What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2021-11-04 compared with 2021-08-05 · 85 added, 90 removed, 108 unchanged (62% of the section changed)

4 unchanged sentences

Caladrius Biosciences, Inc.

(“we,” “us,” "our," “Caladrius” or the “Company”) is a clinical-stage biopharmaceutical company dedicated to the development and commercialization of cellular therapies designed to reverse disease and/or promote the regeneration of damaged tissue.

We are developing first-in-class therapeutics based on the characteristics of naturally occurring CD34+ cells and their ability to stimulate the growth of new microvasculature.

Our technology leverages these cells to enable the body's natural repair mechanisms using formulations unique to each medical indication.

(“we,” “us,” "our," “Caladrius” or the “Company”) is a clinical-stage biopharmaceutical company dedicated to the development of treatments and reversal of severe diseases.

We are developing what are intended to be first-in-class therapeutics based on the characteristics of naturally occurring CD34+ cells and their ability to stimulate the growth of new microvasculature.

Our technology is intended to leverage these cells to enable the body's natural repair mechanisms using formulations unique to each medical indication.

Our leadership team has decades of collective biopharmaceutical development experience.

1 unchanged sentence

Our current product candidates include:

• CLBS16, the subject of both a recently completed positive Phase 2a study (ESCaPE-CMD) and a newly initiated Phase 2b (FREEDOM Trial) study in the United States for the treatment of coronary microvascular dysfunction (“CMD”);

• HONEDRA ® (CLBS12), recipient of SAKIGAKE designation and eligible for early conditional approval in Japan for the treatment of critical limb ischemia (“CLI”) and Buerger’s disease based on the results of an ongoing clinical trial.

CLBS was the recipient of orphan drug designation in March 2021 from the U.S.

• XOWNA ® (CLBS16), the subject of both a recently completed positive Phase 2a study (ESCaPE-CMD) and a newly initiated Phase 2b (FREEDOM Trial) study in the United States for the treatment of coronary microvascular dysfunction (“CMD”);

Additionally, CLBS12 was the recipient of orphan drug designation in March 2021 from the U.S.

Food and Drug Administration ("FDA") for Buerger's disease;

• CLBS201, designed to assess the safety and efficacy of CD34+ cell therapy as a treatment for patients with pre-dialysis diabetic kidney disease (“DKD”);

• OLOGO ™ (CLBS14), a Regenerative Medicine Advanced Therapy (“RMAT”) designated Phase 3 ready therapy for treatment of no-option refractory disabling angina (“NORDA”).

• CLBS201, designed to assess the safety and efficacy of CD34+ cell therapy as a treatment for patients with chronic kidney disease related to type 2 diabetes (diabetic kidney disease or “DKD”).

Ischemic Repair (CD34 Cell Technology)

The CD34+ cell was discovered as a result of the deliberate search for a stem cell capable of stimulating the development and/or repair of blood vessels.

The CD34+ cell was discovered as a result of the deliberate search for a cell capable of stimulating the development and/or repair of blood vessels.

All tissues in the body maintain their function by replacing cells over time.

In addition to the maintenance function, the body must also be capable of building new blood vessels after injury.

A CD34+ cell is a stem cell that has the ability to stimulate new blood vessel formation at the level of the microvasculature.

A CD34+ cell is an endothelial progenitor cell that has the ability to stimulate new blood vessel formation at the level of the microvasculature.

No other native cell discovered to date has demonstrated this same capability.

2 unchanged sentences

Through the administration of CD34+ cells, we seek to promote the development and formation of new microvasculature and thereby increase blood flow to the impacted area.

We believe that a number of conditions caused by underlying ischemic injury can be improved through our CD34+ cell technology including but not limited to Buerger's disease, CLI, CMD, DKD and NORDA.

HONEDRA ® for Treatment of Critical Limb Ischemia

Our randomized and open-label, registration-eligible study of HONEDRA ® in Japan for the treatment of CLI has shown positive results to date.

The initial responses observed in the subjects who have reached an endpoint in this open label study are consistent with a positive therapeutic effect and safety profile as reported by previously published clinical trials in Japan.

The study's enrollment continues to be curtailed by the COVID-19 pandemic's impact in Japan;

however, we are encouraged by the patient pre-screening pipeline and, despite the continually extending States of Emergency in Japan announced by the Japanese government, continues to make progress, albeit slowly, towards study completion, the exact date of which is impossible to predict given the continuing impact of COVID-19 on clinical trials like ours in Japan.

While the final outcome of the trial will depend on all data from all subjects, data, to date, are encouraging.

CLBS16 for Treatment of Coronary Microvascular Dysfunction

In 2017, with the assistance of a $1.9 million grant from the National Institutes of Health (Award Number R44HL135889), we initiated our program for CLBS16 for the treatment of CMD, a disease that afflicts millions of patients with no current targeted treatment options.

That study, the ESCaPE-CMD Trial, was a Phase 2a proof-of-concept study that enrolled patients at the Mayo Clinic in Rochester, MN and Cedars-Sinai Medical Center in Los Angeles, CA.

That data showed a positive therapeutic effect with a statistically significant improvement in angina frequency, coronary flow reserve, Canadian Cardiovascular Society Angina Class and Seattle Angina Questionnaire scores, as well as an acceptable safety profile.

We believe that a number of conditions caused by underlying ischemic injury can be improved through our CD34+ cell technology including but not limited to Buerger's disease, CLI, CMD, and DKD.

XOWNA ® for Treatment of Coronary Microvascular Dysfunction

In 2017, with the assistance of a $1.9 million grant from the National Institutes of Health (Award Number R44HL135889), we initiated our program for XOWNA ® for the treatment of CMD, a disease that afflicts as many as 1.5 million patients in the United States alone, with no current targeted treatment options.

That study, the ESCaPE-CMD Trial, was a Phase 2a proof-of-concept open label study that enrolled patients at the Mayo Clinic in Rochester, MN and Cedars-Sinai Medical Center in Los Angeles, CA.

Those data showed a positive therapeutic effect with a statistically significant improvement in angina frequency, coronary flow reserve, Canadian Cardiovascular Society Angina Class and Seattle Angina Questionnaire scores, as well as an acceptable safety profile.

The full data set from that study was presented at the SCAI 2020 Scientific Sessions Virtual Conference on May 14, 2020 by Dr.

Timothy Henry, FACC, of the Christ Hospital in Cincinnati, Ohio.

In December 2020, we commenced enrollment in our Phase 2b FREEDOM Trial of CLBS16 as a therapy for CMD.

The first patient in the study was subsequently treated in January 2021 at The Christ Hospital Health Network in Cincinnati, Ohio.

This 105-patient, double-blind randomized and placebo-controlled clinical trial is designed to further evaluate the efficacy and safety of intracoronary delivery of autologous CD34+ cells in subjects with CMD and without obstructive coronary artery disease.

To our knowledge, this is the first controlled regenerative medicine trial in CMD.

Investigator and potential subject response to the FREEDOM Trial has been favorable and early enrollment proceeded according to plan.

However, the continued impact of the COVID-19 pandemic, including the resurgence of cases occurring in select areas throughout the United States, has contributed to a general slowing of enrollment.

Further work with investigators and subject feedback also led us to propose to the FDA amendments to the FREEDOM Trial protocol, as originally written, to enhance the breadth and speed of subject enrollment, including by broadening the array of available techniques acceptable for diagnosing CMD.

These changes notwithstanding, based on the uncertainty that remains surrounding the future impact of the COVID-19 pandemic on potential patient recruitment, as well as on accessibility of investigator sites, we now project enrollment completion for the FREEDOM Trial to occur in the third quarter of 2022 with final data (based on the six month assessment of all subjects) expected by the second quarter of 2023.

In December 2020, we commenced enrollment in our Phase 2b FREEDOM Trial of XOWNA ® :

a double-blind, randomized and placebo-controlled clinical trial designed to further evaluate the efficacy and safety of intracoronary delivery of autologous CD34+ cells in subjects with CMD and without obstructive coronary artery disease.

While early enrollment proceeded to plan with the first patient treated in January 2021, the impact of the COVID-19 pandemic contributed to a general slowing of enrollment.

amendments to the initial FREEDOM Trial protocol, as agreed to by the FDA, were implemented with the goal of enhancing breadth and speed of subject enrollment.

Actual improvement in enrollment rate will be assessed during the fourth quarter of 2021.

There can be no assurance that there will be an improvement in enrollment in the near future or at all.

As part of program optimization, we convened an advisory board meeting of key opinion leaders in the fields of cardiology, drug development, and payer access and reimbursement in mid-October 2021 with the objective of assuring the most efficient and effective development program for XOWNA ® .

CLBS201 for Treatment of Diabetic Kidney Disease

We have prepared an initial development plan for the clinical study of CLBS201, a CD34+ investigational product for administration via the renal arteries to slow the deterioration, or, ideally, reverse the decline of, renal function in patients with diabetic kidney disease ("DKD") who, although still pre-dialysis, exhibit rapidly progressive stage 3b disease.

Progressive kidney failure is associated with attrition of the microcirculation of the kidney.

Pre-clinical studies in kidney disease and injury models have demonstrated that protection or replenishment of the microcirculation results in improved kidney function.

A Phase 2 proof of concept, randomized, placebo-controlled study for the stage 3b chronic kidney disease patient population is planned to initiate in the second half of 2021.

The protocol, pending final central institutional review board approval, calls for a six subject open-label treatment run-in arm in which patients will be treated sequentially, to be completed, evaluated and cleared for continuation by the study’s data safety monitoring board prior to initiating the 40 patient randomized, placebo-controlled, double blinded portion of the trial.

We are projecting that safety data for the six subject run-in arm will be complete by the second quarter of 2022.

OLOGO ™ for Treatment of No Option Refractory Disabling Angina

We acquired the rights to data and regulatory filings for a CD34+ cell therapy program for refractory angina that had been advanced to Phase 3 by a previous sponsor.

Based on the clinical evidence from the completed studies that a single administration of OLOGO ™ reduces mortality, improves angina and increases exercise capacity in patients with otherwise untreatable angina, this product received Regenerative Medicine Advanced Therapy (“RMAT”) designation from the FDA.

Discussions with the FDA have resulted in a rejection of our efforts to reduce the FDA requirement of a 400-patient phase 3 study for registration (including an arm of 50 standard of care patients and an arm of 150 placebo patients), despite data showing that the NORDA population is orphan in size.

Because enrollment of a study of this magnitude and design is projected to take many years, if executable at all, we have decided not to pursue a phase 3 program for OLOGO on our own but will continue to seek a partner to execute the study.

Based on these observations, we proposed an initial development plan for CLBS201 contemplating an adaptive design.

However, after multiple conversations with key opinion leaders in the fields of nephrology and drug development, we have elected to move forward with a Phase 1, open-label, proof-of-concept trial evaluating CLBS201 dosed via intra-renal artery injections in subjects with DKD.

This new protocol, pending approval of the Institutional Review Board (the "IRB") is expected to include six subjects in total with the first two subjects sequentially dosed and followed for a two-week safety observation period.

Clearance by the independent Data Safety Monitoring Board overseeing the study will then permit the treatment of the next four patients, with all patients being followed for safety and therapeutic effect A key read-out of data will occur at the six-month follow-up visit for all patients.

We project enrollment of this study will begin in the first quarter of 2022.

A key criterion for continued development of CLBS201 will be its ability to demonstrate a therapeutic effect that will make it competitive in the field of DKD treatment, i.e.

kidney function regeneration, as indicated by increased glomerular filtration rate.

There can be no assurance that we will be able to enroll patients in this study during the first quarter of 2022 or at all.

HONEDRA ® for Treatment of Critical Limb Ischemia

Our randomized, open-label, registration-eligible study of HONEDRA ® in Japan for the treatment of CLI and Buerger's disease continues to demonstrate positive trends in both safety and efficacy.

These data remain consistent with the efficacy and safety from previously published clinical trials in Japan.

The HONEDRA ® study's enrollment, however, has been significantly curtailed by the COVID-19 pandemic's impact in Japan, including the States of Emergency in Japan that have persisted for much of the past 18 months.

Due to the significant and continued operational and financial burden incurred as a result of these COVID-19 delays, coupled with the unpredictability of the timing of site enrollment re-initiation, we are suspending further enrollment and focusing our efforts on consummating a partnership with a Japanese company that could complete the study enrollment of the three remaining no-option CLI subjects and/or explore the possibility of submitting the existing data to Japan's Pharmaceuticals and Medical Devices Agency ("PMDA") under the SAKIGAKE designation, which allows for accelerated approval of innovative medical products.

There can be no assurance that the PMDA will accept the existing data under SAKIGAKE designation.

Also, as previously noted, in March 2021 CLBS12 was awarded an orphan designation in the U.S.

by FDA as a potential treatment for Buerger's disease.

However, based on a recent response from the FDA regarding a development plan for U.S.

registration, we have decided not to pursue U.S.

development in Buerger's disease at this time.

Additional Out-licensing Opportunities

8 unchanged sentences

Our clinical study of HONEDRA ® in Japan has experienced significant delays in enrollment due to the “State of Emergency” in effect in Japan for most of 2020 and reimplemented in Japan on January 7, 2021 through March 21, 2021 covering Tokyo and other regions in response to an increased number of COVID-19 patients.

Due to reported large increases in COVID-19 cases and a low rate of vaccinations in Japan, a “State of Emergency” was renewed on April 25, 2021 through May 11, 2021 and then reimplemented in Tokyo from July 12, 2021 through August 22, 2021.

This newly reinstated “State of Emergency” continues negatively to impact enrollment of the ongoing clinical trial.

Due to reported large increases in COVID-19 cases and a low rate of vaccinations in Japan, a “State of Emergency” was renewed on April 25, 2021 through May 11, 2021 and then reimplemented

in Tokyo from July 12, 2021 through September 30, 2021.

We expect that COVID-19 in Japan will continue to negatively impact enrollment of the HONEDRA ® clinical trial.

Results of Operations

Three Months Ended June 30, 2021 Compared to Three Months Ended June 30, 2020

Overall, net losses were $5.7 million for the three months ended June 30, 2021, compared to net income of $6.6 million for the three months ended June 30, 2020.

Three Months Ended September 30, 2021 Compared to Three Months Ended September 30, 2020

Overall, net losses were $6.9 million for the three months ended September 30, 2021, compared to $5.3 million for the three months ended September 30, 2020.

Operating Expenses

For the three months ended June 30, 2021, operating expenses totaled $7.1 million, compared to $4.3 million for the three months ended June 30, 2020, representing an increase of 67%.

For the three months ended September 30, 2021, operating expenses totaled $7.0 million, compared to $5.4 million for the three months ended September 30, 2020, representing an increase of 30%.

Operating expenses comprised the following:

• Research and development expenses were approximately $4.3 million for the three months ended June 30, 2021, compared to $1.8 million for the three months ended June 30, 2020, representing an increase of $2.5 million or 138%.

This increase was primarily due to an increase in expenses associated with the enrollment of our CLBS16 Phase 2b study (the FREEDOM Trial).

• Research and development expenses were approximately $4.1 million for the three months ended September 30, 2021, compared to $3.0 million for the three months ended September 30, 2020, representing an increase of $1.1 million or 36%.

This increase was primarily due to an increase in expenses associated with the enrollment of our XOWNA ® Phase 2b study (the FREEDOM Trial).

Research and development in both periods focused on the advancement of our ischemic repair platform and related to:

◦ expenses associated with our CLBS16 Phase 2b study (the FREEDOM Trial) which commenced in the fourth quarter of 2020 with the first patient in the study treated in January 2021;

◦ ongoing registration-eligible study expenses for HONEDRA® in critical limb ischemia in Japan, whereby we continue to focus spending on our patient enrollment.

We have experienced significant delays in enrollment in that study due to the “State of Emergency” in effect in Japan for most of 2020 and reimplemented in Japan on January 7, 2021 through March 21, 2021 covering Tokyo and other regions in response to increased number of COVID-19 patients as well as a severe shortage of beds in intensive care units (and other hospital beds) affecting all of our clinical sites.

This newly reinstated “State of Emergency” continues negatively to impact enrollment of the on-going clinical trial due to the increased number of COVID-19 patients as well as a severe shortage of beds in intensive care units (and other hospital beds) affecting all of our clinical sites.

We continue to make progress towards study completion;

◦ expenses associated with our XOWNA ® Phase 2b study (the FREEDOM Trial) which commenced in the fourth quarter of 2020 with the first patient in the study treated in January 2021;

◦ ongoing registration-eligible study expenses for HONEDRA® in critical limb ischemia in Japan which focused on patient enrollment completion.

The study's enrollment has been significantly curtailed by the COVID-19 pandemic's impact in Japan, including the States of Emergency that have persisted there for over 18 months.

Due to the significant and continued operational and financial burden incurred as a result of these COVID-19 delays, coupled with the complete unpredictability of the timing of site enrollment re-initiation, we will focus our efforts on consummating a partnership with a Japanese company in order to complete the study enrollment as well as to explore the possibility of submitting the existing data to PMDA under the SAKIGAKE designation;

◦ expenses associated with the preparation of our filing of an IND for the clinical study of CLBS201 for treatment of diabetic kidney disease.

A Phase 2 proof of concept, randomized, placebo-controlled study is planned for initiation in the second half of 2021.

• General and administrative expenses were approximately $2.8 million for the three months ended June 30, 2021, compared to $2.5 million for the three months ended June 30, 2020, representing an increase of 14%.

A Phase 1, open-label, proof-of-concept trial is being planned and is expected to include six subjects in total with projected enrollment commencing in the first quarter of 2022.

• General and administrative expenses were approximately $2.8 million for the three months ended September 30, 2021, compared to $2.3 million for the three months ended September 30, 2020, representing an increase of 22%.

This increase was primarily due to an increase in Directors and Officers insurance premiums and strategic consulting expenses.

3 unchanged sentences

Other Income (Expense)

Total other income (expense) is comprised of investment income on cash, cash equivalents and marketable securities and a loss on sale of $0.1 million related to the sale of our New Jersey net operating losses ("NJ NOLs").

Income Tax Benefit

In April 2020, we received final approval from the New Jersey Economic Development Authority ("NJEDA") under the Technology Business Tax Certificate Transfer Program ("Program") to sell a percentage of our NJ NOLs.

We subsequently sold a portion of our NJ NOLs to a qualifying and approved buyer pursuant to the Program for net proceeds of $10.9 million.

In April 2021, we received final approval from the NJEDA under the Program to sell a portion of our NJ NOLs, which were subsequently sold to a qualifying and approved buyer pursuant to the Program for net proceeds of $1.4 million.

The $1.5 million of our NJ NOL related tax benefits ("NJ NOL Tax Benefits") have been recorded as a benefit from income taxes and the loss on sale of $0.1 million recorded in other income (expense).

Six Months Ended June 30, 2021 Compared to Six Months Ended June 30, 2020

Overall, net losses were $13.7 million for the six months ended June 30, 2021, compared to net income of $2.6 million for the six months ended June 30, 2020.

Total other income (expense) is comprised of investment income on cash, cash equivalents and marketable securities.

Nine Months Ended September 30, 2021 Compared to Nine Months Ended September 30, 2020

Overall, net losses were $20.7 million for the nine months ended September 30, 2021, compared to $2.7 million for the nine months ended September 30, 2020.

Operating Expenses

For the six months ended June 30, 2021, operating expenses totaled $15.2 million compared to $8.3 million for the six months ended June 30, 2020, representing an increase of 82%.

For the nine months ended September 30, 2021, operating expenses totaled $22.2 million compared to $13.7 million for the nine months ended September 30, 2020, representing an increase of 62%.

Operating expenses comprised the following:

• Research and development expenses were approximately $9.4 million for the six months ended June 30, 2021, compared to $3.3 million for the six months ended June 30, 2020, representing an increase of $6.1 million or 184%.

This increase was primarily due to an increase in expenses associated with the enrollment of our CLBS16 Phase 2b study (the FREEDOM Trial).

• Research and development expenses were approximately $13.5 million for the nine months ended September 30, 2021, compared to $6.3 million for the nine months ended September 30, 2020, representing an increase of $7.2 million or 113%.

This increase was primarily due to an increase in expenses associated with the enrollment of our XOWNA ® Phase 2b study (the

FREEDOM Trial).

Research and development in both periods focused on the advancement of our ischemic repair platform and related to:

◦ expenses associated with our CLBS16 Phase 2b study (the FREEDOM Trial) which commenced in the fourth quarter of 2020 with the first patient in the study treated in January 2021;

◦ ongoing registration-eligible study expenses for HONEDRA® in critical limb ischemia in Japan, whereby we continue to focus spending on our patient enrollment.

We continue to make progress towards study completion;

◦ expenses associated with our XOWNA ® Phase 2b study (the FREEDOM Trial) which commenced in the fourth quarter of 2020 with the first patient in the study treated in January 2021;

◦ ongoing registration-eligible study expenses for HONEDRA® in critical limb ischemia in Japan which focused on patient enrollment completion.

The study's enrollment has been significantly curtailed by the COVID-19 pandemic's impact in Japan, including the States of Emergency that have persisted there for over 18 months.

◦ expenses associated with the preparation of our filing of an IND for the clinical study of CLBS201 for treatment of diabetic kidney disease.

A Phase 2 proof of concept, randomized, placebo-controlled study is planned for initiation in the second half of 2021.

• General and administrative expenses were approximately $5.8 million for the six months ended June 30, 2021, compared to $5.0 million for the six months ended June 30, 2020, representing an increase of 16%.

A Phase 1, open-label, proof-of-concept trial is being planned and is expected to include six subjects in total with projected enrollment commencing in the first quarter of 2022.

• General and administrative expenses were approximately $8.7 million for the nine months ended September 30, 2021, compared to $7.4 million for the nine months ended September 30, 2020, representing an increase of 18%.

This increase was primarily due to an increase in Directors and Officers insurance premiums and strategic consulting expenses.

10 unchanged sentences

Analysis of Liquidity and Capital Resources

As of June 30, 2021, we had cash, cash equivalents and marketable securities of approximately $106.1 million, working capital of approximately $104.2 million, and stockholders’ equity of approximately $104.9 million.

During the six months ended June 30, 2021, we met our immediate cash requirements through existing cash balances.

As of September 30, 2021, we had cash, cash equivalents and marketable securities of approximately $100.1 million, working capital of approximately $98.0 million, and stockholders’ equity of approximately $98.7 million.

During the nine months ended September 30, 2021, we met our immediate cash requirements through existing cash balances.

Additionally, we used equity and equity-linked instruments to pay for services and compensation.

Net cash used in or provided by, operating, investing and financing activities were as follows (in thousands):

Six Months Ended June 30,

Net cash (used in) provided by operating activities $ (12,602) $ 262

Net cash (used in) provided by investing activities (76,294) 2,855

Nine Months Ended September 30,

Net cash used in operating activities $ (17,641) $ (3,256)

Net cash used in investing activities (71,354) (8,187)

Net cash provided by financing activities 85,255 18,567

Operating Activities

Our cash used in operating activities during the six months ended June 30, 2021 was $12.6 million, which is comprised of (i) our net loss of $13.7 million, adjusted for non-cash expenses totaling $2.0 million (which includes adjustments for equity-based compensation, depreciation and amortization, and amortization/accretion of marketable securities), and (ii) changes in operating assets and liabilities using approximately $0.9 million.

Our cash provided by operating activities during the six months ended June 30, 2020 was $0.3 million, which is comprised of (i) our net income of $2.6 million, adjusted for non-cash expenses totaling $0.9 million (which includes adjustments for equity-based compensation, depreciation and amortization, and amortization/accretion of marketable securities), and (ii) changes in operating assets and liabilities using approximately $3.3 million.

Our cash used in operating activities during the nine months ended September 30, 2021 was $17.6 million, which is comprised of (i) our net loss of $20.7 million, adjusted for non-cash expenses totaling $3.6 million (which includes adjustments for equity-based compensation, depreciation and amortization, and amortization/accretion of marketable securities), and (ii) changes in operating assets and liabilities using approximately $0.6 million.

Our cash used in operating activities during the nine months ended September 30, 2020 was $3.3 million, which is comprised of (i) our net loss of $2.7 million, adjusted for non-cash expenses totaling $1.3 million (which includes adjustments for equity-based compensation, depreciation and amortization, and amortization/accretion of marketable securities), and (ii) changes in operating assets and liabilities using approximately $1.9 million.

Investing Activities

Our cash used in investing activities during the six months ended June 30, 2021 totaled $76.3 million and was primarily due to net purchases of marketable securities (net of sales of marketable securities).

Our cash provided by investing activities during the six months ended June 30, 2020 totaled $2.9 million and was primarily due to net proceeds from sales of marketable securities (net of purchases of marketable securities).

Our cash used in investing activities during the nine months ended September 30, 2021 totaled $71.4 million and was primarily due to net purchases of marketable securities (net of sales of marketable securities).

Our cash used in investing activities during the nine months ended September 30, 2020 totaled $8.2 million and was primarily due to net purchases of marketable securities (net of sales of marketable securities).

Financing Activities

Our cash provided by financing activities during the six months ended June 30, 2021 primarily consisted of (i) net proceeds of $23.1 million through the issuance of common shares and warrants in our January 2021 private placement, (ii) net proceeds of $1.8 million in connection with warrant exercises, (iii) net proceeds of $60.6 million through the issuance of common shares and warrants in both of our February 2021 registered direct offerings, which was partially offset by tax withholding-related payments on net share settlement equity awards to employees.

Our cash provided by financing activities during the six months ended June 30, 2020 primarily consisted of (i) net proceeds of $4.5 million through the issuance of common shares and warrants in our April 2020 registered direct offering, (ii) net proceeds of $3.8 million through the issuance of common shares and warrants in our May 2020 registered direct offering, and (iii) net proceeds of $1.3 million through the issuance of common shares under our common stock sales agreement with H.C.

Our cash provided by financing activities during the nine months ended September 30, 2021 primarily consisted of (i) net proceeds of $23.1 million through the issuance of common shares and warrants in our January 2021 private placement, (ii) net proceeds of $1.8 million in connection with warrant exercises, (iii) net proceeds of $60.6 million through the issuance of common shares and warrants in both of our February 2021 registered direct offerings, which was partially offset by tax withholding-related payments on net share settlement equity awards to employees.

Our cash provided by financing activities during the nine months ended September 30, 2020 primarily consisted of (i) net proceeds of $4.5 million through the issuance of common shares and warrants in our April 2020 registered direct offering, (ii) net proceeds of $3.8 million through the issuance of common shares and warrants in our May 2020 registered direct offering, and (iii) net proceeds of $1.9 million through the issuance of common shares and warrants in our July 2020 private placement offering, and (iv) net proceeds of $8.4 million through the issuance of common shares under our common stock sales agreement with H.C.

Wainwright, which was partially offset by tax withholding-related payments on net share settlement equity awards to employees.

8 unchanged sentences

We believe that our cash on hand will enable us to fund operating expenses for at least the next 12 months following the issuance of our financial statements.

On June 4, 2021, the Company entered into an At The Market Offering Agreement (the “ATM Agreement”) with H.C.

Wainwright & Co., LLC (“HCW”), as sales agent, in connection with an “at the market offering” under which the Company from time to time may offer and sell shares of its common stock, having an aggregate offering price of up to $50.0 million.

As of June 30, 2021, the Company had not issued any shares under the ATM Agreement.

In February 2021, the Company received preliminary approval from the NJEDA to participate in the Program.

On June 4, 2021, we entered into an At The Market Offering Agreement (the “ATM Agreement”) with H.C.

Wainwright & Co., LLC (“HCW”), as sales agent, in connection with an “at the market offering” under which we from time to time may offer and sell shares of our common stock, having an aggregate offering price of up to $50.0 million.

As of September 30, 2021, we had not issued any shares under the ATM Agreement.

In February 2021, we received preliminary approval from the NJEDA to participate in the Program.

The Program permits qualified companies to sell a percentage of their NJ NOLs to unrelated profitable corporations.

On April 12, 2021, the Company received final approval from NJEDA to sell $1.5 million of its NJ NOLs, which was subsequently sold to a qualifying and approved buyer pursuant to the Program for net proceeds of $1.4 million.

On April 12, 2021,we received final approval from NJEDA to sell $1.5 million of our NJ NOLs, which was subsequently sold to a qualifying and approved buyer pursuant to the Program for net proceeds of $1.4 million.

In February 2021, we entered into a Securities Purchase Agreement (the “Institutional Purchase Agreement”) with certain institutional investors (the “Institutional Purchasers”).

20 unchanged sentences

Under certain circumstances and in accordance with the Purchase Agreement, we may direct Lincoln Park to purchase shares in multiple accelerated purchases on the same trading day.

As of June 30, 2021, we had not made any sales of common stock to Lincoln Park under the Purchase Agreement other than the Initial Purchase.

As of September 30, 2021, we had not made any sales of common stock to Lincoln Park under the Purchase Agreement other than the Initial Purchase.

While we continue to seek capital through a number of means, there can be no assurance that additional financing will be available on acceptable terms, if at all, and our negotiating position in capital generating efforts may worsen as existing resources are used.

8 unchanged sentences

Critical Accounting Policies and Estimates

There have been no material changes in our critical accounting policies and estimates during the three and six months ended June 30, 2021, compared to those reported in our 2020 Form 10-K.

There have been no material changes in our critical accounting policies and estimates during the three and nine months ended September 30, 2021, compared to those reported in our 2020 Form 10-K.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

1 unchanged sentence

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