What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-05-02 compared with 2021-11-02 · 83 added, 64 removed, 172 unchanged (46% of the section changed)

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Examples of these statements include, but are not limited to, statements regarding the following:

potential future development plans for rNAPc2 (AB201) and Gencaro, including the potential for rNAPc2 to treat COVID-19, our ability to secure sufficient financing to support our anticipated clinical trials of rNAPc2 and Gencaro, the likelihood that any Phase 3 clinical trial results for Gencaro will satisfy the requirements of our Special Protocol Assessment agreement, the expected features and characteristics of Gencaro, including the potential for genetic variations to predict individual patient response to Gencaro or AB171, Gencaro’s potential to treat atrial fibrillation, or AF, future vaccines and treatment options for patients with COVID-19, future treatment options for patients with AF, the potential for Gencaro to be the first genetically-targeted AF prevention treatment, statements regarding potential Phase 3 development plans for Gencaro, including the timing and results thereof, the expected features and characteristics of AB171 as a potential genetically-targeted treatment for peripheral arterial disease, or PAD, and for heart failure, or HF, the potential timeline for development of AB171, including any Investigational New Drug, or IND, application submission related thereto, and the ability of ARCA’s financial resources to support its operations through the end of fiscal year 2022, the sufficiency of our current capital to reach certain of our corporate objectives, our ability to obtain additional funding when needed or enter into a strategic or other transaction, including our ability to raise sufficient capital to fund any clinical trials for rNAPc2 and Gencaro and our other operations, the extent to which our issued and pending patents may protect our products and technology, the potential of such product candidates to lead to the development of safe or effective therapies, our ability to enter into collaborations, our ability to maintain listing of our common stock on a national exchange, our future operating expenses, our future losses, our future expenditures, and the sufficiency of our cash resources to maintain operations.

potential future development plans for rNAPc2 (AB201) and Gencaro, including the potential for rNAPc2 to treat COVID-19, our ability to secure sufficient financing to support our anticipated clinical trials of rNAPc2 and Gencaro, the likelihood that any Phase 3 clinical trial results for Gencaro will satisfy the requirements of our Special Protocol Assessment agreement, the expected features and characteristics of Gencaro, including the potential for genetic variations to predict individual patient response to Gencaro, Gencaro’s potential to treat atrial fibrillation, or AF, future vaccines and treatment options for patients with COVID-19, future treatment options for patients with AF, the potential for Gencaro to be the first genetically-targeted AF prevention treatment, statements regarding potential Phase 3 development plans for Gencaro, including the timing and results thereof, and the ability of ARCA’s financial resources to support its operations at the current levels through at least the middle of fiscal year 2023, the sufficiency of our current capital to reach certain of our corporate objectives, our ability to obtain additional funding when needed or enter into a strategic or other transaction, including our ability to raise sufficient capital to fund any clinical trials for rNAPc2 and Gencaro and our other operations, the extent to which our issued and pending patents may protect our products and technology, the potential of such product candidates to lead to the development of safe or effective therapies, our ability to enter into collaborations, our ability to maintain listing of our common stock on a national exchange, our future operating expenses, our future losses, our future expenditures, and the sufficiency of our cash resources to maintain operations.

Actual results and performance could differ materially from those projected in the forward-looking statements as a result of many factors discussed herein and elsewhere.

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rNAPc2 targets COVID-19 patients with biomarker evidence of coagulopathy, while Gencaro is being developed for patients who have a genotype that identifies a drug target associated with heightened efficacy.

In April 2022, the Board of Directors established a Special Committee to evaluate strategic options, including transactions involving the merger or sale of all or part of our assets, and other alternatives with the goal of maximizing stockholder value.

We believe there are multiple potential opportunities to enhance value for our shareholders.

We do not have a defined timeline for the strategic review process and the review may not result in any specific action or transaction.

rNAPc2 (AB201) for treatment of COVID-19

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Based on its unique mechanism of action, development history and the clinical evidence from the SARS-CoV-2 pandemic, we believe rNAPc2 has potential to be a beneficial therapy for patients with this serious viral disease.

We initiated a Phase 2 clinical trial of rNAPc2 as a potential treatment for patients hospitalized with COVID-19 in the fourth quarter of 2020 and are currently enrolling patients.

We initiated a Phase 2b clinical trial of rNAPc2 as a potential treatment for patients hospitalized with COVID-19 in the fourth quarter of 2020 and completed patient enrollment in the fourth quarter 2021.

In the clinical trial, both doses of rNAPc2 demonstrated a treatment benefit for patients, however, neither dose achieved statistical significance for the primary efficacy endpoint of change in D-dimer level from Baseline to Day 8 compared to standard of care heparin.

Certain patients with severe COVID-19 disease exhibit thrombotic complications and other inflammatory responses suggesting potential dysregulation of the coagulation and immune systems.

rNAPc2 is a potent inhibitor of tissue factor, a cellular receptor responsible for initiation of the primary coagulation pathway and appears to be the major activator of the coagulation cascade during viral infection.

Tissue factor is also implicated in the immune system inflammatory response to viral infections and in the process of viral dissemination during infection.

We believe that evidence from the pandemic implicates tissue factor pathways as an important part of the COVID-19 disease process, and provides a rationale to test rNAPc2 as a potential therapeutic for COVID‑19 for its anticoagulant and potential anti-inflammatory properties.

rNAPc2 is a potent inhibitor of tissue factor, or TF, a cellular receptor responsible for initiation of the primary coagulation pathway and appears to be the major activator of the coagulation cascade during viral infection.

TF is also implicated in the immune system inflammatory response to viral infections and in the process of viral dissemination during infection.

We believe that evidence from the pandemic implicates tissue factor pathways as an important part of

the COVID-19 disease process, and provides a rationale to test rNAPc2 as a potential therapeutic for COVID ‑19 for its anticoagulant and potential anti-inflammatory properties.

rNAPc2 was originally developed for potential use as an anticoagulant due to its inhibition of the TF-initiated coagulation process.

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The disease caused by the SARS-CoV-2 virus has been designated COVID-19.

According to the World Health Organization, since this outbreak was first reported in late 2019, there have been over 240 million confirmed cases of COVID-19 and over 4 million deaths worldwide attributed to the virus (as of October 2021).

According to the World Health Organization, since this outbreak was first reported in late 2019, there have been over 509 million confirmed cases of COVID-19 and over 6 million deaths worldwide attributed to the virus (as of April 2022).

COVID-19 is associated with a high incidence of both arterial and venous coagulation-related adverse events in large and small blood vessels.

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Therefore, we believe that rNAPc2 has therapeutic potential for future viral outbreaks beyond the current pandemic.

rNAPc2 is a single-chain, 85 amino acid, recombinant protein administered subcutaneously, that has previously been evaluated under three FDA Investigational New Drug, or IND, applications in six Phase 1 and three Phase 2 clinical studies in the United States and Europe.

rNAPc2 is a single-chain, 85 amino acid, recombinant protein administered subcutaneously, that has previously been evaluated under three U.S.

Food and Drug Administration, or FDA, Investigational New Drug, or IND, applications in six Phase 1 and three Phase 2 clinical studies in the United States and Europe.

These clinical trials primarily examined the safety, dosing and anticoagulation effects of rNAPc2 in patients with acute coronary syndromes, in patients undergoing knee replacement surgery and in patients undergoing percutaneous coronary interventions.

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We initiated the Phase 2b clinical trial of rNAPc2 (AB201), ASPEN-COVID-19, in patients hospitalized with COVID-19 in the fourth quarter of 2020.

In July 2021, we increased the ASPEN-COVID-19 clinical trial target enrollment from 100 to 160 patients in an effort to increase the sample size for determining if there are differences in the two rNAPc2 dose regimens being investigated, to decrease variance in the standard of care heparin control arm, in recognition of the study being conducted in different geographic regions and to potentially account for evolving changes in the clinical course of COVID-19.

In October 2021, the Data and Safety Monitoring Committee, or DSMC, completed a pre-specified interim analysis and, based on the DSMC’s review of approximately 75% of the projected final efficacy and safety data, recommended completion of the

clinical trial with no modifications to the clinical trial design.

We anticipate announcing topline data from this approximately 1 6 0 patient international Phase 2b clinical trial in the first quarter of 202 2 .

We are evaluating rNAPc2 as a treatment for patients hospitalized with COVID-19 who are at high risk for thrombotic complications, as indicated by elevated D-dimer levels.

The Phase 2b clinical trial is designed to be a randomized comparison of two-dose regimens of rNAPc2 versus heparin prescribed per local standard of care.

The primary endpoint of the clinical trial is the change in D-dimer level from baseline to Day 8 relative to standard of care heparin.

If Phase 2b results indicate a favorable effect on D-dimer levels and safety is confirmed, following FDA review of the data and identification of the proposed Phase 3 rNAPc2 dose, we anticipate that clinical investigative sites will begin enrolling patients in a planned Phase 3 clinical trial.

The primary endpoint of Phase 3 is planned to be clinical recovery as measured by the Adaptive COVID-19 Treatment Trial ordinal scale, with secondary endpoints that include D-dimer levels and the number of thrombotic events.

We believe the Phase 3 clinical trial will be event driven, with an estimated requirement of 450 patients.

We believe that favorable results from this Phase 2b/3 clinical trial program could support use of rNAPc2 in COVID-19 patients, given its potential efficacy both as an anticoagulant and an anti-viral agent that we believe counters the dysregulatory immune response and improves clinical recovery.

The clinical trial is being managed in collaboration with the Colorado Prevention Center, or CPC, the University of Colorado's Academic Research Organization with extensive experience in managing vascular and anticoagulation clinical trials.

We evaluated rNAPc2 as a treatment for patients hospitalized with COVID-19 who are at high risk for thrombotic complications, as indicated by elevated D-dimer levels.

The Phase 2b clinical trial was designed to be a randomized comparison of two-dose regimens of rNAPc2 versus heparin prescribed per local standard of care.

The primary endpoint of the clinical trial was the change in D-dimer level from baseline to Day 8 relative to standard of care heparin.

Secondary endpoints include time to recovery for eligibility of hospital discharge, and the clinical composite of all-cause mortality, thrombosis, need for organ support or re-hospitalization within 30 days from randomization.

This clinical trial used a 1:1:2 randomization between lower dose rNAPc2, higher dose rNAPc2 and standard of care heparin that was delivered in prophylactic doses in 93% of the patients.

rNAPc2 patients received three sub-cutaneous, or SC, doses on days 1, 3 and 5 and then received heparin beginning on day 8.

This Phase 2b study was designed to understand the safety of the doses selected relative to standard of care, and to provide efficacy data that might support further study in a pivotal Phase 3 program.

For the entire cohort for pooled rNAPc2 versus heparin, in the intention to treat, or ITT, population, rNAPc2 was associated with a change in D-dimer of -16.8 (-45.7, 36.8) %, P=0.41 compared to -11.2 (-36, 34.4) %, P=0.91 in the Heparin group (between groups P=0.47).

For the per protocol analysis (N=81) of the 38 rNAPc2 patients who received all three doses and remained hospitalized long enough to have the day 8 end-of-efficacy period D-dimer levels measured, there was a reduction from baseline of -28.7 (-49.1,14.0) %, P=0.23, while the Heparin group change from baseline was an increase of 1.1 (-45.2,108) %, P=0.33;

between groups P=0.33.

The clinical trial statistical analysis plan called for analysis of data stratified by a modified WHO COVID-19 Severity Scale that assigned randomized patients to either Mild or Severe groups.

There was an imbalance by rNAPc2 dose group between these strata with more higher dose group patients in the Severe stratum (15 vs 10 lower dose) and more lower dose in the Mild stratum.

Because treatment effects were different in these strata, dose response had to be analyzed within each stratum.

In the ITT analysis, WHO Mild patients (N= 84) had baseline median (IQR) D-dimer levels of 314 (206,473) D-Dimer Units (DDUs, ng/ml).

D-dimer levels as percent change decreased at day 8 or hospital discharge in both the pooled high and low dose rNAPc2 arms (-32.7 (-44.7,4.3), P=0.009) and in the heparin arm (-16.8 (-36.0.0.5), P= 0.010);

this decrease was statistically significant in the higher dose rNAPc2 group (-32.3 (-43.7,-2.4), P=0.016) but not in the lower dose group (-33.0 (-45.8,8.0), P=0.17).

In contrast, in WHO Severe patients (N= 51, baseline DDU median 546 (318,872), P<0.0001 vs.

Mild) D-dimer levels increased in the heparin group (% change 29.0 (‑14.9,145), P=0.022) but did not change in the pooled rNAPc2 group (25.9 (-49.1,136), P=0.16) or in either rNAPc2 dose group (lower, -12.1(-50.2,498), P=0.84;

higher, 36.8 (-41.7,136) P=0.13).

On the secondary endpoints measuring thrombotic events and time-to-recovery, there was a numerical imbalance in favor of rNAPc2 that was non-significant.

rNAPc2 was well-tolerated at both doses.

There were no serious treatment-related adverse events and no dose dependent increase in adverse events was observed.

There was no difference between rNAPc2 and standard-of-care heparin in major or non-major clinically relevant bleeding.

We plan to meet with the FDA to review the Phase 2b clinical study data.

The clinical trial is being managed in collaboration with the Colorado Prevention Center, or CPC, the University of Colorado's Academic Research Organization.

We have financed the development of rNAPc2 through public equity sales.

Our rNAPc2 development plans, including the timeline, depend on our ability to enroll patients during the COVID-19 pandemic, the results of our Phase 2b clinical trial, FDA guidance, and availability of drug product, all of which are currently uncertain.

We own the clinical development program of rNAPc2, including the Phase 2 clinical development.

If rNAPc2 is successfully developed, we believe it will have intellectual property protection, including 12 years of market exclusivity as an innovative biologic product under FDA law in the United States, 10 years data protection exclusivity in the European Union, or EU, and potentially patent protection in addition to this.

We own the clinical development program of rNAPc2, including the Phase 2b clinical development.

If rNAPc2 is successfully developed, we believe it will have intellectual property protection, including 12 years of market exclusivity as an innovative biologic product under FDA regulation in the United States, 10 years data protection exclusivity in the European Union, or EU, and potentially patent protection in addition to this.

We have filed an international patent application for the use of rNAPc2 in COVID-19 and plan to prosecute this patent in the United States and other markets.

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Wolfram Ruf, the Scientific Director and Alexander von Humboldt Professor at the Center for Thrombosis and Hemostasis (CTH) of the University Medical Center Mainz, and his collaborators.

We have upfront and potential milestone obligations to the University Medical Center Mainz that could total approximately €1.6 million and royalty obligations in the low single digit range, if rNAPc2 receives regulatory approval and is commercialized.

We have upfront and potential milestone obligations to the

University Medical Center Mainz that could total approximately €1.6 million and royalty obligations in the low single digit range, if rNAPc2 receives regulatory approval and is commercialized.

The term of the Agreement extends to the date of expiration of the last to expire of any of the assigned patents .

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This analysis showed novel results for Gencaro in patients in the clinical trial with EF’s of 40% and higher.

The Phase 3 pivotal clinical trial of Gencaro conducted under an SPA will include secondary endpoints that are intended to capture some of this new information, such as a reduction in the need to deploy rhythm control interventions including electrical cardioversion, catheter ablation and use of anti-arrhythmic drugs and avoidance of drug-related

complications such as bradycardia.

We currently have an agreement with the FDA, known as a Special Protocol Assessment, or SPA, for the requirements of a Gencaro Phase 3 clinical trial that would support approval of Gencaro if successful.

Based on these analyses, we were issued a United States patent in February 2021 for the use of Gencaro in this patient population.

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We are seeking similar patent protection in other countries.

We believe that patients with HF and AF represent a major unmet medical need, and this need is most pronounced in patients with EF values of 40% and above.

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If we are unable to obtain sufficient financing or are unable to complete a strategic transaction, we may discontinue our development activities on rNAPc2 or Gencaro or discontinue our operations .

We believe our cash and cash equivalents as of September 30, 2021 will be sufficient to fund our operations through the end of fiscal year 2022, including the projected costs for the rNAPc2 ( AB201) Phase 2b clinical trial.

We believe our cash and cash equivalents as of March 31, 2022 will be sufficient to fund our operations at the current levels through at least the middle of fiscal year 2023.

Our review of our strategic options may impact this projection.

Conducting a Phase 3 rNAPc2 clinical trial or the Phase 3 PRECISION-AF trial would likely require additional financing.

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Initiating any Phase 3 clinical trial of Gencaro is dependent on sustained improvement in the COVID-19 pandemic and will require additional financing .

In 2017, we entered into a sales agreement with a placement agent to sell, from time to time, our common stock having an aggregate offering price of up to $10.2 million, in an “at the market offering.” In 2020, we further amended the sales agreement to increase the maximum aggregate value of shares which we may issue and sell from time to time under this sales agreement to $32.4 million.

This sales agreement terminated in July 2020.

Under this sales agreement, we had sold an aggregate of 3,302,159 shares of our common stock pursuant to the terms of such sales agreement, as amended, for aggregate gross proceeds of approximately $32.3 million.

Net proceeds received in this offering were approximately $30.8 million, after deducting expenses for executing the “at the market offering” and commissions paid to the placement agent.

We believe there are multiple potential opportunities to enhance value for our shareholders.

We do not have a defined timeline for the strategic review process and the review may not result in any specific action or transaction.

In July 2020, we entered into a new sales agreement with a placement agent to sell, from time to time, our common stock having an aggregate offering price of up to $54.0 million, in an “at the market offering.” As of February 2021, we had sold an aggregate of 9,928,272 shares of our common stock pursuant to the terms of such sales agreement for aggregate gross proceeds of approximately $54.0 million.

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333-254585) .

As of April 29, 2022, the amount available for the offering under the prospectus supplement is subject to the limitation of not selling a total value amount of shares exceeding more than one-third of our public float in any 12-month period, which as of April 29, 2022 would have been approximately $10.1 million .

In March 2020, the World Health Organization declared the outbreak of COVID-19, a novel strain of Coronavirus, a global pandemic.

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Our R&D expense is almost entirely generated by our activities relating to the development of rNAPc2 (AB201).

R&D expense for the three months ended September 30, 2021 was $3.4 million compared to $1.1 million for the corresponding period of 2020, an increase of $2.4 million.

R&D expense for the nine months ended September 30, 2021 was $9.9 million compared to $1.8 million for the corresponding period of 2020, an increase of approximately $8.1 million.

Clinical expense increased approximately $1.7 million and $5.0 million for the three and nine months ended September 30, 2021, as compared to the corresponding periods of 2020.

Manufacturing process development costs increased approximately $0.3 million and $2.0 million for the three and nine months ended September 30, 2021, as compared to the corresponding periods of 2020.

The increase was related to the initiation of our rNAPc2 (AB201) clinical trial in the second half of 2020.

The remaining increase is primarily a result of higher outside services and consulting costs.

R&D personnel costs increased approximately $0.3 million and $0.7 million for the three and nine months ended September 30, 2021, as compared to the corresponding periods of 2020.

R&D expense in 2021 is expected to be higher than 2020, as we continue our rNAPc2 (AB201) international Phase 2b clinical trial.

R&D expense for the three months ended March 31, 2022 was $2.2 million compared to $2.9 million for the corresponding period of 2021, a decrease of $0.7 million.

Clinical expense decreased approximately $0.9 million for the three months ended March 31, 2022, as compared to the corresponding periods of 2021.

The decrease was related to the completion of enrollment in our rNAPc2 (AB201) international Phase 2b clinical trial in the fourth quarter of 2021.

Manufacturing process development costs increased approximately $0.4 million for the three months ended March 31, 2022, as compared to the corresponding periods of 2021.

R&D personnel costs decreased approximately $0.1 million for the three months ended March 31, 2022, as compared to the corresponding periods of 2021.

R&D expense in 2022 is expected to be lower than 2021, as we completed our rNAPc2 (AB201) international Phase 2b clinical trial in the fourth quarter of 2021.

General and Administrative Expenses

General and administrative, or G&A, expenses primarily consist of personnel costs, consulting and professional fees, insurance, facilities and depreciation expenses, and various other administrative costs.

G&A expenses were $1.3 million for the three months ended September 30, 2021 compared to $0.9 million for the corresponding period of 2020, an increase of $0.3 million.

G&A expenses were $3.8 million for the nine months ended September 30, 2021 compared to $2.9 million for the corresponding period of 2020, an increase of $0.9 million The increases were primarily a result of higher personnel and insurance costs in 2021.

G&A expenses in the last quarter of 2021 are expected to be consistent with the third quarter of 2021 as we maintain administrative activities to support our ongoing operations.

G&A expenses were $1.1 million for the three months ended March 31, 2022 compared to $1.2 million for the corresponding period of 2021, a decrease of $0.1 million.

The decrease was primarily a result of lower personnel costs in 2022, offset by increases in consulting costs.

G&A expenses in 2022 are expected to be consistent with 2021 as we maintain administrative activities to support our ongoing operations.

Interest and Other Income

Interest and other income was $4,000 and $1,000 in the three months ended September 30, 2021 and 2020, respectively.

Interest and other income was $9,000 and $27,000 in the three months ended September 30, 2021 and 2020, respectively.

Interest and other income was $7,000 and $2,000 in the three months ended March 31, 2022 and 2021, respectively.

Interest income for the remainder of 2022 is expected to be negligible.

Interest Expense

Interest expense was $2,000 and $9,000 for the three and nine months ended September 30, 2020.

Based on our current capital structure, interest expense for the remainder of 2021 is expected to be negligible.

Other Expense

Other expense was $2,000 for the three months ended March 31, 2022.

Based on our current capital structure, other expense for the remainder of 2022 is expected to be negligible.

Liquidity and Capital Resources

Cash and Cash Equivalents

September 30,

(in thousands)

Cash and cash equivalents

As of September 30, 2021, we had total cash and cash equivalents of $58.3 million, as compared to $49.1 million as of December 31, 2020.

The net increase of $9.2 million primarily reflects the net proceeds of $23.1 million from the issuance of common stock, offset by $13.8 million of cash used in operating activities during the nine months ended September 30, 2021.

As of March 31, 2022, we had total cash and cash equivalents of $49.1 million, as compared to $53.4 million as of December 31, 2021.

The net decrease of $4.3 million primarily reflects the cash used in operating activities during the three months ended March 31, 2022.

Cash Flows from Operating, Investing and Financing Activities

Nine Months Ended

September 30,

Three Months Ended March 31,

(in thousands)

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Financing activities

Net increase in cash and cash equivalents

Net cash used in operating activities for the nine months ended September 30, 2021 increased $9.1 million compared with the same period in 2020.

This was primarily due to higher outflows related to changes in operating assets and liabilities and a higher net loss in 2021, as discussed in Results of Operations above.

Net cash used in investing activities for the nine months ended September 30, 2021 was $36,000 for the purchase of property and equipment.

Net cash used in investing activities for the nine months ended September 30, 2020 was $6,000 for the purchase of property and equipment.

Net cash provided by financing activities was $23.1 million for the nine months ended September 30, 2021 related to net proceeds from sales of our common stock in our “at the market” equity offering in the period.

Net cash provided by financing activities was $47.5 million for the nine months ended September 30, 2020 representing $47.7 million in net proceeds from sales of our common stock in our registered direct equity offering and our “at the market” equity offering in the period, less $0.3 million of payments on a vendor finance arrangement.

Net (decrease) increase in cash and cash equivalents

Net cash used in operating activities for the three months ended March 31, 2022 decreased $0.9 million compared with the same period in 2021.

This was primarily due to lower outflows related to changes in operating assets and liabilities and a lower net loss in 2022, as discussed in Results of Operations above.

Net cash used in investing activities for the three months ended March 31, 2022 was $2,000 for the purchase of property and equipment.

Net cash used in investing activities for the three months ended March 31, 2021 was $6,000 for the purchase of property and equipment.

There were no financing activities in the three months ended March 31, 2022.

Net cash provided by financing activities was $23.1 million for the three months ended March 31, 2021 related to net proceeds from sales of our common stock in our “at the market” equity offering in the period.

Sources and Uses of Capital

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The primary uses of our capital resources to date have been to fund operating activities, including research, clinical development and drug manufacturing expenses, license payments, and spending on capital items.

In July 2020, we entered into a sales agreement with a placement agent to sell, from time to time, our common stock having an aggregate offering price of up to $54.0 million, in an “at the market offering.” As of February 2021, we had sold an aggregate of 9,928,272 shares of our common stock pursuant to the terms of such sales agreement for aggregate gross proceeds of approximately $54.0 million.

Net proceeds received in this offering were approximately $52.2 million, after deducting expenses for executing the “at the market offering” and commissions paid to the placement agent.

In April 2021, we amended the new sales agreement and have $50.0 million available for the offering under our prospectus to our registration statement on Form S-3 (No.

333-254585 ).

In March 2020, the World Health Organization declared the outbreak of COVID-19, a novel strain of Coronavirus, a global pandemic.

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However, if the pandemic continues to be a severe worldwide crisis, it could have a material adverse effect on our business, results of operations, financial condition and cash flows.

Our ability to execute our development programs in accordance with our projected time line depends on a number of factors, including, but not limited to, the following:

Our ability to execute our development program s in accordance with our projected time line depends on a number of factors, including, but not limited to, the following:

the costs and timing for the potential additional clinical trials in order to gain possible regulatory approval for rNAPc2, Gencaro or any other product candidate;

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the terms and conditions of our existing collaborative and licensing agreements.

We believe our cash and cash equivalents balance as of September 30, 2021 will be sufficient to fund our operations through the end of fiscal year 2022.

We believe our cash and cash equivalents as of March 31, 2022 will be sufficient to fund our operations at the current levels through at least the middle of fiscal year 2023.

Our review of our strategic options may impact this projection .

Conducting a Phase 3 rNAPc2 clinical trial or the Phase 3 PRECISION-AF trial would likely require additional financing .

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We may not be able to raise sufficient capital on acceptable terms, or at all, to continue development and potential commercialization of rNAPc2 or Gencaro or to otherwise continue operations and may not be able to execute any strategic transaction.

We believe there are multiple potential opportunities to enhance value for our shareholders.

We do not have a defined timeline for the strategic review process and the review may not result in any specific action or transaction.

Critical Accounting Policies and Estimates

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We develop estimates of liabilities using our judgment based upon the facts and circumstances known at the time.

Off-Balance Sheet Arrangements

We have not participated in any transactions with unconsolidated entities, such as special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements.

Indemnifications

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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