What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-08-04 compared with 2022-05-05 · 92 added, 56 removed, 136 unchanged (52% of the section changed)

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Our technology leverages 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 product development experience in a variety of therapeutic categories.

Our leadership team has decades of collective biopharmaceutical product development experience in a variety of therapeutic categories, including cardiovascular and oncology.

Our goal is to develop and commercialize products that address important unmet medical needs based on a broad and versatile portfolio of candidates.

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• CLBS201, the subject of a study 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”).

In addition, we desire to diversify our pipeline of development product candidates and are exploring a range of strategic transactions in furtherance of that goal.

We have taken, and intend to continue to take, active steps to identify diligence-suitable assets and/or companies that would complement and de-risk our current development programs.

Such assets could potentially include indications beyond cardiovascular as well as product categories outside of cell therapy and transactions could include an acquisition, merger, business combination, in-license or other strategic transaction, any of which could result in the issuance of securities that could significantly dilute the shares of our existing stockholders.

There can be no assurance that this exploration of strategic alternatives will result in us entering into or completing any transaction or that such transaction, if completed, will add to shareholder value.

On April 26, 2022, we, CS Cedar Merger Sub, Inc., a Delaware corporation and our wholly owned subsidiary (“Merger Sub”), and Cend Therapeutics, Inc., a Delaware corporation (“Cend”), entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”), pursuant to which, among other matters, and subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, Merger Sub will merge with and into Cend, with Cend continuing as our wholly owned subsidiary and the surviving corporation of the merger (the “Merger”).

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Under the exchange ratio formula, as of immediately after the Merger, the former Cend stockholders are expected to own approximately 50% of the outstanding shares of Caladrius Common Stock and our stockholders as of immediately prior to the Merger are expected to own approximately 50% of the outstanding shares of Caladrius Common Stock.

The actual allocation

will be subject to adjustment based on our net cash balance at the time of closing and the amount of any transaction expenses of Cend in excess of $250 thousand at the time of closing.

Consummation of the Merger is subject to certain closing conditions, including, among other things, approval by the stockholders of Caladrius and Cend, and Caladrius’s satisfaction of a minimum net cash threshold at closing, expected to be approximately $64.9 million assuming a closing at the end of the third quarter of 2022, and as described further in the Merger Agreement.

In accordance with the terms of the Merger Agreement, (i) certain executive officers, directors and stockholders of Cend (solely in their respective capacities as Cend stockholders) holding approximately 77.5% of the outstanding Cend capital stock have entered into support agreements with Caladrius to vote all of their shares of Cend capital stock in favor of adoption of the Merger Agreement (the “Cend Support Agreements”) and (ii) certain executive officers and directors of Caladrius (solely in their respective capacities as Caladrius stockholders) holding approximately 1.8% of the outstanding Caladrius common stock have entered into support agreements with Cend to vote all of their shares of Caladrius common stock in favor of approval of the Merger Agreement (the “Caladrius Support Agreements,” together with the Cend Support Agreements, the “Support Agreements”).

The actual allocation will be subject to adjustment based on our net cash balance at the time of closing and the amount of any transaction expenses of Cend in excess of $250 thousand at the time of closing.

Consummation of the Merger is subject to certain closing conditions, including, among other things, approval by the stockholders of Caladrius and Cend, and Caladrius’ satisfaction of a minimum net cash threshold at closing, expected to be approximately $64.9 million assuming a closing at the end of the third quarter of 2022, and as described further in the Merger Agreement.

in their respective capacities as Caladrius stockholders) holding approximately 1.8% of the outstanding Caladrius common stock have entered into support agreements with Cend to vote all of their shares of Caladrius common stock in favor of approval of the Merger Agreement (the “Caladrius Support Agreements,” together with the Cend Support Agreements, the “Support Agreements”).

The Support Agreements include covenants with respect to the voting of such shares in favor of approving the transactions contemplated by the Merger Agreement and against any competing acquisition proposals and place certain restrictions on the transfer of the shares of Caladrius and Cend held by the respective signatories thereto.

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Cend Investment and Collaboration Agreement

In order to provide Cend with capital for its development programs prior to the closing of the Merger, we and Cend entered into a Series D Preferred Stock Purchase Agreement (the “Purchase Agreement”), pursuant to which we agreed to purchase from Cend 1,135,628 shares of Series D Preferred Stock, $0.00001 par value per share (the “Series D Preferred Stock”), of Cend at a purchase price per share equal to $8.8057 per share (the “Series D Original Issue Price”), or approximately $10 million in the aggregate.

In order to provide Cend with capital for its development programs prior to the closing of the Merger, we and Cend entered into a Series D Preferred Stock Purchase Agreement (the “Purchase Agreement”), pursuant to which we purchased from Cend 1,135,628 shares of Series D Preferred Stock, $0.00001 par value per share (the “Series D Preferred Stock”), of Cend at a purchase price per share equal to $8.8057 per share (the “Series D Original Issue Price”), or approximately $10 million in the aggregate.

The Purchase Agreement contains customary representations, warranties and agreements by us and Cend and customary conditions to closing.

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In connection with the Purchase Agreement, we and Cend entered into a Collaboration Agreement (the “Collaboration Agreement”), pursuant to which we agreed to collaborate with Cend on certain developmental and clinical activities prior to the closing of the Merger.

Under the Collaboration Agreement, we and Cend will form a joint steering committee (the “Committee”) comprised of individuals from both entities.

The Committee will meet regularly and be responsible for monitoring ongoing studies and making recommendations for development activity and trial planning.

Pursuant to the Collaboration Agreement, we and Cend have formed a joint steering committee (the “Committee”) comprised of individuals from both entities.

The Committee meets regularly and is responsible for monitoring ongoing studies and making recommendations for development activity and trial planning.

Cend has agreed to pay each member of the Committee from Caladrius an hourly consulting fee for such service.

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Ischemia occurs when the supply of oxygenated blood to healthy tissue is restricted or reduced.

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.

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, and DKD.

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

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 artery 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, including supply chain disruptions affecting the availability of qualified catheters used in the diagnosis of CMD and/or administration of XOWNA®.

In December 2020, we commenced enrollment in our Phase 2b FREEDOM Trial of XOWNA ® , a double-blind, randomized, placebo-controlled clinical trial designed to further evaluate the efficacy and safety of intracoronary artery delivery of autologous CD34+ cells in subjects with CMD and without obstructive coronary artery disease and was expected to complete enrollment in approximately 12 months.

Protocol 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.

In May 2022, we announced that enrollment in the FREEDOM Trial had been suspended and that we intend to conduct an interim analysis of the data from not less than the first 20 patients enrolled using the 6-month follow-up data to evaluate the efficacy and safety of XOWNA ® in subjects with CMD and corroborate the ESCaPE-CMD study results.

The interim analysis is expected to be completed in the third quarter of 2022 and the next steps in development of XOWNA ® will subsequently be determined after appropriate regulatory and business review, expected to be announced prior to year-end 2022.

HONEDRA ® for Treatment of Critical Limb Ischemia

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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 2020, 2021, and 2022.

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 suspended further enrollment and are focusing our efforts on consummating a partnership for the product in Japan.

Such a partnership may become the basis for the completion of development and registration of HONEDRA ® in Japan and may include the completion of enrollment of the four remaining no-option CLI subjects stipulated in the original protocol, if necessary, and/or exploration of submitting the existing data to Japan's Pharmaceuticals and Medical Devices Agency (“PMDA”) under Japan's regenerative medicine regulations, which allow for conditional approval of innovative regenerative medicine products.

Despite receipt from FDA in March 2021 of orphan designation in the United States for CLBS12 as a potential treatment for Buerger's disease, based on a response from the FDA in October 2021 regarding a development plan for U.S.

Following study suspension, we completed all protocol-defined patient observations and are preparing the clinical study report.

HONEDRA ® is now in the pre-consultation phase of the registration process with the Pharmaceuticals and Medical Devices Agency (“PMDA”) in Japan.

Data from the follow-up of all patients completed in the registration-eligible clinical trial in Japan has been compiled and is expected to be reviewed by PMDA during the third quarter of 2022 after which the PMDA is expected to provide important perspective to be considered in preparation for the formal consultation meetings which precede the Japanese new drug application.

We are focusing our efforts on consummating a partnership for the product in Japan.

Such a partnership may become the basis for the completion of development and registration of HONEDRA ® in Japan.

This may include the completion of enrollment of the four-remaining no-option CLI subjects stipulated in the original protocol, if necessary, and/or exploration of submitting the existing data to Japan's PMDA under Japan's regenerative medicine regulations, which allow for conditional approval of innovative regenerative medicine products.

Despite receipt of orphan designation from FDA in March 2021 in the United States for CLBS12 as a potential treatment for Buerger's disease, based on a response from the FDA in October 2021 regarding a development plan for U.S.

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

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Based on these observations, we have elected to move forward with a Phase 1b, open-label, proof-of-concept trial evaluating CLBS201 dosed via intra-renal artery injections in subjects with DKD.

This protocol 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 an independent Data Safety Monitoring Board (“DSMB”) overseeing the study will then permit the treatment of the next four patients, with all patients being followed for safety and therapeutic effect.

This protocol includes six subjects in total with the first two subjects sequentially dosed and followed for a two-week safety observation period.

Clearance by an independent Data Safety Monitoring Board (“DSMB”) overseeing the study then permitted the treatment of the next four patients, with all patients being followed for safety and therapeutic effect.

A read-out of data will occur after the six-month follow-up visit for all patients.

A key criterion for continued development of CLBS201 will be our 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.

As announced recently, the Company has treated the first patient in the CLBS201 proof-of-concept study and targets treatment completion for all six subjects during the third quarter of 2022.

Additional Out-licensing Opportunities and Pipeline Diversification

The Company treated the first patient in the CLBS201 proof-of-concept study in April 2022

and completed treatment for all six subjects during the third quarter of 2022.

Top-line data is anticipated from all subjects by the first quarter of 2023.

Additional Out-licensing Opportunities

Our broad intellectual property portfolio of cell therapy assets includes notable programs available for out-licensing in order to continue their clinical development.

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We believe that we are well-positioned to realize potentially meaningful value increases within our own proprietary pipeline if we are successful in advancing our product candidates to their next significant development milestones.

In addition, we further desire to diversify our pipeline of development product candidates and are exploring a range of strategic transactions in furtherance of that goal.

We have taken, and intend to continue to take, active steps to identify assets and/or companies for acquisition and/or partnership that would enhance and de-risk our current development portfolio.

Such assets could target indications beyond cardiovascular disease as well as product categories outside of cell therapy.

The range of possible transactions includes an acquisition, merger, business combination, in-license or other strategic transaction, any of which could result in the issuance of securities that could significantly dilute the shares of our existing stockholders.

Impact of the COVID-19 Pandemic

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For the safety of our employees and families, we implemented a universal work from home policy as well as stringent social distancing and other hygiene policies for employees when they must be in the office.

Our clinical study of HONEDRA ® in Japan has experienced significant delays in enrollment due to the States of Emergency in effect in Japan for most of 2020 and 2021 covering Tokyo and other regions in response to an increased number of COVID-19 infections.

Our clinical study of HONEDRA ® in Japan experienced significant delays in enrollment due to the States of Emergency in effect in Japan for most of 2020, 2021, and 2022 covering Tokyo and other regions in response to an increased number of COVID-19 infections.

With our expectation that COVID-19 in Japan would continue to impact negatively enrollment of patients in the HONEDRA ® clinical trial, we elected to suspend trial enrollment, seek a development partner and consult with the Japanese regulatory authorities regarding the submission of patient data already accrued.

In addition, our phase 2b trial of XOWNA ® in the United States has also experienced delays in enrolling patients as a result of COVID-19.

In addition, our phase 2b trial of XOWNA ® in the United States has also experienced delays in enrolling patients as a result of COVID-19, as described above.

Beyond its impact on our development pipeline described above, the extent to which COVID-19 ultimately impacts our business, results of operations and financial condition will depend on future developments, which remain highly uncertain and cannot be predicted with confidence, such as the duration of the outbreak, the emergence of new variants, new information that may emerge concerning the severity of COVID-19 or the effectiveness of actions taken to contain COVID-19 or treat its impact, including vaccination campaigns, among others.

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Results of Operations

Three Months Ended March 31, 2022 Compared to Three Months Ended March 31, 2021

The following table summarizes our results of operations for the three months ended March 31, 2022 and March 31, 2021:

Three Months Ended March 31,

Three Months Ended June 30, 2022 Compared to Three Months Ended June 30, 2021

The following table summarizes our results of operations for the three months ended June 30, 2022 and June 30, 2021:

Three Months Ended June 30,

2022 2021 Change

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Loss from operations (6,720) (7,147) 427

Total other (expense) income (85) 23 (108)

Total other income (expense) 94 (43) 137

Benefit from income taxes — (1,508) (1,508)

Net loss $ (6,626) $ (5,682) $ (944)

Overall, net losses were $4.2 million for the three months ended March 31, 2022, compared to $8.1 million for the three months ended March 31, 2021.

Overall, net losses were $6.6 million for the three months ended June 30, 2022, compared to $5.7 million for the three months ended June 30, 2021.

Operating Expenses

For the three months ended March 31, 2022, operating expenses totaled $6.6 million compared to $8.1 million for the three months ended March 31, 2021, representing a decrease of 18%.

For the three months ended June 30, 2022, operating expenses totaled $6.7 million compared to $7.1 million for the three months ended June 30, 2021, representing a decrease of 6%.

Operating expenses comprised the following:

• Research and development expenses were approximately $3.3 million for the three months ended March 31, 2022, compared to $5.1 million for the three months ended March 31, 2021, representing a decrease of $1.8 million or 35%.

This decrease was primarily due to a decrease in expenses associated with manufacturing start up costs and process development expenses for our XOWNA ® Phase 2b study (the FREEDOM Trial).

• Research and development expenses were approximately $3.2 million for the three months ended June 30, 2022, compared to $4.3 million for the three months ended June 30, 2021, representing a decrease of $1.1 million or 25%.

This decrease was primarily due to a decrease in expenses associated with HONEDRA ® in Japan, revenue received from the Collaboration Agreement and one off recruiting expenses in the prior year.

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

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

A Phase 1b, open-label, proof-of-concept trial which commenced in the first quarter of 2022 with the first patient in the study treated in April 2022.

The trial is expected to include six subjects in total with enrollment completion targeted during the third quarter of 2022.

• General and administrative expenses were approximately $3.3 million for the three months ended March 31, 2022, compared to $3.0 million for the three months ended March 31, 2021, representing an increase of 11%.

This increase was primarily due to an increase in fees associated with the review of potential strategic transactions.

A Phase 1b, open-label, proof-of-concept trial which includes six subjects in total.

The trial commenced in the first quarter of 2022 with the first patient in the study treated in April 2022 and completed treatment for all six subjects during the third quarter of 2022.

Top-line data is anticipated from all subjects by the first quarter of 2023.

• General and administrative expenses were approximately $3.5 million for the three months ended June 30, 2022, compared to $2.8 million for the three months ended June 30, 2021, representing an increase of 24%.

This increase was primarily due to an increase in fees associated with the proposed merger with Cend Therapeutics, Inc.

Our general and administrative expenses focus on general corporate-related activities.

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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 NJ NOLs.

Total other income (expense) is comprised of investment income on cash, cash equivalents and marketable securities and a loss on sale related to the sale of our NJ NOLs.

Six Months Ended June 30, 2022 Compared to Six Months Ended June 30, 2021

The following table summarizes our results of operations for the six months ended June 30, 2022 and June 30, 2021:

Six Months Ended June 30,

2022 2021 Change

Operating Expenses:

Research and development $ 6,517 $ 9,405 $ (2,888)

General and administrative 6,823 5,828 995

Total operating expenses 13,340 15,233 (1,893)

Loss from operations (13,340) (15,233) 1,893

Total other income (expense) 9 (20) 29

Benefit from income taxes (2,479) (1,508) 971

Net loss $ (10,852) $ (13,745) $ 2,893

Overall, net losses were $10.9 million for the six months ended June 30, 2022, compared to $13.7 million for the six months ended June 30, 2021.

For the six months ended June 30, 2022, operating expenses totaled $13.3 million compared to $15.2 million for the six months ended June 30, 2021, representing a decrease of 12%.

Operating expenses comprised the following:

• Research and development expenses were approximately $6.5 million for the six months ended June 30, 2022, compared to $9.4 million for the six months ended June 30, 2021, representing a decrease of $2.9 million or 31%.

This decrease was primarily due to a decrease in expenses associated with manufacturing start-up costs and process development expenses for our XOWNA ® Phase 2b study (the FREEDOM Trial), a decrease in expenses associated with HONEDRA ® in Japan, revenue received from the Collaboration Agreement and one off recruiting expenses in the prior year.

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

◦ 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 most of 2020, 2021 and 2022.

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 and study start-up expenses for the clinical study of CLBS201 for treatment of diabetic kidney disease.

A Phase 1b, open-label, proof-of-concept trial which includes six subjects in total.

The trial commenced in the first quarter of 2022 with the first patient in the study treated in April 2022 and completed treatment for all six subjects during the third quarter of 2022.

Top-line data is anticipated from all subjects by the first quarter of 2023.

• General and administrative expenses were approximately $6.8 million for the six months ended June 30, 2022, compared to $5.8 million for the six months ended June 30, 2021, representing an increase of 17%.

This increase was primarily due to an increase in fees associated with the review of potential strategic transactions and an increase in fees

associated with the proposed merger with Cend Therapeutics, Inc.

Our general and administrative expenses focus on general corporate-related activities.

Historically, to minimize our use of cash, we have used a variety of equity and equity-linked instruments to compensate employees, consultants and other service providers.

The use of these instruments has resulted in charges to the results of operations, which have been significant in the past.

Other Income (Expense)

Total other income (expense) is comprised of investment income on cash, cash equivalents and marketable securities and a loss on sale related to the sale of our NJ NOLs.

Income Tax Benefit

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Analysis of Liquidity and Capital Resources

As of March 31, 2022, we had cash, cash equivalents and marketable securities of approximately $88.5 million, working capital of approximately $87.9 million, and stockholders’ equity of approximately $88.5 million.

During the three months ended March 31, 2022, we met our immediate cash requirements through existing cash balances.

As of June 30, 2022, we had cash, cash equivalents and marketable securities of approximately $73.0 million, working capital of approximately $71.6 million, and stockholders’ equity of approximately $82.4 million.

During the six months ended June 30, 2022, 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):

Three Months Ended March 31,

Six Months Ended June 30,

Net cash used in operating activities $ (10,704) $ (12,602)

Net cash used in investing activities (6,090) (65,090)

Net cash provided by (used in) investing activities 19,544 (76,294)

Net cash (used in) provided by financing activities (139) 85,319

Operating Activities

Our cash used in operating activities during the three months ended March 31, 2022 was $5.6 million, which is comprised of (i) our net loss of $4.2 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 $2.7 million.

Our cash used in operating activities during the three months ended March 31, 2021 was $8.0 million, which is comprised of (i) our net loss of $8.1 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 $0.8 million.

Our cash used in operating activities during the six months ended June 30, 2022 was $10.7 million, which is comprised of (i) our net loss of $10.9 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 $1.9 million.

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.

Investing Activities

Our cash used in investing activities during the three months ended March 31, 2022 totaled $6.1 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 three months ended March 31, 2021 totaled $65.1 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, 2022 totaled $19.5 million and was primarily due to net sales of marketable securities (net of purchases of marketable securities).

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).

Financing Activities

Our cash used in financing activities during the three months ended March 31, 2022 totaled $0.2 million, consisted of tax withholding-related payments on net share settlement equity awards to employees.

Our cash provided by financing activities during the three months ended March 31, 2021 totaled $85.3 million, 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 used in financing activities during the six months ended June 30, 2022 totaled $0.1 million, consisted primarily of 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, 2021 totaled $85.3 million, 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.

Liquidity and Capital Requirements Outlook

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As such, we will not be able to sell shares under the ATM Agreement until we regain compliance, if ever.

As of March 31, 2022, we had not issued any shares under the ATM Agreement.

As of June 30, 2022, we had not issued any shares under the ATM Agreement.

HCW is only obligated to make sales when we are in compliance with all Nasdaq listing standards.

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Critical Accounting Policies and Estimates

There have been no material changes in our critical accounting policies and estimates during the three months ended March 31, 2022, compared to those reported in our 2021 Form 10-K.

There have been no material changes in our critical accounting policies and estimates during the three and six months ended June 30, 2022, compared to those reported in our 2021 Form 10-K.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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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