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Item 2. Management’s Discussion and Analysis

2024-08-14 compared with 2024-05-15 · 122 added, 56 removed, 153 unchanged (54% of the section changed)

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The following discussion and analysis of the results of operations and financial condition of Eyenovia, Inc.

(“Eyenovia,” the “Company,” “we,” “us” and “our”) as of March 31, 2024 and for the three months ended March 31, 2024 and 2023 should be read in conjunction with our unaudited condensed financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q and with our audited financial statements and the notes thereto included in the 2023 Form 10-K, as amended by the 2023 Form 10-K Amendment.

(“Eyenovia,” the “Company,” “we,” “us” and “our”) as of June 30, 2024 and for the three and six months ended June 30, 2024 and 2023 should be read in conjunction with our unaudited condensed financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q and with our audited financial statements and the notes thereto included in the 2023 Form 10-K, as amended by the 2023 Form 10-K Amendment.

Forward Looking Statements

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These statements are based on the beliefs and assumptions of our management based on information currently available to management.

Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forwardlooking statements.

Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the sections titled “Summary Risk Factors” and “Risk Factors” included in Item 1A of Part I of our Form 10-K, as filed with the SEC on March 18, 2024, as amended by our 2023 Form 10-K Amendment, and the risks discussed in our other SEC filings.

Furthermore, such forward-looking statements speak only as of the date of this Quaterly Report on Form 10-Q.

Furthermore, such forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q.

Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

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We are developing versions of the Optejet with on-board digital technology that records the date and time of each use.

These data may be used to provide reminders via Bluetooth to smart devices and to allow healthcare practioners to monitor usage.

These data may be used to provide reminders via Bluetooth to smart devices and to allow healthcare practitioners to monitor usage.

This information can then be used by practitioners and health care systems to measure treatment compliance and improve medical decision making.

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In this agreement, we agreed to pay Bausch + Lomb $2.0 million in cash up front.

Upon transfer of the regulatory documents and study elements to us on April 11, 2024, we issued $3.0 million of our common stock, or 2,299,397 shares to Bausch + Lomb on May 3, 2024.

Upon transfer of the regulatory documents and study elements to us on April 11, 2024, we issued 2,299,397 shares to Bausch + Lomb on May 3, 2024 (calculated pursuant to the Letter Agreement at $3.0 million using a thirty-day volume-weighted average price on April 11, 2024, but valued at $2.3 million on the May 3, 2024 settlement date).

We also agreed to pay Bausch + Lomb a low single-digit royalty on net sales once MicroPine is commercialized in the United States, assuming receipt of regulatory approvals.

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On April 23, 2024, the Company and Bausch + Lomb entered into the Side Letter, pursuant to which the Company agreed to pay approximately $0.5 million to Bausch + Lomb related to defective clinical supply.

It was also agreed that the Company will receive approximately $0.25 million from Bausch + Lomb related to amounts previously held back that will be due upon completion of the CHAPERONE study.

It was also agreed that the Company will receive approximately $0.25 million from Bausch + Lomb related to amounts previously held back from vendors that will be due upon completion of the CHAPERONE study.

In addition, the Company purchased $0.5 million of clinical supplies from Bausch + Lomb in April 2024.

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We released positive top-line results from VISION-2 in the fourth quarter of 2022.

We are planning to meet with the FDA in mid-2024 to discuss a transition of the product into our new Gen-2 Optejet device, which has a significantly lower cost to manufacture than the first generation device.

Mydcombi is the only FDA-approved fixed combination of the two leading mydriatic agents, tropicamide and phenylephrine in the United States and our first FDA-approved product.

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Those benefits may include improved cost-effectiveness in centers that employ single-use bottles for mydriasis, more efficient use of office time and resources, and an overall improved doctor-patient experience.

We have begun the commercialization of Mydcombi, with the first commercial sale of the product occurring on August 3, 2023 as part of a targeted launch, and plan to expand our launch with the onboarding of ten sales representatives in early June 2024.

We have begun the commercialization of Mydcombi, with the first commercial sale of the product occurring on August 3, 2023 as part of a targeted launch, expanded our launch with the hiring and onboarding of nine sales representatives through August 1, 2024.

We received FDA approval for our primary Mydcombi manufacturing facility in February 2024, which we believe will allow us to expand and continue to build our manufacturing operations.

On July 24, 2024, we received written comments from the FDA outlining the design of a clinical bridging study to transition Mydcombi into our new Gen-2 Optejet device, which has a significantly lower cost to manufacture than the currently approved product.

On August 10, 2020, we entered into a license agreement with Arctic Vision (as amended on September 14, 2021, the “Arctic Vision License Agreement”) pursuant to which Arctic Vision may develop and commercialize MicroPine, MicroLine and Mydcombi in Greater China (mainland China, Hong Kong, Macau and Taiwan) and South Korea.

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The License will remain in effect for ten years from the date of the first commercial sale of a Licensed Product, unless earlier terminated.

We paid Formosa an upfront payment in an aggregate amount of $2.0 million which consisted of (a) cash in the amount of $1.0 million and (b) 487,805 shares of common stock valued at $1.0 million.

We paid Formosa an upfront payment in an aggregate amount of $2.0 million which consisted of (a) cash in the amount of $1.0 million and (b) 487,805 shares of common stock valued pursuant to the License Agreement at $1.0 million.

We also capitalized $122,945 of transaction costs in connection with the License.

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The trigger for the initial $2.0 million development milestone payment was FDA approval of the Licensed Product and the effective date of the acceptance by the Company of the transfer and assignment of the FDA approval, which occurred on March 14, 2024.

Based on the achievement of this milestone, we paid Formosa the aggregate amount of $2.0 million, consisting of (a) cash in the amount of $1.0 million on April 26, 2024 and (b) 613,496 shares of common stock valued at $1.0 million on April 29, 2024.

The remaining $2.0 million development milestone was earned and accrued upon FDA approval, but payment will be triggered on the earlier of twelve months after FDA approval of the Licensed Product or six months following the first commercial sale of the Licensed Product.

Based on the achievement of this milestone, we paid Formosa (a) cash in the amount of $1.0 million on April 26, 2024 and (b) 613,496 shares of common stock (calculated pursuant to the License Agreement at $1.0 million using a five-day volume-weighted average price on March 14, 2024, but valued at $0.4 million on the April 29, 2024 settlement date).

The remaining $2.0 million development milestone (to be fully paid in cash) was earned and accrued upon FDA approval, but payment will be triggered on the earlier of twelve months after FDA approval of the Licensed Product or six months following the first commercial sale of the Licensed Product.

On July 23, 2024, we entered into a collaboration agreement with Senju, under which the companies intend to work to develop EYEN-520, a combination of Senju’s corneal epithelial wound healing candidate with our Optejet dispensing technology, as a potential treatment for chronic dry eye disease.

The companies anticipate a meeting with the FDA in late 2024, to be followed by execution of a definitive agreement related to the further development of the product and anticipated completion of a Phase 2b study in 2025.

If successful, the collaboration agreement could be expanded to bring the product into two Phase 3 studies by 2026.

On July 26, 2024, we received notice from the staff (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) providing notification that the Company had regained compliance with the $1.00 minimum bid price requirement for continued listing on The Nasdaq Capital Market under Listing Rule 5550(a)(2).

Previously, Nasdaq had notified us on July 2, 2024 that, for the preceding 30 consecutive business days, the closing bid price of our common stock had been below the minimum requirement of $1.00 per share.

The notification letter stated that we would be provided 180 calendar days to regain compliance.

In order to regain compliance, the closing bid price of our common stock had to be at least $1.00 for a minimum of 10 consecutive business days at any time before December 30, 2024.

Subsequently, the Staff determined that, from July 12 to July 25, 2024, the closing bid price of our common stock had been at $1.00 per share or greater.

Accordingly, the Company had regained compliance with Listing Rule 5550(a)(2).

Historically, we have financed our operations principally through equity offerings.

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If we are unable to secure additional capital, we may be required to curtail our research and development initiatives and/or take additional measures to reduce costs.

Our net losses were $10.9 million and $5.7 million for the three months ended March 31, 2024 and 2023, respectively.

As of March 31, 2024, we had working capital and an accumulated deficit of approximately $2.0 million and $156.4 million, respectively.

Our net losses were $11.1 million and $6.2 million for the three months ended June 30, 2024 and 2023, respectively.

As of June 30, 2024, we had a working capital deficit and an accumulated deficit of approximately $8.6 million and $167.5 million, respectively.

Financial Overview

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Revenue is earned from the sale of our product, Mydcombi.

The first commercial sale of the product occurred on August 3, 2023 as part of a targeted launch and plan to expand our launch with the onboarding of ten sales representatives in early June 2024.

Cost of sales consisted of the cost of the production of the Mydcombi ophthalmic spray that was sold.

The first commercial sale of the product occurred on August 3, 2023 as part of a targeted launch and we expanded our launch with the onboarding of nine sales representatives through July 15, 2024.

Cost of sales consisted of the cost of the production of the Mydcombi ophthalmic spray that was sold and the write-down of inventories to net realizable value.

Research and Development Expenses

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We record costs for some development activities, such as clinical trials, based on an evaluation of the progress to completion of specific tasks using data such as subject enrollment, clinical site activations or other information our vendors provide to us.

We expect that our research and development expenses will increase with the continuation of the aforementioned initiatives.

We expect that our research and development expenses will increase with the continuation of these initiatives.

General and Administrative Expenses

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Other income (expense), net consists of (a) other income (expense) related to our sales of clinical supply to our licensees;

(b) interest income earned on Treasury bills;

and (c) interest expense incurred on our indebtedness.

(b) changes in fair value of equity consideration (the equity payable for the Baush + Lomb and Formosa transactions);

and (d) interest expense incurred on our indebtedness.

Results of Operations

Three Months Ended March 31, 2024 Compared with Three Months Ended March 31, 2023

Three Months Ended June 30, 2024 Compared with Three Months Ended June 30, 2023

Revenue and Cost of Revenue

Revenue for the three months ended March 31, 2024 totaled $4,993, which was offset by cost of revenues of $4,993.

We expect to generate flat gross margins (after writing inventories down to net realizable value) during the early stages of the commercialization process for Mydcombi until such time as we can roll out our second generation Optejet device and scale up production.

No revenue was earned or recognized during the three months ended March 31, 2023.

Revenue for the three months ended June 30, 2024 totaled $22,625, which was offset by cost of revenues of ($490,361).

Write-down of inventories to net realizable value for the three months ended June 30, 2024 totaled approximately $0.5 million, compared to no expense for the three months ended June 30, 2023.

The $0.5 million represented the write-down of short-dated inventory to net realizable value.

The negative gross loss was primarily due to write-downs of commercial inventory that were still on the balance sheet at June 30, 2024.

No revenue was earned or recognized during the three months ended June 30, 2023.

Research and Development Expenses

Research and development expenses for the three months ended March 31, 2024 totaled $3.9 million, an increase of $1.4 million, or 56%, as compared to $2.5 million recorded for the three months ended March 31, 2023.

Research and development expenses for the three months ended June 30, 2024 totaled $4.6 million, an increase of $1.8 million, or 64%, compared to $2.8 million recorded for the three months ended June 30, 2023.

Research and development expenses consisted of the following:

For the Three Months Ended March 31,

For the Three Months Ended June 30,

Personnel-related expenses

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Total research and development expenses

The increase in personnel-related expenses was primarily due to new staff additions made during the last three quarters of 2023 and the first quarter of 2024.

The increase in supplies and materials expense was primarily due to (a) the expensing of Gen-1 MicroPine vials and cartridges that will now be used in Eyenovia-led clinical trials rather than being sold to Bausch as a result of the reacquisition of the Bausch license rights;

(b) drug formulation engineering batches;

and (c) the purchase of parts for the Gen-2 device that were used during the period.

The increase in direct clinical and non-clinical expenses was primarily due to increased costs related to Gen-2 R&D, MicroStat stability testing and clinical regulatory expenses.

The decrease in non-cash stock-based compensation expenses was primarily due to the ending of the amortization period for older grants.

The increase in depreciation expense was primarily due to increased equipment purchases and equipment placed in service during the last three quarters of 2023 and the first quarter of 2024.

and (c) the purchase of parts for the Gen-2 device that are intended to be used for Eyenovia-led clinical trials.

The increase in non-cash stock-based compensation expenses was primarily due to new grants in the second quarter of 2024.

The increase in direct clinical and non-clinical expenses was primarily due to increased costs related to Gen-2 R&D, Mydcombi stability testing and clinical regulatory expenses.

The decrease in facilities expenses was due to costs incurred in 2023 related to getting the new Reno facility online that were not incurred in 2024.

The increase in depreciation expense was primarily due to increased equipment purchases and equipment placed in service during the last two quarters of 2023 and the first and second quarters of 2024.

The increase in other expenses was primarily due to increased IT expenses related to data tracking and cybersecurity.

General and Administrative Expenses

General and administrative expenses for the three months ended March 31, 2024 totaled $3.8 million, an increase of $0.9 million, or 31%, as compared to $2.9 million recorded for the three months ended March 31, 2023.

General and administrative expenses for the three months ended June 30, 2024 totaled $3.8 million, an increase of $0.7 million, or 19%, compared to $3.1 million recorded for the three months ended June 30, 2023.

General and administrative expenses consisted of the following:

For the Three Months Ended March 31,

Personnel-related expenses

For the Three Months Ended June 30,

Salaries and benefits

Professional fees

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Insurance expense

Writedown of commercial inventory to net realizable value

Sales and marketing

Travel, lodging and meals

Investor relations

Facilities expense

Director fees and expense

Total general and administrative expenses

The increase in personnel-related expenses was mainly due to new staff additions made to support commercialization during the last two quarters of 2023 and the first quarter of 2024.

The decrease in stock-based compensation expenses was primarily due to the ending of the amortization period for older equity grants.

The increase in travel, lodging and meals was primarily due to increased travel between our New York, Nevada and California locations, an increase in the number of investor conferences attended and increased travel by the sales team to promote Mycombi.

The increase in other expenses is primarily due to commercial regulatory costs for Mydcombi.

Reacquisition of License Rights

Reacquisition of license rights for the three months ended June 30, 2024 totaled approximately $2.9 million, compared to no expense for the three months ended June 30, 2023.

The $2.9 million amount is comprised of the $3.0 million settled in common stock to Bausch + Lomb in the second quarter 2024 in connection with the reacquisition of the license (which we are recording as an operating expense), offset by $0.1 million of the purchase price allocated to the repurchase of equipment.

Other Income (Expense)

Other income (expense) for the three months ended June 30, 2024 totaled approximately $0.6 million of net other income, a decrease of $0.9 million, compared to ($0.3 million) of net other expense for the three months ended June 30, 2023.

Net other expense for the three months ended June 30, 2024 primarily consisted of approximately $0.7 million of interest expense related to the Avenue loan, partially offset by $1.2 million of changes in fair value of equity consideration (the equity payable for the Baush + Lomb and Formosa transactions) and $0.1 million of interest income primarily from Treasury bills.

Results of Operations

Six Months Ended June 30, 2024 Compared with Six Months Ended June 30, 2023

Revenue and Cost of Revenue

Revenue for the six months ended June 30, 2024 totaled $27,618, which was offset by cost of revenues of ($693,388).

Write-down of inventories to net realizable value for the six months ended June 30, 2024 totaled approximately $0.7 million, compared to no expense for the six months ended June 30, 2023.

The $0.7 million was comprised of the adjustment to bring the inventory to list price for the first quarter of 2024 and the write-down of short-dated inventory to net realizable value for the second quarter of 2024.

The negative gross loss was primarily due to write-downs of commercial inventory that were still on the balance sheet at June 30, 2024.

No revenue was earned or recognized during the six months ended June 30, 2023.

Research and Development Expenses

Research and development expenses for the six months ended June 30, 2024 totaled $9.0 million, an increase of $3.7 million, or 69%, compared to $5.3 million recorded for the six months ended June 30, 2023.

Research and development expenses consisted of the following:

For the Six Months Ended June 30,

Personnel-related expenses

Supplies and materials

Non-cash stock-based compensation expenses

Direct clinical and non-clinical expenses

Facilities expenses

Depreciation expense

Other expenses

Total research and development expenses

The increase in personnel-related expenses was primarily due to new staff additions made to support commercialization during the last two quarters of 2023 and the first quarter of 2024.

The increase in supplies and materials expense was primarily due to (a) the expensing of Gen-1 MicroPine vials and cartridges that will now be used in Eyenovia-led clinical trials rather than being sold to Bausch + Lomb as a result of the reacquisition of the Bausch license rights;

(b) drug formulation engineering batches;

and (c) the purchase of parts for the Gen-2 device that are intended to be used in Eyenovia-led clinical trials.

The increase in direct clinical and non-clinical expenses was primarily due to increased costs related to Gen-2 R&D, Mydcombi stability testing and clinical regulatory expenses.

The increase in depreciation expense was primarily due to increased equipment purchases and equipment placed in service during the last two quarters of 2023 and the first and second quarters of 2024.

The increase in other expenses was primarily due to increased IT expenses related to data tracking and cybersecurity.

General and Administrative Expenses

General and administrative expenses for the six months ended June 30, 2024 totaled $7.4 million, an increase of $1.3 million, or 22%, compared to $6.1 million recorded for the six months ended June 30, 2023.

General and administrative expenses consisted of the following:

For the Six Months Ended June 30,

Salaries and benefits

Professional fees

Stock-based compensation

Insurance expense

Sales and marketing

Travel, lodging and meals

Investor relations

Facilities expense

Director fees and expense

Total general and administrative expenses

The increase in personnel-related expenses was mainly due to new staff additions made during the last three quarters of 2023 and the first quarter of 2024.

The increase in professional fees was primarily due to an increase in temporary staffing.

The increase in personnel-related expenses was mainly due to new staff additions related to commercialization efforts made during the last two quarters of 2023 and the first quarter of 2024.

The increase in professional fees was primarily due to the short-term need for temporary staff while in the process of hiring permanent employees.

The decrease in stock-based compensation expenses was primarily due to the ending of the amortization period for older equity grants.

The writedown of commercial inventory occurred as a result of the generation of flat gross sales margins during the early stages of the commercialization process for Mydcombi.

The increase in travel, lodging and meals was primarily due to increased travel between our New York, Nevada and California locations and an increase in the number of conferences attended.

The increase in other expenses was primarily due to commercial regulatory costs for Mydcombi.

Reacquisition of License Rights

Reacquisition of license rights for the three months ended March 31, 2024 totaled $2.0 million, as compared to no expense for the three months ended March 31, 2023.

The $2.0 million was the amount paid to Bausch + Lomb in connection to the reacquisition of the license, which we are recording as an operating expense.

Reacquisition of license rights for the six months ended June 30, 2024 totaled $4.9 million, compared to no expense for the six months ended June 30, 2023.

The $4.9 million in the account is comprised of the aggregate $5.0 million of payments ($2.0 million of cash and $3.0 million settled in common stock) to Bausch + Lomb in connection with the reacquisition of the license (which we are recording as an operating expense), offset by $0.1 million related to the repurchase of equipment.

Other Income (Expense)

Other income (expense) for the three months ended March 31, 2024 totaled approximately $0.7 million of net other expense, an increase of $0.4 million, as compared to $0.3 million of net other expense for the three months ended March 31, 2023.

Net other expense for the three months ended March 31, 2024 primarily consisted of approximately $0.7 million of interest expense related to the Avenue loan and $0.1 million related to the charge for the defective clinical supply settlement (see Note 8 – Commitments and Contingencies – Defective Clinical Supply), partially offset by $0.1 million of interest income primarily from Treasury bills.

Other income (expense) for the six months ended June 30, 2024 totaled approximately ($20,632) of net other expense, a decrease of $0.5 million, compared to $0.5 million of net other expense for the six months ended June 30, 2023.

Net other expense for the six months ended June 30, 2024 primarily consisted of approximately $1.4 million of interest expense related to the Avenue loan and $0.1 million related to the charge for the defective clinical supply settlement (see Note 8 – Commitments and Contingencies – Defective Clinical Supply), partially offset by $1.2 million of changes in fair value of equity consideration (the equity payable for the Baush + Lomb and Formosa transactions) and $0.2 million of interest income primarily from Treasury bills.

Liquidity and Going Concern

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Since inception, we have experienced negative cash flows from operations and our operations have primarily been funded by proceeds from equity and debt financings.

Our net losses were $10.9 million and $5.7 million for the three months ended March 31, 2024 and 2023, respectively.

As of March 31, 2024, we had an accumulated deficit of approximately $156.4 million.

As of March 31, 2024, we had a cash and cash equivalents balance of $8.0 million, working capital deficit of $2.0 million and stockholders’ equity of $1.8 million.

As of March 31, 2024 and December 31, 2023, we had $16.1 million and $15.6 million, respectively, of debt outstanding.

Our net losses were $22.0 million and $12.0 million for the six months ended June 30, 2024 and 2023, respectively.

As of June 30, 2024, we had an accumulated deficit of approximately $167.5 million.

As of June 30, 2024, we had a cash and cash equivalents balance of $2.3 million, a working capital deficit of $8.6 million and stockholders’ deficiency of $2.4 million.

As of June 30, 2024 and December 31, 2023, we had $15.1 million and $15.6 million, respectively, of gross debt outstanding.

These conditions raise substantial doubt about our ability to continue as a going concern for at least one year from the date that the financial statements included elsewhere in this Quarterly Report on Form 10-Q were issued.

Our financial statements do not include adjustments to the amounts and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern.

Our ability to continue as a going concern depends on our ability to raise additional capital through the sale of equity or debt securities to support our future operations.

Our ability to continue as a going concern depends on our ability to raise additional capital through the sale of equity or debt securities to support our future operations and the potential for entering into collaborations with other companies to enhance or complement our product and service offerings.

Our operating needs include the planned costs to operate our business, including amounts required to fund research and development activities including clinical studies, working capital and capital expenditures.

Our future capital requirements and the adequacy of our available funds will depend on many factors, including our ability to successfully commercialize our products and services, competing technological and market developments, and the need to enter into collaborations with other companies or acquire other companies or technologies to enhance or complement our product and service offerings.

Our future capital requirements and the adequacy of our available funds will depend on many factors, including our ability to successfully commercialize our products and services, competing technological and market developments, and the need to enter into collaborations with other companies or acquire other companies or technologies to further improve the marketability of our product and service offerings.

If we are unable to secure additional capital, we may be required to curtail our research and development initiatives and take additional measures to reduce general and administrative and sales and marketing costs in order to conserve our cash.

During the three months ended March 31, 2024 and 2023, our sources and uses of cash were as follows:

Net cash used in operating activities for the three months ended March 31, 2024 was approximately $9.9 million, which includes cash used to fund a net loss of $10.9 million, reduced by $1.5 million of non-cash expenses, plus $0.5 million of net cash used by changes in the levels of operating assets and liabilities.

Net cash used in operating activities for the three months ended March 31, 2023 was approximately $7.0 million, which includes cash used to fund a net loss of $5.7 million, reduced by $1.2 million of non-cash expenses, and $2.4 million of cash used to fund changes in the balances of operating assets and liabilities.

Net cash used in investing activities for the three months ended March 31, 2024 was approximately $0.1 million, which was primarily related to the purchase of property and equipment.

Cash used in investing activities for the three months ended March 31, 2023 was $0.8 million, which was primarily related to the purchase of property and equipment.

Net cash provided by financing activities for the three months ended March 31, 2024 totaled approximately $3.1 million, which was primarily attributable to $3.2 million of net proceeds from the sale of common stock in our “at-the-market” offering pursuant to the Sales Agreement with Leerink Partners, partially offset by $0.1 million from the repayment of notes payable.

Net cash provided by financing activities for the three months ended March 31, 2023 totaled $3.4 million, which was attributable to aggregate proceeds received pursuant to the Sales Agreement with Leerink Partners in an “at-the-market” offering.

On July 1, 2024, the Company raised $5.0 million of gross proceeds from a registered direct offering of equity securities.

Also, subsequent to June 30, 2024, the Company raised $0.8 million of gross proceeds from its ongoing “at-the-market” offering.

During the six months ended June 30, 2024 and 2023, our sources and uses of cash were as follows:

Net cash used in operating activities for the six months ended June 30, 2024 was approximately $18.1 million, which includes cash used to fund a net loss of $22.0 million, reduced by $4.6 million of net non-cash expenses, plus $0.7 million of net cash used by changes in the levels of operating assets and liabilities.

Net cash used in operating activities for the six months ended June 30, 2023 was $11.7 million, which includes cash used to fund a net loss of $12.0 million, reduced by $2.1 million of non-cash expenses, plus $1.8 million of cash used to fund changes in operating assets and liabilities.

Net cash used in investing activities for the six months ended June 30, 2024 was approximately $0.2 million, which was primarily related to the purchase of property and equipment.

Cash used in investing activities for the six months ended June 30, 2023 was $2.1 million, which was related to purchases of property and equipment.

Net cash provided by financing activities for the six months ended June 30, 2024 totaled approximately $5.7 million, which was primarily attributable to $1.9 million of net proceeds from the sale of common stock and warrants in a registered direct offering, $4.9 million of net proceeds from the sale of common stock in our “at-the-market” offering pursuant to the Sales Agreement with Leerink Partners, partially offset by $1.1 million from the repayment of notes payable.

Net cash provided by financing activities for the six months ended June 30, 2023 totaled $8.4 million, which was attributable to $3.9 million of net proceeds received from sales under our “at-the-market” offering and $4.9 million of net proceeds from the additional tranche under the Loan and Security Agreement with Avenue.

This was partially offset by the repayment of $0.4 million of notes payable in connection with the D&O Loan.

Contractual Obligations and Commitments

During the next twelve months we have commitments to pay (a) $5.7 million to settle our March 31, 2024 accounts payable, accrued expenses and other current liabilities, (b) $0.6 million relating to our non-cancelable operating lease commitments, and (c) $8.8 million of gross payments due under our notes payable and convertible notes payable (if not previously converted).

After twelve months we have commitments to pay (a) an additional $1.1 million relating to our non-cancelable operating lease commitments, and (b) $7.3 million of gross payments due in connection with notes payable and convertible notes payable (if not previously converted).

During the next twelve months we have commitments to pay (a) $5.7 million to settle our June 30, 2024 accounts payable, accrued expenses and other current liabilities, (b) $0.6 million relating to our non-cancelable operating lease commitments, and (c) $10.3 million of gross payments due under our notes payable, convertible notes payable (if not previously converted) and D&O Loan.

After the next twelve months we have commitments to pay (a) an additional $1.0 million relating to our non-cancelable operating lease commitments, and (b) $4.8 million of gross payments due in connection with notes payable and convertible notes payable (if not previously converted).

Risks and Uncertainties

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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