What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2020-11-09 compared with 2020-08-10 · 41 added, 28 removed, 244 unchanged (22% of the section changed)

37 unchanged sentences

If our efforts to develop a RAS dynamic signaling test are successful, the percentage of cancer patients who could benefit from a CELsignia test would increase significantly.

We reported pre-clinical study results for our first CELsignia test for ovarian cancer at the 2020 Annual Meeting of the American Association for Cancer Research in late June 2020.

This new test identifies a new sub-group of ovarian cancer patients with tumors that have abnormal c-Met and HER2 signaling activity.

We reported pre-clinical study results for our first CELsignia test for ovarian cancer at the 2020 Annual Meeting of the American Association for Cancer Research in late June 2020.This new test identifies a new sub-group of ovarian cancer patients with tumors that have abnormal c-Met and HER2 signaling activity.

These findings suggest that a significant sub-group of ovarian cancer patients may respond to treatment with a combination of ErbB and c-Met inhibitors.

18 unchanged sentences

i) pan-HER and c-Met inhibitors;

2) pan-HER inhibitors and endocrine therapy;

ii) pan-HER inhibitors and endocrine therapy;

iii) pan-HER inhibitors and chemotherapies;

4 unchanged sentences

As a result, we are not and have never been profitable and have incurred losses in each period since our inception in 2012.

For the three months ended June 30, 2020 and 2019, we reported a net loss of approximately $2.2 million and $1.7 million, respectively, and for the six months ended June 30, 2020 and 2019, we reported a net loss of approximately $4.4 million and $3.6 million, respectively.

As of June 30, 2020, we had an accumulated deficit of approximately $12.6 million under Celcuity LLC and $21.3 million under Celcuity Inc.

As of June 30, 2020, we had cash and cash equivalents of approximately $15.4 million.

For the three months ended September 30, 2020 and 2019, we reported a net loss of approximately $2.5 million and $2.0 million, respectively, and for the nine months ended September 30, 2020 and 2019, we reported a net loss of approximately $6.9 million and $5.6 million, respectively.

As of September 30, 2020, we had an accumulated deficit of approximately $12.6 million under Celcuity LLC and $23.8 million under Celcuity Inc.

As of September 30, 2020, we had cash and cash equivalents of approximately $13.7 million.

Impact of COVID-19 on our Business

4 unchanged sentences

We enacted rigorous safety measures in our laboratory and administrative offices, including implementing social distancing protocols, allowing working from home for those employees that do not need to be physically present in a lab to perform their work, suspending travel, implementing temperature checks at the entrances to our facilities, extensively and frequently disinfecting our workspaces and providing masks to those employees who must be physically present.

We expect to continue to implement these measures until the COVID-19 pandemic is contained and we may take further actions as government authorities require or recommend or as we determine to be in the best interests of our employees, suppliers, and collaborators.

We expect to continue with these measures until the COVID-19 pandemic is contained and we may take further actions as government authorities require or recommend or as we determine to be in the best interests of our employees, suppliers, and collaborators.

Clinical Trials and Collaborations

48 unchanged sentences

Three Months Ended

September 30,

Increase (Decrease)

12 unchanged sentences

Income tax benefits

Six Months Ended

$ (2,474,298 )

$ (1,984,254 )

Nine Months Ended

September 30,

Increase (Decrease)

12 unchanged sentences

Income tax benefits

$ (6,923,282 )

$ (5,550,339 )

$ (1,372,943 )

Research and Development

Our research and development expenses for the three months ended June 30, 2020 were approximately $1.77 million, representing an increase of approximately $0.30 million, or 20%, compared to the same period in 2019.

Our research and development expenses for the three months ended September 30, 2020 were approximately $1.96 million, representing an increase of approximately $0.25 million, or 15%, compared to the same period in 2019.

The increase primarily resulted from a $0.19 million increase in compensation related expenses, including approximately $0.09 million of non-cash stock-based compensation, to support development of our CELsignia platform.

In addition, other research and development expenses increased $0.06 million due to clinical validation and laboratory studies, and operational and business development activities.

Our research and development expenses for the six months ended June 30, 2020 were approximately $3.61 million, representing an increase of approximately $0.55 million, or 18%, compared to the same period in 2019.

Our research and development expenses for the nine months ended September 30, 2020 were approximately $5.57 million, representing an increase of approximately $0.80 million, or 17%, compared to the same period in 2019.

The increase primarily resulted from a $0.71 million increase in compensation related expenses, including approximately $0.45 million of non-cash stock-based compensation, to support development of our CELsignia platform.

4 unchanged sentences

General and Administrative

Our general and administrative expenses for the three months ended June 30, 2020 were approximately $0.45 million, representing an increase of approximately $0.08 million, or 20%, compared to the same period in 2019.

The increase was attributable to an increase in non-cash stock-based compensation.

Our general and administrative expenses for the six months ended June 30, 2020 were approximately $0.91 million, representing an increase of approximately $0.16 million, or 21%, compared to the same period in 2019.

The increase was attributable to an increase in non-cash stock-based compensation.

Our general and administrative expenses for the three months ended September 30, 2020 were approximately $0.52 million, representing an increase of approximately $0.14 million, or 36%, compared to the same period in 2019.

The increase primarily resulted from a $0.09 million increase in compensation related expenses, including approximately $0.06 million of non-cash stock-based compensation.

In addition, other general and administrative expenses increased $0.05 million primarily due to professional fees associated with being a public company.

Our general and administrative expenses for the nine months ended September 30, 2020 were approximately $1.43 million, representing an increase of approximately $0.30 million, or 26%, compared to the same period in 2019.

The increase primarily resulted from a $0.24 million increase in compensation related expenses, including approximately $0.21 million of non-cash stock-based compensation.

In addition, other general and administrative expenses increased $0.06 million primarily due to professional fees associated with being a public company.

We anticipate that our general and administrative expenses will increase in future periods, reflecting both increased costs in connection with the potential future commercialization of CELsignia tests, an expanding infrastructure, and increased professional fees associated with being a public company.

Interest Expense

Interest expense for the three and six months ended June 30, 2020 is related to finance lease liabilities.

Interest expense for the three and nine months ended September 30, 2020 is related to finance lease liabilities.

Interest Income

Interest income for the three months ended June 30, 2020 was approximately $0.01 million, representing a decrease of approximately 90% compared to the same period in 2019.

Interest income for the three months ended September 30, 2020 was approximately $0.01 million, representing a decrease of approximately 95% compared to the same period in 2019.

This decrease was primarily the result of lower market interest rates.

Interest income for the six months ended June 30, 2020 was approximately $0.08 million, representing a decrease of approximately 70% compared to the same period in 2019.

Interest income for the nine months ended September 30, 2020 was approximately $0.08 million, representing a decrease of approximately 77% compared to the same period in 2019.

This decrease was primarily the result of lower market interest rates.

1 unchanged sentence

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

Through June 30, 2020, we have raised capital of approximately $13.7 million and $7.5 million through private placements of common equity and unsecured convertible notes, respectively.

Through September 30, 2020, 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.

2 unchanged sentences

The ATM Agreement allows us to sell shares of common stock up to an aggregate offering price of $10.0 million.

Through June 30, 2020 we generated approximately $0.1 million of additional cash through sales pursuant to the ATM Agreement, after taking into account commissions and offering expenses.

Through September 30, 2020, we generated approximately $0.05 million of additional cash through sales pursuant to the ATM Agreement, after taking into account commissions and offering expenses.

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

As of June 30, 2020, our cash and cash equivalents were approximately $15.4 million, and we had an accumulated deficit of approximately $12.6 million under Celcuity LLC and approximately $21.3 million under Celcuity Inc.

As of September 30, 2020, our cash and cash equivalents were approximately $13.7 million, and we had an accumulated deficit of approximately $12.6 million under Celcuity LLC and approximately $23.8 million under Celcuity Inc.

We expect that our research and development and general and administrative expenses will increase as we continue to develop our CELsignia platform and additional CELsignia tests, conduct research related to the discovery of new cancer sub-types, conduct clinical trials, and pursue other business development activities.

7 unchanged sentences

Additional capital may not be available on reasonable terms, or at all.

Six Months Ended

Nine Months Ended

September 30,

Net cash provided by (used in):

Operating activities

$ (5,038,438 )

$ (4,294,953 )

Investing activities

Financing activities

Net decrease in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

$ (5,038,615 )

Operating Activities

Net cash used in operating activities was approximately $3.39 million for the six months ended June 30, 2020 and consisted primarily of a net loss of approximately $4.45 million and working capital changes of approximately $0.02 million, offset by non-cash expense items of approximately $1.08 million.

Net cash used in operating activities was approximately $5.04 million for the nine months ended September 30, 2020 and consisted primarily of a net loss of approximately $6.92 million, adjusted for working capital changes of approximately $0.26 million and non-cash expense items of approximately $1.62 million.

The approximately $0.26 million of working capital changes was primarily due to decreases in prepaid assets and increases in accrued expenses.

Non-cash expense items of approximately $1.62 million primarily consisted of depreciation expense of $0.29 million and $1.33 million of stock-based compensation expense.

The net cash used in operating activities was approximately $2.82 million for the six months ended June 30, 2019 and consisted primarily of a net loss of approximately $3.57 million, adjusted for working capital changes of approximately $0.21 million and non-cash expense items of approximately $0.54 million.

The net cash used in operating activities was approximately $4.29 million for the nine months ended September 30, 2019 and consisted primarily of a net loss of approximately $5.55 million, adjusted for working capital changes of approximately $0.31 million and non-cash expense items of approximately $0.95 million.

The approximately $0.31 million of working capital changes was primarily due to decreases in prepaid assets and increases in accounts payable and accrued expenses.

1 unchanged sentence

Investing Activities

Net cash used in investing activities for the six months ended June 30, 2020 was approximately $0.07 million and consisted of purchases of property and equipment.

Net cash provided by investing activities for the six months ended June 30, 2019 was approximately $1.56 million and consisted primarily of net proceeds from the sale of investments of approximately $1.74 million, offset by approximately $0.18 million for purchases of property and equipment.

Net cash used in investing activities for the nine months ended September 30, 2020 was approximately $0.08 million and consisted of purchases of property and equipment.

Net cash provided by investing activities for the nine months ended September 30, 2019 was approximately $4.39 million and consisted primarily of net proceeds from the sale of investments of approximately $4.74 million, offset by approximately $0.35 million for purchases of property and equipment.

Financing Activities

Net cash provided by financing activities for the six months ended June 30, 2020 was approximately $0.15 million and primarily reflects net proceeds from the sale of shares of our common stock through the ATM Agreement and employee stock purchases.

The net cash provided by financing activities for the six months ended June 30, 2019 was approximately $0.23 million and primarily reflects the proceeds from the exercise of common stock options and employee stock purchases.

Net cash provided by financing activities for the nine months ended September 30, 2020 was approximately $0.08 million and primarily reflects net proceeds from the sale of shares of our common stock through the ATM Agreement and employee stock purchases.

The net cash provided by financing activities for the nine months ended September 30, 2019 was approximately $0.23 million and primarily reflects the proceeds from the exercise of common stock options and employee stock purchases.

Off-Balance Sheet Arrangements

55 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