Item 2. Management’s Discussion and Analysis
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with our condensed consolidated financial statements and related notes in “Item 1. Condensed Consolidated Financial Statements”. References in this report to “Rockwell,” the “Company,” “we,” “our” and “us” are references to Rockwell Medical, Inc. and its subsidiaries.
Forward-Looking Statements
We make forward-looking statements in this report and may make such statements in future filings with the Securities and Exchange Commission, or SEC. We may also make forward-looking statements in our press releases or other public or shareholder communications. Our forward-looking statements are subject to risks and uncertainties and include information about our current expectations and possible or assumed future results of our operations. When we use words such as “may,” “might,” “will,” “should,” “believe,” “expect,” “anticipate,” “estimate,” “continue,” “could,” “plan,” “potential,” “predict,” “forecast,” “project,” “intend,” or similar expressions, or make statements regarding our intent, belief, or current expectations, we are making forward-looking statements. Our forward looking statements also include, without limitation, statements about our liquidity and capital resources; our ability to continue as a going concern; our ability to develop Ferric Pyrophosphate Citrate (“FPC”) for other indications; our ability to successfully execute on our business strategy and development of new indications; our ability to raise additional capital; our ability to renegotiate certain terms of our supply contracts; our ability to successfully implement certain cost containment and cost-cutting measures; our ability to achieve profitability and statements regarding our anticipated future financial condition, operating results, cash flows and business plans.
While we believe our forward-looking statements are reasonable, you should not place undue reliance on any such forward-looking statements, which are based on information available to us on the date of this report or, if made elsewhere, as of the date made. Because these forward-looking statements are based on estimates and assumptions that are subject to significant business, economic and competitive uncertainties, many of which are beyond our control or are subject to change, actual results could be materially different. Factors that might cause such a difference include, without limitation, the risks and uncertainties discussed in this report, “Item 1A — Risk Factors” in our Form 10-K for the year ended December 31, 2021 and from time to time in our other reports filed with the SEC, including in this Form 10-Q.
Other factors not currently anticipated may also materially and adversely affect our results of operations, cash flow and financial position. There can be no assurance future results will meet expectations. Forward-looking statements speak only as of the date of this report and we expressly disclaim any intent to update or alter any statements whether as a result of new information, future events or otherwise, except as may be required by applicable law.
Overview
Rockwell Medical is a commercial healthcare company focused on providing life-sustaining products for patients suffering from blood disorders and diseases associated with the kidney.
Rockwell is a revenue-generating business and the second largest supplier of acid and bicarbonate concentrates for dialysis patients in the United States. Hemodialysis is the most common form of end-stage kidney disease treatment and is usually performed at a freestanding outpatient dialysis center, at a hospital-based outpatient center, or in a patient’s home. This represents a large market opportunity for which Rockwell's products are well-positioned to meet the needs of patients.
Rockwell manufactures hemodialysis concentrates under cGMP regulations at its three facilities in Michigan, Texas, and South Carolina totaling approximately 175,000 square feet, and manufactures mixers in its Iowa facility. Rockwell delivers the majority of its hemodialysis concentrates products and mixers to dialysis clinics throughout the United States and internationally utilizing its own delivery trucks and third-party carriers. Rockwell has developed a core expertise in manufacturing and delivering hemodialysis concentrates, and has built a longstanding reputation for reliability, quality, and excellent customer service.
Rockwell has a proprietary parenteral iron product, TRIFERIC ® (ferric pyrophosphate citrate, "FPC"), which is indicated to maintain hemoglobin in adult patients with hemodialysis-dependent chronic kidney disease. While Rockwell has discontinued commercialization of TRIFERIC ® in the United States, the Company has established several international partnerships with companies seeking to develop and commercialize TRIFERIC ® outside the United States and is working closely with these international partners to develop and commercialize TRIFERIC ® in their respective regions.
Rockwell continues to evaluate the viability of its FPC platform and FPC's potential to treat iron deficiency and iron deficiency anemia and for acute heart failure.
Rockwell’s strategy is focused on growing the Company's revenue-generating business, which currently includes hemodialysis concentrates and international partnerships for TRIFERIC ® and achieving profitability in 2024 to put the Company in a stronger and more stable financial position.
Hemodialysis Concentrates Business : Rockwell is the second largest supplier of life-sustaining hemodialysis concentrates products to dialysis clinics in the United States. Our hemodialysis concentrates products are used to sustain a patient's life by removing toxins and balancing electrolytes in a dialysis patient’s bloodstream. A key element of our dialysis business strategy going forward is to improve the strength of our concentrates business. We believe we can achieve this by growing our business through the addition of new customers, expanding our territory coverage, increasing the efficiency by which Rockwell produces its products, and pricing our products appropriately to drive profitability.
Prior to the second quarter of 2022, Rockwell's concentrates business operated at a loss. This loss was accelerated due to inflation, which has increased our manufacturing and operating costs. We undertook discussions with our largest customers to renegotiate our existing supply contracts to improve the profitability of this business line. On April 6, 2022, we amended our agreement with our long-time partner, DaVita, Inc. ("DaVita"), a leading provider of kidney care, to enable us to stabilize our concentrates business. The amended agreement provides a stronger financial arrangement which encompasses pricing, cost share, cost cutting, and joint efforts to improve supply chain, all of which is intended to drive Rockwell’s concentrates business to operate profitably in the future. In addition to the amended agreement, DaVita invested $15 million in preferred stock in two equal tranches. The first tranche of $7.5 million was funded on April 7, 2022. The second tranche of $7.5 million was funded on June 16, 2022. We continue to review our entire supply chain to identify opportunities for improvement, prioritizing initiatives that will have the largest impact on long-term efficiency, profitability, and growth.
On November 9, 2022, Rockwell reacquired its distribution rights to its hemodialysis concentrates products from Baxter and has agreed to terminate the exclusive distribution agreement dated October 2, 2014. Exclusivity and other provisions associated with the distribution agreement terminated November 9, 2022 and the remaining operational elements of the agreement terminate December 31, 2022. Under the exclusive distribution agreement, Baxter distributed and commercialized Rockwell’s hemodialysis concentrates products in the United States and certain other countries. Rockwell manufactured all hemodialysis concentrates products and provided customer service and order delivery to nearly all U.S. customers. Following the reacquisition of these rights, Rockwell will now be able to sell its hemodialysis concentrates products directly to dialysis clinics throughout the United States and around the world. Additionally, Rockwell will now be able to independently price its products, eliminate costs associated with manufacturing covenants, improve manufacturing efficiencies, realize the full benefits from those improvements, and develop, in-license, or acquire new products to develop a broader kidney care products portfolio. This is expected to improve Rockwell's overall profitability and set the Company on a positive growth trajectory. Collectively, this affords Rockwell the opportunity to expand its leadership position within a large market opportunity, which currently is valued at $380 million and is anticipated to grow to approximately $500 million by 2026 in the United States alone.
Rockwell will pay Baxter a fee for the reacquisition of its distribution rights. This fee will be payable in two equal installments on January 1, 2023 and April 1, 2023. To ensure that customer needs continue to be met after January 1, 2023, Baxter and Rockwell are working closely together to transition customers’ purchases of Rockwell’s hemodialysis concentrates from Baxter to Rockwell.
TRIFERIC ® : Our first two branded products from our FPC platform, TRIFERIC ® (dialysate) and TRIFERIC ® AVNU (intravenous), are indicated to maintain hemoglobin in patients undergoing hemodialysis. We began commercializing TRIFERIC ® and TRIFERIC ® AVNU in the United States in the second half of 2019 and in early 2021, respectively. In addition, Rockwell established six international partnerships to develop and commercialize TRIFERIC ® in China, India, Korea, Turkey, Peru and Chile.
Rockwell undertook a strategic review of TRIFERIC ® 's viability in the United States. TRIFERIC ® was launched into a very competitive marketplace with well-entrenched products and a lack of consensus regarding unmet medical needs for dialysis patients with anemia. Due to its limited market adoption, unfavorable reimbursement, and absence of interest from other companies to license or acquire TRIFERIC ® despite Rockwell's significant effort to partner the program, the Company discontinued its New Drug Applications (“NDAs”) for TRIFERIC ® and TRIFERIC ® AVNU in the United States. Sustaining
TRIFERIC ® commercially in the United States resulted in a loss to Rockwell of approximately $2 million to $3 million, annually. The decision to discontinue the NDAs was not made lightly as the Company realizes the direct impact this action has on patients currently using the products. TRIFERIC ® and its approved presentations were not discontinued for safety reasons.
Rockwell will continue to support its partners outside the United States. Rockwell has six international partnerships in China, India, Korea, Turkey, Peru, and Chile with organizations who have exclusive license agreements to develop and commercialize TRIFERIC ® outside the United States. Partnering in these regions allows us to better leverage the development, regulatory, commercial presence and expertise of business partners to increase sales of our products throughout the world. We believe there is still significant opportunity for TRIFERIC ® internationally and will work diligently to support our partners, which requires minimal financial commitment from Rockwell and provides us with potential for near- and long-term revenue. We continue to pursue international licensing opportunities in other countries and regions.
Research and Development Pipeline :
FPC for Home Infusion is Rockwell's follow-up to TRIFERIC ® and utilizes the FPC platform in the home infusion setting.
In late 2021, Rockwell filed an Investigational New Drug (“IND”) application with the United States Food and Drug Administration (“FDA”) for the treatment of iron deficiency anemia in patients, who are receiving medications in the home infusion setting. During the second quarter 2022, Rockwell provided the FDA with supplemental data to be used in Rockwell’s clinical studies and to clinically support the Company’s IND application for home infusion. The FDA placed this program on Clinical Hold and requested that additional data related to the microbiology and short-term stability of this formulation be provided to support the application. During the third quarter of 2022, Rockwell conducted a microbiological and short-term stability study of FPC for Home Infusion, in accordance with FDA guidance, to support the Company’s IND application. Preliminary results from the microbiology and short-term stability study indicated that the program would likely not meet the FDA’s requirements to support the IND application and would require significant capital expenditure and resources to support additional re-formulation work and conduct a Phase 2 study. As a result, Rockwell has put development work associated with FPC for Home Infusion on hold.
Rockwell is also exploring FPC’s impact on the treatment of hospitalized acute heart failure patients, which affects more than one million people in the United States annually. We believe that FPC may deliver rapidly bioavailable iron to the heart and improve cardiac energetics during hospitalization. This effect could help patients recover faster potentially resulting in shorter hospital stays and fewer 30-day re-admissions. If realized, these outcomes could translate into a meaningful reduction in healthcare costs and human suffering. Rockwell submitted a pre-IND meeting request to the FDA and expects to meet with the FDA before the end of this year. Depending on the feedback from FDA, Rockwell will determine the path forward for this program.
Reverse Stock Split
On May 9, 2022, the Company's stockholders authorized the Company's Board of Directors to effect a reverse stock split of all outstanding shares of common stock, warrants and options. The Board of Directors subsequently approved the implementation of a reverse stock split as a ratio of one-for-eleven shares, which became effective on May 13, 2022. The Company’s outstanding stock options were also adjusted to reflect the one-for-eleven reverse stock split of the Company’s common stock. Outstanding stock options were proportionately reduced and the respective exercise prices, if applicable, were proportionately increased. The reverse stock split resulted in an adjustment to the Series X convertible preferred stock conversion prices to reflect a proportional decrease in the number of shares of common stock to be issued upon conversion. All share and per share data in these condensed consolidated financial statements and related notes hereto have been retroactively adjusted to the account for the effect of the reverse stock split for the three- and nine-month periods ended September 30, 2022 and 2021, respectively, and the balance sheet at September 30, 2022 and December 31, 2021.
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Results of Operations for the Three Months Ended September 30, 2022 and 2021
The following table summarizes our operating results for the periods presented below (dollars in thousands):
For the Three Months Ended September 30,
2022 % of Revenue 2021 % of Revenue % Change
Net Sales $ 18,691 $ 15,988 16.9 %
Cost of Sales 17,914 95.8 % 16,317 102.1 % 9.8
Gross Profit (Loss) 777 4.2 (329) (2.1) (336.2)
Research and Product Development 469 2.5 1,221 7.6 (61.6)
Selling and Marketing 762 4.1 1,541 9.6 (50.6)
General and Administrative 3,254 17.4 3,881 24.3 (16.2)
Operating Loss $ (3,708) (19.8) % $ (6,972) (43.6) % (46.8) %
Net Sales
During the three months ended September 30, 2022, our net sales were $18.7 million compared to net sales of $16.0 million during the three months ended September 30, 2021. The increase of $2.7 million was primarily due to the restructuring of our supply contract with DaVita and increased pricing to other customers.
Gross Profit (Loss)
Cost of sales during the three months ended September 30, 2022 was $17.9 million, resulting in gross profit of $0.8 million during the three months ended September 30, 2022, compared to cost of sales of $16.3 million and a gross loss of $0.3 million during the three months ended September 30, 2021. Gross profit increased by $1.1 million primarily due to the restructuring of our supply contract with DaVita and increased pricing to other customers. As a result, the Company expects an improvement in margins for the remainder of 2022.
Research and Product Development Expense
Research and product development expenses were $0.5 million and $1.2 million for the three months ended September 30, 2022 and 2021, respectively. Research and product development expenses decreased by $0.7 million due to greater cash management over project costs, a reduction in headcount and shifting our project timelines as noted above in the "Overview and Recent Developments" section above.
Selling and Marketing Expense
Selling and marketing expenses were $0.8 million during the three months ended September 30, 2022, compared with $1.5 million during the three months ended September 30, 2021. The decrease of $0.7 million is due to reduced marketing spend for our TRIFERIC ® products and previous headcount reduction. See "Overview and Recent Developments" for more detail.
General and Administrative Expense
General and administrative expenses were $3.3 million during the three months ended September 30, 2022, compared with $3.9 million during the three months ended September 30, 2021. The decrease is primarily due to greater cash management and the reduced usage of outside agencies.
Other Income (Expense)
Other income for the three months ended September 30, 2022 and 2021 was negligible. Other expense for the three months ended September 30, 2022 was $0.5 million of interest expense related to our debt facility (see Note 14 to the condensed consolidated financial statements included elsewhere in this Form 10-Q for more information on our debt facility). Other expense for the three months ended September 30, 2021 was $0.6 million of interest expense related to our debt facility.
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Results of Operations for the Nine Months Ended September 30, 2022 and 2021
The following table summarizes our operating results for the periods presented below (dollars in thousands):
For the Nine Months Ended September 30,
2022 % of Revenue 2021 % of Revenue % Change
Net Sales $ 53,497 $ 46,599 14.8 %
Cost of Sales 51,760 96.8 % 46,788 100.4 % 10.6
Gross Profit (Loss) 1,737 3.2 (189) (0.4) (1,019.0)
Research and Product Development 2,963 5.5 5,445 11.7 (45.6)
Selling and Marketing 1,743 3.3 4,860 10.4 (64.1)
General and Administrative 11,845 22.1 11,483 24.6 3.2
Operating Loss $ (14,814) (27.7) % $ (21,977) (47.2) % (32.6) %
Net Sales
During the nine months ended September 30, 2022, our net sales were $53.5 million compared to net sales of $46.6 million during the nine months ended September 30, 2021. The increase of $6.9 million wa s primarily due to the restructuring of our supply contract with DaVita and increased pricing to other customers.
Gross Profit (Loss)
Cost of sales during the nine months ended September 30, 2022 was $51.8 million, resulting in gross profit of $1.7 million during the nine months ended September 30, 2022, compared to cost of sales of a $46.8 million and a gross loss of $0.2 million during the nine months ended September 30, 2021. Gross profit increased by $1.9 million primarily due to the restructuring of our supply contract with DaVita and increased pricing to other customers . As a result, the Company expects an improvement in margins for the remainder of 2022.
Research and Product Development Expense
Research and product development expenses were $3.0 million for the nine months ended September 30, 2022, compared with $5.4 million during the nine months ended September 30, 2021. Th is decrease of $2.4 million is primarily due to the resignation of our Chief Development Officer, headcount reductions, greater cash management over projects costs and shifting our project timelines as noted above in the "Overview and Recent Developments" section above.
Selling and Marketing Expense
Selling and marketing expenses were $1.7 million during the nine months ended September 30, 2022, compared with $4.9 million during the nine months ended September 30, 2021. The decrease of $3.2 million is primarily due to reduced marketing spend for our TRIFERIC ® products and headcount reductions. See "Overview and Recent Developments" for more detail.
General and Administrative Expense
General and administrative expenses were $11.8 million during the nine months ended September 30, 2022, compared with $11.5 million during the nine months ended September 30, 2021. The increase of $0.3 million is due primarily t o a one-time charge related to the severance agreement for our former Chief Executive Officer offset by reductions in the use of outside agencies.
Other Income (Expense)
Other income for the nine months ended September 30, 2022 and 2021 was $(10,000) and $17,000, respectively. Other expense for the nine months ended September 30, 2022 was $1.5 million of interest expense related to our debt facility (see Note 14 for more information on our debt facility). Other expense for the nine months ended September 30, 2021 was $1.8 million of interest expense related to our debt facility.
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Liquidity and Capital Resources
As of September 30, 2022, we had approximately $27.6 million of cash, cash equivalents and investments available-for-sale, and working capital of $23.0 million. Net cash used in operating activities for the nine months ended September 30, 2022 was approximately $16.8 million.
On April 6, 2022, the Company and DaVita entered into an amendment (the "Amendment") to the Products Purchase Agreement, dated July 1, 2019, under which the Company supplies DaVita with certain dialysis concentrates. Under the Amendment, the Company and DaVita agreed to certain price increases, effective May 1, 2022, as well as the pass-through of certain inflationary costs, determined on a quarterly basis. The Amendment also requires the Company to implement certain cost containment and cost-cutting measures. The Amendment contains certain covenants with respect to the Company’s ongoing operations, including a minimum cash covenant of $10 million, or we will be in default under the Products Purchase Agreement. An event of default could result in termination of that agreement.
On April 6, 2022, the Company and DaVita entered into a Securities Purchase Agreement (the “SPA”), pursuant to which the Company issued $15 million of preferred stock to DaVita in two separate tranches. The Company initially issued 7,500 shares of a newly designated series of preferred stock, which is designated “Series X Convertible Preferred Stock” (the “Series X Preferred Stock”) for gross proceeds of $7.5 million. On June 15, 2022, the Company issued to DaVita an additional 7,500 shares of Series X Preferred Stock in a second closing (the “Second Tranche”) for an additional $7.5 million. The Second Tranche was conditioned upon the Company raising an additional $15.0 million in capital within a certain timeline, which took place on June 2, 2022.
On April 8, 2022, the Company entered into a sales agreement (the “Sales Agreement”) with Cantor Fitzgerald & Co. (the “Agent”), pursuant to which the Company may offer and sell from time to time up to $12,200,000 of shares of Company’s common stock through the Agent. The offering and sale of such shares has been registered under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to the Company’s Registration Statement on Form S-3 (File No. 333-259923) (the “Registration Statement”), which was originally filed with the Securities and Exchange Commission (“SEC”) on September 30, 2021 and declared effective by the SEC on October 8, 2021, the base prospectus contained within the Registration Statement, and a prospectus supplement that was filed with the SEC on April 8, 2022. During the quarter ended September 30, 2022, no sales were made pursuant to the Sales Agreement. Approximately $12.2 million remains available for sale under the ATM facility. Under the RD Purchase Agreement and the PIPE Purchase Agreement discussed below, the Company has agreed not to make any sales under any at-the-market offering facility, including pursuant to the Sales Agreement, until at least January 1, 2023 (or until such later time when the Company is permitted to make additional sales under Instruction I.B.6 to Form S-3).
On May 30, 2022, the Company entered into a Securities Purchase Agreement (the “RD Purchase Agreement”) with the purchaser named therein (the “Purchaser”), pursuant to which the Company agreed to issue and sell, in a registered direct offering (the “Offering”), 844,613 shares of its common stock at price of $1.39 per share, and prefunded warrants to purchase up to an aggregate of 7,788,480 shares of common stock (the “Pre-Funded Warrants” and the shares of common stock underlying the Pre-Funded Warrants, the “Warrant Shares”). The purchase price of each Pre-Funded Warrant was equal to the price at which a share of common stock was sold to the public in the Offering, minus $0.0001, and the exercise price of each Pre-Funded Warrant is $0.0001 per share.
Also on May 30, 2022, concurrently with the Offering, the Company entered into a Securities Purchase Agreement with the Purchaser (the “PIPE Purchase Agreement”) relating to the offering and sale (the “Private Placement”) of warrants to purchase up to a total of 9,900,990 shares of common stock and pre-funded warrants to purchase up to a total of 1,267,897 shares of common stock (the “PIPE Warrants”). Each warrant was sold at a price of $0.125 per underlying warrant share and is exercisable at an exercise price of $1.39 per share. The purchase price of each Pre-Funded Warrant was equal to the price at which a share of common stock was sold to the public in the Offering, minus $0.0001, and the exercise price of each prefunded warrant is $0.0001 per share. The Offering and the Private Placement closed on June 2, 2022. The net proceeds to the Company from the Offering and the Private Placement were approximately $14.9 million, after deducting fees and expenses.
The Offering and the Private Placement closed on June 2, 2022. The net proceeds to the Company from the Offering and the Private Placement were approximately $14.9 million, after deducting fees and expenses.
Based on the currently available working capital, and capital raises described above, management believes the Company currently has sufficient funds to meet its operating requirements for at least the next twelve months from the date of the filing of this report.
The Company may require additional capital to sustain its operations and make the investments it needs to execute its strategic plan. If the Company attempts to obtain additional debt or equity financing, the Company cannot assume such financing will be available on favorable terms, if at all.
In addition, the Company is subject to certain covenants and cure provisions under its Loan Agreement with Innovatus. As of the date of this report, the Company is in compliance with all covenants (See Note 14 to the condensed consolidated financial statements included elsewhere in this Form 10-Q for more information on our debt facility).
The COVID-19 pandemic and resulting domestic and global disruptions, particularly in the supply chain and labor market, among other areas, have adversely affected Rockwell's business and operations, including, but not limited to, the Company's sales and marketing efforts and its research and development activities, the Company's plant and transportation operations, and the operations of third parties upon whom Rockwell relies. The Company's international business development activities may also continue to be negatively impacted by COVID-19.
The COVID-19 pandemic and the resulting global disruptions and recent inflationary pressures have caused significant volatility in financial and credit markets. Rockwell has utilized a range of financing methods to fund its operations in the past; however, current conditions in the financial and credit markets may limit the availability of funding, refinancing, or increase the cost of funding. Due to the rapidly evolving nature of the global situation, it is not possible to predict the extent to which these conditions could adversely affect the Company's liquidity and capital resources in the future.
General
The actual amount of cash we will need to execute our business strategy is subject to many factors, including, but not limited to, the expenses and revenue associated with the commercial operations in the United States and internationally (with partners); the timing and magnitude of cash received from product sales; the timing and expenditures associated with the development programs including our FPC technology; and the costs associated with our manufacturing and transportation operations related to our concentrate business.
We may elect to raise capital in the future through one or more of the following: (i) equity and debt raises through the equity and capital markets, though there can be no assurance we will be able to secure additional capital or funding on acceptable terms, or if at all; and (ii) strategic transactions, including potential alliances and collaborations focused on markets outside the United States, as well as potential combinations (including by merger or acquisition) or other corporate transactions.
We believe our ability to fund our activities in the long term will be highly dependent upon 1) our ability to execute on the growth strategy of our hemodialysis concentrates business, 2) our ability to achieve profitability, and 3) our ability to identify, develop, in-license, or acquire new products in developing our renal care product portfolio. All of these strategies are subject to significant risks and uncertainties such that there can be no assurance we will be successful in achieving them. If we are unsuccessful in executing our business plan and we are unable to raise the required capital, we may be forced to curtail all of our activities and, ultimately, cease operations. Even if we are able to raise sufficient capital, such financings may only be available on unattractive terms, or result in significant dilution of stockholders’ interests and, in such event, the market price of our common stock may decline.
Cash Used in Operating Activities
Net cash used in operating activities was $16.8 million for the nine months ended September 30, 2022 compared to net cash used in operating activities of $24.5 million for the nine months ended September 30, 2021. The decrease in cash used from operating activities during the current period was primarily due to an increase in net income, offset by changes in current balance sheet accounts in the ordinary course of business of approximately $3.1 million, including an increase in net account receivable of $1.5 million, decrease in other assets of $2.1 million, decrease in lease liability of $1.4 million and decrease in deferred revenue of $1.4 million.
Cash Provided by (Used in) Investing Activities
Net cash provided by investing activities was $5.6 million during the nine months ended September 30, 2022 compared to net cash used in investing activities of $0.2 million for the nine months ended September 30, 2021. The net cash provided by investing activities during the nine months ended September 30, 2022 was primarily due to sales and purchase of available-for-sale investments during the year.
Cash Provided by (Used in) Financing Activities
Net cash provided by financing activities was $22.1 million during the nine months ended September 30, 2022 compared to the net cash used in financing activities of $0.6 million for the nine months ended September 30, 2021. The net cash provided during the nine months ended September 30, 2022 was primarily due to multiple equity raises (See Note 10), offset by payments on the Company's debt and short term note payable.
Contractual Obligations and Other Commitments
See Note 12 to the condensed consolidated financial statements included elsewhere in this Form 10-Q for additional disclosures. There have been no other material changes from the Contractual Obligations and Other Commitments disclosed in Note 14 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021.
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Critical Accounting Policies and Significant Judgments and Estimates
Our critical accounting policies and significant estimates are detailed in our Annual Report on Form 10-K for the year ended December 31, 2021. Our critical accounting policies and significant estimates have not changed from those previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021.
Recently issued and adopted accounting pronouncements :
We have evaluated all recently issued accounting pronouncements and believe such pronouncements do not have a material effect our financial statements. See Note 3 to the condensed consolidated financial statements included elsewhere in this Form 10-Q.
Item 3 . Quantitative and Qualitative Disclosures about Market Risk
Per §229.305 of Regulation S-K, the Company, designated a Smaller Reporting Company as defined in §229.10(f)(1) of Regulation S-K, is not required to provide the disclosure required by this Item.