What changed in this filing

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Item 7. Management’s Discussion and Analysis

2024-03-27 compared with 2023-03-15 · 99 added, 130 removed, 152 unchanged (60% of the section changed)

Management’s Discussion

And Analysis Of Financial Condition And Results Of Operations

Discussion And Analysis Of Financial Condition And Results Of Operations

following discussion and analysis of our financial condition and results of operations should be read together with our financial statements

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thousands, except per share data, or otherwise indicated.

are focused on redefining the intracellular delivery of nucleic acids and small molecules through our lipid nanocrystal (LNC) drug delivery

platform and its application to overcome current challenges in safely and effectively delivering small molecules, nucleic acids, gene

therapies, proteins/peptides, and vaccines.

are a clinical-stage biopharmaceutical company focused on delivering groundbreaking therapies using our lipid nanocrystal (LNC) platform

delivery technology (LNC Platform).

We are seeking to develop an internal pipeline of products utilizing the LNC Platform to successfully

encapsulate small molecules and small oligonucleotides and facilitate targeted and extrahepatic delivery to desired cells tissues without

elements of our strategy include:

Advancing our LNC Platform

and expanding the utilization of this promising technology into areas of innovative medicine beyond small molecules, including nucleic

acids (e.g., mRNA, DNA, ASOs) and proteins.

Positioning MAT2203 for

an NDA filing for various indications for the treatment of serious IFIs, including cryptococcal meningitis.

We are seeking non-dilutive

funds from prospective third-party pharmaceutical partners and various governmental sources of capital, such as the Biomedical Advanced

Research and Development Authority (BARDA) and the NIH in order to continue the development of MAT2203 into Phase 3.

seeking the input and guidance of the FDA for an additional Phase 3 study of various IFIs.

Building an external pipeline

of collaborations focused on our LNC Platform with leading pharmaceutical companies like BioNTech, Genentech and National Resilience

to provide delivery solutions for their complex nucleic acid drug products.

have incurred losses for each period from inception.

Our net loss was $20,997 and $23,283 for the fiscal years ended December 31, 2022

and 2021, respectively.

We expect to incur significant expenses and operating losses over the next several years.

Accordingly, we will

need additional financing to support our continuing operations.

We will seek to fund our operations through public or private equity

offerings, debt financings, government, or other third-party funding, collaborations, and licensing arrangements.

Adequate additional

financing may not be available to us on acceptable terms, or at all.

Our failure to raise capital as and when needed would impact our

ability to continue as a going concern and would have a negative impact on our financial condition and our ability to pursue our business

We will need to generate significant revenues to achieve profitability, and we may never do so.

MAT2203 into the ORALTO trial for the treatment of invasive aspergillosis in patients with limited treatment options by securing

a development and/or commercial partner.

This initial indication is designed to be a gateway indication to establish the pharmacodynamic

bridge necessary to expand the use of MAT2203 into other indications to treat deadly invasive fungal infections (e.g., mucormycosis,

candidiasis and the endemic mycoses) through limited additional clinical work under a 505(b)(2) pathway, thereby making MAT2203 a

pipeline in a product.

the utilization of our LNC Platform with other small molecules and small oligonucleotides into inflammation and oncology in order

to develop an internal pipeline of differentiated drug candidates.

Oral, extrahepatic and non-toxic intracellular delivery of these

molecules would represent a significant advancement.

an external pipeline of collaborations focused on our LNC Platform with leading pharmaceutical companies to provide delivery solutions

for their complex small molecules and small oligonucleotides, including ASOs and siRNAs.

the years ended December 31, 2023 and 2022, our net loss was $22,942 and $20,997, respectively.

We have incurred losses for each

period from our inception and expect to incur additional losses for the foreseeable future.

We do not believe that the cash, cash

equivalents and marketable debt securities on hand are sufficient to fund planned operations beyond the next twelve months from the filing date of this Annual Report.

We will seek to fund our operations through public or private equity offerings, debt financings, government or other

third-party funding, collaborations, and licensing arrangements.

These financing alternatives may not be available to us on

acceptable terms, or at all.

As a result, substantial doubt exists about our ability to continue as a going concern.

Operations Overview

the year ended December 31, 2023, we generated $1,096 in contract research revenue resulting from the research collaboration with BioNTech

During the year ended December 31, 2021, we generated $33 in contract revenue from the feasibility study agreement with Genentech

Our ability to generate product revenue, which we do not expect to occur for many years, if ever, will depend heavily on the successful

development and eventual commercialization of our early-stage product candidates.

SE and Genentech Inc.

During the year ended December 31, 2022, we generated $3,188 in contract revenue resulting from the research collaboration

with BioNTech SE.

Our ability to generate product revenue, which we do not expect to occur for many years, if ever, will depend heavily

on the successful development and eventual commercialization of our early-stage product candidates.

and Development Expenses

and development expenses consist of costs incurred for the development of product candidates MAT2203 and MAT2501, and advancement of

our LNC Platform, which include:

conducting pre-clinical work;

the cost of acquiring,

developing, and manufacturing pre-clinical and human clinical trial materials;

costs for consultants and

contractors associated with Chemistry and Manufacturing Controls (CMC), pre-clinical and clinical activities and regulatory operations;

expenses incurred under

agreements with contract research organizations, or CROs, including the NIH, that conduct our pre-clinical or clinical trials;

and development expenses consist of costs incurred for the development of product candidate MAT2203, and advancement of our LNC Platform,

which include:

cost of acquiring, developing, and manufacturing pre-clinical and human clinical trial materials;

for consultants and contractors associated with Chemistry and Manufacturing Controls (CMC), pre-clinical and clinical activities

and regulatory operations;

incurred under agreements with contract research organizations, or CROs, including the NIH, that conduct our pre-clinical or clinical

employee-related

expenses, including salaries and stock-based compensation expense for those employees involved in the research and development process;

the reimbursement of certain

expenses related to the CFF award agreement.

reimbursement of certain expenses related to the CFF award agreement.

table below summarizes our direct research and development expenses for our product candidates and development platform for the years

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However, we anticipate that our research and

development expenses during 2023 will be relatively consistent with expenses incurred in 2022 as we pause the development of MAT2501

to focus our existing resources on MAT2203 and advancement of our LNC platform delivery technology into the field of nucleic acids.

development expenses during 2024 will be lower compared with expenses incurred during 2023 until such time as we are able to secure additional

funding to support initiation of our Phase 3 registration trial for MAT2203 and advancement of our LNC platform delivery technology.

and Administrative Expenses

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review, consulting, and accounting/audit services.

We anticipate that our general and administrative expenses during 2023 will remain

relatively consistent with expenses incurred during 2022.

We anticipate that our general and administrative expenses during 2024 will decrease

slightly compared to expenses incurred during 2023.

of Net Operating Losses (NOLs) & Tax Credits

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Tax Certificate Program was $484 and $3,491 for the years ended December 31, 2023 and 2022, respectively.

The 2022 NOL sales included

tax years 2021 and 2020, and the 2021 NOL sale included tax year 2019.

The income recorded in 2023

included sales related to tax year 2022, while income recorded in 2022 included sales related to tax years 2021 and 2020.

income, net is largely comprised of interest income (expense) and dividends.

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the application of the most difficult, subjective and complex judgments;

(i) Stock-based compensation, (ii) Fair value measurements,

(iii) Research and development costs, and (iv) Goodwill and other intangible assets.

(i) Research and development costs, and (ii) Goodwill and other

intangible assets.

Operating Trends

current R&D efforts are focused on advancing our lead LNC product candidate, MAT2203, through clinical development toward an initial

indication for the treatment of CM and expanding application of our LNC Platform through both internal efforts and collaborations with

third parties.

Our R&D expenses consist of manufacturing work and the cost of active pharmaceutical ingredients and excipients used

in such work, fees paid to consultants for work related to clinical trial design and regulatory activities, fees paid to providers for

conducting various clinical studies as well as for the analysis of the results of such studies, and for other medical research addressing

the potential efficacy and safety of our drugs.

We believe that significant investment in product development is a competitive necessity,

and we plan to continue these investments to be in a position to realize the potential of our product candidates and proprietary technologies.

current R&D efforts are focused on advancing our lead LNC product candidate, MAT2203, through clinical development and expanding

application of our LNC Platform through both internal efforts and collaborations with third parties.

Our R&D expenses consist of

manufacturing work and the cost of active pharmaceutical ingredients and excipients used in such work, fees paid to consultants for work

related to clinical trial design and regulatory activities, fees paid to providers for conducting various clinical studies as well as

for the analysis of the results of such studies, and for other medical research addressing the potential efficacy and safety of our drugs.

We believe that significant investment in product development is a competitive necessity, and we plan to continue these investments to

be in a position to realize the potential of our product candidates and proprietary technologies.

expect that most of our R&D expenses in the near-term future will be incurred in support of our current and future preclinical and

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The amount earned during 2023 consists

of contract research revenue resulting from the research collaboration with BioNTech SE while the amount earned during 2021 resulted

from the feasibility study agreement with Genentech Inc.

of contract research revenue resulting from the research collaboration with BioNTech SE and the feasibility study agreement with Genentech

Inc., while the amount earned during 2022 resulted exclusively from the research collaboration with BioNTech SE.

and Development expenses.

R&D expense for the years ended December 31, 2022 and 2021 was $16,678 and $14,583,

respectively.

The increase of $2,095 was due to an increase of $2,327 of compensation expense, primarily related to headcount

increases, $1,441 increase in clinical trials expenses due to the continued advancement of MAT2203, partially offset by an increase

in the reimbursement of certain MAT2501 program expenses of $811 and a decrease of $916 primarily related to the Aquarius Merger

Agreement in 2021 in connection with the LNC Platform.

R&D expense for the years ended December 31, 2023 and 2022 was $14,489 and $16,678, respectively.

The decrease of $2,189 was due to a decrease of $1,302 of clinical trial expenses and $541 decrease in professional & consulting

fees, primarily related to the pause of our MAT2203 development program, and a $291 decrease due to the license agreement amendment expense

recorded in 2022.

and Administrative expenses.

G&A expense for the years ended December 31, 2023 and 2022 was $10,373 and $11,100, respectively.

The increase of $915 over prior year was primarily due to higher compensation expense related to stock-based compensation of $506 and

increased headcount.

The decrease of $727 over the prior year was primarily due to a decrease in certain insurance premiums, and lower consulting fees and

facility expenses related to certain projects that began in the prior year.

of net operating losses (NOLs) & tax credits.

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party under the New Jersey Technology Business Tax Certificate Program.

The 2022 NOL sales included tax years 2021 and 2020, and the

2021 NOL sale included tax year 2019.

The income recorded in 2023 included sales related to tax year

2022, while income recorded in 2022 included sales related to tax years 2021 and 2020.

and capital resources

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stock warrants.

As of December 31, 2022, we have raised a total of $156,651 in gross proceeds and $143,941, net, from sales of our equity

securities since inception in 2013.

As of December 31, 2023, we have raised a total of $156,851 in gross proceeds and $144,141, net proceeds, from sales

of our equity securities since inception in 2013.

of December 31, 2023, we had cash, cash equivalents and marketable debt securities, excluding restricted cash, totaling $13,756.

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BTIG may terminate the Sales Agreement in certain limited circumstances.

During 2022, we did not sell

any shares of our common stock under the ATM Sales Agreement.

During 2021, BTIG sold 3,023,147 shares of the Company’s common stock

generating gross proceeds of $5,753 and net proceeds of $5,580, after deducting BTIG’s commission on gross proceeds.

31, 2022, the ATM’s available capacity was $44,247.

following table sets forth the primary sources and uses of cash for each of the period set forth below:

We did not sell any shares

of our common stock under the Sales Agreement during either 2023 or 2022.

At December 31, 2023, the Sales Agreement’s available

capacity was $44,247.

following table sets forth the primary sources and uses of cash for each of the periods set forth below:

Years Ended December 31

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Cash provided by investing activities

Cash provided by financing activities

Net (decrease)/increase in cash and cash equivalents and restricted cash

Cash (used in) provided by financing activities

Net decrease in cash and cash equivalents and restricted cash

cash used in operating activities for the year ended December 31, 2023 was $15,278, compared to $19,156 in the prior year.

of $3,933 for the period was primarily due to an increase of $6,324 of working capital adjustments due to the timing of receipts and

payments in the ordinary course of business and the $1,200 Aquarius agreement charge in 2021 offset by $2,286 of a decrease in net loss

in the current period, the $936 increase in stock based compensation expense, including other non-cash expenses, and the license agreement

charge of $291 in 2022.

We expect that there will be a similar amount of cash used in operations during 2023 as we continue to move our

product candidates and LNC Platform forward in their development cycles.

cash of $4,877 was provided by investing activities for the year ended December 31, 2022, while $16,770 of net cash was provided by investing

of $3,878 for the period was primarily due to a decrease of $6,456 of working capital adjustments due to the timing of receipts and payments

in the ordinary course of business, partially offset by a $1,945 increase in net loss in the current period, $280 decrease in stock based

compensation expense, and a decrease associated with the license agreement charge of $291 in 2022.

We expect the amount of cash used

in operations during 2024 to be slightly higher as we continue to move our product candidates and LNC Platform forward in their development

cash provided by investing activities for the year ended December 31, 2023 was $13,242, compared to $4,877 of net cash provided by investing

activities for the year ended December 31, 2022.

The decrease of cash provided by investing activities of $11,893 was primarily due to

the $24,975 decrease in proceeds received from maturities of our marketable debt securities and the increase of $632 in purchases of

equipment and leasehold improvements, partially offset by the decrease of $13,714 in purchases of marketable debt securities as compared

to the prior year.

cash provided by financing activities was $79 and $6,965 for the years ended December 31, 2022 and 2021, respectively.

The decrease of

$6,886 in cash provided by financing activities is primarily due to the Company raising $5,580 of net proceeds from the 2021 ATM sales

of our common stock for which the Company did not have similar equity raises during year ended December 31, 2022, and a decrease in the

receipt of proceeds of $1,316 from the exercise of stock options.

The increase of $8,365 provided by investing activities was primarily due to a $7,691

net decrease in the purchases and maturities of marketable debt securities and $674 decrease in purchases of equipment and leasehold

improvements as compared to the prior year.

cash (used in) and provided by financing activities was ($7) and $79 for the years ended December 31, 2023 and 2022, respectively.

decrease of $86 in cash provided by financing activities is primarily due to the decrease in the receipt of proceeds of $99 from the

exercise of stock options in 2022.

Requirements and Other Liquidity Matters

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will increase substantially if and as we:

conduct further

preclinical and clinical studies of MAT2203, our lead product candidate, even is such studies are primarily financed with non-dilutive

funding from NIH;

seek to discover and develop

additional product candidates;

seek regulatory approvals

for any product candidates that successfully complete clinical trials;

require the manufacture

of larger quantities of product candidates for clinical development and potentially commercialization;

maintain, expand, and protect

our intellectual property portfolio;

hire additional clinical,

quality control and scientific personnel;

add operational, financial

and management information systems and personnel, including personnel to support our product development and planned future commercialization

efforts and personnel and infrastructure necessary to help us comply with our obligations as a public company.

expect that our existing cash, cash equivalents and marketable debt securities will be sufficient to fund our operating expenses and

capital expenditures requirements into the second quarter of 2024.

further clinical studies of MAT2203, our lead product candidate, even is such studies are primarily financed with non-dilutive funding

to discover and develop additional product candidates;

regulatory approvals for any product candidates that successfully complete clinical trials;

the manufacture of larger quantities of product candidates for clinical development and potentially commercialization;

expand, and protect our intellectual property portfolio;

additional clinical, quality control and scientific personnel;

operational, financial and management information systems and personnel, including personnel to support our product development and

planned future commercialization efforts and personnel and infrastructure necessary to help us comply with our obligations as a public

do not believe that our existing cash, cash equivalents and marketable debt securities will be sufficient to fund our operating expenses and

capital expenditures requirements beyond the next twelve months from the filing date of this Annual Report.

As a result, substantial doubt exists about the Company’s

ability to continue as a going concern.

such time, if ever, that we can generate product revenues sufficient to achieve profitability, we expect to finance our cash needs through

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clinical trial expenses, negatively impacting our results of operations.

On March 10, 2023, Silicon Valley Bank (“SVB”)

was closed by the California Department of Financial Protection and Innovation, and the Federal Deposit Insurance Corporation (“FDIC”)

was appointed as receiver.

We have deposit accounts at SVB.

The standard deposit insurance amount is up to $250 thousand per depositor,

per insured bank, for each account ownership category.

On March 12, 2023, the U.S.

Treasury, Federal Reserve, and FDIC announced that

SVB depositors will have access to all of their money starting March 13, 2023.

The Company does not expect to be negatively impacted

by these events.

Obligations and Commitments

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statements for a discussion of recent accounting pronouncements.

Quantitative And Qualitative

Disclosures About Market Risk

And Qualitative Disclosures About Market Risk

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis