What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-08-12 compared with 2022-05-16 · 276 added, 177 removed, 302 unchanged (60% of the section changed)

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that involve risks and uncertainties.

You should review the “Risk Factors” discussed in Item 1A of Part II in this Quarterly

Report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied

by the forward-looking statements contained in the following discussion and analysis.

is a clinical-stage biotechnology company seeking to extend the lives of cancer patients by pursuing an integrated therapeutic and companion

diagnostic strategy.

The company’s lead therapeutic candidate is gedatolisib, a pan-PI3K/mTOR inhibitor.

Its mechanism of action

and pharmacokinetic properties are highly differentiated from other currently approved and investigational therapies that target PI3K

or mTOR alone or together.

The company expects to initiate a Phase 3 study evaluating gedatolisib in patients with HR+/HER2- advanced

breast cancer in 2022.

Its CELsignia companion diagnostic platform is uniquely able to analyze live patient tumor cells to identify new

groups of cancer patients likely to benefit from already approved targeted therapies.

lead drug candidate, gedatolisib, is a potent, well-tolerated, small molecule dual inhibitor, administered intravenously, that selectively

targets all class I isoforms of PI3K and mammalian target of rapamycin (mTOR).

In April 2021, we obtained exclusive global development

and commercialization rights to gedatolisib under a license agreement with Pfizer, Inc.

We believe gedatolisib’s unique mechanism

of action, differentiated chemical structure, favorable pharmacokinetic properties, and intravenous formulation offer distinct advantages

over currently approved and investigational therapies that target PI3K or mTOR alone or together.

limitations of therapies that only inhibit a single class I PI3K isoform or only one mTOR kinase complex

is a pan-class I isoform PI3K inhibitor with low nanomolar potency for the p110α, p110β, p110γ, and p110δ

Each isoform is known to preferentially affect different signal transduction events that involve tumor cell survival, depending

upon the aberrations associated with the linked pathway.

When a therapy only inhibits a single class I isoforms (e.g., alpelisib,

a PI3K-α inhibitor) or only one mTOR kinase complex (e.g., everolimus, an mTORC1 inhibitor), numerous feedforward and feedback

loops between the PI3K isoforms and mTOR cross-activates the uninhibited sub-units.

This, in turn, induces compensatory resistance

that reduces the efficacy of isoform specific PI3K or single mTOR kinase complex inhibitors.

Inhibiting all four PI3K isoforms and

both mTOR complexes, as gedatolisib does, thus prevents the confounding effect of isoform interaction that may occur with isoform-specific

PI3K inhibitors and the confounding interaction between PI3K isoforms and mTOR.

You should review the “Risk Factors” discussed in our Quarterly Report for the period

ended March 31, 2022 and elsewhere in this Quarterly Report for a discussion of important factors that could cause actual results to

differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and

is a clinical-stage biotechnology company focused on development of targeted therapies for hormonally driven cancers.

The company’s

lead therapeutic candidate is gedatolisib, a pan-PI3K/mTOR inhibitor.

Its mechanism of action and pharmacokinetic properties are highly

differentiated from other currently approved and investigational therapies that target PI3K or mTOR alone or together.

The company expects

to initiate a Phase 3 study evaluating gedatolisib in patients with HR+/HER2- advanced breast cancer in 2022.

Its CELsignia companion

diagnostic platform is uniquely able to analyze live patient tumor cells to identify new groups of cancer patients likely to benefit

from already approved targeted therapies.

is a potent, well-tolerated, small molecule reversible dual inhibitor, administered intravenously, that selectively targets all class

I isoforms of PI3K and mammalian target of rapamycin (mTOR).

In April 2021, we obtained exclusive global development and commercialization

rights to gedatolisib under a license agreement with Pfizer, Inc.

We believe gedatolisib’s unique mechanism of action, differentiated

chemical structure, favorable pharmacokinetic properties, and intravenous formulation offer distinct advantages over currently approved

and investigational therapies that target PI3K or mTOR alone or together.

limitations of therapies that only inhibit a single class I PI3K isoform or only one mTOR

kinase complex

is a pan-class I isoform PI3K inhibitor with low nanomolar potency for the p110α, p110β, p110γ, and p110δ isoforms.

Each isoform is known to preferentially affect different signal transduction events that involve tumor cell survival, depending upon

the aberrations associated with the linked pathway.

When a therapy only inhibits a single class I isoforms (e.g., alpelisib, a PI3K-α

inhibitor) or only one mTOR kinase complex (e.g., everolimus, an mTORC1 inhibitor), numerous feedforward and feedback loops between the

PI3K isoforms and mTOR cross-activates the uninhibited sub-units.

This, in turn, induces compensatory resistance that reduces the efficacy

of isoform specific PI3K or single mTOR kinase complex inhibitors.

Inhibiting all four PI3K isoforms and both mTOR complexes, as gedatolisib

does, thus prevents the confounding effect of isoform interaction that may occur with isoform-specific PI3K inhibitors and the confounding

interaction between PI3K isoforms and mTOR.

tolerated by patients than oral PI3K and mTOR drugs

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or dual PI3K/mTOR inhibitors that are no longer being clinically developed.

Oral pan-PI3K or PI3K/mTOR inhibitors have repeatably

been found to induce significant side effects that were not well tolerated by patients.

This typically leads to a high proportion

of patients requiring dose reductions or treatment discontinuation.

The challenging toxicity profile of these drug candidates ultimately

played a significant role in the decisions to halt their development, despite showing promising efficacy.

By contrast, gedatolisib

stabilizes at lower concentration levels in plasma compared to orally administered PI3K inhibitors, resulting in less toxicity, while

maintaining concentrations sufficient to inhibit PI3K/mTOR signaling.

Oral pan-PI3K or PI3K/mTOR inhibitors have repeatably been

found to induce significant side effects that were not well tolerated by patients.

This typically leads to a high proportion of patients

requiring dose reductions or treatment discontinuation.

The challenging toxicity profile of these drug candidates ultimately played a

significant role in the decisions to halt their development, despite showing promising efficacy.

By contrast, gedatolisib stabilizes

at lower concentration levels in plasma compared to orally administered PI3K inhibitors, resulting in less toxicity, while maintaining

concentrations sufficient to inhibit PI3K/mTOR signaling.

Isoform-specific

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still leads to challenging toxicities.

The experience with an FDA approved oral p110-α specific inhibitor, Piqray, illustrates

the challenge.

In its Phase 3 pivotal trial Piqray was found to induce a Grade 3 or 4 adverse event (AE) related to hyperglycemia

in 39% of patients evaluated.

In addition, 26% of patients discontinued alpelisib due to treatment related adverse events.

in the 103-patient dose expansion portion of the Phase 1b clinical trial with gedatolisib, only 7% of patients experienced Grade

3 or 4 hyperglycemia and less than 10% discontinued treatment.

of March 31, 2022, 492 patients with solid tumors have received gedatolisib in eight clinical trials sponsored by Pfizer.

patients, 129 were treated with gedatolisib as a single agent in three clinical trials.

The remaining 363 patients received gedatolisib

in combination with other anti-cancer agents in five clinical trials.

Additional patients received gedatolisib in combination with other

anti-cancer agents in nine investigator sponsored clinical trials.

The experience with an FDA approved oral p110-α specific inhibitor, Piqray (“alpelisib”),

illustrates the challenge.

In its Phase 3 pivotal trial Piqray was found to induce a Grade 3 or 4 adverse event (AE) related to

hyperglycemia in 39% of patients evaluated.

In addition, 26% of patients discontinued alpelisib due to treatment related adverse

By contrast, in the 103-patient dose expansion portion of the Phase 1b clinical trial with gedatolisib, only 7% of patients

experienced Grade 3 or 4 hyperglycemia and less than 10% discontinued treatment.

of June 30, 2022, 492 patients with solid tumors have received gedatolisib in eight clinical trials sponsored by Pfizer.

Of the 492 patients,

129 were treated with gedatolisib as a single agent in three clinical trials.

The remaining 363 patients received gedatolisib in combination

with other anti-cancer agents in five clinical trials.

Additional patients received gedatolisib in combination with other anti-cancer

agents in nine investigator sponsored clinical trials.

Phase 1b trial (B2151009) evaluating patients with HR+/HER2- metastatic breast cancer was initiated in 2016 and subsequently enrolled

138 patients.

Ten patients from this study continue to receive study treatment, as of March 31, 2022, each of whom have received study

Ten patients from this study continue to receive study treatment, as of June 30, 2022, each of whom have received study

treatment for more than three years.

The B2151009 clinical trial was an open label, multiple arm Phase 1b study that evaluated

gedatolisib in combination with palbociclib (CDK4/6 inhibitor) and fulvestrant or letrozole in patients with HR+/HER2- advanced breast

Thirty-five patients were enrolled in two dose escalation arms to evaluate the safety and tolerability and to determine the maximum

tolerated dose (MTD) of gedatolisib when used in combination with the standard doses of palbociclib and endocrine therapy (letrozole

or fulvestrant).

The B2151009 clinical trial was an open label, multiple arm Phase 1b study that evaluated gedatolisib

in combination with palbociclib (CDK4/6 inhibitor) and fulvestrant or letrozole in patients with HR+/HER2- advanced breast cancer.

patients were enrolled in two dose escalation arms to evaluate the safety and tolerability and to determine the maximum tolerated dose

(MTD) of gedatolisib when used in combination with the standard doses of palbociclib and endocrine therapy (letrozole or fulvestrant).

The MTD was determined to be 180 mg administered intravenously once weekly.

A total of 103 patients were subsequently

enrolled in one of four expansion arms (A, B, C, D).

A total of 103 patients were subsequently enrolled in one

of four expansion arms (A, B, C, D).

objective overall response rates (ORR) were observed in all four expansion arms and were comparable in each arm for PIK3CA WT and PIK3CA

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and 2) gedatolisib in combination with fulvestrant.

to initiate the VIKTORIA-1 study in mid-2022.

to initiate the VIKTORIA-1 study in 2022.

clinical trial will enable separate evaluation of subjects according to their PIK3CA status.

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Subjects who meet eligibility criteria and are PIK3CA MT will be randomly assigned (1:1:1)

to receive a regimen of either gedatolisib, palbociclib, and fulvestrant (Arm D) or alpelisib and fulvestrant (Arm E).

to receive a regimen of either gedatolisib, palbociclib, and fulvestrant (Arm D), alpelisib and fulvestrant (Arm E), or gedatolisib and

fulvestrant (Arm F).

proprietary CELsignia diagnostic platform is the only commercially ready technology we are aware of that uses a patient’s living

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the probability of getting regulatory approval to market the targeted therapy indication

August 9, 2022, Celcuity amended its existing debt financing agreement with an affiliate of Innovatus Capital Partners, LLC (“Innovatus”)

to provide Celcuity with up to $75 million in term loans, a $50 million increase from the original debt financing agreement dated April

Celcuity received $15 million at the closing of the original agreement in April 2021.

Celcuity will be able to draw an additional

$20 million tranche following closing of the $100 million private placement.

Celcuity will be able to draw on two additional tranches

of $10 million each and one additional tranche of $20 million upon achievement of certain clinical trial milestones and satisfaction of

certain financial covenants determined on a pro forma as-funded basis.

Funding of these additional tranches is also subject to other customary

conditions and limits on when the Company can request funding for such tranches.

Celcuity is entitled to make interest only payments for

the 48-month period from the original agreement date or for the 60-month period from the original agreement date if certain conditions

The loans will mature on April 8, 2027, the sixth anniversary of the initial funding date.

Innovatus has the right to convert

outstanding principal into shares of Celcuity common stock until the third anniversary of the loan amendment date, with such amount limited

to an aggregate of up to $6.5 million assuming all tranches are funded.

The loan is secured by all of Celcuity’s assets.

VIKTORIA-1 Phase 3 clinical trial remains on track to dose the first patient in the next few months.

The operational activities required

to initiate the clinical trial at a study site are completed.

Further details about the study will be available at www.CT.gov.

trial protocol was updated to include an additional study arm (Arm F) to evaluate gedatolisib plus fulvestrant in 50 patients who have

PIK3CA mutations.

This update was made in response to a recommendation from the European Medicines Agency (EMA) that the study arms for

PIK3CA mutated patients mirror the same study arms for PIK3CA non-mutated patients.

No changes were made to the primary endpoints.

will evaluate the safety and efficacy of gedatolisib in combination with fulvestrant with or without palbociclib in adults with HR+/HER2-

advanced breast cancer whose disease progressed while receiving prior CDK4/6 therapy.

July 18, 2022, gedatolisib was granted Breakthrough Therapy Designation for HR+/HER2- metastatic breast cancer after progression on CDK4/6

Breakthrough Therapy designation is granted by the FDA to expedite the development and regulatory review of an investigational

medicine that is intended to treat a serious or life-threatening condition.

The criteria for Breakthrough Therapy designation require

preliminary clinical evidence that demonstrates the drug may have substantial improvement on one or more clinically significant endpoints

over available therapy.

The benefits of Breakthrough Therapy Designation include more intensive guidance from the FDA on an efficient

development program, access to a scientific liaison to help accelerate review time, and potential eligibility for priority review if

relevant criteria are met.

Celcuity’s breakthrough application was supported by data from a Phase 1b study that assessed the safety,

tolerability and clinical activity of gedatolisib in combination with palbociclib and fulvestrant in patients with HR+/HER2- metastatic

breast cancer whose disease progressed during treatment with a CDK4/6 therapy and an aromatase inhibitor.

May 15, 2022, the Company entered into a securities purchase agreement with certain institutional and other accredited investors for

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private placement.

March 2022, the company announced the design for its pivotal Phase 3 trial for gedatolisib, an investigational pan-PI3K/mTOR

The pivotal Phase 3 clinical trial, which is named VIKTORIA-1, will be an open-label, randomized study to evaluate the

safety and efficacy of gedatolisib in combination with fulvestrant with or without palbociclib in adults with HR+/HER2- advanced

breast cancer whose disease progressed while receiving prior CDK4/6 therapy.

February 4, 2022, the Company entered into an Open Market Sale Agreement SM with Jefferies LLC, as agent (“Jefferies”),

pursuant to which we may offer and sell, from time to time, through Jefferies, shares of our common stock having an aggregate offering

price of up to $50,000,000.

We will pay Jefferies a commission equal to 3.0% of the aggregate gross proceeds from each sale of such shares.

To date, we have not yet made any sales under this arrangement.

January 13, 2022, gedatolisib was granted Fast Track designation for the treatment of patients with ER+/HER2- metastatic breast cancer

after progression on CDK4/6 therapy.

Fast Track designation is granted by the FDA for products that are intended for the treatment of

serious or life-threatening disease or conditions and which demonstrate the potential to address an unmet medical need.

The designation

offers the opportunity for frequent interactions with the FDA to discuss the drug’s development plan and to ensure collection of

appropriate data needed to support drug approval, as well as eligibility for rolling submission of a New Drug Application.

of COVID-19 on our Business

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We experienced delays in the enrollment of patients in our ongoing clinical trials

and now expect interim results from the FACT-1 and FACT-2 trials to be delayed until the first half of 2023 and final results approximately

nine months later.

We could experience further delays in clinical trials and collaborations with pharmaceutical companies and sponsors

if new variants emerge or if the spread of COVID-19 once again accelerates.

Due to the inherent uncertainty associated with the COVID-19

pandemic, we are unable to predict the impact the pandemic may have on our clinical trial work and overall financial condition.

and now expect interim results from two of our CELsignia Phase 2 clinical trials, FACT-1 and FACT-2 to be delayed until mid-2023 and

final results approximately nine months later.

We could experience further delays in clinical trials and collaborations with pharmaceutical

companies and sponsors if new variants emerge or if the spread of COVID-19 once again accelerates.

Due to the inherent uncertainty associated

with the COVID-19 pandemic, we are unable to predict the impact the pandemic may have on our clinical trial work and overall financial

of Operations

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As a result, we are not and have never been profitable and have incurred losses in each period since our inception

For the three months ended March 31, 2022 and 2021, we reported a net loss of approximately $7.9 million and $2.8 million, respectively.

As of March 31, 2022, we had an accumulated deficit of approximately $63.9 million.

As of March 31, 2022, we had cash and cash

equivalents of approximately $78.3 million.

For the three months ended June 30, 2022 and 2021, we reported a net loss of approximately $10.0 million and $14.0 million,

respectively and for the six months ended June 30, 2022 and 2021, we reported a net loss of approximately $17.9 million and $16.8 million,

respectively.

As of June 30, 2022, we had an accumulated deficit of approximately $73.8 million.

As of June 30, 2022, we had cash

and cash equivalents of approximately $66.9 million.

of Operating Results

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● employee-related

expenses related to our research and development activities, including salaries, benefits, recruiting, travel and stock-based compensation

expenses related to our research and development activities, including salaries, benefits,

recruiting, travel and stock-based compensation expenses;

fees paid to third parties;

validation costs for gedatolisib

costs for gedatolisib;

costs associated with patent applications.

and external research and development costs are expensed as they are incurred.

As we initiate clinical trials to evaluate efficacy of

targeted therapies in cancer patients selected with one of our CELsignia tests and to develop gedatolisib, the proportion of research

and development expenses allocated to external spending will grow at a faster rate than expenses allocated to internal expenses.

As we continue development of gedatolisib, initiate the

VIKTORIA-1 Phase 3 trial and manage clinical trials to evaluate the efficacy of targeted therapies in cancer patients selected with one

of our CELsignia tests, the proportion of research and development expenses allocated to external spending will grow at a faster rate

than expenses allocated to internal expenses.

and Administrative

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To date, we have incurred immaterial

sales and marketing expenses as we continue to focus primarily on the development of our CELsignia platform and corresponding CELsignia

We would expect to begin to incur increased sales and marketing expenses in anticipation of the commercialization of our first

CELsignia tests and the commercialization of our first drug, gedatolisib.

These increased expenses are expected to include payroll-related

costs as we add employees in the commercial departments, costs related to the initiation and operation of our sales and distribution

network and marketing related costs.

sales and marketing expenses as we continue to focus primarily on the development of our first drug, gedatolisib, CELsignia platform

and corresponding CELsignia tests.

We would expect to begin to incur increased sales and marketing expenses in anticipation of the commercialization

of our first drug, gedatolisib, and CELsignia tests.

These increased expenses are expected to include payroll-related costs as we add

employees in the commercial departments, costs related to the initiation and operation of our sales and distribution network and marketing

related costs.

expense is primarily due to a loan agreement and finance lease obligations.

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of Operations

of the Three Months Ended March 31, 2022 and 2021

of Operations Data:

and development

of the Three Months Ended June 30, 2022 and 2021

Statements of Operations

Operating expenses:

$ (4,702,421 )

and administrative

Total operating expenses

Loss from operations

(13,643,468 )

Other income (expense)

Interest expense

Other income (expense),

loss before income taxes

(14,032,852 )

Income tax benefits

$ (9,960,526 )

$ (14,032,852 )

of the Six Months Ended June 30, 2022 and 2021

Statements of Operations

Operating expenses:

from operations

income (expense)

and administrative

Total operating expenses

Loss from operations

(17,108,332 )

(16,435,238 )

Other income (expense)

Interest expense

Interest income

on sale of fixed assets

income (expense), net

Other income (expense),

loss before income taxes

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(16,824,520 )

Income tax benefits

$ (17,894,973 )

$ (16,824,520 )

$ (1,070,453 )

and Development

research and development expenses for the three months ended March 31, 2022 were approximately $6.7 million, representing an

increase of approximately $4.5 million, or 199%, compared to the same period in 2021.

The increase of $4.5 million primarily

resulted from expenses related to the development of gedatolisib.

Employee related expenses, including consulting fees, accounted

for $1.6 million of the $4.5 million increase.

The increase of $1.6 million also included an increase of $0.2 million in non-cash

stock-based compensation.

The remaining increase of $2.9 million of the $4.5 million is related to costs for existing clinical

trials and for activies supporting the initiation of the VIKTORIA-1 pivotal trial.

research and development expenses for the three months ended June 30, 2022 were approximately $8.4 million, representing a decrease of

approximately $4.7 million, or 36%, compared to the same period in 2021.

This decrease reflected a $10 million reduction in gedatolisib

licensing related expenses partially offset by increases of $5.3 million in other research and development expenses.

In the 2021 period,

research and development expenses included a $10.0 million upfront license fee related to the execution of the Pfizer license agreement

while there were no licensing agreement expenses for gedatolisib in 2022.

Of the $5.3 million increase in research and development expenses,

$1.5 million was related to increased employee and consulting expenses, of which $0.5 million was in the form of non-cash stock-based

compensation.

The remaining $3.8 million increase of research and development expenses is primarily related to costs for existing clinical

trials and for activities supporting the initiation of the VIKTORIA-1 pivotal trial.

research and development expenses for the six months ended June 30, 2022 were approximately $15.1 million, representing a decrease of

approximately $0.2 million, or 2%, compared to the same period in 2021.

The decrease reflected a $10 million reduction in gedatolisib

licensing related expenses largely offset by increases of $9.8 million in other research and development expenses.

In the 2021 period,

research and development expenses included a $10.0 million upfront license fee related to the execution of the Pfizer license agreement

while there were no licensing agreement expenses for gedatolisib in 2022.

Of the $9.8 million increase in research and development expense,

$3.1 million was related to increased employee and consulting expenses, of which $0.7 million was in the form of non-cash stock-based

compensation.

The remaining $6.7 million increase of research and development expenses is related to costs for existing clinical trials

and for activities supporting the initiation of the VIKTORIA-1 pivotal trial.

a significant amount of research and development is central to our business model.

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and Administrative

general and administrative expenses for the three months ended March 31, 2022 were approximately $0.8 million, representing an increase

general and administrative expenses for the three months ended June 30, 2022 were approximately $1.2 million, representing an

increase of approximately $0.6 million, or 115%, compared to the same period in 2021.

Employee related expenses accounted for the

$0.6 million increase, including approximately $0.5 million in non-cash stock-based compensation.

general and administrative expenses for the six months ended June 30, 2022 were approximately $2.0 million, representing an increase

of approximately $0.9 million, or 81%, compared to the same period in 2021.

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$0.9 million increase, including approximately $0.6 million in non-cash stock-based compensation.

The remaining $0.1 million of the $0.3

million increase resulted from director and officer insurance and other professional fees associated with being a public company.

The remaining $0.1 million of the increase

resulted from director and officer insurance and other professional fees associated with being a public company.

anticipate that our general and administrative expenses will increase in future periods, reflecting both increased costs in connection

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fees associated with being a public company.

expense for the three months ended March 31, 2022 was $0.4 million and represents an increase of $0.4 million compared to the same period

The increase is due to the loan agreement that was executed in April 2021 and includes $0.2 million of non-cash interest expense.

income for the three months ended March 31, 2022 was slightly higher compared to the same period in 2021.

The increase was primarily

due to marginally higher market interest rates.

expense for the three months ended June 30, 2022 was $0.5 million and represents an increase of $0.1 million, or 16%, compared to the

same period in 2021.

The increase is due to the loan agreement being in place for the entire three-month period in 2022 rather than for

only a fraction of the period in 2021 and a higher interest rate on the loan.

expense for the six months ended June 30, 2022 was $0.9 million and represents an increase of $0.5 million, or 128%, compared to the

same period in 2021.

The increase is due to the loan agreement being in place for the entire six-month period in 2022 rather than for

only a fraction of the period in 2021 and a higher interest rate on the loan.

income for the three months ended June 30, 2022 was $0.1 million higher compared to the same period in 2021.

The increase was due to

higher market interest rates and a higher cash and cash equivalents balance.

income for the six months ended June 30, 2022 was $0.1 million higher compared to the same period in 2021.

The increase was due to higher

market interest rates and a higher cash and cash equivalents balance.

and Capital Resources

our inception, we have incurred losses and cumulative negative cash flows from operations.

Through March 31, 2022, we have raised capital

Through June 30, 2022, we have raised capital

of approximately $13.7 million and $7.5 million through private placements of common equity and unsecured convertible notes, respectively.

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whereby Innovatus agreed to loan up to $25 million in three tranches consisting of (i) a $15.0 million non-contingent term A loan that

was funded on April 8, 2021, (ii) a $5 million term B loan to be funded upon our request no later than March 31, 2022, and (iii) a $5

million term C loan to be funded upon our request no later than March 31, 2023.

Funding of the term B and C loan is subject to our ability

to achieve certain milestones.

The Company is no longer eligible to draw on the term B loan.

On July 1, 2021, we completed a follow-on

offering of our common stock, which generated approximately $52.8 million of additional cash after taking into account underwriting discounts

of approximately $3.4 million and offering expenses of approximately $0.1 million.

February 4, 2022, we entered into an Open Market Sale AgreementSM with Jefferies LLC, as agent, pursuant to which we may offer and sell,

from time to time, through Jefferies, shares of our common stock having an aggregate offering price of up to $50,000,000.

have not yet made any sales under this arrangement.

May 15, 2022, we entered into a securities purchase agreement with certain institutional and other accredited investors

for the sale of Company common stock, preferred stock that may be convertible into common stock and warrants initially exercisable

for preferred stock for $100 million in the aggregate, before deducting placement agent fees and other offering expenses.

to the securities purchase agreement, investors will purchase shares of common stock and preferred stock at a price per share of

$5.75 (on an as converted to common stock basis), with the closing (funding) of such purchase to occur following the achievement of a milestone

in our forthcoming Phase 3 study (VIKTORIA-1).

The sale of shares of common stock includes forty percent (40%) warrant coverage

and customary resale registration rights.

Please see “Management’s Discussion and Analysis of Financial Condition and Results

of Operations—Recent Developments” above for additional details.

was funded on April 8, 2021, (ii) a $5 million term B loan with a deadline of March 31, 2022, which we are no longer eligible to draw on,

and (iii) a $5 million term C loan to be funded upon our request no later than March 31, 2023.

Funding of the term C loan is subject

to our ability to achieve certain milestones.

On July 1, 2021, we completed a follow-on offering of our common stock, which generated

approximately $52.8 million of additional cash after taking into account underwriting discounts of approximately $3.4 million and offering

expenses of approximately $0.1 million.

February 4, 2022, we entered into an Open Market Sale Agreement SM with Jefferies LLC, as agent, pursuant to which we may offer

and sell, from time to time, through Jefferies, shares of our common stock having an aggregate offering price of up to $50,000,000.

date, we have not yet made any sales under this arrangement.

May 15, 2022, we entered into a securities purchase agreement with certain institutional and other accredited investors for the sale

of Company common stock, preferred stock that may be convertible into common stock and warrants initially exercisable for preferred stock

for $100 million in the aggregate, before deducting placement agent fees and other offering expenses.

Pursuant to the securities purchase

agreement, investors will purchase shares of common stock and preferred stock at a price per share of $5.75 (on an as converted to common

stock basis), with the closing (funding) of such purchase to occur following the achievement of a milestone in our forthcoming Phase

3 study (VIKTORIA-1).

The sale of shares of common stock includes forty percent (40%) warrant coverage and customary resale registration

Please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Recent Developments”

above for additional details.

August 9, 2022, the Company amended the loan agreement with Innovatus to provide up to $75 million in term loans.

above, the initial term A loan of $15 million was funded on April 8, 2021.

The Company will be able to draw an additional $20

million following the closing of the $100 million private placement.

Additionally, the Company will be able to draw on two

additional tranches of $10 million and one additional tranche of $20 million upon achievement of certain clinical trial milestones

and satisfaction of certain financial covenants determined on a pro forma as-funded basis.

Funding of these additional tranches is

also subject to other customary conditions and limits on when the Company can request funding for such tranches.

from our historical capital raising activities has been our primary source of funds for our operations since inception.

As of March 31,

As of June 30,

2022, our cash and cash equivalents were approximately $66.9 million, and we had an accumulated deficit of approximately $73.8 million.

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Additional capital may not be available on reasonable terms,

following table sets forth the primary sources and uses of cash for the three months ended March 31:

cash provided by (used in):

following table sets forth the primary sources and uses of cash for the six months ended June 30:

Net cash provided by (used in):

Operating activities

$ (17,222,132 )

$ (10,139,253 )

increase (decrease) in cash and cash equivalents

Investing activities

Net increase (decrease)

in cash and cash equivalents

$ (17,375,557 )

cash used in operating activities was approximately $5.9 million for the three months ended March 31, 2022 and consisted primarily of

a net loss of approximately $7.9 million, offset by non-cash expense items of approximately $1.0 million and working capital changes

cash used in operating activities was approximately $17.2 million for the six months ended June 30, 2022 and consisted primarily of a

net loss of approximately $17.9 million and working capital changes of approximately $2.1 million, offset by non-cash expense

items of approximately $2.8 million.

The approximately $2.1 million of working capital changes was primarily due to an increase of approximately

$3.9 million in prepaid assets, partially offset by increases in accounts payable and accrued expenses of approximately $0.7 million

and $0.9 million, respectively.

Non-cash expense items of approximately $2.8 million primarily consisted of approximately $2.3 million

of stock-based compensation expense, non-cash interest expense of approximately $0.4 million and depreciation expense of approximately

$0.1 million.

cash used in operating activities was approximately $10.1 million for the six months ended June 30, 2021 and consisted primarily of a

net loss of approximately $16.8 million, offset by non-cash expense items of approximately $6.4 million and working capital changes

of $0.3 million.

Non-cash expense items of approximately $1.0 million primarily consisted of $0.7 million of stock-based compensation

expense, non-cash interest expense of $0.2 million and depreciation expense of $0.1 million.

The approximately $1.0 million of working

capital changes was primarily due to an increase in accounts payable and accrued expenses.

The net cash used in operating activities

was approximately $2.5 million for the three months ended March 31, 2021 and consisted primarily of a net loss of approximately

$2.8 million and working capital changes of approximately $0.3 million, adjusted for non-cash expense items of approximately $0.6 million.

Non-cash expense items of approximately $0.6 million primarily consisted of $0.5 million of stock-based compensation expense and depreciation

expense of $0.1 million.

The approximately $0.3 million of working capital changes was primarily due to an increase in prepaid assets

and a decrease in accrued expenses.

cash used in investing activities for the three months ended March 31, 2022 and 2021 were minimal and consisted of purchases of property

Non-cash expense items of approximately $6.4 million primarily consisted of $5.0 for issuance of common stock related

to a license agreement, stock-based compensation expense of approximately $1.0 million, non-cash interest expense of approximately $0.2

million and depreciation expense of approximately $0.2 million.

The approximately $0.3 million of working capital changes was primarily

due to an increase in accounts payable and a decrease in accrued expenses.

cash used in investing activities for the six months ended June 30, 2022 and 2021 were minimal and consisted of purchases of property

and equipment.

cash used in financing activities for the three months ended March 31, 2022 was minimal and primarily consisted of payments for secondary

registration statement costs.

The net cash provided by financing activities for the three months ended March 31, 2021 was approximately

$25.9 million and primarily reflects net proceeds from the sale of shares of our common stock through a follow-on offering.

cash used in financing activities was approximately $0.1 million for the six months ended June 30, 2022 and consisted of payments for

secondary registration statement costs, offset partially by proceeds from the exercise of employee stock options and proceeds from employee

stock purchases.

cash provided by financing activities for the six months ended June 30, 2021 was approximately $40.2 million.

The $40.2 million primarily

consisted of approximately $25.8 million from net proceeds from the sale of shares of our common stock through a follow-on offering and

approximately $14.3 million from net proceeds related to the closing of a loan agreement.

The remaining $0.1 million was the result of

proceeds from the exercise of common stock warrants and employee stock options and proceeds from employee stock purchases.

Accounting Pronouncements

39 unchanged sentences

be owed to Pfizer under the license agreement;

(vii) our expectations regarding partnering with pharmaceutical companies and other

third parties;

(vii) our expectations regarding partnering with pharmaceutical companies and other third

(viii) our expectations regarding revenue from sales of CELsignia tests and revenue from milestone or other payment sources;

9 unchanged sentences

(xiii) our plans with respect to potentially raising capital;

and (xiv) our expectations regarding the impact that the COVID-19 pandemic and related economic effects will have on our business

and results of operations.

and (xiv) our expectations regarding the impact that the COVID-19 pandemic and related economic effects will have on our business and

results of operations.

some cases, you can identify forward-looking statements by the following words:

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with defending third-party claims of intellectual property infringement, investigations or litigation threatened or initiated against

These and additional risks, uncertainties and other factors are described more fully in our Annual Report on Form 10-K for

the year ended December 31, 2021 and elsewhere in this Quarterly Report.

Copies of filings made with the SEC are available through the

SEC’s electronic data gathering analysis and retrieval system (EDGAR) at www.sec.gov.

These and additional risks, uncertainties and other factors are described more fully in our Quarterly Report for the period

ended March 31, 2022 and elsewhere in this Quarterly Report.

Copies of filings made with the SEC are available through the SEC’s

electronic data gathering analysis and retrieval system (EDGAR) at www.sec.gov.

should read the cautionary statements made in this Quarterly Report as being applicable to all related forward-looking statements wherever

9 unchanged sentences

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