What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-11-04 compared with 2021-08-04 · 83 added, 89 removed, 169 unchanged (50% of the section changed)

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Forward-Looking Statements

The information in this discussion contains forward-looking statements and information within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which are subject to the “safe harbor” created by those sections.

The information in this Quarterly Report on Form 10-Q contains forward-looking statements and information within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which are subject to the “safe harbor” created by those sections.

These forward-looking statements include, but are not limited to any statements concerning the potential effects of the COVID-19 pandemic on our business, statements concerning our strategy, future operations, future financial position, future revenues, projected costs, prospects and plans and objectives of management.

The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements.

We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place

undue reliance on our forward-looking statements.

Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make.

These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation, the risks set forth in our

filings with the SEC.

The forward-looking statements are applicable only as of the date on which they are made, and we do not assume any obligation to update any forward-looking statements.

We are a life sciences instrumentation company in the genome analysis space that provides tools and services based on our Saphyr system to scientists and clinicians conducting genetic research and patient testing, and provides diagnostic testing for those with autism spectrum disorder (“ASD”) and other neurodevelopmental disabilities through Lineagen, Inc., our wholly owned subsidiary (“Lineagen”).

We develop and market the Saphyr system, a platform for ultra-sensitive and ultra-specific structural variation detection that enables researchers and clinicians to accelerate the search for new diagnostics and therapeutic targets and to streamline the study of changes in chromosomes, which is known as cytogenetics.

Our Saphyr system comprises an instrument, chip consumables, reagents and a suite of data analysis tools, and genome analysis services to provide access to data generated by the Saphyr system for researchers who want to evaluate Saphyr data quickly and with a low up-front investment.

Lineagen has been providing genetic testing services to families and their healthcare providers for over nine years and has performed over 65,000 tests for those with neurodevelopmental concerns.

We are a provider of genome analysis solutions that can enable researchers and clinicians to reveal answers to challenging questions in biology and medicine.

Our mission is to transform the way the world sees the genome through optical genome mapping, or OGM, solutions, diagnostic services and software.

We offer OGM solutions for applications across basic, translational and clinical research.

Through our Lineagen, Inc., or Lineagen, business, we also provides diagnostic testing for patients with clinical presentations consistent with autism spectrum disorder and other neurodevelopmental disabilities.

Through our BioDiscovery, Inc., or BioDiscovery, business, we also offer an industry-leading, platform-agnostic software solution, which integrates next-generation sequencing and microarray data designed to provide analysis, visualization, interpretation and reporting of copy number variants, single-nucleotide variants and absence of heterozygosity across the genome in one consolidated view.

We have incurred losses in each year since our inception.

Our net loss was $18.8 million and $28.7 million for the three and six months ended June 30, 2021, respectively.

As of June 30, 2021, we had an accumulated deficit of $172.4 million.

Our net loss was $20.8 million and $49.5 million for the three and nine months ended September 30, 2021, respectively.

As of September 30, 2021, we had an accumulated deficit of $193.2 million.

We expect to continue to incur significant expenses and operating losses as we:

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Recent Highlights

We shipped 13 Saphyr systems during the quarter ended June 30, 2021, compared to 6 systems shipped in the same quarter in 2020.

The installed base of Saphyr systems was 121 as of June 30, 2021, compared to 87 as of June 30, 2020.

We sold 2,742 nanochannel array flow cells during the quarter ended June 30, 2021, which represents an increase of 118% over the same period in 2020.

We analyzed 190 samples in our Saphyr service lab during the quarter ended June 30, 2021, compared to 77 samples analyzed in the same quarter in 2020.

We shipped 24 Saphyr systems during the quarter ended September 30, 2021, compared to 11 systems shipped in the same quarter in 2020.

The installed base of Saphyr systems was 141 as of September 30, 2021, compared to 93 as of September 30, 2020.

We sold 3,969 nanochannel array flow cells during the quarter ended September 30, 2021, compared to 1,785 in the same quarter in 2020, an increase of 122%.

We analyzed 309 samples in our Saphyr service lab during the quarter ended September 30, 2021, compared to 84 samples analyzed in the same quarter in 2020.

COVID-19 Overview

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We generate product revenue from sales of our instruments and consumables.

We currently sell our products for research use only applications and our customers are primarily laboratories associated with academic and governmental research institutions, as well as pharmaceutical, biotechnology and contract research companies.

We currently sell our products for research use only applications and our customers are primarily clinical research laboratories, laboratories associated with academic and governmental research institutions, as well as pharmaceutical, biotechnology and contract research companies.

Consumable revenue consists of sales of complete assays which are developed internally by us, plus sales of kits which contain all the elements necessary to run tests.

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The following table presents our revenue for the periods indicated:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

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Total $ 4,655,000 $ 2,196,000 $ 11,679,000 $ 4,513,000

1 Includes $1,115,000 and $1,966,000 of revenue generated from Lineagen during the three and six months ended June 30, 2021, respectively.

1 Includes $1,050,000 and $3,016,000 of revenue generated from Lineagen during the three and nine months ended September 30, 2021, respectively.

The following table reflects total revenue by geography and as a percentage of total revenue, based on the billing address of our customers.

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Asia Pacific includes China, Japan, South Korea, Singapore and Australia.

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

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Total $ 4,655,000 100 % $ 2,196,000 100 % $ 11,679,000 100 % $ 4,513,000 100 %

2 Includes $1,115,000 and $1,966,000 of revenue generated from Lineagen during the three and six months ended June 30, 2021, respectively.

2 Includes $1,050,000 and $3,016,000 of revenue generated from Lineagen during the three and nine months ended September 30, 2021, respectively.

Cost of Revenue

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Results of Operations

Comparison of the Three Months Ended June 30, 2021 and 2020

The following table sets forth our results of operations for the three months ended June 30, 2021 and 2020:

Three Months Ended June 30, Period-to-Period Change

Comparison of the Three Months Ended September 30, 2021 and 2020

The following table sets forth our results of operations for the three months ended September 30, 2021 and 2020:

Three Months Ended September 30, Period-to-Period Change

Product revenue $ 3,300,000 $ 1,580,000 $ 1,720,000 108.9 %

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Other income (expenses):

Interest expense $ (210,000) $ (561,000) 351,000 (62.6) %

Loss on debt extinguishment $ (2,076,000) $ — (2,076,000) 100.0 %

Interest income (expense) $ 27,000 $ (589,000) 616,000 (104.6) %

Other income (expenses) $ (67,000) $ 54,000 (121,000) (224.1) %

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Net loss $ (20,753,000) $ (10,792,000) $ (9,961,000) 92.3 %

Total revenue increased by $2.7 million, or 226.2%, to $3.9 million for the three months ended June 30, 2021 compared to $1.2 million for the same period in 2020.

The increase impacted all regions.

The increase in product sales was driven by increased demand of our reagent rental program and consumables, while the increase in service and other revenue was mostly driven by sales generated by our Lineagen subsidiary.

Furthermore, below is a summary of changes for the three months ended June 30, 2021 as compared to the same period in 2020:

Total revenue increased by $2.5 million, or 112.0%, to $4.7 million for the three months ended September 30, 2021 compared to $2.2 million for the same period in 2020.

The increase in product sales was driven by increased demand for our Saphyr OGM solutions, including increased instrument sales and greater demand for our reagent rental program and consumables.

We believe increased demand for our OGM systems was primarily driven by increased market awareness and additional published data demonstrating the utility of OGM.

The increase in service and other revenue was primarily driven by sales generated by our Lineagen subsidiary.

Below is a summary of changes for the three months ended September 30, 2021 as compared to the same period in 2020:

• North America revenue increased by $1.7 million, or 192.6%;

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• Asia Pacific revenue increased by $0.7 million, or 632.2%.

Revenue for the three months ended June 30, 2021, includes service revenue of $1.1 million generated from our Lineagen subsidiary.

Revenue for the three months ended September 30, 2021, includes service revenue of $1.1 million generated from our Lineagen subsidiary.

Cost of Revenue

Total cost of revenue increased by $1.8 million, or 300.8%, to $2.4 million for the three months ended June 30, 2021 compared to $0.6 million for the same period in 2020.

Total cost of revenue increased by $2.0 million, or 139.8%, to $3.5 million for the three months ended September 30, 2021 compared to $1.5 million for the same period in 2020.

The increase was due to an increase in sales volume.

Gross margins were affected by a shift in our product mix towards lower margin instrument sales .

In addition, our gross margins for the three months ended September 30, 2021 were affected by higher cost of warranty repairs on OGM products and higher lab costs on our service revenues .

Research and Development Expenses

Research and development expenses increased by $1.7 million, or 70.2%, to $4.1 million for the three months ended June 30, 2021 compared to $2.4 million for the same period in 2020.

The increase is primarily due to a $1.0 million increase in compensation expenses and an increase of $0.5 million in product development costs.

The increase in compensation expense is driven by a 22% increase in headcount as well as wages returning against a lower comparable last year where wages were reduced 25% as part of a COVID-related savings measure.

In addition, compensation expense included a $0.3 million increase in stock-based compensation expense as a result of increased grant date fair values of options issued this year.

Research and development expenses increased by $4.2 million, or 182.3%, to $6.5 million for the three months ended September 30, 2021 compared to $2.3 million for the same period in 2020.

The increase is primarily due to a $1.6 million increase in compensation expenses, an increase of $1.8 million in product development costs, and an increase of $0.3 million in professional services.

The increase in compensation expense is primarily driven by a 73.7% increase in headcount.

In addition, compensation expense included a $0.6 million increase in stock-based compensation expense as a result of increased grant date fair values of options issued this year and the increase in headcount.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased by $8.2 million, or 146.4%, to $13.8 million for the three months ended June 30, 2021 compared to $5.6 million for the same period in 2020.

The increase is primarily due to a $4.6 million increase in compensation expenses, $1.0 million in other headcount-related expenses, and $1.9 million in professional services.

The increase in compensation expense is driven mainly by a 133% increase in headcount, over half of which are employees of Lineagen, as well as wages returning against a lower comparable last year where wages were reduced 25% as part of a COVID-related savings measure.

In addition, compensation expense included a $1.4 million increase in stock-based compensation expense as a result of increased grant date fair values of options issued.

Other headcount-related expenses include the cost of recruiting, temporary employment, and facilities expenses incurred in order to support increased product demand.

Professional services include expenses incurred to expand our global marketing outreach as well consulting, audit, legal, and other fees necessary to satisfy our obligations as a public company.

Selling, general and administrative expenses increased by $6.7 million, or 77.0%, to $15.3 million for the three months ended September 30, 2021 compared to $8.7 million for the same period in 2020.

The increase is primarily due to a $4.7 million increase in compensation expenses, and a $0.7 million increase in other headcount-related expenses.

The increase in compensation expense is driven primarily by a 67.2% increase in headcount.

In addition, compensation expense included a $1.7 million increase in stock-based compensation expense as a result of increased grant date fair values of options issued and the increase in headcount.

Other headcount-related expenses included the cost of recruiting, temporary employment, and facilities expenses incurred in order to support increased product demand.

Interest Expense

Interest expense decreased by $0.4 million, or 62.6%, to $0.2 million for the three months ended June 30, 2021 compared to $0.6 million for the same period in 2020, driven by payment in full of the LSA Innovatus Term Loan during the three months ended June 30, 2021.

Loss on debt extinguishment

A loss on debt extinguishment of $2.1 million was recognized during the three months ended June 30, 2021 in connection with our payment in full of the LSA Innovatus Term Loan, including all accrued interest, an end of term fee, a prepayment fee, and write-off of unamortized debt issuance costs.

Comparison of the Six Months Ended June 30, 2021 and 2020

The following table sets forth our results of operations for the six months ended June 30, 2021 and 2020:

Six Months Ended June 30, Period-to-Period Change

Interest expense decreased by $0.6 million, or 104.6%, to $0.03 million for the three months ended September 30, 2021 compared to $0.6 million for the same period in 2020, driven by payment in full of the outstanding term loan under that certain Loan and Security Agreement with Innovatus Life Sciences Lending Fund I, LP, or the LSA Innovatus Term Loan during the three months ended June 30, 2021.

Comparison of the Nine Months Ended September 30, 2021 and 2020

The following table sets forth our results of operations for the nine months ended September 30, 2021 and 2020:

Nine Months Ended September 30, Period-to-Period Change

Product revenue $ 7,845,000 $ 3,503,000 $ 4,342,000 124.0 %

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Other income (expenses):

Interest expense (748,000) (1,322,000) 574,000 (43.4) %

Interest income (expense) (721,000) (1,911,000) 1,190,000 (62.3) %

Gain on forgiveness of Paycheck Protection Program loan 1,775,000 — 1,775,000 100.0 %

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Net loss $ (49,486,000) $ (29,376,000) $ (20,110,000) 68.5 %

Total revenue increased by $4.7 million, or 203.0%, to $7.0 million for the six months ended June 30, 2021 compared to $2.3 million for the same period in 2020.

The increase impacted all regions.

Furthermore, below is a summary of changes for the six months ended June 30, 2021 as compared to the same period in 2020:

Total revenue increased by $7.2 million, or 158.8%, to $11.7 million for the nine months ended September 30, 2021 compared to $4.5 million for the same period in 2020.

The increase in product sales was driven by increased demand for our Saphyr OGM solutions, including increased instrument sales and greater demand for our reagent rental program and consumables.

Demand for our OGM systems is driven by increased market awareness and additional published data demonstrating the utility of OGM.

The increase in service and other revenue was primarily driven by sales generated by our Lineagen subsidiary.

Below is a summary of changes for the nine months ended September 30, 2021 as compared to the same period in 2020:

• North America revenue increased by $4.0 million, or 168.8%;

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• Asia Pacific revenue increased by $1.3 million, or 590.3%.

Revenue for the six months ended June 30, 2021, includes service revenue of $2.0 million generated from our Lineagen subsidiary.

Revenue for the nine months ended September 30, 2021, includes service revenue of $3.0 million generated from our Lineagen subsidiary.

Cost of Revenue

Total cost of revenue increased by $3.1 million, or 211.3%, to $4.5 million for the six months ended June 30, 2021 compared to $1.5 million for the same period in 2020.

Total cost of revenue increased by $5.1 million, or 175.6%, to $8.0 million for the nine months ended September 30, 2021 compared to $2.9 million for the same period in 2020.

The increase was primarily due to an increase in sales volume.

Gross margins reduced due to a shift in our product mix towards lower margin instrument sales.

Gross margins reduced due to higher cost of warranty repairs on OGM products and higher lab costs on our service revenue.

Research and Development Expenses

Research and development expenses increased by $1.7 million, or 33.3%, to $6.8 million for the six months ended June 30, 2021 compared to $5.1 million for the same period in 2020.

The increase is primarily due to a $1.1 million increase in

compensation expenses and an increase of $0.3 million in product development costs.

In addition, compensation expense included a $0.3 million increase in stock-based compensation expense as a result of increased grant date fair values of options issued this year.

Research and development expenses increased by $5.9 million, or 79.8%, to $13.3 million for the nine months ended September 30, 2021 compared to $7.4 million for the same period in 2020.

The increase is primarily due to a $2.7 million increase in compensation expenses, an increase of $1.7 million in product development costs, and an increase of $0.5 million in

professional services.

Compensation expense included a $1.0 million increase in stock-based compensation expense as a result of increased grant date fair values of options issued this year and an increase in headcount.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased by $10.4 million, or 79.9%, to $23.4 million for the six months ended June 30, 2021 compared to $13.0 million for the same period in 2020.

Selling, general and administrative expenses increased by $17.0 million, or 78.8%, to $38.7 million for the nine months ended September 30, 2021 compared to $21.6 million for the same period in 2020.

The increase is primarily due to a $11.4 million increase in compensation expenses, $1.9 million in other headcount-related expenses, and $2.2 million in professional services.

In addition, compensation expense included a $1.5 million increase in stock-based compensation expense as a result of increased grant date fair values of options issued.

The increase in compensation expense is driven mainly by a 67.2% increase in headcount.

In addition, compensation expense included a $2.9 million increase in stock-based compensation expense as a result of increased grant date fair values of options issued and the increase in headcount.

Other headcount-related expenses include the cost of recruiting, temporary employment, and facilities expenses incurred in order to support increased product demand.

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Interest Expense

Interest expense decreased by $0.6 million, or 43.4%, to $0.7 million for the six months ended June 30, 2021 compared to $1.3 million for the same period in 2020, driven by payment in full of the LSA Innovatus Term Loan during the three months ended June 30, 2021.

Interest expense decreased by $1.2 million, or 62.3%, to $0.7 million for the nine months ended September 30, 2021 compared to $1.9 million for the same period in 2020, driven by payment in full of the LSA Innovatus Term Loan during the three months ended June 30, 2021.

Gain on forgiveness of Paycheck Protection Program loan

A gain on forgiveness of Paycheck Protection Program loan of $1.8 million was recognized during the six months ended June 30, 2021 in connection with the forgiveness of our PPP Loan, including all accrued interest in full.

A gain on forgiveness of Paycheck Protection Program loan of $1.8 million was recognized during the nine months ended September 30, 2021 in connection with the forgiveness of our PPP Loan, including all accrued interest in full.

Loss on debt extinguishment

A loss on debt extinguishment of $2.1 million was recognized during the six months ended June 30, 2021 in connection with our payment in full of the LSA Innovatus Term Loan, including all accrued interest, an end of term fee, a prepayment fee, and write-off of unamortized debt issuance costs.

A loss on debt extinguishment of $2.1 million was recognized during the nine months ended September 30, 2021 in connection with our payment in full of the LSA Innovatus Term Loan, including all accrued interest, an end of term fee, a prepayment fee, and write-off of unamortized debt issuance costs.

Liquidity and Capital Resources

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We anticipate that future sources of liquidity will principally come from sales of common stock and other equity instruments, borrowings from credit facilities and revenue from our commercial operations.

See Note 6 to our condensed consolidated financial statements for a discussion of our recent equity activity and Note 5 to our condensed consolidated financial statements for a discussion of terms and provisions of our debt included elsewhere in this Quarterly Report on Form 10-Q for more information.

We incurred net losses of $28.7 million and $18.6 million for the six months ended June 30, 2021 and 2020, respectively.

As of June 30, 2021, we had an accumulated deficit of $172.4 million and cash and cash equivalents of $332.6 million.

See Note 6 to our condensed consolidated financial statements for a discussion of our recent equity activity and Note 5 to our condensed consolidated financial statements for a discussion of terms and provisions of our previous debt facilities included elsewhere in this Quarterly Report on Form 10-Q for more information.

We incurred net losses of $49.5 million and $29.4 million for the nine months ended September 30, 2021 and 2020, respectively.

As of September 30, 2021, we had an accumulated deficit of $193.2 million, cash and cash equivalents of $140.7 million, and available-for-sales investment securities of $185.3 million.

The following table sets forth the cash flow from operating, investing and financing activities for the periods presented:

Net cash provided by (used in):

Six Months Ended June 30,

Nine Months Ended September 30,

Operating activities $ (46,305,000) $ (26,210,000)

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We have historically experienced negative cash flows from operating activities as we have developed our technology, expanded our business and built our infrastructure and this may continue in the future.

Net cash used in operating activities was $26.3 million during the six months ended June 30, 2021 as compared to $15.3 million during the same period in 2020.

The increase in cash used in operating activities of $11.0 million is primarily attributed to increased headcount-related costs resulting from the acquisition of Lineagen plus incremental headcount growth exceeding 40%.

Net cash used in operating activities was $46.3 million during the nine months ended September 30, 2021 as compared to $26.2 million during the same period in 2020.

The increase in cash used in operating activities of $20.1 million was primarily attributed to an incremental headcount growth of 69.5%.

Investing Activities

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We expect to continue to incur additional costs for capital expenditures related to these efforts in future periods.

During the six months ended June 30, 2021, cash provided by investing activities was negligible.

During the nine months ended September 30, 2021, cash used in investing activities was primarily attributed to the purchase of $205.3 million in available for sale investment securities..

Financing Activities

Net cash provided by financing activities was $320.4 million during the six months ended June 30, 2021 as compared to the same period in 2020 where we had net cash provided by financing activities of $15.1 million, an increase of $305.2 million.

During the six months ended June 30, 2021, we raised approximately $328.6 million in gross proceeds from executing two follow-on offerings and sales under our at-the-market facility with Ladenburg Thalmann.

Net cash provided by financing activities was $334.1 million during the nine months ended September 30, 2021 as compared to the same period in 2020 where we had net cash provided by financing activities of $30.2 million, an increase of $303.9 million.

During the nine months ended September 30, 2021, we raised approximately $342.7 million in gross proceeds from executing two follow-on offerings and sales under our at-the-market facilities with Landenburg and Cowen.

In addition, we raised approximately $10.1 million from warrant and option exercises.

Paycheck Protection Program

In April 2020, we received loan proceeds of approximately $1.8 million (the “PPP Loan”) pursuant to the Paycheck Protection Program (“the PPP”) under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) administered by the U.S.

Small Business Administration (the “SBA”).

In April 2020, we received loan proceeds of approximately $1.8 million, or the PPP Loan pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, administered by the U.S.

Small Business Administration, or the SBA.

The PPP Loan accrued interest at a rate of 1.00% per annum, and is subject to the standard terms and conditions applicable to loans administered by the SBA under the CARES Act.

In February 2021, we applied for forgiveness of the PPP Loan, and in March 2021, the PPP Loan, including all accrued interest, was forgiven in full.

Under the terms of the CARES Act, recipients of loans under the PPP can apply for and be granted forgiveness for all or a portion of such loan granted under the PPP.

Such forgiveness will be determined, subject to limitations, based on the use of loan proceeds for payment of payroll costs and certain other eligible costs (the “Eligible Costs”).

Pursuant to the Paycheck Protection Program Flexibility Act (the “PPPFA”), enacted on June 5, 2020, we were permitted to use loan proceeds on Eligible Costs through October 2, 2020, or the date that was 24 weeks from the PPP Loan origination date (the “Covered Period”).

In order to apply for the PPP Loan, we were required to certify, among other things, that the current economic uncertainty made the PPP Loan request necessary to support our ongoing operations.

This certification further required us to take into account the maintenance of our workforce, our need for additional funding to continue operations, and our ability to access alternative forms of capital in the current market environment to offset the effects of the COVID-19 pandemic.

The PPP Loan is also described in Note 5 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Capital Resources

As of June 30, 2021, we had approximately $332.6 million in cash and cash equivalents, and working capital of $331.2 million.

In August 2020, we filed a shelf registration statement on Form S-3 with the SEC covering the offering, issuance and sale of up to $125.0 million of our securities, including up to $40.0 million of common stock pursuant to an at-the-market facility (“ATM”) with Ladenburg Thalmann & Co.

As of September 30, 2021, we had approximately $140.7 million in cash and cash equivalents, available-for-sales investment securities of $185.3 million, and working capital of $324.3 million.

Approximately $50 million in cash was used to fund the acquisition of BioDiscovery subsequent to September 30, 2021 as described in Note 9 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

acting as sales agent.

During October through December 2020, we sold 27,025,384 shares of common stock under the ATM at an average share price of $0.82, and received gross proceeds of approximately $22.1 million before deducting offering costs of $573,263.

In January 2021, we sold an additional 6,298,152 shares of common stock under the ATM at an average share price of $2.68, and received gross proceeds of approximately $16.9 million before deducting offering costs of $422,034.

During October through December 2020, we sold 27,025,384 shares of common stock under the Ladenburg ATM at an average share price of $0.82, and received gross proceeds of approximately $22.1 million before deducting offering costs of $573,263.

In January 2021, we sold an additional 6,298,152 shares of common stock under the Ladenburg ATM at an average share price of $2.68, and received gross proceeds of approximately $16.9 million before deducting offering costs of $422,034.

The Ladenburg ATM was terminated effective March 22, 2021.

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The gross proceeds were approximately $230.0 million before deducting underwriting discounts and commissions and other offering expenses.

On March 23, 2021, we entered into a Sales Agreement with Cowen and Company, LLC (“Cowen”), pursuant to which we may offer and sell, from time to time at our sole discretion, shares of our common stock having an aggregate offering price of up to $350.0 million, through or to Cowen, acting as sales agent or principal.

As of the date of this filing, no shares have been issued pursuant to this Sales Agreement.

On March 23, 2021, we entered into a Sales Agreement with Cowen and Company, LLC, or Cowen, pursuant to which we may offer and sell, from time to time at our sole discretion, shares of our common stock having an aggregate offering price of up to $350.0 million, through or to Cowen, acting as sales agent or principal, or the Cowen ATM.

In August and September 2021, the Company sold 2,256,000 shares of common stock under the Cowen ATM at an average share price of $6.15 per share, and received gross proceeds of approximately $13.9 million before deducting offering costs of $0.6 million.

Management believes the available cash balance will be sufficient to fund operations, obligations as they become due and capital investments for at least the next twelve months.

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Actual results may materially differ from these estimates under different assumptions or conditions.

There were no material changes in our critical accounting policies and estimates during the six months ended June 30, 2021.

There were no material changes in our critical accounting policies and estimates during the nine months ended September 30, 2021 unless indicated in Note 1 in this Quarterly Report on Form 10-Q.

See Note 2 to the condensed consolidated financial statements in our Annual Report.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis