What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-05-15 compared with 2022-11-10 · 267 added, 351 removed, 242 unchanged (72% 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 focused on development of targeted therapies for treatment of multiple solid tumor indications.

You should review the “Risk Factors” discussed in our Annual Report on Form 10-K for

the year ended December 31, 2022, filed with the SEC on March 23, 2023 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 analysis.

is a clinical-stage biotechnology company focused on the development of targeted therapies for treatment of multiple solid tumor indications.

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

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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.

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

is currently enrolling patients.

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

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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 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.

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

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.

When a therapy only inhibits a single

Class 1 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-activate the uninhibited sub-units.

in turn, induces compensatory resistance that can reduce 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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discontinued treatment.

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

of March 31, 2023, 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.

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138 patients.

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).

Seven patients from this study continue to receive study treatment, as of March 31, 2023, each of whom have received study

treatment for more than four years.

The B2151009 clinical 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

In treatment-naïve patients (Arm A), ORR was 85%.

In patients who received prior hormonal therapy alone or in combination

with a CDK4/6 inhibitor (Arms B, C, and D), ORR ranged from 32% to 77%.

As of the data cut-off date, December 12, 2022, for Expansion Arm

A, median progression free survival (mPFS) was 48.6 months.

In patients who received prior hormonal therapy alone or in combination with

a CDK4/6 inhibitor (Arms B, C, and D), ORR ranged from 32% to 77%.

Each arm achieved its primary endpoint target, which was reporting

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benefit rate (CBR) of ≥79% was observed.

Median progression-free survival (PFS) was 31.1 months for patients receiving first-line

treatment (Arm A) and 12.9 months for patients who received a prior CDK4/6 inhibitor and were treated in the study with the Phase 3 dosing

schedule (Arm D).

Median progression-free survival (PFS) was 12.9 months for patients who received a prior

CDK4/6 inhibitor and were treated in the study with the Phase 3 dosing schedule (Arm D).

combined with palbociclib and endocrine therapy demonstrated a favorable safety profile with manageable toxicity.

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No grade 5 events were reported in this study.

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

are currently enrolling patients in a Phase 3, open-label, randomized clinical trial (VIKTORIA-1) 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 inhibitor:

1) gedatolisib in combination with palbociclib and fulvestrant;

and 2) gedatolisib in combination with fulvestrant.

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.

Subjects who meet eligibility criteria and

are PIK3CA WT will be randomly assigned (1:1:1) to receive a regimen of either gedatolisib, palbociclib, and fulvestrant (Arm A), gedatolisib

and fulvestrant (Arm B), or fulvestrant (Arm C).

Subjects who meet eligibility criteria and are PIK3CA MT will be randomly assigned (3:3:1)

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

fulvestrant (Arm F).

Two 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 of 2022.

The first dosage of a subject in the trial occurred in December 2022.

VIKTORIA-1 clinical trial will enable separate evaluation of subjects according to their PIK3CA status.

Subjects who meet eligibility

criteria and are PIK3CA WT will be randomly assigned (1:1:1) to receive a regimen of either gedatolisib, palbociclib, and fulvestrant

(Arm A), gedatolisib and fulvestrant (Arm B), or fulvestrant (Arm C).

Subjects who meet eligibility criteria and are PIK3CA MT will be

randomly assigned (3:3:1) to receive a regimen of either gedatolisib, palbociclib, and fulvestrant (Arm D) or 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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companies, that would rely on a CELsignia CDx to select patients.

Five Phase 2 trials are underway to evaluate the efficacy and safety

Four Phase 2 trials are underway to evaluate the efficacy and safety

of these therapies in CELsignia selected patients.

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With each program, we are:

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”)

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 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 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

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.

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

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

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).

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

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.

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

our April 2021 license agreement with Pfizer to research, develop, manufacture and commercialize gedatolisib, we paid a $5.0 million

upfront fee and granted to Pfizer $5.0 million shares of Company common stock, which fee and grant were effected and expensed to research & development in full for the quarter in which we signed the license agreement.

In addition, we are also required to make milestone

payments to Pfizer upon achievement of certain development and commercial milestone events, up to an aggregate of $335.0 million.

Additionally,

the Company will pay Pfizer tiered royalties on sales of gedatolisib at percentages ranging from the low to mid-teens, which may be subject

to deductions for expiration of valid claims, amounts due under third-party licenses and generic competition.

Unless earlier terminated,

the license agreement will expire upon the expiration of all royalty obligations.

The royalty period will expire on a country-by-country

basis upon the later of (a) 12 years following the date of first commercial sale of such product in such country, (b) the expiration

of all regulatory or data exclusivity in such country for such product or (c) the date upon which the manufacture, use, sale, offer for

sale or importation of such product in such country would no longer infringe, but for the license granted in the license agreement, a

valid claim of a licensed patent right.

Company has the right to terminate the license agreement for convenience upon 90 days’ prior written notice.

Pfizer may not terminate

the agreement for convenience.

Either the Company or Pfizer may terminate the license agreement if the other party is in material breach

and such breach is not cured within the specified cure period.

In addition, either the Company or Pfizer may terminate the license agreement

in the event of specified insolvency events involving the other party.

May 2023, updated data from the Company’s Phase 1b study in treatment naïve patients with HR+, HER2- advanced breast

cancer was presented at the European Society for Medical Oncology (ESMO) Breast Cancer Annual Congress.

These patients, from

Expansion Arm A and Escalation Arm A of the clinical trial, were treated with gedatolisib in combination with palbociclib and

As of a database update on March 16, 2023, median progression free survival (mPFS) in treatment naïve patients in

Expansion Arm A was 48.6 months (n=30) and Escalation Arm A was 45.8 months (n=11).

When treatment naïve patients from both

Escalation Arm A and Expansion Arm A arms are combined (N=41), mPFS was 48.6 months and mDOR was 46.9 months.

These results compare

favorably to published data with other therapies in this setting.

April 2023, Celcuity presented a poster at the American Association for Cancer Research (AACR) Annual Meeting 2023 highlighting preclinical

data of gedatolisib’s superior anti-proliferative potency and efficacy in endometrial, ovarian and cervical cancer cell lines compared

to the other PI3K, AKT, and mTOR inhibitors evaluated regardless of PTEN, P13K or AKT mutational status.

February 2023, the company presented data from preclinical studies evaluating gedatolisib and other PI3K, AKT, and mTOR inhibitors in

prostate cancer cell lines at the American Society of Clinical Oncology Genitourinary Cancers Symposium.

The presentation demonstrated

gedatolisib’s superior potency and efficacy across different prostate cancer cell lines relative to the other PI3K, AKT, and mTOR

inhibitors evaluated regardless of PTEN or PI3K mutational status.

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 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

and now expect interim results from the FACT-1 and FACT-2 trials to be delayed until the first half of 2024 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.

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 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.

For the three months ended March 31, 2023 and 2022, we reported a net loss of approximately $11.9 million and $7.9 million,

respectively.

As of March 31, 2023, we had an accumulated deficit of approximately $108.2 million.

As of March 31, 2023, we had

cash and cash equivalents and short-term investments of approximately $157.5 million.

of Operating Results

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With the execution of the Pfizer license agreement in April 2021, whereby we acquired exclusive

world-wide licensing rights to develop and commercialize gedatolisib, we expect to conduct clinical trials to support potential regulatory

approval to market gedatolisib.

If we obtain regulatory approvals to market gedatolisib, we expect to generate revenue from sales of

the drug for the treatment of breast cancer patients.

Additionally, we will seek to generate revenue from partnership agreements with

pharmaceutical companies to provide companion diagnostics for such pharmaceutical partners’ existing or investigational targeted

world-wide licensing rights to develop and commercialize gedatolisib, we initiated a Phase 3 clinical trial, VIKTORIA-1, in 2022 to support

potential regulatory approval to market gedatolisib.

If we obtain regulatory approvals to market gedatolisib, we expect to generate revenue

from sales of the drug for the treatment of breast cancer patients.

Additionally, we will seek to generate revenue from partnership agreements

with pharmaceutical companies to provide companion diagnostics for such pharmaceutical partners’ existing or investigational targeted

If a new drug indication is received that requires use of our companion diagnostic to identify eligible patients, we expect

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and Development

our inception, we have primarily focused on research and development of our CELsignia platform, development and validation of our CELsignia

tests, and research related to the discovery of new cancer sub-types.

Beginning in April 2021, we are also focusing on development of

gedatolisib, a PI3K/mTOR targeted therapy.

our inception, we have primarily focused on research and development of gedatolisib, a PI3K/mTOR targeted therapy and our CELsignia platform

and corresponding tests.

Research and development expenses primarily include:

employee-related

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

recruiting, travel and stock-based compensation expenses;

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

fees paid to third parties;

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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 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.

sales and marketing expenses as we continue to focus primarily on the development of our first drug, gedatolisib, managing the VIKTORIA-1

Phase 3 trial, and development of our 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.

income consists of interest income earned on our cash and cash equivalent balances.

income consists of interest income earned on our cash, cash equivalents, and investment balances.

of Operations

of the Three Months Ended September 30, 2022 and 2021

of the Three Months Ended March 31, 2023 and 2022

Three Months Ended

September 30,

Increase (Decrease)

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$ (4,003,970 )

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:

Research and development

General and administrative

Total operating expenses

Loss from operations

(27,751,887 )

(22,035,023 )

Other income (expense)

Interest expense

Interest income

Loss on sale of fixed assets

Other income (expense), net

Net loss before income taxes

(28,788,694 )

(22,851,766 )

Income tax benefits

$ (28,788,694 )

$ (22,851,766 )

$ (5,936,928 )

and Development

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.

The remaining $3.5 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 nine months ended September 30, 2022 were approximately $24.7 million, representing an increase

research and development expenses for the three months ended March 31, 2023 were approximately $11.3 million, representing an increase

of approximately $4.6 million, or 68%, compared to the same period in 2022.

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 $4.6 million increase in research and development

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compensation.

The remaining $10.2 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.

The remaining $3.8 million increase of research and development costs is related to costs supporting activities for the

VIKTORIA-1 pivotal trial and other existing clinical trials.

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

We plan to increase our research and development expenses

for the foreseeable future as we seek to develop gedatolisib, discover new cancer sub-types, and develop and validate additional CELsignia

tests to diagnose such sub-types.

We also expect to incur increased expenses to support companion diagnostic business development activities

with pharmaceutical companies as we develop additional CELsignia tests and initiate a clinical trial for gedatolisib.

for the foreseeable future as we seek to develop gedatolisib, manage the VIKTORIA-1 Phase 3 trial, discover new cancer sub-types, and

develop and validate additional CELsignia tests to diagnose such sub-types.

We also expect to incur increased expenses to support companion

diagnostic business development activities with pharmaceutical companies as we develop additional CELsignia tests and initiate a clinical

trial for gedatolisib.

and Administrative

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.

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

general and administrative expenses for the three months ended March 31, 2023 were approximately $1.3 million, representing an increase

of approximately $0.5 million, or 56%, compared to the same period in 2022.

Employee related expenses accounted for $1.1 million of the

$1.3 million increase, including approximately $0.9 million in non-cash stock-based compensation.

The remaining $0.2 million of the increase

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

Non-cash stock-based compensation accounted for $0.3 million

of the $0.5 million increase.

The remaining $0.2 million of the $0.5 million increase resulted from professional fees and other expenses

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 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.

expense for the three months ended March 31, 2023 was $1.2 million and represents an increase of $0.8 million compared to the same period

Interest expense is primarily the result of a Loan Agreement that was executed in April 2021 and amended in August 2022.

increase is due to rising interest rates and the incremental $20 million funding of Term Loan B in December 2022.

The $1.2 million of

interest expense includes $0.5 million of non-cash interest expense.

income for the three months ended March 31, 2023 increased $1.8 million compared to the same period in 2022.

The increase was primarily

the result of higher market interest rates and the closing of additional financing activities, leading to higher cash, cash equivalents

and short-term investment balances.

and Capital Resources

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

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 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.

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.

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 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”

above for additional details.

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

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 September

30, 2022, our cash and cash equivalents were approximately $57.5 million, and we had an accumulated deficit of approximately $84.7 million.

Through March 31, 2023, we have funded our

operations primarily through private placements and registered offerings of our equity securities and unsecured convertible notes, and

borrowings under loan agreements.

From inception through March 31, 2023, we raised an aggregate of approximately $223.7 million of net

proceeds through sales of our securities, and as of March 31, 2023 had $35.0 million of borrowings under loan agreements.

31, 2023, our cash and cash equivalents and short-term investments were approximately $33.6 million and $123.8.0 million, respectively,

and we had an accumulated deficit of approximately $108.2 million.

On December 9, 2022, we issued 6,182,574 shares of common stock, 1,120,873 shares of Series A Preferred Stock and warrants

exercisable for 6,956,450 shares of common stock to certain institutional and other accredited investors pursuant to a Securities Purchase

Agreement entered into on May 15, 2022.

Pursuant to the Securities Purchase Agreement, the closing (funding) of the private placement

occurred following dosage of the first patient in the Company’s Phase 3 study, VIKTORIA-1.

Investors purchased shares of common

stock and Series A Preferred Stock at a price of $5.75 per share (on an as converted to common stock basis), with forty percent (40%)

warrant coverage (on an as converted to common stock basis) and customary resale registration rights.

The warrants have an exercise price

of $8.05 per share.

The private placement generated gross proceeds of approximately $100 million before deducting placement agent fees

and other offering expenses of $4.3 million.

Market Sale Agreement SM .

On 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.

On 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).

At March 31, 2023, $44.8 million of common stock remains available for sale under the Jefferies agreement.

Loan Agreement.

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

under which 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 (iii) a $5 million Term C loan

to be funded upon our request, subject to our ability to achieve certain milestones, no later than March 31, 2023.

On August 9, 2022,

the Company amended the Loan Agreement with Innovatus to provide for up to $75 million in term loans.

As of March 31, 2023, term loans

totaling $35 million are outstanding under the Loan Agreement, including the initial Term A loan of $15 million which was funded on April

8, 2021, and a $20 million Term B loan which was funded on December 22, 2022 following the closing of the $100 million private placement

described above.

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.

expect that our research and development and general and administrative expenses will increase as we continue to develop gedatolisib,

conduct research related to the discovery of new cancer sub-types, conduct clinical trials, and pursue other business development activities.

We would also expect to incur sales and marketing expenses as we commercialize gedatolisib and our CELsignia tests.

We expect to use

cash on hand, together with the funds to be received under the securities purchase agreement described above, to fund our research and

development expenses, clinical trial costs, capital expenditures, working capital, sales and marketing expenses, and general corporate

on our current business plan, we believe that our current cash on hand will provide sufficient cash to finance operations and pay obligations

when due for at least the next twelve months.

may seek to raise additional capital to expand our business, pursue strategic investments, and take advantage of financing or other opportunities

that we believe to be in the best interests of the Company and our stockholders.

Additional capital may be raised through the sale of

common or preferred equity or convertible debt securities, entry into debt facilities or other third-party funding arrangements.

sale of equity and convertible debt securities may result in dilution to our stockholders and those securities may have rights senior

to those of our common shares.

Agreements entered into in connection with such capital raising activities could contain covenants that

would restrict our operations or require us to relinquish certain rights.

Additional capital may not be available on reasonable terms,

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

September 30,

manage the VIKTORIA-1 Phase 3 trial, conduct research related to the discovery of new cancer sub-types, conduct clinical trials, and

pursue other business development activities.

We would also expect to incur sales and marketing expenses as we commercialize gedatolisib

and our CELsignia tests.

We expect to use cash on hand, together with the funds to be received under the Securities Purchase Agreement

described above, to fund our research and development expenses, clinical trial costs, capital expenditures, working capital, sales and

marketing expenses, and general corporate expenses.

on our current business plan, we believe that our current cash, cash equivalents and short-term investments together with available borrowings

under the Innovatus Loan Agreement will provide sufficient cash to finance our operations and pay obligations when due for at least the

next twelve months.

expectations as to how long our current capital resources will be sufficient to fund our operations are based on assumptions that may

not be accurate, and we could use our current capital resources sooner than we currently expect.

In addition, we may seek to raise additional

capital to finance capital expenditures and operating expenses over the next several years as we launch our integrated therapeutic and

companion diagnostic strategy and expand our infrastructure, commercial operations and research and development activities, and to take

advantage of financing or other opportunities that we believe to be in the best interests of the Company and our stockholders.

capital may be raised through the sale of common or preferred equity or convertible debt securities, entry into debt facilities or other

third-party funding arrangements.

The sale of equity and convertible debt securities may result in dilution to our stockholders and those

securities may have rights senior to those of our common shares.

Agreements entered into in connection with such capital raising activities

could contain covenants that would restrict our operations or require us to relinquish certain rights.

Additional capital may not be

available on reasonable terms, or not at all.

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

Net cash provided by (used in):

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$ (5,990,955 )

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.

The approximately $2.0 million of working capital changes was primarily due to an increase of approximately

$5.9 million in prepaid assets, partially offset by increases in accounts payable and accrued expenses of approximately $1.6 million

and $2.3 million, respectively.

Non-cash expense items of approximately $4.3 million primarily consisted of approximately $3.5 million

of stock-based compensation expense, non-cash interest expense of approximately $0.6 million and depreciation expense of approximately

cash used in operating activities was approximately $12.9 million for the three months ended March 31, 2023 and consisted primarily of

a net loss of approximately $11.9 million and working capital changes of $1.0 million, offset by non-cash expense items of approximately

$0.1 million.

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 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 $0.2 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.

Non-cash expense items of approximately $0.1 million primarily consisted of $1.3 million of stock-based compensation expense

and non-cash interest expense of $0.5 million, offset by $1.7 million of non-cash interest income.

The approximately $1.0 million of

working capital changes was primarily due to a decrease in accrued expenses.

The net 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 $1.0 million and working capital changes of $1.0 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.

cash provided by investing activities for the three months ended March 31, 2023 was approximately $21.9 million and consisted primarily

of net proceeds from maturities of short-term investments in government securities (U.S.

Treasury Bills and U.S.

government securities)

and minimal purchases of property and equipment.

Net cash used in investing for the three months ended March 31, 2022 were minimal and

consisted of purchases of property and equipment.

cash provided by financing activities for the three months ended March 31, 2023 was minimal and primarily consisted of proceeds from

the exercise of employee stock options, slightly offset by payments for secondary registration and debt issuance costs.

provided by financing activities for the three months ended March 31, 2022 was minimal and primarily consisted of payments for secondary

registration costs.

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 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;

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;

(iv) the expected benefits of gedatolisib;

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.

(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 owned 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.

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

26 unchanged sentences

in government regulations;

and obtaining and maintaining intellectual property protection for our technology and time and expense associated

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 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.

tightening credit markets and limitations on access to capital;

and obtaining and maintaining intellectual

property protection for our technology and time and expense associated with defending third-party claims of intellectual property infringement,

investigations or litigation threatened or initiated against us.

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, 2022 and elsewhere in this Quarterly Report.

of filings made with the SEC are available through the SEC’s electronic data gathering analysis and retrieval system (EDGAR) at

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