What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-08-08 compared with 2024-05-07 · 124 added, 55 removed, 172 unchanged (51% of the section changed)

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Currently available therapies for these diseases are limited, with few Alzheimer’s disease (“AD”) treatments, two approved treatments for geographic atrophy (“GA”) secondary to dry age-related macular degeneration (“dAMD”) and no approved treatments for dementia with Lewy bodies.

Our goal is to develop disease-modifying treatments for patients with these degenerative disorders by initially leveraging our expertise in the σ-2 (sigma-2) receptor (“S2R”), which is expressed by multiple cell types, including neuronal synapses, and acts as a key regulator of cellular damage commonly associated with certain age-related degenerative diseases of the CNS and retina.

We believe that targeting the S2R complex represents a mechanism that is functionally distinct from other current approaches in clinical development for the treatment of degenerative diseases.

Recent clinical results support this hypothesis.

Our goal is to develop disease-modifying treatments for participants with these degenerative disorders by initially leveraging our expertise in the σ-2 (sigma-2) receptor (“S2R”), which is expressed by multiple cell types, including neuronal synapses, and acts as a key regulator of cellular damage commonly associated with certain age-related degenerative diseases of the CNS and retina.

Data indicates that CT1812 antagonizes the binding and toxicity of amyloid beta oligomers via targeting the S2R complex and represents a mechanism that is functionally distinct from other current approaches in clinical development for the treatment of degenerative diseases.

Clinical results support this hypothesis, and our clinical trial findings provide evidence that the displacement of oligomers from synapses via CT1812 engagement with the S2R results in improved synapse function.

In the SNAP study, results of which were published in May 2023 in the journal, Translational Neurodegeneration and showed that a single oral dose of CT1812 rapidly displaces Aβ oligomers from synapses of individuals with AD.

In the SEQUEL study, top-line results showed that four weeks of treatment with CT1812 improved synapse activity and connectivity of brain regions as measured via quantitative electroencephalogram (“qEEG”).

Together, these findings provide evidence that the displacement of oligomers from synapses via CT1812 engagement with the S2R results in improved synapse function.

In blinded and unblinded clinical trials, several patients experienced asymptomatic, reversible elevations in serum liver chemistries prompting harmonization of monitoring, increasing frequency where appropriate, across our clinical trials.

In blinded and unblinded clinical trials, several participants experienced asymptomatic, reversible elevations in serum liver chemistries prompting harmonization of monitoring, increasing frequency where appropriate, across our clinical trials.

In July 2024, we reported results from our Phase 2 SHINE trial, which showed a consistent trend in cognitive improvement in participants treated with CT1812 (pooled 100mg and 300mg) compared to placebo across all cognitive measures including ADAS-Cog 11, ADAS-Cog 13, cognitive composite and Mini-Mental State Examination scores.

In addition, there were signals of improvement in functional measures (ADCS-ADL and ADCS-CGIC).

SHINE enrolled 153 adults with mild-to-moderate (MMSE 18-26) Alzheimer's disease who were randomized evenly (1:1:1) to one of two oral daily doses of CT1812 (100mg or 300mg) or placebo.

P-values less than 0.05 were observed on ADAS-Cog 11 and MMSE at Day 98, the midpoint of the study.

Through the course of the study, participants in the placebo arm worsened approximately 2.70 points as measured by ADAS-Cog 11 on Day 182.

In contrast, CT1812-treated participants declined by an average of 1.66 points, a 39% slowing of decline favoring CT1812.

Similar results were seen in the MMSE score on Day 98 for the pooled CT1812 arms.

On the exploratory measures of function (ADCS-ADL and CGIC), there was a signal of benefit favoring CT1812 at the six-month timepoint.

In the SHINE trial, CT1812 did not achieve statistical significance on the first of the ordered secondary efficacy endpoints in the pooled 100mg and 300mg dose group compared to placebo.

The SHINE trial achieved its primary objective and demonstrated a favorable safety and tolerability profile, consistent with previous clinical experience.

The percentage of participants experiencing any adverse event was similar between the pooled CT1812 treatment arms (76.5%) and the placebo group (78%).

The majority of adverse events were mild or moderate in severity.

In the placebo arm, 10% of participants experienced a serious adverse event (“SAE”) compared to approximately 5% in the combined CT1812 treated arms.

Among CT1812-treated participants, two experienced treatment-emergent SAEs in the 100mg group, including stomatitis, chronic constipation, and hip fracture

(all deemed not related to treatment) and three experienced treatment-emergent SAEs in the 300mg group, including hematuria, abdominal pain, and infection (all deemed not related to treatment) and recurrent presyncope (deemed related to treatment).

At the 300mg dose, nine participants experienced treatment-emergent liver enzyme test (“LFT”) increases (greater than 3xULN), which subsided after cessation of drug without evidence of serious liver injury.

There were no LFT elevations observed in the 100mg dose.

We have enrolled 130 patients in the Phase 2 COG1201 (SHIMMER) study of CT1812 in mild-to-moderate dementia with Lewy bodies, or DLB.

The design of this trial is a double-blind, randomized, six-month trial involving three dose groups, two active treatment cohorts and a placebo group.

Clinical endpoints of the trial include safety and physical activity measurements, cognitive assessments, and PK and pharmacodynamic biomarker analyses compared to baseline measurements recorded at the beginning of the trial.

In addition, cerebrospinal fluid will be collected and analyzed for α-synuclein content and established patterns of differential protein expression.

This study is not powered to show significance in the efficacy endpoints.

We expect to report topline results from our SHIMMER trial by year-end 2024.

Since our inception in 2007, we have incurred significant operating losses and devoted substantially all of our time and resources to developing our lead product candidate, CT1812, building our intellectual property portfolio, raising capital and recruiting management and technical staff to support these operations.

As of March 31, 2024, we had an accumulated deficit of $150.3 million.

We incurred a net loss of $9.2 million and $6.2 million for the three months ended March 31, 2024 and 2023, respectively.

To date, we have funded our operations primarily with proceeds from grants awarded by the National Institute of Aging (the “NIA”), a division of the National Institutes of Health (the “NIH”), and proceeds from our initial public offering (the “IPO”), completed in October 2021, proceeds from our follow-on public offering in November 2022 and March 2024, sales of our common stock through our ATM (as defined below), sales of our convertible promissory notes, convertible preferred stock, simple agreements for future equity (“SAFE”) and stock option exercises.

As of June 30, 2024, we had an accumulated deficit of $157.4 million.

We incurred a net loss of $7.0 million and $16.2 million for the three and six months ended June 30, 2024, respectively, and net loss of $4.7 million and $10.9 million for the three and six months ended June 30, 2023, respectively.

To date, we have funded our operations primarily with proceeds from grants awarded by the National Institute of Aging (the “NIA”), a division of the National Institutes of Health (the “NIH”), and proceeds from our initial public offering (the “IPO”), completed in October 2021, proceeds from our follow-on public offerings, sales of our common stock through our ATM (as defined below), sales of our convertible promissory notes, convertible preferred stock, simple agreements for future equity (“SAFE”) and stock option exercises.

Since our inception, we have received approximately $171.0 million in cumulative grant awards to fund our clinical trials, primarily from the NIA, and we have raised approximately $125.9 million in net proceeds from sales of our equity securities, convertible notes, SAFE, stock option exercises, IPO and follow-on public offerings, ATM, and equity line financing with Lincoln Park.

As of March 31, 2024, we had cash and cash equivalents of $34.7 million.

As of June 30, 2024, we had cash and cash equivalents of $28.5 million.

To date, $57.3 million of the cumulative grant funds remain available.

On December 23, 2022, we entered into a sales agreement with Cantor Fitzgerald & Co.

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(the “Sales Agents”), providing for the offering, issuance and sale by us of up to $40.0 million of our common stock from time to time in “at-the-market” offerings (the “ATM”).

We sold 191,273 shares of common stock under the ATM during the three months ended March 31, 2024 for gross proceeds of approximately $0.4 million.

As of March 31, 2024, there

was approximately $34.3 million of common stock remaining available for sale under the ATM subject to the limitations of General Instruction I.B.6 of Form S-3.

We sold 191,273 shares of common stock under the ATM during the six months ended June 30, 2024 for gross proceeds of approximately $0.4 million.

As of June 30, 2024, there was approximately $34.3 million of common stock remaining available for sale under the ATM.

On March 10, 2023, we entered into a purchase agreement with Lincoln Park Capital Fund, LLC (“Lincoln Park”) for an equity line financing (the “Lincoln Park Purchase Agreement”).

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333-268992) covering the resale of shares of common stock that are issued under the Lincoln Park Purchase Agreement.

During the three months ended March 31, 2024, we did not sell any shares of common stock to Lincoln Park.

As of March 31, 2024, $34.8 million was available to draw pursuant to the Lincoln Park Purchase Agreement.

During the six months ended June 30, 2024, we did not sell any shares of common stock to Lincoln Park.

As of June 30, 2024, $34.8 million was available to draw pursuant to the Lincoln Park Purchase Agreement.

On March 14, 2024, we completed our follow-on public offering, pursuant to which we issued and sold 6,571,428 shares of our common stock at a public offering price of $1.75 per share.

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In connection with the follow-on public offering, we received net proceeds of approximately $11.9 million, after deducting underwriting discounts and commissions and other offering related expenses.

We expect to continue to incur significant and increasing expenses and net losses for the foreseeable future, as we advance our current and future product candidates through preclinical and clinical development, manufacture drug product and drug supply, seek regulatory approval for our current and future product candidates, maintain and expand our intellectual property portfolio, hire additional research and development and business personnel and operate as a public company.

and drug supply, seek regulatory approval for our current and future product candidates, maintain and expand our intellectual property portfolio, hire additional research and development and business personnel and operate as a public company.

We will not generate revenue from product sales unless and until we successfully complete clinical development and obtain regulatory approval for our product candidates.

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For example, our ongoing and/or planned clinical trials may be impacted by interruptions or delays at clinical trial sites or operations of the FDA and comparable foreign regulatory authorities.

Additionally, we have made certain adjustments to the operation of our trials in an effort to ensure the monitoring and safety of patients and minimize risks to trial integrity during the pandemic in accordance with the guidance issued by the FDA and may need to make further adjustments in the future.

Additionally, we have made certain adjustments to the operation of our trials in an effort to ensure the monitoring and safety of participants and minimize risks to trial integrity during the pandemic in accordance with the guidance issued by the FDA and may need to make further adjustments in the future.

While the potential further economic impact brought by the COVID-19 pandemic may be difficult to assess or predict, there could be a significant disruption of global financial markets, reducing our ability to access capital, which could in the future negatively affect our liquidity and financial position.

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Research and development expenses consist primarily of direct and indirect costs incurred for our research activities, including development of our drug discovery efforts and the development of our product candidates.

Direct costs include laboratory materials and supplies, contracted research and manufacturing, clinical trial costs, consulting fees, and other expenses incurred to sustain our research and development program.

Direct costs include

laboratory materials and supplies, contracted research and manufacturing, clinical trial costs, consulting fees, and other expenses incurred to sustain our research and development program.

Indirect costs include personnel-related expenses, consisting of employee salaries, related benefits, and stock-based compensation expense for employees engaged in research and development activities, facilities, and other expenses consisting of direct and allocated expenses for rent and depreciation, and lab consumables.

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We expense general and administrative costs as incurred.

We expect that our general and administrative expenses will increase for the foreseeable future as we increase our headcount to support our continued research activities and development of our programs.

Other Income (Expense)

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Only costs that are allowable under the grant award, certain government regulations and the NIH’s supplemental policy and procedure manual may be claimed for reimbursement, and the reimbursements are subject to routine audits from governmental agencies from time to time.

As of March 31, 2024, the Company has been awarded grants with project periods that extend through May 31, 2027, subject to extension.

Our clinical trials have been funded by approximately $171.0 million in cumulative grants awarded primarily by the NIA, which includes an approximately $81.0 million grant from the NIA to fund our Phase 2 (COG0203) study of CT1812 in patients with early-stage AD, an approximately $30.5 million grant from the NIA to fund our Phase 2 (COG0201) study of CT1812 in patients with mild-to-moderate AD, and an approximately $29.5 million grant from the NIA to fund our Phase 2 (COG1201) study of CT1812 in patients with dementia with Lewy bodies.

As of June 30, 2024, the Company has been awarded grants with project periods that extend through May 31, 2027, subject to extension.

Our clinical trials have been funded by approximately $171.0 million in cumulative grants awarded primarily by the NIA, which includes an approximately $81.0 million grant from the NIA to fund our Phase 2 (COG0203-START) study of CT1812 in participants with early-stage AD, an approximately $30.5 million grant from the NIA to fund our Phase 2 (COG0201-SHINE) study of CT1812 in participants with mild-to-moderate AD, and an approximately $29.5 million grant from the NIA to fund our Phase 2 (COG1201-SHIMMER) study of CT1812 in participants with dementia with Lewy bodies.

Other Income (Expense), Net

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Results of Operations

Comparison of the Three Months Ended March 31, 2024 and 2023

Comparison of the Three Months Ended June 30, 2024 and 2023

The following table summarizes our results of operations (in thousands):

Three Months Ended March 31,

Three Months Ended June 30,

Operating Expenses:

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Other income (expense):

Other income, net

Interest expense

Total other income, net

Research and Development Expenses

The following table summarizes our research and development expenses (in thousands):

Three Months Ended June 30,

Clinical programs

Manufacturing

Preclinical programs

Other expense

Research and development expenses were $11.6 million for the three months ended June 30, 2024, compared to $8.5 million for the three months ended June 30, 2023.

The increase of $3.1 million was primarily due to the following:

● an increase of $3.3 million in clinical programs primarily related to increased Phase 2 trial activities with contract research organizations;

● an increase of $0.7 million in personnel costs associated with expanded research and development activities, and equity-based compensation expense;

● a decrease of $0.3 million in manufacturing related to lower costs with contract manufacturing organizations for the production of pre-clinical and future clinical trial supply ;

● a decrease of $0.6 million in preclinical programs and other expense primarily due to decreased research activities .

General and Administrative Expenses

General and administrative expenses were $3.1 million for the three months ended June 30, 2024, compared to $3.3 million for the three months ended June 30, 2023.

The decrease of $0.2 million in general and administrative expenses was driven by lower professional services.

Other Income (Expense)

Grant income was $7.3 million for the three months ended June 30, 2024, compared to $6.9 million for the three months ended June 30, 2023.

The change in grant income is correlated with the increase in eligible reimbursable costs related to clinical trials incurred during 2024 as compared to 2023.

Other Income, Net

Other income, net was $0.3 million for the three months ended June 30, 2024, compared to other income, net of $0.2 million for the three months ended June 30, 2023.

The change in other income, net was driven primarily by interest earned on money market funds.

Interest Expense

Interest expense was less than $0.1 million for the three months ended June 30, 2024, compared to interest expense of less than $0.1 million for the three months ended June 30, 2023.

Interest expense was not significant in either period.

Comparison of the Six Months Ended June 30, 2024 and 2023

The following table summarizes our results of operations (in thousands):

Six Months Ended June 30,

Operating Expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

Other income (expense):

Other income (expense), net

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The following table summarizes our research and development expenses (in thousands):

Three Months Ended March 31,

Six Months Ended June 30,

Clinical programs

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Preclinical programs

Research and development expenses were $10.6 million for the three months ended March 31, 2024, compared to $5.4 million for the three months ended March 31, 2023.

Other expense

Total research & development expenses

Research and development expenses were $ 22.1 million for the six months ended June 30, 2024, compared to $13.9 million for the six months ended June 30, 2023.

The increase of $ 8.2 million was primarily due to the following:

● an increase of $4.4 million in clinical programs primarily related to increased Phase II trial activities with contract research organizations;

● an increase of $7.7 million in clinical programs primarily related to increased Phase 2 trial activities with contract research organizations;

● an increase of $1.0 million in personnel costs associated with expanded research and development activities, and equity-based compensation expense;

● an increase of $0.6 million in manufacturing related to higher costs with contract manufacturing organizations for the replenishment of clinical trial supply;

● a decrease of $0.6 million in preclinical programs and other costs primarily due to decreased research activities.

● a decrease of $1.1 million in preclinical programs, and other expense primarily due to decreased research activities.

General and Administrative Expenses

General and administrative expenses were $3.5 million for the three months ended March 31, 2024, compared to $3.5 million for the three months ended March 31, 2023.

The fluctuation of general and administrative expenses were insignificant period over period.

General and administrative expenses were $6.7 million for the six months ended June 30, 2024, compared to $6.9 million for the six months ended June 30, 2023.

The decrease of $0.2 million in general and administrative expenses was driven by lower professional services.

Other Income (Expense)

Grant income was $4.9 million for the three months ended March 31, 2024, compared to $3.4 million for the three months ended March 31, 2023.

The change in grant income is correlated with the increase in eligible reimbursable costs related to clinical trials incurred during 2024 as compared to 2023.

Other Income (Expense), Net

Other income, net was $0.2 million for the three months ended March 31, 2024, compared to other expense, net of $0.6 million for the three months ended March 31, 2023.

The change in other income (expense), net was driven primarily by interest earned on money market funds.

Grant income was $12.2 million for the six months ended June 30, 2024, compared to $10.4 million for the six months ended June 30, 2023.

The change in grant income is correlated with the increase in eligible reimbursable costs incurred during 2024 as compared to 2023.

O ther Income (Expense), Ne t

Other income, net was $0.6 million for the six months ended June 20, 2024, compared to other expense, net of $0.4 million for the six months ended June 30, 2023.

The change in other income (expense), net was driven primarily by interest earned on money market funds, as well as prior year expenses related to the Lincoln Park Purchase Agreement.

Interest Expense

Interest expense was less than $0.1 million for the three months ended March 31, 2024, compared to interest expense of less than $0.1 million for the three months ended March 31, 2023.

Interest expense was less than $0.1 million for the six months ended June 30, 2024, compared to interest expense of less than $0.1 million for the six months ended June 30, 2023.

Interest expense was not significant in either period.

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The net proceeds were approximately $5.2 million, after deducting underwriting discounts and commissions and other offering related expenses payable by us.

On December 23, 2022, we entered into a sales agreement with the Sales Agents, providing for the offering, issuance and sale by us of up to $40.0 million of our common stock from time to time in ATM offerings, subject to the limitations of General Instructions I.B.6 of Form S-3.

As of March 31, 2024, we sold 3,050,347 shares of common stock under the ATM for gross proceeds of approximately $5.7 million.

As of March 31, 2024, there was $34.3 million of common stock remaining available for sale under the ATM.

As of June 30, 2024, we sold 3,050,347 shares of common stock under the ATM for gross proceeds of approximately $5.7 million.

As of June 30, 2024, there was $34.3 million of common stock remaining available for sale under the ATM.

In addition, in March 2023, we entered into the Lincoln Park Purchase Agreement with Lincoln Park Capital Fund, LLC, or Lincoln Park, giving the Company the right, but not the obligation to sell to Lincoln Park up to $35.0 million worth of shares of our common stock.

As of March 31, 2024, we have sold 125,000 shares of common stock to Lincoln Park for proceeds of $0.2 million, as part of the equity line financing arrangement.

As of March 31, 2024, $34.8 million was available to draw pursuant to the Lincoln Park Purchase Agreement.

As of June 30, 2024, we have sold 125,000 shares of common stock to Lincoln Park for proceeds of $0.2 million, as part of the equity line financing arrangement.

As of June 30, 2024, $34.8 million was available to draw pursuant to the Lincoln Park Purchase Agreement.

On March 14, 2024, we closed a follow-on public offering of 6,571,428 shares of our common stock at a public offering price of $1.75 per share.

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The net proceeds were approximately $11.9 million, after deducting underwriting discounts and commissions and other offering related expenses payable by us.

As of March 31, 2024, we had $34.7 million in cash and cash equivalents and have not generated positive cash flows from operations.

Based on our current business plans, we believe that our existing cash and cash equivalents, and income from non-dilutive grants, will be sufficient for us to fund our operating expenses and capital expenditures requirements through the second quarter of 2025, which assumes no usage from the remaining ATM nor the Lincoln Park Purchase Agreement.

As of June 30, 2024, we had $28.5 million in cash and cash equivalents and have not generated positive cash flows from operations.

Based on our current business plans, we believe that our existing cash and cash equivalents, and income from non-dilutive grants, will be sufficient for us to fund our operating expenses and capital expenditures into the second quarter of 2025, which assumes no usage from the remaining ATM nor the Lincoln Park Purchase Agreement.

We have based these estimates on assumptions that may prove to be incorrect or require adjustment as a result of business decisions, and we could utilize our available capital resources sooner than we currently expect.

As of August 8, 2024, the date of issuance of this Quarterly Report, we believe that our cash and cash equivalents as of June 30, 2024 is not sufficient to fund operations for the period through one year after the date of this filing and therefore we have concluded that substantial doubt exists about our ability to continue as a going concern.

To execute our business plans, we will need substantial funding to support our continuing operations and pursue our growth strategy.

Until such time that we can generate significant revenue from product sales, if ever, we expect to finance our operations through the sale of common stock in public offerings and/or private placements, debt financings or other capital sources, including collaborations with other companies or other strategic transactions.

There can be no assurance that additional financing will be available to us or that such financing, if available, will be available on terms acceptable to us.

The terms of any financing may adversely affect the holdings or the rights of our stockholders.

If we are unable to obtain funding, we could be forced to delay, reduce or abandon our product development programs, which could have a material adverse effect on our business prospects.

Future Funding Requirements

We anticipate that we will need to raise additional funding in the future to fund our operations, including the commercialization of any approved product candidates.

We anticipate that we will need to raise additional funding in the future to fund our operations, including continuing and completing our clinical trials.

We are subject to the risks typically related to the development of new products, and we may encounter unforeseen expenses, difficulties, complications, delays, and other unknown factors that may adversely affect our business.

Our future funding requirements will depend on many factors, including, but not limited to:

● the scope, progress, costs and results of our ongoing and planned clinical trials of CT1812, as well as the associated costs, including any unforeseen costs we may incur as a result of preclinical study or clinical trial delays due a pandemic, such as the COVID-19 pandemic or other diseases, macroeconomic conditions, global or political instability, such as the ongoing global and regional conflicts, inflation, or other delays ;

● the scope, progress, costs and results of our ongoing and planned clinical trials of CT1812, as well as the associated costs, including any unforeseen costs we may incur as a result of preclinical study or clinical trial delays due to a pandemic, such as the COVID-19 pandemic or other diseases, macroeconomic conditions, global or political instability, such as the ongoing global and regional conflicts, inflation, or other delays ;

● the scope, progress, costs and results of preclinical development, laboratory testing and clinical trials for any future product candidates we may decide to pursue ;

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To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders.

Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

Debt financing and preferred equity financing, if

available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

If we raise funds through collaborations, licenses and other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock.

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The following table summarizes our cash flows for the periods indicated (in thousands):

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows used in operating activities

Cash flows used in investing activities

Cash flows provided by (used in) financing activities

Cash flows provided by financing activities

Effect of exchange rate changes on cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Net decrease in cash and cash equivalents

Operating Activities

Net cash used in operating activities for the three months ended March 31, 2024 was $7.2 million, which consisted primarily of a net loss of $9.2 million, offset primarily by the impact of equity-based compensation of $1.2 million and a net change of $0.5 million in operating assets and liabilities.

The net change in operating assets and liabilities was primarily due to an increase in grant receivables of $0.4 million, an increase in prepaid expenses and other assets of $0.6 million, a decrease in accounts payable and accrued expenses of $0.4 million, and a decrease in deferred grant income and other liabilities of $0.1 million.

Net cash used in operating activities for the three months ended March 31, 2023 was $2.7 million, which consisted primarily of our net loss of $6.2 million, offset primarily by the impact of equity-based compensation of $1.2 million and a net change of $1.9 million in our operating assets and liabilities.

The net change in our operating assets and liabilities was primarily due to a decrease in grant receivables of $2.1 million, an increase in prepaid expenses and other assets of $0.1 million, and a decrease in accounts payable and accrued expenses of less than $0.1 million.

Net cash used in operating activities for the six months ended June 30, 2024 was $13.2 million, which consisted primarily of a net loss of $16.2 million, offset primarily by the impact of equity-based compensation of $2.3 million and a net change of $0.3 million in operating assets and liabilities.

The net change in operating assets and liabilities was primarily due to an increase in grant receivables of $1.8 million, an increase in accounts payable and accrued expenses of $1.3 million, a decrease in prepaid expenses and other assets of $1.1 million, and a decrease in deferred grant income and other liabilities of $0.3 million.

Net cash used in operating activities for the six months ended June 30, 2023, was $6.4 million, which consisted primarily of a net loss of $10.9 million, offset primarily by the impact of equity-based compensation of $2.2 million and a net change of $1.9 million in operating assets and liabilities.

The net change in operating assets and liabilities was primarily due to a decrease in grant receivables of $1.3 million, a decrease in prepaid expenses and other assets of $0.8 million, an increase in accounts payable and accrued expenses of $1.2 million, and a decrease in deferred grant income and other liabilities of $1.3 million.

Investing Activities

Net cash used in investing activities for the three months ended March 31, 2024 and 2023 was $0 and less than $0.1 million, respectively.

Net cash used in investing activities for the six months ended June 30, 2024 and 2023 was less than $0.1 million and less than $0.1 million, respectively.

Overall, the change in net cash used in investing activities was insignificant.

Financing Activities

Net cash provided by financing activities was $12.0 million for the three months ended March 31, 2024, and net cash used by financing activities was less than $0.1 million for the three months ended March 31, 2023.

Net cash provided by financing activities for the six months ended June 30, 2024 and 2023 was $11.9 million and $2.1 million, respectively.

The change in net cash provided by financing activities is primarily related to net proceeds from the issuance of common stock in our follow-on offering in March 2024 and under the ATM program.

Contractual Obligations

The following table summarizes our contractual obligations as of March 31, 2024 (in thousands):

The following table summarizes our contractual obligations as of June 30, 2024 (in thousands):

Operating lease obligations:

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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