What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-11-10 compared with 2022-08-12 · 249 added, 234 removed, 344 unchanged (58% of the section changed)

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that involve risks and uncertainties.

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.

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 focused on development of targeted therapies for treatment of multiple solid tumor indications.

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 initiated VIKTORIA-1, a Phase 3 study evaluating gedatolisib in patients with HR+/HER2- advanced breast cancer in 2022.

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

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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.

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

p110δ isoforms and mTORC1 and mTORC2 complexes.

Each PI3K isoform and mTOR complex is known to preferentially affect different

signal transduction events that involve tumor cell survival, depending upon the aberrations associated with the linked pathway.

a therapy only inhibits a single class I isoform (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 complexes

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.

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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PI3K inhibitors administered orally were developed to reduce toxicities in patients.

While the range of toxicities associated with

isoform-specific inhibitors is narrower than oral pan-PI3K or PI3K/mTOR inhibitors, administering them orally on a continuous basis

still leads to challenging toxicities.

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.

While the range of toxicities associated with isoform-specific

inhibitors is narrower than oral pan-PI3K or PI3K/mTOR inhibitors, administering them orally on a continuous basis still leads to challenging

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

3 pivotal trial Piqray was found to induce a Grade 3 or 4 adverse event (AE) related to hyperglycemia in 39% of patients evaluated.

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

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

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 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 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).

Nine patients from this study continue to receive study treatment, as of September 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 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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No grade 5 events were reported in this study.

are preparing to initiate VIKTORIA-1, a Phase 3, open-label, randomized clinical trial to evaluate the efficacy and safety of two regimens

in adults with HR+/HER2- advanced breast cancer whose disease has progressed after prior CDK4/6 therapy in combination with an aromatase

activated VIKTORIA-1, a Phase 3, open-label, randomized clinical trial to evaluate the efficacy and safety of two regimens in adults

with HR+/HER2- advanced breast cancer whose disease has progressed after prior CDK4/6 therapy in combination with an aromatase

1) gedatolisib in combination with palbociclib and fulvestrant;

and 2) gedatolisib in combination with fulvestrant.

to initiate the VIKTORIA-1 study in 2022.

hundred clinical sites in North America, Europe, South America, Asia, and Australia have been selected to participate in the study.

The first clinical site was activated in the third quarter.

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

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With each program, we are:

the proprietary insights CELsignia provides into live patient tumor cell function

a CELsignia CDx to identify new patients likely to respond to the paired targeted therapy

a new targeted therapeutic option for breast cancer patients

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

Leveraging the proprietary insights CELsignia provides

into live patient tumor cell function

Using a CELsignia CDx to identify new patients likely

to respond to the paired targeted therapy

Developing a new targeted therapeutic option for breast

cancer patients

Maximizing 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”)

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Celcuity will be able to draw an additional

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

$20 million tranche following closing the 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

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 are met.

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.

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

completed selection of clinical trial sites for the Phase 3 VIKTORIA-1 clinical trial.

The 200-sites selected exceeded the number of

sites initially targeted.

Operational activities are focused now on facilitating activation of these sites

and to dose the first patient.

The clinical 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.

VIKTORIA-1 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.

Further details about the study are available at ClinicalTrials.gov.

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

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For each share of common stock and each 1/10 of a share of preferred stock purchased, investors will receive

a warrant initially exercisable for preferred stock equivalent to 0.40 shares of common stock on an as converted basis.

price of the warrants will be at a 40% premium to the price paid by investors for the initial shares of common stock purchased in the

private placement.

The preferred stock will be convertible into common stock at the holder’s election, subject to certain limitations

such as beneficial ownership and the approval by the Company’s stockholders to increase the number of authorized shares of common

stock sufficient to cover the shares of common stock issuable upon conversion of (i) the preferred stock purchased in the private placement

and (ii) the shares of preferred stock that may be issued upon exercise of warrants purchased in the private placement.

are initially exercisable for preferred stock and will convert into warrants to purchase common stock if the proposed increase in the

Company’s authorized common stock is approved by stockholders.

The closing of the private placement is conditioned on, among other

customary items, the first patient enrolled in the Company’s forthcoming Phase 3 clinical study (VIKTORIA-1) having received their

first dose of treatment at a clinical site located in the United States, provided that such date must occur on or before December 31,

The Company also entered into a customary registration rights agreement with the investors pursuant to which it agreed to file

a registration statement with the SEC registering the resale of (i) the shares of common stock to be issued and sold in the private placement,

(ii) the shares of common stock issuable upon conversion of the preferred stock purchased in the private placement and (iii) the shares

of common stock issuable upon conversion of the shares of preferred stock that may be issued upon exercise of warrants purchased in the

private placement.

a warrant exercisable for 0.40 shares of common stock.

The exercise price of the warrants will be at a 40% premium to the price paid

by investors for the initial shares of common stock purchased in the private placement.

The preferred stock will be convertible into

common stock at the holder’s election, subject to certain limitations such as beneficial ownership.

The closing of the private

placement is conditioned on, among other customary items, the first patient enrolled in the Company’s Phase 3 clinical

study (VIKTORIA-1) having received their first dose of treatment at a clinical site located in the United States, provided that if such

date does not occur on or before December 31, 2022, each investor will have the right to terminate its obligation to purchase securities

under the securities purchase agreement.

The Company also entered into a customary registration rights agreement with the investors pursuant

to which it agreed to file a registration statement with the SEC registering the resale of (i) the shares of common stock to be issued

and sold in the private placement, (ii) the shares of common stock issuable upon conversion of the preferred stock purchased in the private

placement and (iii) the shares of common stock issuable upon conversion of the shares of preferred stock that may be issued upon exercise

of warrants purchased in the private placement.

of COVID-19 on our Business

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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 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.

For the three months ended September 30, 2022 and 2021, we reported a net loss of approximately $10.9 million and $6.0 million,

respectively and for the nine months ended September 30, 2022 and 2021, we reported a net loss of approximately $28.8 million and $22.9

million, respectively.

As of September 30, 2022, we had an accumulated deficit of approximately $84.7 million.

As of September

30, 2022, we had cash and cash equivalents of approximately $57.5 million.

of Operating Results

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

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

As we continue development of gedatolisib, manage the

VIKTORIA-1 Phase 3 trial and other 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

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of Operations

of the Three Months Ended June 30, 2022 and 2021

Statements of Operations

of the Three Months Ended September 30, 2022 and 2021

Three Months Ended

September 30,

Increase (Decrease)

Percent Change

Statements of Operations Data:

Operating expenses:

$ (4,702,421 )

and administrative

Research and development

General and administrative

Total operating expenses

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Interest expense

Other income (expense),

loss before income taxes

Interest income

Other income (expense), net

Net loss before income taxes

(10,893,721 )

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$ (6,027,246 )

of the Six Months Ended June 30, 2022 and 2021

Statements of Operations

$ (4,866,475 )

of the Nine Months Ended September 30, 2022 and 2021

Nine Months Ended

September 30,

Increase (Decrease)

Percent Change

Statements of Operations Data:

Operating expenses:

and administrative

Research and development

General and administrative

Total operating expenses

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Interest income

on sale of fixed assets

Other income (expense),

loss before income taxes

Loss on sale of fixed assets

Other income (expense), net

Net loss before income taxes

(28,788,694 )

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and Development

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

research and development expenses for the three months ended September 30, 2022 were approximately $9.6 million, representing an increase

of approximately $4.7 million, or 94%, compared to the same period in 2021.

Of the $4.7 million increase in research and development

expenses, $1.2 million was related to increased employee and consulting expenses, of which $0.2 million was in the form of non-cash stock-based

compensation.

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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

research and development expenses for the nine months ended September 30, 2022 were approximately $24.7 million, representing an increase

of approximately $4.4 million, or 22%, compared to the same period in 2021.

Included in the $4.4 million increase is a $10 million reduction

in gedatolisib licensing related expenses offset by increases of $14.4 million in other research and development expenses.

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 $14.4 million increase in research and development

expense, $4.2 million was related to increased employee and consulting expenses, of which $0.9 million was in the form of non-cash stock-based

compensation.

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and Administrative

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

general and administrative expenses for the three months ended September 30, 2022 were approximately $1.0 million, representing an increase

of approximately $0.4 million, or 60%, compared to the same period in 2021.

Employee related expenses accounted for $0.3 million of the

$0.4 million increase, including approximately $0.3 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

The remaining $0.1 million increase

of general and administrative expenses resulted from director and officer insurance and other professional fees associated with being

a public company.

general and administrative expenses for the nine months ended September 30, 2022 were approximately $3.1 million, representing an increase

of approximately $1.3 million, or 73%, compared to the same period in 2021.

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fees associated with being a public company.

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.

expense for the three months ended September 30, 2022 was $0.5 million and represents an increase of $0.1 million, or 24%, compared to

the same period in 2021.

The increase is due to a higher interest rate on the loan.

expense for the nine months ended September 30, 2022 was $1.4 million and represents an increase of $0.6 million, or 73%, compared to

the same period in 2021.

The increase is due to the loan agreement being in place for the entire nine-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 September 30, 2022 was $0.3 million higher compared to the same period in 2021.

The increase was due

to higher market interest rates.

income for the nine months ended September 30, 2022 was $0.4 million higher compared to the same period in 2021.

The increase was due

to higher market interest rates.

and Capital Resources

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

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.

On September 22, 2017, we closed on the initial public offering of our common stock, which generated approximately $ 23.3

million of additional cash after taking into account underwriting discounts and commissions and offering expenses.

2020, we entered into an At Market Issuance Sales Agreement with B.

Through September 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.

On September 22, 2017, we closed on the initial public offering of our common stock, which generated

approximately $ 23.3 million of additional cash after taking into account underwriting

discounts and commissions and offering expenses.

On June 5, 2020, we entered into an At Market Issuance Sales Agreement with B.

Riley, FBR, Inc (the “ATM Agreement”).

The ATM Agreement

allowed us to sell shares of common stock up to an aggregate offering price of $10.0 million.

Through March 31, 2022, we generated approximately

$0.1 million of additional cash through sales pursuant to the ATM Agreement, after taking into account commissions and offering expenses.

On February 26, 2021, we completed a follow-on offering of our common stock, which generated approximately $25.8 million of additional

cash after taking into account underwriting discounts and offering expenses.

In conjunction with the follow-on offering, the ATM Agreement

was terminated.

On April 8, 2021, we entered into a loan agreement with Innovatus Life Sciences Lending Fund I, LP (“Innovatus”),

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 with a deadline of March 31, 2022, which we are no longer eligible to draw on,

The ATM Agreement allowed us to sell shares of common stock up to an aggregate

offering price of $10.0 million.

Through September 30, 2022, we generated approximately $0.1 million of additional cash through

sales pursuant to the ATM Agreement, after taking into account commissions and offering expenses.

On February 26, 2021, we completed

a follow-on offering of our common stock, which generated approximately $25.8 million of additional cash after taking into account

underwriting discounts and offering expenses.

In conjunction with the follow-on offering, the ATM Agreement was terminated.

8, 2021, we entered into a loan agreement with Innovatus Life Sciences Lending Fund I, LP (“Innovatus”), 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 with a deadline of March 31, 2022 and 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.

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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.

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.

October 12, 2022, pursuant to this agreement, the Company sold 500,000 shares of common stock in a single transaction at a price

of $10.35 per share, generating gross proceeds of $5.2 million ($4.8 million net of commissions and offering expenses).

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

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

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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.

As mentioned above,

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

Th 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 June 30,

As of September

30, 2022, our cash and cash equivalents were approximately $57.5 million, and we had an accumulated deficit of approximately $84.7 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 six months ended June 30:

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

September 30,

Net cash provided by (used in):

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Investing activities

Net increase (decrease)

in cash and cash equivalents

Financing activities

Net increase (decrease) in cash and cash equivalents

$ (26,802,605 )

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

cash used in operating activities was approximately $26.5 million for the nine months ended September 30, 2022 and consisted primarily

of a net loss of approximately $28.8 million and working capital changes of approximately $2.0 million, offset by non-cash expense

items of approximately $4.3 million.

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$0.2 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 $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

cash used in operating activities was approximately $14.2 million for the nine months ended September 30, 2021 and consisted primarily

of a net loss of approximately $22.9 million, offset by non-cash expense items of approximately $7.3 million and working capital

changes of $1.4 million.

Non-cash expense items of approximately $7.3 million primarily consisted of $5.0 million for issuance of common

stock related to a license agreement, stock-based compensation expense of approximately $1.7 million, non-cash interest expense of approximately

$0.4 million and depreciation expense of approximately $0.2 million.

The approximately $1.4 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

due to an increase in accounts payable and accrued expenses.

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

and equipment.

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.

cash used in financing activities was approximately $0.2 million for the nine months ended September 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 nine months ended September 30, 2021 was approximately $93.0 million.

The $93.0 million

primarily consisted of approximately $78.5 million from net proceeds from the sale of shares of our common stock through two follow-on

offerings and approximately $14.4 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

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This Quarterly Report contains forward-looking statements that involve risks and uncertainties including,

but not limited to, (i) our clinical trial plans and the estimated costs for such trials, including the timing of launching a Phase 3

clinical trial for gedatolisib;

(ii) our expectations with respect to costs and timelines to develop, validate and launch CELsignia tests

and to continue to develop gedatolisib;

(iii) our beliefs related to the perceived advantages of our CELsignia tests compared to traditional

molecular or other diagnostic tests;

but not limited to, (i) our clinical trial plans and the estimated costs for such trials, including the timing of activating a

Phase 3 clinical trial for gedatolisib and enrolling patients in such trial;

(ii) our expectations with respect to costs and timelines

to develop, validate and launch CELsignia tests and to continue to develop gedatolisib;

(iii) our beliefs related to the perceived advantages

of our CELsignia tests compared to traditional molecular or other diagnostic tests;

(iv) the expected benefits of gedatolisib;

(v) our expectations regarding the timeline of patient

enrollment and results from clinical trials, including the existing clinical trial for gedatolisib;

(vi) the future payments that may

be owed to Pfizer under the license agreement;

(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;

(ix) our plans with respect to research and development and related expenses for the foreseeable future;

(x) our expectations regarding

business development activities, including companion diagnostic related activities with pharmaceutical companies, expanding our sales

and marketing functions and the costs associated with such activities;

(xi) our expectations with respect to the CELsignia tests and

the analytical capabilities and potential impact of such tests;

(xii) our beliefs regarding the ability of our cash on hand to fund our

research and development expenses, capital expenditures, working capital, sales and marketing expenses, and general corporate expenses,

as well as the increased costs associated with being a public company;

(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.

expectations regarding the timeline of patient enrollment and results from clinical trials, including the existing clinical trial for

(vi) the future payments that may be owed to Pfizer under the license agreement;

(vii) our expectations regarding partnering

with pharmaceutical companies and other third parties;

(viii) our expectations regarding revenue from sales of CELsignia tests and revenue

from milestone or other payment sources;

(ix) our plans with respect to research and development and related expenses for the foreseeable

(x) our expectations regarding business development activities, including companion diagnostic related activities with pharmaceutical

companies, expanding our sales and marketing functions and the costs associated with such activities;

(xi) our expectations with respect

to the CELsignia tests and the analytical capabilities and potential impact of such tests;

(xii) our beliefs regarding the ability of

our cash on hand to fund our research and development expenses, capital expenditures, working capital, sales and marketing expenses,

and general corporate expenses, as well as the increased costs associated with being a public company;

(xiii) our expectations with respect

to closing on our $100 million private placement announced May 16, 2022 and our plans with respect to potentially raising capital;

(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 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.

These and additional risks, uncertainties and other factors are described more fully in Item 1A of Part II of this Quarterly

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

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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