilution as much as possible. Consequently, we are continuing to pursue financing through the issuance of a debt instrument and international licensing agreements.

We continue to work with a number of potential investors and continue to pursue the necessary funding based on our stated objectives. It has taken longer to raise the funds than originally estimated; however, we remain confident that our goal is achievable. In the interim, the officers and related parties intend to continue to fund the Company's essential operating costs.

We have continued the planning for the clinical trials to the extent we are able, considering funding constraints. As previously reported we have chosen a CRO to assist in our IND submission and conducting the trials. We have identified and received quotes from potential NovaDerm contract manufacturers. Clinical site selection and patient recruitment should be somewhat simpler than other clinical trials, as we are limited in site selection to the 127 burn centers qualified to treat pediatric and adult full thickness catastrophic burns. In addition, the surgical protocol will be similar to the split thickness allografting procedures currently in use at those facilities. NovaDerm® should thus require minimal physician training.

The initial trials are planned to begin with a total of ten subjects with an Initial Data Safety Monitoring Board (DSMB) review of safety on the first three subjects once they have reached 6 months follow-up. We do not intend to interrupt our trial waiting for the DSMB report.

Our management is considering various possibilities and approaches to obtaining clinical trial materials and manufacturing. While no final decision has been made, management's approach is to set up the trials so as to allow for a seamless transition into commercial production upon approval.

We have access to a clean room facility for growing NovaDerm here in New Jersey in addition to instate and out of state FDA registered contract manufacturers. Our selection for the clinical trial material manufacturer must have the ability to produce marketable material when NovaDerm is approved for sale by the FDA.



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Results of Operations for the Three and Nine Months Ended June 30, 2022 and 2021

We generated no revenues from September 6, 2007 (date of inception) to June 30, 2022. We do not expect to generate revenues until we are able to obtain FDA approval of our product and thereafter successfully market and sell the product.

We incurred operating expenses of $152,721 and $454,766 for the three and nine months ended June 30, 2022, compared with operating expenses of $155,559 and $532,113 for the three and nine months ended June 30, 2021.. The decrease was the result of a decrease in insurance expense and stock-based compensation.

Other expenses was $10,372 and $29,101 for the three and nine months ended June 30, 2022, as compared to other expenses of $9,786 and $26,414 for the three and nine months ended June 30, 2021. Other income (expenses) consisted of interest expense and an unrealized loss on securities. The increase in interest expense related primarily to interest charged on a convertible note issued to John Weber, the Company's chief financial officer, on March 31, 2020.

Liquidity and Capital Resources

As of June 30, 2022, we had cash of $1,643. At September 30, 2021, we had cash of $1,859.

Operating activities used $27,216 in cash for the nine months ended June 30, 2022. The decrease in cash was primarily attributable to funding the loss for the period.

There were no investing activities provided during the reported period.

Cash flows from financing activities for the nine months ended June 30, 2022 represents proceeds from loans from officers of $27,000.

We have issued various promissory notes to meet our short term demands, the terms of which are provided in the notes to the consolidated financial statements accompanying this report. While this source of financing has been helpful in the short term to meet our financial obligations, we will need additional financing to fund our operations, continue with the FDA approval process, and implement our business plan. Our long term financial needs are estimated at about $8-10 million.



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Off Balance Sheet Arrangements

As of June 30, 2022, there were no off-balance sheet arrangements.





Going Concern

Our consolidated financial statements have been prepared assuming that we will continue as a going concern which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. We have incurred operating losses from inception, expect to incur further losses in the development of our business, and have been dependent on funding operations through the issuance of convertible debt and private sale of equity securities. These conditions raise substantial doubt about our ability to continue as a going concern. Management's plans include continuing to finance operations through the private or public placement of debt and/or equity securities and the reduction of expenditures. However, no assurance can be given at this time as to whether we will be able to achieve these objectives. The consolidated financial statements do not include any adjustment relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.

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