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Item 7. Management’s Discussion and Analysis

2025-03-31 compared with 2024-03-28 · 155 added, 114 removed, 235 unchanged (53% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our accompanying consolidated financial statements and the related notes contained in Part II, Item 8 of this Annual Report on Form 10-K.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our accompanying consolidated financial statements and related notes contained in Part II, Item 8 of this Annual Report on Form 10-K.

Unless the context indicates otherwise, references in this Annual Report on Form 10-K to the “Company,” “Humacyte,” “we,” “us,” “our” and similar terms refer to Humacyte, Inc.

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You should read the sections of this Annual Report on Form 10-K titled “Forward-Looking Statements” and “Risk Factors” 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.

We are a commercial-stage biotechnology platform company developing universally implantable, bioengineered human tissues at commercial scale, and in the first quarter of 2025 commenced the United States commercial launch of our first FDA-approved product.

We are pioneering the development and manufacture of off-the-shelf, universally implantable, bioengineered human tissues, advanced tissue constructs and organ systems with the goal of improving the lives of patients and transforming the practice of medicine.

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We are leveraging our novel, scalable technology platform to develop proprietary bioengineered, acellular human tissues for use in the treatment of diseases and conditions across a range of anatomic locations in multiple therapeutic areas.

We are initially using our proprietary, scientific technology platform to engineer and manufacture HAVs.

Our investigational HAVs are designed to be easily implanted into any patient without inducing a foreign body response or leading to immune rejection.

We are developing a portfolio, or “cabinet”, of HAVs with varying diameters and lengths.

The HAV cabinet would initially target the vascular repair, reconstruction and replacement market, including use in vascular trauma, AV access for hemodialysis, and PAD.

We are also developing the HAV for CABG and pediatric heart surgery.

Over the longer term, we are developing our HAV for the delivery of cellular therapies, including pancreatic islet cell transplantation to treat Type 1 diabetes (our BVP).

We are initially using our proprietary, scientific technology platform to engineer and manufacture ATEVs.

On December 19, 2024, the FDA granted full approval for the ATEV under the brand name Symvess TM for use in adults as a vascular conduit for extremity arterial injury when urgent revascularization is needed to avoid imminent limb loss, and when autologous vein graft is not feasible.

Our ATEVs are designed to be easily implanted into any patient without inducing a foreign body response or leading to immune rejection.

We are developing a portfolio, or “cabinet”, of ATEVs with varying diameters and lengths.

The ATEV cabinet would initially target the vascular repair, reconstruction and replacement market, including use in vascular trauma, AV access for hemodialysis, and PAD.

We are also developing the ATEV for CABG and pediatric heart surgery.

Over the longer term, we are developing our ATEV for the delivery of cellular therapies, including pancreatic islet cell transplantation to treat Type 1 diabetes (our BVP).

We will continue to explore the application of our technology across a broad range of markets and indications, including the development of urinary conduit, trachea, esophagus and other novel cell delivery systems.

For the HAV, we believe there is substantial clinical demand for safe and effective vascular conduits to replace and repair blood vessels throughout the body.

For the ATEV, we believe there is substantial clinical demand for safe and effective vascular conduits to replace and repair blood vessels throughout the body.

Vascular injuries resulting from trauma are common in civilian and military populations, frequently resulting in the loss of either life or limb.

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In addition, in many instances of vascular trauma the patient may not have adequate vein available, or the time between injury and treatment is too long to make autologous graft repair feasible.

Synthetic grafts are often contraindicated in the setting of vascular trauma due to higher infection risk that can lead to prolonged hospitalization and limb loss.

Given the competitive advantages our HAVs are designed to have over existing vascular substitutes, we believe that HAVs have the potential to become the standard of care and lead to improved patient outcomes and lower healthcare costs.

As of December 31, 2023, our HAVs have been implanted in approximately 573 patients.

We and our collaborators are currently conducting Phase 3 and Phase 2 trials of our 6 millimeter HAV across three therapeutic indications:

vascular trauma, AV access for hemodialysis, and PAD.

We were granted Fast Track designation by the FDA for our 6 millimeter HAV for use in AV access for hemodialysis in 2014.

Synthetic grafts are often contraindicated in the setting of vascular trauma due to wound contamination that contributes to higher infection risk that can lead to prolonged hospitalization and limb loss.

Given the competitive advantages our ATEVs are designed to have over existing vascular substitutes, we believe that ATEVs have the potential to become the standard of care and lead to improved patient outcomes and lower healthcare costs.

As of December 31, 2024 , our ATEV s have been implanted in approximately 601 patients.

In addition to extremity vascular trauma, we and our collaborators are currently conducting Phase 3 and Phase 2 trials of our 6 millimeter ATEV in AV access for hemodialysis and PAD.

We were granted Fast Track designation by the FDA for our 6 millimeter ATEV for use in AV access for hemodialysis in 2014.

We also received the first RMAT designation from the FDA, for the creation of vascular access for performing hemodialysis, in March 2017.

In May 2023, we were granted the RMAT designation for the HAV for urgent arterial repair following extremity vascular trauma.

In addition, in 2018 our HAV product candidate was assigned a priority designation by the Secretary of Defense under Public Law 115-92, enacted to expedite the FDA’s review of products that are intended to diagnose, treat or prevent serious or life-threatening conditions facing American military personnel.

In September 2023, we announced positive top line results from our V005 Phase 2/3 trial in vascular trauma, and in December 2023 we filed a BLA for urgent arterial repair following extremity vascular trauma when synthetic graft is not indicated, and when autologous vein use is not feasible.

In May 2023, we were granted the RMAT designation for the ATEV for urgent arterial repair following extremity vascular trauma, and in June 2024, we were granted the RMAT designation for the ATEV for patients with advanced PAD.

In addition, in 2018 our ATEV product candidate was assigned a priority designation by the Secretary of Defense under Public Law 115-92, enacted to expedite the FDA’s review of products that are intended to diagnose, treat or prevent serious or life-threatening conditions facing American military personnel.

In September 2023, we announced positive topline results from our V005 Phase 2/3 trial in vascular trauma, and in December 2023, we filed a BLA for urgent arterial repair following extremity vascular trauma when synthetic graft is not indicated, and autologous vein use is not feasible.

In February 2024, the FDA accepted the BLA filing and granted priority review and set a PDUFA date of August 10, 2024.

In April 2023, we announced completion of enrollment of our V007 Phase 3 trial of the HAV for use in AV access for hemodialysis.

Upon anticipated completion of our V007 Phase 3 trial in 2024, and dependent upon clinical results, we intend to submit a BLA supplement to the FDA for an indication in AV access for hemodialysis.

On August 9, 2024, the FDA informed us that it required additional time to complete its review of the BLA for the vascular trauma indication.

On December 19, 2024, the FDA granted full approval for Symvess (acellular tissue engineered vessel-tyod) for use in adults as a vascular conduit for extremity arterial injury when urgent revascularization is needed to avoid imminent limb loss, and autologous vein graft is not feasible.

In February 2025, the FDA completed its required review of commercial batch information for Symvess and has authorized us to commence commercial shipments.

In April 2023, we announced completion of enrollment of our V007 Phase 3 trial of the ATEV for use in AV access for hemodialysis.

In July 2024, we announced positive topline results from our V007 Phase 3 trial, where the ATEV met the primary endpoints in the study.

Dependent upon interim results from our ongoing V012 Phase 3 trial in women, we plan to submit a supplemental BLA for the ATEV to the FDA for an indication in AV access for hemodialysis in the second half of 2026.

We have generated no product revenue and incurred operating losses and negative cash flows from operations in each year since our inception in 2004.

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Substantially all of our operating losses resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations.

We expect to incur substantial operating losses and negative cash flows from operations for the foreseeable future as we advance our product candidates.

As of December 31, 2023, we had cash and cash equivalents of $80.4 million.

Subsequent to December 31, 2023, in March 2024 we completed the Offering (defined below), which provided approximately $43.1 million in net proceeds and received an additional $20.0 million under the Purchase Agreement (defined below) We believe our cash and cash equivalents on hand will be sufficient to fund operations, including clinical trial expenses and capital expenditure requirements, for at least 12 months from the date of this Annual Report on Form 10-K.

We expect to incur substantial operating losses and negative cash flows from operations for the foreseeable future as we begin to commercialize Symvess and advance our product candidates.

As of December 31, 2024, we had cash and cash equivalents of $44.9 million and restricted cash of $50.4 million.

Subsequent to December 31, 2024, in March 2025 we completed a public offering of common stock which provided approximately $46.6 million in net proceeds.

We believe our cash and cash equivalents on hand will be sufficient to fund operations for at least 12 months from the date of this Annual Report on Form 10-K.

See Note 1 — Organization and Description of Business in the notes to our accompanying consolidated financial statements contained in Part II, Item 8 of this Annual Report on Form 10-K for additional information regarding this assessment.

Our need for additional capital will depend in part on the scope and costs of our development and commercial manufacturing activities.

To date, we have not generated any revenue from the sale of commercialized products.

Our ability to generate product revenue will depend on the successful development and eventual commercialization of one or more of our product candidates.

Until such time, if ever, we expect to finance our operations through the use of existing cash and cash equivalents, the sale of equity or debt, proceeds from the Purchase Agreement, borrowings under credit facilities, or through potential collaborations, other strategic transactions or government and other grants.

Our need for additional capital will depend in part on the scope and costs of our development and commercial manufacturing activities, and the results of our commercial sales efforts.

We recently received FDA approval to commercialize Symvess, but we have not generated any revenue from the sale of commercialized products to date.

Our ability to generate product revenue will depend on the successful development and commercialization of Symvess and our product candidates.

Until such time, if ever, we expect to finance our operations through the use of existing cash and cash equivalents, the sale of equity or debt, borrowings under credit facilities, or through potential collaborations, other strategic transactions or government and other grants.

Adequate capital may not be available to us when needed or on acceptable terms.

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We anticipate that our expenses will increase substantially as we seek to:

• obtain marketing approval for our 6 millimeter HAV for vascular repair, reconstruction and replacement, including for indications in vascular trauma and AV access for hemodialysis;

• commercialize the HAV via U.S.

market launches for an indication in vascular trauma and hemodialysis AV access;

• scale out our manufacturing facility to the extent required to satisfy potential demand following any receipt of marketing approval;

• commercialize Symvess via U.S.

market launch for indications in vascular trauma and, if approved, in AV access for hemodialysis;

• obtain marketing approval for our 6 millimeter ATEV in additional indications involving vascular repair, reconstruction and replacement, including in AV access for hemodialysis;

• scale out our manufacturing facility to the extent required to satisfy potential market demand for Symvess in the United States and our product candidates, following receipt of any regulatory approval;

• continue our preclinical and clinical development efforts;

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Recent Developments

On February 29, 2024, we entered into an underwriting agreement (the “Underwriting Agreement”) with Cowen and Company, LLC and Cantor Fitzgerald & Co.

as representatives of the several underwriters named therein (collectively, the “Underwriters”), relating to the issuance and sale in an underwritten offering (the “Offering”) of 15,410,000 shares of our Common Stock, which included a full exercise of the Underwriters’ option to purchase additional shares, at a price to the public of $3.00 per share (the “Shares”).

The net proceeds to us from the Offering were approximately $43.1 million after deducting underwriting discounts and commissions and estimated Offering expenses.

The Offering closed on March 5, 2024.

On March 25, 2025, we entered into an underwriting agreement with TD Securities (USA) LLC, Barclays Capital Inc.

and BTIG, LLC, as representatives of the several underwriters named therein, relating to the issuance and sale in an underwritten offering (the “Public Offering”) of 25,000,000 shares of Common Stock, at a price to the public of $2.00 per share (the “Firm Shares”).

The Company also granted the underwriters a 30-day option to purchase up to an additional 3,750,000 shares of Common Stock at the same price as the Firm Shares.

The net proceeds to us from the Public Offering were approximately $46.6 million after deducting underwriting discounts and commissions and estimated Public Offering expenses.

The Public Offering closed on March 27, 2025.

Components of Results of Operations

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Research and Development Expenses

Since our inception, we have focused our resources on our research and development activities, including conducting preclinical studies and clinical trials, developing our manufacturing process and activities related to regulatory filings for our product candidates.

Since our inception, we have focused our resources on our research and development activities, including conducting preclinical studies and clinical trials, developing and refining our manufacturing process and activities related to regulatory filings for our product candidates.

We recognize research and development expenses as they are incurred.

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• salaries and related overhead expenses for personnel in research and development functions, including stock-based compensation and benefits;

• fees paid to consultants and CROs, including in connection with our clinical trials, and other related clinical trial fees, such as for investigator grants, patient screening, laboratory work and statistical compilation and analysis;

• fees paid to CROs and consultants, including in connection with our clinical trials, and other related clinical trial fees, such as for clinical site fees and investigator grants related to patient screening and treatment, conduct of clinical trials, laboratory work and statistical compilation and analysis;

• allocation of facility lease and maintenance costs;

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• license fees related to in-licensed technologies.

The majority of our research and development resources are currently focused on our Phase 2 and 3 clinical trials for our 6 millimeter HAV and other work needed to obtain marketing approval for our 6 millimeter HAV for use for vascular repair, reconstruction and replacement, including vascular trauma and AV access in hemodialysis in the United States.

The majority of our research and development resources are currently focused on our Phase 2 and 3 clinical trials for our 6 millimeter ATEV and other work needed to obtain marketing approval for our 6 millimeter ATEV for use for in AV access in hemodialysis in the United States.

We have incurred and expect to continue to incur significant expenses in connection with these and our other clinical development efforts, including expenses related to regulatory filings, trial enrollment and conduct, data analysis, patient follow up and study report generation for our Phase 2 and Phase 3 clinical trials.

We do not allocate all of our costs by each research and development program for which we are developing our cabinet of HAVs, as a significant amount of our development activities broadly support multiple programs that use our technology platform.

We plan to further increase our research and development expenses for the foreseeable future as we continue the development of our proprietary scientific technology platform and our novel manufacturing paradigm.

Direct expenses for our vascular trauma, AV access for hemodialysis and PAD indications include costs related to our clinical trials, including fees paid to CROs, consultants, clinical sites and investigators.

Costs related to development activities which broadly support multiple programs using our technology platform, including personnel, materials and supplies, external services costs, and other internal expenses, such as facilities and overhead costs, are not allocated to

individual research and development programs.

Other research and development expenses include direct costs not identifiable with a specific product candidate, including costs associated with our research and development platform used across programs, process development, manufacturing analytics and preclinical research and development for prospective product candidates and new technologies.

The successful development of our preclinical and clinical product candidates is highly uncertain.

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• the extent of any required post-marketing approval commitments to applicable regulatory authorities;

• development of clinical and commercial manufacturing capabilities or making arrangements with third-party manufacturers in order to ensure that it or its third-party manufacturers are able to successfully manufacture our product;

• development and refinement of clinical and commercial manufacturing capabilities or making arrangements with third-party manufacturers in order to ensure that it or its third-party manufacturers are able to successfully manufacture our product;

• obtaining, maintaining, defending and enforcing patent claims and other intellectual property rights;

• significant and changing government regulations;

• launching commercial sales of our product candidates, if approved, whether alone or in collaboration with others;

• the degree of market acceptance of any product candidates that obtain marketing approval;

• maintaining a continued acceptable safety profile following approval, if any, of our product candidates.

• launching commercial sales of Symvess and our product candidates, if approved, whether alone or in collaboration with others;

• the degree of market acceptance of Symvess and any product candidates that obtain marketing approval;

• maintaining a continued acceptable safety profile following approval of Symvess in the vascular trauma indication and in any other indications for which approval may be granted, or for any of our product candidates, if approved.

A change in the outcome of any of these variables could lead to significant changes in the costs and timing associated with the development of our product candidates.

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Other significant general and administrative expenses include facilities costs, professional fees for accounting and legal services and expenses associated with obtaining and maintaining patents.

We expect our general and administrative expenses will continue to increase for the foreseeable future to support our expanded infrastructure and increased costs of operating as a public company and as we prepare for our anticipated commercial launch of the HAV.

We expect our general and administrative expenses will continue to increase for the foreseeable future to support our expanded infrastructure and increased costs of operating as a public company and as we commercialize Symvess in the United States and seek marketing approval for Symvess outside of the United States.

These increases are expected to include increased employee-related expenses, increased sales and marketing expenses, and increased director and officer insurance premiums, audit and legal fees, and expenses for compliance with public company reporting requirements under the Exchange Act and rules implemented by the SEC, as well as Nasdaq rules.

Other Income (Expense), Net

Total other income (expense), net consists of (i) the change in fair value of the Contingent Earnout Liability that was accounted for as a liability as of the date of the Merger, and is remeasured to fair value at each reporting period, resulting in a non-cash gain or loss, (ii) interest income earned on our cash and cash equivalents and short-term investments, (iii) interest expense incurred on the Purchase Agreement (defined below), finance leases, and our former loan agreement with SVB during the periods each were outstanding, (iv) the change in fair value of our derivative liabilities including the private placement Common Stock warrant liabilities related to the Private Placement Warrants, which we assumed in connection with the Merger;

Total other income (expense), net consists of (i) the change in fair value of the Contingent Earnout Liability that was accounted for as a liability as of the date of the Merger, and is remeasured to fair value at each reporting period, resulting in a non-cash gain or loss, (ii) interest income earned on our cash and cash equivalents and short-term investments, (iii) interest expense incurred on the Purchase Agreement (defined below), finance leases, and our former loan agreement with SVB during the periods each were outstanding, (iv) the change in fair value of our derivative liabilities and asset including the private placement Common Stock warrant liabilities related to the Private Placement Warrants, which we assumed in connection with the Merger;

Common Stock warrant liabilities related to our Registered Direct Offerings;

the contingent derivative liability related to the Purchase Agreement;

a liability related to a freestanding option agreement related to the Purchase Agreement;

and the derivative liability related to our agreement with JDRF (defined below), all of which are subject to remeasurement to fair value at each balance sheet date resulting in a non-cash gain or loss, (v) a loss on debt extinguishment related to the prepayment of our loan agreement with SVB in May 2023, and (vi) an employee retention credit we recognized in June 2023.

a derivative liability related to our agreement with JDRF (defined below);

and a derivative asset related to our Common Stock Purchase Agreement (defined below), all of which are subject to remeasurement to fair value at each balance sheet date resulting in a non-cash gain or loss, (v) a loss on debt extinguishment related to the prepayment of our loan agreement with Silicon Valley Bank in May 2023, and (vi) an employee retention credit we recognized in June 2023.

Results of Operations

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($ in thousands) 2024 2023 $

Grant revenue $ — $ 1,565 $ (1,565) (100) %

Operating expenses:

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Change in fair value of Contingent Earnout Liability (33,045) (10,023) (23,022) 230 %

Interest expense (9,277) (6,599) (2,678) 41 %

Change in fair value of derivatives 3,915 (260) 4,175 (1606) %

Employee retention credit — 3,107 (3,107) (100) %

Loss on extinguishment of debt — (2,421) 2,421 (100) %

Interest expense (6,599) (6,200) (399) 6 %

Change in fair value of derivative liabilities (260) 417 (677) (162) %

Total other income (expense), net

Total other expense, net

(34,303) (10,729) (23,574) 220 %

$ (148,701) $ (110,776) $ (37,925) 34 %

Grant Revenue

There was no revenue for the year ended December 31, 2023, compared to $1.6 million in grant revenue for the year ended December 31, 2022.

Revenue for 2022 related to the reimbursement of qualifying expenses incurred in connection with our grant from DoD, which totaled approximately $6.8 million over the life of the grant before this program ended in November 2022.

Research and Development Expenses

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($ in thousands) 2024 2023 $ %

Direct Expenses

Vascular Trauma $ 2,181 $ 3,976 $ (1,795) (45) %

AV Access 6,620 8,748 (2,128) (24) %

PAD 143 306 (163) (53) %

Total 8,944 13,030 (4,086) (31) %

Unallocated Expenses

External services

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14,282 13,591 691 5 %

$ 76,550 $ 63,260 $ 13,290 21 %

Total 79,655 63,520 16,135 25 %

Total research and development expenses $ 88,599 $ 76,550 $ 12,049 16 %

Research and development expenses were $88.6 million for the year ended December 31, 2024, representing an increase of $12.0 million, or 16%, from $76.6 million for the year ended December 31, 2023.

The increase was primarily driven by expenses incurred to support our expanded research and development initiatives, including the completion of our V005 Phase 2/3 trial and the V017 study for the use of the HAV in extremity vascular trauma, and our related BLA filing in December 2023, increased product manufacturing and development, and clinical development of the HAV for use in AV access for hemodialysis.

Expense increases were primarily comprised of (i) a $6.4 million increase in payroll and personnel expenses, (ii) a $3.6 million increase in external services, including the support of clinical studies, (iii) a $2.5 million increase in the purchase of materials and supplies, and (iv) a $0.8 million increase in other research and development expenses.

The increase was primarily driven by expenses incurred to support our expanded research and development initiatives, including increased product manufacturing and development and support of the FDA review of the BLA in vascular trauma.

Expense increases were primarily comprised of a $8.1 million increase in the purchase of materials and supplies, in part due to an increased number of manufacturing production runs, and $6.4 million in additional payroll and personnel expenses.

General and Administrative Expenses

General and administrative expenses were $25.8 million and $23.5 million for the years ended December 31, 2024 and 2023, respectively.

The slight net increase in general and administrative expenses during the year ended December 31, 2023 of $0.6 million, or 3%, compared to the year ended December 31, 2022 was primarily driven by preparation for the planned commercial launch of the HAV for an indication in vascular trauma, including a $1.3 million increase in payroll and personnel expenses and a $0.3 million increase in insurance expense, partially offset by a $1.0 million decrease in professional fees, including a reduction in legal fees.

The increase in general and administrative expenses during the year ended December 31, 2024 of $2.3 million, or 10%, compared to the year ended December 31, 2023 was primarily driven by preparation for our planned commercial launch of the ATEV in vascular trauma.

Major changes in expenses included a $2.6 million increase in salaries and benefits due to the recruitment and hiring of a sales force for Symvess and other expansion of the commercial team, and a $1.3 million increase in professional fees, partially offset by a $1.8 million decrease in non-cash stock compensation expense.

Total Other Income (Expense), net

Total other income (expense), net was expense of $10.7 million for the year ended December 31, 2023, compared to income of $72.6 million for the year ended December 31, 2022.

The increase in expense of $83.3 million primarily resulted from the remeasurement of the Contingent Earnout Liability as of December 31, 2023, which resulted in non-cash expense of $10.0 million for the year ended December 31, 2023, compared to a $75.8 million non-cash gain for the year ended December 31, 2022, and a $2.4 million loss on extinguishment of debt related to the prepayment of balances outstanding under our loan agreement with SVB, partially offset by a $3.1 million employee retention credit and a $2.8 million increase in interest income earned on our cash, cash equivalents and short-term investments during 2023 primarily due to higher interest rates.

Total other expense, net was $34.3 million for the year ended December 31, 2024, compared to net expense of $10.7 million for the year ended December 31, 2023.

The increase in net expense of $23.6 million primarily resulted from a $23.0 million increase in the non-cash loss resulting from the remeasurement of the Contingent Earnout Liability during each year.

Liquidity and Capital Resources

Sources of Liquidity

We have historically financed our operations primarily through the sale of equity securities and convertible debt, proceeds from the Merger and related PIPE Financing (as defined in Note 1 to our accompanying consolidated financial statements contained in Part II, Item 8 of this Annual Report on Form 10-K), borrowings under loan facilities, the Purchase Agreement (defined below), and, to a lesser extent, through grants from governmental and other agencies.

We have historically financed our operations primarily through the sale of equity securities and convertible debt, including pursuant to the Offering (as defined below) and Registered Direct Offerings we completed in October and November 2024, proceeds from the Merger and related PIPE Financing (as defined in Note 14 to our accompanying consolidated financial statements contained in Part II, Item 8 of this Annual Report on Form 10-K), borrowings under loan facilities, the Purchase Agreement (defined below), and, to a lesser extent, through grants from governmental and other agencies.

Since our inception, we have incurred significant operating losses and negative cash flows.

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As of December 31, 2024 and 2023, we had working capital of $27.9 million and $64.8 million, respectively.

As of December 31, 2023, we had cash and cash equivalents of $80.4 million and as of December 31, 2022, we had cash and cash equivalents and short-term investments of $151.9 million.

Subsequent to December 31, 2023, in March 2024 we completed the Offering which provided approximately $43.1 million in net proceeds and received an additional $20.0 million under the Purchase Agreement.

We believe our cash and cash equivalents will be sufficient to fund operations, including clinical trial expenses and capital expenditure requirements for at least 12 months from the date of this Annual Report on Form 10-K.

As of December 31, 2024 and 2023, we had cash and cash equivalents of $44.9 million and $80.4 million, respectively, and restricted cash of $50.4 million and $0.4 million, respectively.

We funded the restricted cash account on August 14, 2024, in accordance with our amended Purchase Agreement (defined below), of which $50.0 million is not subject to our unilateral control.

Subsequent to December 31, 2024, in March 2025 we completed a public offering of common stock which provided approximately $46.6 million in net proceeds.

As of March 31, 2025, we had $47.5 million in remaining availability for sales of Common Stock under our Common Stock Purchase Agreement with Lincoln Park and $72.6 million in remaining availability for sales of Common Stock under our ATM Facility, defined below.

B efore consideration of management’s plans described below, we believe our cash and cash equivalents on hand and existing capacity under our Common Stock Purchase Agreement will be sufficient to fund operations at least into March 2026.

The future viability of the Company beyond that point is dependent on our ability to generate cash flows from the sale of Symvess and raise additional capital to finance our operations.

See Note 1 to our accompanying consolidated financial statements contained in Part II, Item 8 of this Annual Report on Form 10-K for additional information regarding our assessment.

We believe that our longer-term working capital, planned research and development, capital expenditures and other general corporate funding requirements may be satisfied through the sale of equity, debt, borrowings under credit facilities or through potential collaborations with other companies, other strategic transactions or government or other grants.

If we are unable to raise capital, we could be forced to delay, reduce, suspend or cease our research and development programs or any future commercialization efforts, which would have a negative impact on our business, prospects, operating results and financial condition.

On May 12, 2023, we entered into a Revenue Interest Purchase Agreement (the “Purchase Agreement”) with two purchasers (the “Purchasers”), both affiliates of Oberland Capital Management LLC (“Oberland”), and another affiliate of Oberland, as agent for the Purchasers (the “Agent”), to obtain financing in respect to the further development and commercialization of our HAV, to repay our then outstanding credit facility with SVB, and for other general corporate purposes.

Pursuant to the Purchase Agreement, on May 12, 2023, the Purchasers purchased certain revenue interests (the “Revenue Interests”) from us in exchange for an aggregate investment amount of up to $150.0 million (the “Investment Amount”).

On May 12, 2023, we received an initial payment of $40.0 million , less certain transaction expenses, which was used to repay in full all of the outstanding obligations under our loan agreement with SVB .

We will be entitled to receive up to approximately $110.0 million in subsequent installments subject to the terms and conditions set forth in the Purchase Agreement, as follows:

(i) $20.0 million upon our BLA for an indication in vascular trauma being accepted on or prior to March 31, 2024, (ii) $40.0 million , at our option, upon us receiving FDA approval of the HAV for the vascular trauma indication on or prior to December 31, 2024 and (iii) $50.0 million , at our option, upon reaching $35.0 million trailing worldwide three-month net sales any time prior to December 31, 2025.

Each tranche is dependent on the satisfaction of the conditions and receipt of funds from the previous tranche.

On February 18, 2024, we agreed with the Purchasers and the Agent, to waive certain breaches related to, and extend the deadline for certain post-closing obligations under, the Purchase Agreement, including the requirement for a leasehold mortgage over our headquarters.

Giving effect to the extension and waiver, we are obligated to deliver by no later than April 30, 2024 (or such later date as the Agent may agree in its sole discretion), an executed leasehold mortgage (or alternative documentation satisfactory to the Agent in its sole discretion) over our headquarters.

Concurrently with such agreement, we delivered a request that the Purchasers fund the second payment under the Purchase Agreement in an aggregate amount equal to $20.0 million, which was funded on March 11, 2024.

As of March 15, 2024, we had received funding of $60.0 million under the Purchase Agreement.

For additional information about this financing transaction, see Note 6 to our accompanying consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.

On February 29, 2024, we entered into the Underwriting Agreement with the Underwriters, relating to the issuance and sale in an underwritten offering of 15,410,000 shares of our Common Stock at a price to the public of $3.00 per share.

The net proceeds to us from the Offering were approximately $43.1 million, after deducting underwriting discounts and commissions and estimated Offering expenses.

We believe that our longer-term working capital, planned research and development, capital expenditures and other general corporate funding requirements may be satisfied through the sale of equity, debt financings, debt refinancing or restructuring or through potential collaborations with other companies, other strategic transactions or government or other grants.

Our liquidity plans are subject to a number of risks and uncertainties, including those described in the sections of this Annual Report on Form 10-K titled “Forward-Looking Statements” and “Risk Factors.” If we are unable to raise sufficient capital, we plan to implement a program that delays, reduces, suspends or ceases certain of our planned capital expenditures, research and development programs or any future commercialization efforts, which would have a negative impact on our business, prospects, operating results and financial condition.

Based on our current cash and cash equivalents on hand and existing capacity under our Common Stock Purchase Agreement, and after considering management’s plans, we believe we have the ability to fund operations at least into the middle of 2026.

On May 12, 2023, we entered into a Revenue Interest Purchase Agreement (the “Purchase Agreement”) with two purchasers (the “Purchasers”), both affiliates of Oberland Capital Management LLC (“Oberland”), and another affiliate of Oberland, as agent for the Purchasers (the “Agent”), to obtain financing in respect to the further development and commercialization of our ATEV , to repay our then outstanding credit facility with SVB, and for other general corporate purposes.

Pursuant to the Purchase Agreement, and subject to customary closing conditions, the Purchasers purchased certain revenue interests (the “Revenue Interests”) from us in exchange for an aggregate investment amount of up to $150.0 million (the “Investment Amount”).

Under the terms of the Purchase Agreement, $40.0 million of the Investment Amount , less certain transaction expenses, was funded o n May 12, 2023, which was used to repay in full all and retire our indebtedness under our loan agreement with SVB, with the remaining proceeds funded to the Company .

On March 11, 2024, $20.0 million of the Investment Amount was funded to the Company.

On December 19, 2024, the FDA granted full approval for our BLA for the vascular trauma indication, and we did not elect to draw the additional $40.0 million that became available under the Purchase Agreement.

As of December 31, 2024, we are not entitled to draw on any further installments under the Purchase Agreement.

See Note 6 to our accompanying consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K for additional details about this financing transaction.

On May 8, 2024, we reached an agreement with the Purchasers to amend the Purchase Agreement to remove requirements related to the leasehold mortgage.

In exchange for the removal of this requirement, on August 14, 2024 we funded an account in the amount of $54.0 million, over which the Agent has certain consent and other rights to $50.0 million of the funds.

See Note 6 for further information.

On February 29, 2024, we entered into an underwriting agreement with Cowen and Company, LLC and Cantor & Fitzgerald & Co., as representatives of the several underwriters named therein, relating to the issuance and sale in an underwritten offering (the “Offering”) of 15,410,000 shares of our Common Stock at a price to the public of $3.00 per share.

The net proceeds to us from the Offering were approximately $43.0 million, after deducting underwriting discounts and commissions and Offering expenses.

The Offering closed on March 5, 2024.

On September 24, 2024, we entered into the Common Stock Purchase Agreement with Lincoln Park for an equity line financing, which provides that, subject to the terms and conditions set forth in the Common Stock Purchase Agreement, we have the sole right, but not the obligation, to sell to Lincoln Park shares of Common Stock having an aggregate value of up to $50.0 million over a 24-month period.

We control the timing and amount of any sales to Lincoln Park.

As of December 31, 2024 , we had completed sales of shares under the Common Stock Purchase Agreement that provided $2.5 million in gross proceeds.

As of March 31, 2025 , we had $47.5 million in remaining availability for sales of our Common Stock under our Common Stock Purchase Agreement with Lincoln Park.

On October 4, 2024, we entered into a securities purchase agreement with an institutional investor pursuant to which the investor purchased approximately $30.0 million worth of Common Stock and warrants in the October 2024 Registered Direct Offering (as defined below).

The net proceeds to us from the October 2024 Registered Direct Offering were approximately $28.0 million, after deducting placement agent’s fees and offering expenses of approximately $2.0 million.

The October 2024 Registered Direct Offering closed on October 7, 2024.

On November 13, 2024, we entered into a securities purchase agreement with an institutional investor pursuant to which the investor purchased approximately $15.0 million worth of Common Stock and warrants in the November 2024 Registered Direct Offering (as defined below).

The net proceeds to us from the November 2024 Registered Direct Offering were approximately $14.9 million after deducting offering expenses of approximately $0.1 million.

The November 2024 Registered Direct Offering closed on November 15, 2024.

On March 25, 2025, we entered into an underwriting agreement with TD Securities (USA) LLC, Barclays Capital Inc.

and BTIG, LLC, as representatives of the several underwriters named therein, relating to the issuance and sale in the Public Offering of 25,000,000 shares of Common Stock, at a price to the public of $2.00 per share.

We also granted the underwriters a 30-day option to purchase up to an additional 3,750,000 shares of Common Stock at the same price as the Firm Shares.

The net proceeds to us from the Public Offering were approximately $46.6 million after deducting underwriting discounts and commissions and estimated Public Offering expenses.

The Public Offering closed on March 27, 2025.

On September 1, 2022, we entered into an agreement with Jefferies LLC for the sale from time to time of up to $80.0 million of shares of Common Stock pursuant to a sales agreement (the “ATM Facility”).

In December 2024, we sold an aggregate of 1,333,596 shares of Common Stock under the ATM Facility at an average price of $5.26 per share for net proceeds of approximately $6.8 million after deducting sales commissions of approximately $0.2 million .

From December 31, 2024 through March 31, 2025, we sold an aggregate of 75,793 shares of Common Stock under the ATM Facility at an average price of $5.04 per share for net proceeds of approximately $0.4 million .

Material Cash Requirements

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(3) employee wages, benefits, and incentives;

(4) financing and operating lease payments (for additional information see below and Note 8 to our accompanying consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K), and (5) payments under the JDRF Agreement (for additional information see Note 13 to our accompanying consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K).

(4) financing and operating lease payments (for additional information see below and Note 8 to our accompanying consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K), and (5) payments under our JDRF Agreement (for additional information see Note 13 to our accompanying consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K).

We have also entered into contracts with CROs primarily for clinical trials.

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As of December 31, 2024, we had non-cancellable purchase com mitments of $31.3 million for supplies and services that are primarily for research and development.

We have existing license agreements with Duke University and Yale University, a distribution agreement with Fresenius Medical Care and the JDRF Agreement.

We have existing license agreements with Duke University and Yale University, a distribution agreement with Fresenius Medical Care and our JDRF Agreement.

The amount and timing of any potential milestone payments, license fee payments, royalties and other payments that we may be required to make under these agreements are unknown or uncertain at December 31, 2024.

For additional information regarding our agreements with Duke University, Yale University, and Fresenius Medical Care, and the nature of payments that could become due thereunder, see the sections in this Annual Report on Form 10-K titled “Business — Distribution” and “Business — Intellectual Property.” For additional information about the JDRF Agreement, see Note 13 — Commitments and Contingencies to our accompanying consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K .

For additional information regarding our agreements with Duke University, Yale University, and Fresenius Medical Care, and the nature of payments that could become due thereunder, see the sections in this Annual Report on Form 10-K titled “Business — Distribution” and “Business — Intellectual Property.” For additional information about our JDRF Agreement, see Note 13 — Commitments and Contingencies to our accompanying consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K .

Revenue Interest Purchase Agreement

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Under the Purchase Agreement, as of December 31, 2024, we had $64.2 million recorded as a revenue interest liability on our consolidated financial statements.

On February 18, 2024, we delivered a request that the Purchasers fund the second payment under the Purchase Agreement in an aggregate amount of $20.0 million, which was funded on March 11, 2024.

For additional information regarding repayment, see Note 6 — Revenue Interest Purchase Agreement to our accompanying consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.

Our finance lease relates to our headquarters facility containing our manufacturing, research and development and general and administrative functions, which was substantially completed in June 2018 and is being leased through May 2033, and our operating lease relates to the land lease associated with our headquarters.

Our finance leases relate to our headquarters facility containing our manufacturing, research and development and general and administrative functions, which was substantially completed in June 2018 and is being leased through May 2033, and our operating lease relates to the land lease associated with our headquarters.

See Note 8 to our accompanying consolidated financial statements contained in Part II, Item 8 of this Annual Report on Form 10-K for further information regarding our leases.

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$ 21,431 $ 4,212 $ 7,000 $ 4,447 $ 5,772

Operating leases

Operating lease

784 105 210 210 259

On September 1, 2022, we entered into an agreement for the sale from time to time up to $80.0 million of shares of Common Stock pursuant to a sales agreement (the “ATM Facility”).

As of December 31, 2023, we have not conducted any sales of Common Stock under the ATM Facility.

Future Funding Requirements

We expect to incur significant expenses in connection with our ongoing activities as we seek to (i) continue clinical development of our 6 millimeter HAV for use in vascular trauma and hemodialysis AV access and submit BLAs for FDA approval, (ii) if marketing approval is obtained, to launch and commercialize our HAVs for an indication in vascular trauma and hemodialysis AV access in the U.S.

market, including subsequent launches in key international markets, (iii) advance our pipeline in major markets, including PAD Phase 3 trials and continue preclinical development and advance to planned clinical studies in CABG and BVP for diabetes, and (iv) scale out our manufacturing facility as required to satisfy potential demand if our HAVs receive marketing approval.

We expect to incur significant expenses in connection with our ongoing activities as we seek to (i) commercialize Symvess and seek marketing approval for Symvess in additional indications and for our product candidates in the United States and to obtain marketing approval for our 6 millimeter ATEV outside of the United States, (ii) continue clinical development of our 6 millimeter ATEV for use in hemodialysis AV access and submit a BLA for FDA approval of an indication in hemodialysis AV access, (iii) advance our pipeline in major markets, including PAD Phase 3 trials and continue preclinical development and advance to planned clinical studies in CABG and BVP for diabetes, and (iv) scale out our manufacturing facility as required to satisfy market demand.

We will need additional funding in connection with these activities.

Our future funding requirements, both short-term and long-term, will depend on many factors, including:

• the cost and timing of our future commercialization activities, including product manufacturing, marketing and distribution for Symvess in the United States, and any other product candidate for which we receive marketing approval in the future;

• the amount and timing of revenues, if any, that we receive from commercial sales of Symvess and any product candidates for which we receive marketing approval;

• the progress and results of our clinical trials and interpretation of those results by the FDA and other regulatory authorities;

• the cost, timing and outcome of regulatory review of our product candidates, particularly for marketing approval of our HAVs in the United States;

• the cost, timing and outcome of regulatory review of our product candidates, particularly for marketing approval of Symvess outside of the United States and of our product candidates in the United States;

• the scope, progress, results and costs of preclinical development, laboratory testing and clinical trials for our additional product candidates;

• the cost and timing of our future commercialization activities, including product manufacturing, marketing and distribution for our HAVs if approved by the FDA, and any other product candidate for which we receive marketing approval in the future;

• the amount and timing of revenues, if any, that we receive from commercial sales of any product candidates for which we receive marketing approval;

• the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims;

• the costs of operating as a public company, including hiring additional personnel as well as increased director and officer insurance premiums, audit and legal fees, and expenses for compliance with public company reporting requirements under the Exchange Act and rules implemented by the SEC and Nasdaq.

Until such time, if ever, as we are able to successfully develop and commercialize one or more of our product candidates, we expect to continue financing our operations through the sale of equity, debt, borrowings under credit facilities or through potential collaborations with other companies, other strategic transactions or government or other grants.

Until such time, if ever, as we are able to successfully commercialize Symvess and to develop and commercialize our product candidates, we expect to continue financing our operations through the sale of equity, debt, borrowings under credit facilities or through potential collaborations with other companies, other strategic transactions or government or other grants.

Adequate capital may not be available to us when needed or on acceptable terms.

Other than the funds that may become available to us under the Purchase Agreement upon the achievement of specified milestones, we do not currently have any committed external source of funds.

We do not currently have any committed external source of funds.

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 diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of stockholders.

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Debt financing would also result in fixed payment obligations.

If we are unable to raise capital, we plan to implement a program that delays, reduces, suspends or ceases our planned capital expenditures, research and development programs or any future commercialization efforts, which would have a negative impact on our business, prospects, operating results and financial condition.

Our principal use of cash in recent periods has been primarily to fund our operations, including the clinical and preclinical development of our product candidates.

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Net cash used in operating activities (98,122) (73,305)

Net cash provided by (used in) investing activities (173) 4,845

Net cash provided by (used in) financing activities 4,507 (1,446)

Net decrease in cash, cash equivalents and restricted cash $ (68,971) $ (67,730)

Net cash used in investing activities (1,572) (173)

Net cash provided by financing activities 114,183 4,507

Net increase (decrease) in cash, cash equivalents and restricted cash $ 14,489 $ (68,971)

Cash, cash equivalents and restricted cash at the beginning of the period $ 80,801 $ 149,772

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___________________________

(1) Includes depreciation, amortization related to our leases and our debt discount, stock-based compensation expense, non-cash interest expense related to our revenue interest liability and our JDRF Award liability (defined below), the changes in fair value of our Contingent Earnout Liability and our derivative liabilities, and in 2023 includes a loss on extinguishment of debt and an immaterial amount of loss on disposal of property and equipment.

(1) Primarily includes depreciation, amortization related to our leases, stock-based compensation expense, non-cash interest expense related to our revenue interest liability and our JDRF Award liability (defined below) the changes in fair value of our Contingent Earnout Liability and our derivative liabilities and asset, and an immaterial amount of loss on disposal of property and equipment, and in 2023 includes a loss on extinguishment of debt, amortization of our debt discount.

Cash Flow from Operating Activities

The increase in net cash used in operating activities from 2022 to 2023 was primarily due to increased spending on pre-clinical, clinical and pre-commercial activities as well as payroll and personnel expenses, primarily those related to preparation for the completion of our trial for the use of the HAV in vascular trauma and our related BLA filing, expansion of clinical development of the HAV for use in AV access, and preparation for the planned commercial launch of the HAV for an indication in vascular trauma.

The increase in net cash used in operating activities from 2023 to 2024 was primarily due to increased spending on preclinical, clinical and pre-commercial activities as well as payroll and personnel expenses, expansion of clinical development of the ATEV for use in AV access, and preparation for the planned commercial launch of the ATEV for an indication in vascular trauma.

Cash Flow from Investing Activities

Net cash used in investing activities for the year ended December 31, 2023 consisted of purchases of property and equipment partially offset by proceeds from the maturity of our short-term investments (certificates of deposit).

Net cash provided by investing activities for the year ended December 31, 2022 was primarily due to a net cash inflow of $5.9 million related to our certificates of deposit classified as short-term investments.

Net cash used in investing activities for the year ended December 31, 2024 consisted of purchases of property and equipment.

Net cash used in investing activities for the year ended December 31, 2023 consisted primarily of purchases of property and equipment, which fully offset proceeds from the maturity of our short-term investments (certificates of deposit).

Cash Flow from Financing Activities

Net cash provided by financing activities for the year ended December 31, 2023 consisted primarily of net proceeds from the Purchase Agreement, partially offset by the repayment of our loan agreement with SVB.

Net cash used in financing activities for the year ended December 31, 2022 consisted primarily of principal payments of our finance leases.

Net cash provided by financing activities for the year ended December 31, 2024 consisted primarily of $43.1 million of net proceeds from our Registered Direct Offerings we completed in October and November 2024, $43.0 million of net proceeds from our Offering we completed in March 2024 and $19.5 million of net proceeds from our Purchase Agreement.

Net cash provided by financing activities for the year ended December 31, 2023 consisted primarily of $37.9 million of net proceeds from our Purchase Agreement, partially offset by $31.8 million of cash payments related to the repayment of our loan agreement with SVB.

Off-Balance Sheet Arrangements

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Revenue Interest Liability

On May 12, 2023, we entered into the Purchase Agreement to obtain financing in respect to the further development and commercialization of our HAV, to repay our credit facility with SVB, and for other general corporate purposes.

On May 12, 2023, we entered into the Purchase Agreement to obtain financing in respect to the further development and commercialization of our ATEV , to repay our credit facility with SVB, and for other general corporate purposes.

We recorded a revenue interest liability related to the Purchase Agreement on our consolidated balance sheet on the date we entered into the Purchase Agreement, which is presented net of issuance costs and a debt discount.

We impute interest expense associated with this liability using the effective interest rate method.

We impute interest expense associated with this liability using the interest method.

The estimated effective interest rate is calculated based on the rate that would enable the debt to be repaid in full over the anticipated life of the arrangement.

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A significant increase or decrease in net sales could materially impact the revenue interest liability, interest expense and the time period for repayment.

At December 31, 2023, the revenue interest liability is calculated using our current estimate of forecasted global net sales of our products for our planned commercial launch, and impacted by a debt discount comprising the estimated fair value of a bifurcated derivative liability related to the Purchasers’ put option under the Purchase Agreement, the estimated fair value of a freestanding option agreement related to the Purchase Agreement, and issuance and transaction costs incurred.

As our product candidates are not yet approved for sale, the estimated probability and timing or amounts of repayment is likely to change each reporting period.

At December 31, 2024, the revenue interest liability is calculated using our current estimate of forecasted global net sales of our products, and impacted by a debt discount comprising the estimated fair value of a bifurcated derivative liability related to the Purchasers’ put option under the Purchase Agreement, the estimated fair value of a freestanding option agreement related to the Purchase Agreement, and issuance and transaction costs incurred.

As Symvess is currently our only product approved for sale in the United States and we have not yet generated product revenue, the estimated probability and timing or amounts of repayment is likely to change each reporting period.

The fair value of the contingent derivative liability is valued using a “with-and-without” method.

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The simplified method is based on the vesting period and the contractual term for each grant, or for each vesting-tranche for awards with graded vesting.

The mid-point between the vesting date and the maximum contractual expiration date is used as the expected term under this method.

The mid-point between the vesting date and the maximum contractual expiration date is used as

the expected term under this method.

For awards with multiple vesting-tranches, the times from grant until the mid-points for each of the tranches may be averaged to provide an overall expected term.

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Common Stock Warrants

Public and Private Placement Warrants

Under the Merger, we assumed 5,000,000 publicly-traded warrants (“Public Warrants”) and 177,500 private placement warrants issued to AHAC in connection with AHAC’s initial public offering (“Private Placement Warrants” and, together with the Public Warrants, the “Common Stock Warrants”).

We account for the Common Stock Warrants in accordance with the guidance contained in ASC Topic 480, Distinguishing Liabilities from Equity and ASC Topic 815, Derivatives and Hedging ( “ASC 815”) .

We account for the Private Placement Warrants in accordance with the guidance contained in ASC 815, under which the warrants do not meet the criteria for equity treatment and must be recorded as liabilities.

As the Private Placement Warrants meet the definition of a derivative under ASC 815, we recorded these warrants as liabilities on the consolidated balance sheet at fair value, with subsequent changes in their respective fair values recognized in the consolidated statements of operations and comprehensive loss at each reporting date.

We account for the Common Stock Warrants in accordance with the guidance contained in ASC Topic 480, Distinguishing Liabilities from Equity ( “ASC 480”) and ASC Topic 815, Derivatives and Hedging ( “ASC 815”) .

We accounted for the Private Placement Warrants in accordance with the guidance contained in ASC 815, under which the warrants did not meet the criteria for equity treatment and must be recorded as liabilities.

As the Private Placement Warrants met the definition of a derivative under ASC 815, we recorded these warrants as liabilities on the consolidated balance sheet at fair value, with subsequent changes in their respective fair values recognized in the consolidated statements of operations and comprehensive loss at each reporting date.

The fair value of the warrants was estimated using a Monte Carlo simulation value model utilizing assumptions including our current common stock price, expected volatility, risk-free rate, expected term and expected dividend yield.

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Determining the fair value of the Private Placement Warrants involves certain assumptions requiring significant judgment and actual results can differ from assumed and estimated amounts.

The Public Warrants are considered to be “indexed to the Company’s own stock” and as we have a single class of common stock, a qualifying cash tender offer of more than 50% of the Company’s common stock will always result in a change-in-control and would not preclude permanent equity classification of the Public Warrants.

Based on this evaluation, we concluded that the Public Warrants meet the criteria to be classified within stockholders’ equity.

The Public Warrants are considered to be “indexed to the Company’s own stock” and as we have a single class of common stock, a qualifying cash tender offer of more than 50% of Common Stock will always result in a change-in-control and would not preclude permanent equity classification of the Public Warrants.

Based on this evaluation, we concluded that the Public Warrants met the criteria to be classified within stockholders’ equity.

Registered Direct Offering Warrants

We accounted for the common stock warrants issued in the Registered Direct Offerings in accordance with the guidance contained in ASC 480 and ASC 815.

The Registered Direct Offering Warrants (as defined in Note 2 to our accompanying consolidated financial statements contained in Part II, Item 8 of this Annual Report on Form 10-K) did not meet the criteria for equity treatment and must be recorded as liabilities.

As the Registered Direct Offering Warrants meet the definition of a derivative under ASC 815, we recorded these warrants as liabilities on the consolidated balance sheet at fair value, with subsequent changes in their respective fair values recognized in the consolidated statements of operations and comprehensive loss at each reporting date.

The fair value of the warrants was estimated using a Black-Scholes valuation model utilizing assumptions including our current common stock price, expected volatility, risk-free rate, expected term and expected dividend yield.

The fair value of the Registered Direct Offering Warrants is based on significant unobservable inputs, which represent Level 3 fair value measurements within the fair value hierarchy (see “Fair Value of Financial Instruments” accounting policy described in Note 2 to our accompanying consolidated financial statements contained in Part II, Item 8 of this Annual Report on Form 10-K).

Determining the fair value of the Registered Direct Offering Warrants involves certain assumptions requiring significant judgment and actual results can differ from assumed and estimated amounts.

Emerging Growth Company and Smaller Reporting Company Status

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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-K

Item 7. Management’s Discussion and Analysis