What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-03-05 compared with 2024-03-13 · 224 added, 321 removed, 26 unchanged (95% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

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

and related notes appearing elsewhere in this Annual Report on Form 10-K.

Some of the information contained in this discussion and analysis

or set forth elsewhere in this Annual Report on Form 10-K, including information with respect to our plans and strategy for our business

and related financing, includes forward-looking statements that involve risks and uncertainties.

As a result of many factors, including

those factors set forth in the “Risk Factors” section of this document, our actual results could differ materially from the

results described in, or implied by, the forward-looking statements contained in the following discussion and analysis.

are a New York City based clinical-stage biopharmaceutical company committed to advancing transformative therapies for the treatment

of cancer and rare diseases.

We were founded on the principle of applying modern scientific, regulatory or manufacturing advancements

to established mechanisms in order to create new development opportunities.

We prioritize creativity, diverse perspectives, integrity

and tenacity to expedite our goal of bringing life-changing therapies to people with limited treatment options.

portfolio includes two development programs utilizing TARA-002, an investigational cell therapy based on the broad immunopotentiator,

OK-432, which was originally granted marketing approval by the Japanese Ministry of Health and Welfare as an immunopotentiating cancer

therapeutic agent.

This cell therapy is currently approved in Japan and Taiwan for LMs and multiple oncologic indications.

Management’s Discussion and Analysis of Financial

Condition and Results of Operations

You should read the following

discussion and analysis of our financial condition and results of operations together with our financial statements and related notes

appearing elsewhere in this Annual Report on Form 10-K.

Some of the information contained in this discussion and analysis or set forth

elsewhere in this Annual Report on Form 10-K, including information with respect to our plans and strategy for our business and related

financing, includes forward-looking statements that involve risks and uncertainties.

As a result of many factors, including those factors

set forth in the “Risk Factors” section of this document, our actual results could differ materially from the results described

in, or implied by, the forward-looking statements contained in the following discussion and analysis.

We are a New York City based

clinical-stage biopharmaceutical company committed to advancing transformative therapies for the treatment of cancer and rare diseases.

We were founded on the principle of applying modern scientific, regulatory or manufacturing advancements to established mechanisms in

order to create new development opportunities.

We prioritize creativity, diverse perspectives, integrity and tenacity to expedite our

goal of bringing life-changing therapies to people with limited treatment options.

Our portfolio includes two

development programs utilizing TARA-002, an investigational cell therapy based on the broad immunopotentiator, OK-432, which was originally

granted marketing approval by the Japanese Ministry of Health and Welfare as an immunopotentiating cancer therapeutic agent.

therapy is currently approved in Japan and Taiwan for lymphatic malformations, or LMs, and multiple oncologic indications.

We have secured

1 unchanged sentence

was developed from the same master cell bank of genetically distinct group A Streptococcus pyogenes as OK-432 (marketed as Picibanil®

in Japan and Taiwan by Chugai Pharmaceutical Co., Ltd., or Chugai Pharmaceutical).

We are currently developing TARA-002 in non-muscle

invasive bladder cancer, or NMIBC, and in LMs.

lead oncology program is TARA-002 in NMIBC, which is cancer found in the tissue that lines the inner surface of the bladder that has

not spread into the bladder muscle.

Bladder cancer is the sixth most common cancer in the United States, with NMIBC representing approximately

80% of bladder cancer diagnoses.

Approximately 65,000 patients are diagnosed with NMIBC in the United States each year.

therapeutics have been approved for NMIBC since the 1990s and the current standard of care for NMIBC includes intravesical Bacillus Calmette–Guérin,

The mechanism of action of TARA-002 is similar in some ways to that of BCG.

TARA-002 and BCG are both intravesically administered,

elicit a Th1 type immune response and produce a locally-activated generally similar array of cytokines and immune cells.

We are conducting a Phase

1 open-label clinical trial to evaluate TARA-002 in treatment-naïve and treatment-experienced NMIBC patients with carcinoma in situ,

or CIS, and high-grade papillary tumors, or Ta, known as the ADVANCED-1 trial.

In the initial dose escalation phase of the trial, patients

received six weekly intravesical doses of TARA-002, evaluating the 10KE, 20KE and 40KE doses (Klinische Einheit, or KE, is a German term

indicating a specified weight of dried cells in vial).

The primary objective of the trial is to evaluate the safety, tolerability and

preliminary signs of anti-tumor activity of TARA-002, with the goal of establishing a recommended Phase 2 dose.

In April 2023, we announced

positive preliminary data from the Phase 1a dose escalation component of the ongoing ADVANCED-1 trial through the 40KE dose, in which

TARA-002 indicated favorable tolerability and anti-tumor activity in NMIBC patients.

A maximum tolerated dose was not determined,

and dose escalation remains ongoing in exploratory cohorts.

Preliminary data from the

ADVANCED-1 trial suggested that intravesical TARA-002 was generally well tolerated at the three dose levels evaluated in the initial phase

of the trial, and no dose limiting toxicities were observed.

The Company has selected the 40KE dose for use in subsequent clinical trials.

The majority of reported adverse events were Grades 1 and 2 across all dose levels, and treatment-related adverse events, as assessed

by study investigators, were in line with typical responses to bacterial immunopotentiation and included fatigue, headache, fever and

The most common urinary symptoms were urinary urgency, urinary frequency, urinary tract pain/burning, incomplete emptying, and

bladder spasm.

Most bladder irritations resolved soon after administration, or in a few hours to a few days.

A total of nine patients

were enrolled in the dose escalation portion of the study through the 40KE dose.

Of those, three patients with CIS,

one of whom was a heavily pre-treated BCG-unresponsive patient, achieved a complete response at the 20KE dose, and tumor regression

was observed in the other two patients.

Results from six patients with high-grade, non-invasive papillary, or HGTa, tumors showed five

of six patients with high-grade recurrence free survival, or HGRFS, at week 12.

The patient who did not achieve HGRFS was dosed at 10KE,

the lowest dose of TARA-002 offered in the trial.

The ongoing open-label expansion

trial, or ADVANCED-1EXP, is evaluating intravesical TARA-002 at the 40KE dose in up to 12 CIS patients, including BCG-naïve, BCG-unresponsive,

and BCG-inadequately treated patients.

Dosing is progressing in the trial, and we anticipate having preliminary data from this trial in

the first half of 2024.

Based on the preliminary

results of ADVANCED-1, we are proceeding with the clinical development of TARA-002 for the treatment of NMIBC.

In September 2023, we initiated

ADVANCED-2, a Phase 2 open-label trial evaluating intravesical TARA-002 in at least 102 patients with high-grade CIS.

Cohort A of the

Phase 2 trial is expected to enroll 27 patients with CIS (± Ta/T1), BCG-Naïve or BCG-experienced, who have not received intravesical

BCG for at least 24 months prior to CIS diagnosis.

Cohort B of the Phase 2 trial is expected to enroll 75-100 patients with BCG-unresponsive

CIS (± Ta/T1).

The Company expects to share preliminary results from a pre-planned risk-benefit analysis of the ongoing Phase 2

open-label ADVANCED-2 trial in the second half of 2024.

The analysis is expected to include approximately 10 patients who are six-month

addition, we continue to conduct pre-clinical studies on TARA-002 to better characterize the mechanism of action to help us understand

how TARA-002 may perform in potential combinations with other agents used to treat NMIBC.

We use pre-clinical data to help us define

other cancer targets for TARA-002, both within urothelial cancer and other types of cancer affecting different parts of the body.

We are also pursuing TARA-002

in LMs, which are rare, non-malignant cysts of the lymphatic vascular system that primarily form in the head and neck region of children

before the age of two.

In July 2020, the FDA granted Rare Pediatric Disease designation for TARA-002 for the treatment of LMs and in May

2022 the European Medicines Agency granted orphan drug designation to TARA-002 for the treatment of LMs.

In addition to the clinical experience

in Japan, we have secured the rights to a dataset from one of the largest ever conducted Phase 2 trials in LMs, in which OK-432 was administered

via a compassionate use program led by the University of Iowa to over 500 pediatric and adult patients.

We have an investigational new

drug application for LMs with the Vaccines and Related Products Division of the FDA, or Vaccines Division.

In October 2023, we

initiated STARBORN-1 is a Phase 2 single-arm, open-label,

prospective clinical trial to evaluate the safety and efficacy of intracystic injection of TARA-002 for the treatment of macrocystic

and mixed-cystic LMs (≥ 50% macrocystic disease) in participants six months to less than 18 years of age.

Including an age

de-escalation safety lead-in, the trial will enroll approximately 30 patients who will receive up to four injections of TARA-002

spaced approximately six weeks apart.

primary endpoint of the trial is the proportion of participants with macrocystic LMs and mixed-cystic LMs who demonstrated clinical success,

defined as having either a complete response (90% to 100% reduction from baseline in total LM volume) or substantial response (60% to

less than 90% reduction in total LM volume) as measured by axial imaging.

The third development program

in our portfolio is intravenous, or IV, Choline Chloride, an investigational phospholipid substrate replacement therapy, for patients

receiving parenteral nutrition, or PN.

The FDA has granted IV Choline Chloride Orphan Drug Designation for the prevention of choline deficiency

in PN patients.

We have conducted a two-part prevalence study to enhance our understanding of the PN patient population.

The first, or

retrospective, part of the prevalence study was completed in September 2021, when we reported results that supported that there was a

significant unmet medical need in patients dependent on PN.

We have concluded the second, or prospective part, of the prevalence study,

which is a multi-center, cross-sectional observational study that assessed the prevalence of choline deficiency in patients dependent

We shared these results with the FDA to inform our discussion on next steps for the IV Choline Chloride program.

There are currently

no IV formulations of choline available or in development for PN patients.

We have devoted

substantial efforts to the development of these programs and do not have any approved products and have not generated any revenue

from product sales.

Neither TARA-002 nor IV Choline Chloride have been approved for use for any indications.

We do not expect to generate revenues in the near-term,

and it is possible we may never generate revenues in the future.

To finance our current strategic plans, including the conduct of

ongoing and future clinical trials and further research and development costs, we will need to raise additional capital.

“—Liquidity and Capital Resources” for additional information about our liquidity and capital resource needs.

inception, we have incurred significant operating losses.

As of December 31, 2023, we had an accumulated deficit of approximately $200.4

We expect to continue to incur significant expenses and increasing operating losses for at least the next few years as we continue

our development of, and seek marketing approvals for, our product candidates, prepare for and begin the commercialization of any approved

products, and add infrastructure and personnel to support our product development efforts and operations as a public company in the United

a clinical-stage company, our expenses and results of operations are likely to fluctuate significantly from quarter-to-quarter and year-to-year.

We believe that our period-to-period comparisons of our results of operations should not be relied upon as indicative of our future performance.

of December 31, 2023, we had approximately $65.6 million in cash, cash equivalents, and marketable debt securities.

and Development

and development expenses consist primarily of costs incurred for the development of TARA-002 and IV Choline Chloride, which include personnel-related

expenses, including salaries, benefits, travel and stock-based compensation expense, expenses incurred under agreements with clinical

research organizations, or CROs, contract development and manufacturing organizations, or CDMOs, the cost of acquiring, developing and

manufacturing clinical trial materials, clinical and non-clinical related costs, costs associated with regulatory operations and facilities,

depreciation and other expenses, which include expenses for rent and maintenance of facilities and other supplies.

and Administrative

and administrative expenses consist principally of personnel-related expenses, including salaries, benefits, travel and stock-based compensation

expense, in executive and other administrative functions.

Other general and administrative expenses also include professional fees for

legal, intellectual property matters, consulting and accounting services, facility related costs, as well as expenses related to audit,

legal, regulatory and tax-related services associated with maintaining compliance with our Nasdaq listing and SEC requirements, director

and officer liability insurance premiums and investor relations costs associated with being a public company.

Income (Expense), net

and investment income consists of interest and dividend income on our cash, cash equivalents and marketable debt securities and amortization

of premiums and/or accretion of discounts.

Accounting Policies and Significant Judgments and Estimates

management’s discussion and analysis of our financial position and results of operations is based on our financial statements,

which have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP.

The preparation

of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported in the

financial statements and accompanying notes.

We base our estimates on historical experience and other market-specific or other relevant

assumptions that we believe to be reasonable under the circumstances.

in Japan by Chugai Pharmaceutical Co., Ltd., or Chugai Pharmaceutical).

We are currently developing TARA-002 in non-muscle invasive bladder

cancer, or NMIBC, and in LMs.

We are also pursuing intravenous,

or IV, Choline Chloride, an investigational phospholipid substrate replacement therapy, for patients receiving parenteral support, or

PS, which includes both nutrition and fluids.

Choline is a known important substrate for phospholipids that are critical for healthy liver

function and also plays an important role in modulating gene expression, cell membrane signaling, brain development and neurotransmission,

muscle function and bone health.

PS patients are unable to synthesize choline from enteral nutrition sources, and there are currently

no available PS formulations containing choline.

For additional information regarding our various clinical trials

and programs, see “Item 1.

Business.” We have devoted substantial efforts to the development of these programs and do not

have any approved products and have not generated any revenue from product sales.

Neither TARA-002 nor IV Choline Chloride have been approved

for use for any indications.

We do not expect to generate revenues in the near-term, and it is possible we may never generate revenues

in the future.

To finance our current strategic plans, including the conduct of ongoing and future clinical trials and further research

and development costs, we will need to raise additional capital.

Management’s Discussion and Analysis of Financial

Condition and Results of Operations—Liquidity and Capital Resources” for additional information about our liquidity and capital

resource needs.

Since inception, we have

incurred significant operating losses.

As of December 31, 2024, we had an accumulated deficit of approximately $245.0 million.

to continue to incur significant expenses and increasing operating losses for at least the next few years as we continue our development

of, and seek marketing approvals for, our product candidates, prepare for and begin the commercialization of any approved products, and

add infrastructure and personnel to support our product development efforts and operations as a public company in the United States.

As a clinical-stage company,

our expenses and results of operations are likely to fluctuate significantly from quarter-to-quarter and year-to-year.

We believe that

our period-to-period comparisons of our results of operations should not be relied upon as indicative of our future performance.

As of December 31, 2024,

we had approximately $170.3 million in cash and cash equivalents, and marketable debt securities.

Financial Overview

Research and Development

Research and development expenses consist primarily of costs incurred

for the development of TARA-002 and IV Choline Chloride, which include personnel-related expenses, including salaries, benefits, travel

and stock-based compensation expense, external expenses incurred under agreements with contract research organizations, or CROs, contract

development and manufacturing organizations, or CDMOs, the cost of acquiring, developing and manufacturing clinical trial materials, clinical

and non-clinical related costs, costs associated with regulatory operations and facilities, depreciation and other expenses, which include

expenses for rent and maintenance of facilities and other supplies.

General and Administrative

General and administrative expenses consist primarily of personnel-related

expenses, including salaries, benefits, travel and stock-based compensation expense, in executive and other administrative functions.

Other general and administrative expenses also include professional fees for business and market development, legal, intellectual property

matters, consulting and accounting services, facility related costs, as well as expenses related to audit, legal, regulatory and tax-related

services associated with maintaining compliance with our Nasdaq listing and Securities and Exchange Commission, or SEC, requirements,

director and officer liability insurance premiums and investor relations costs associated with being a public company.

Other Income (Expense), net

Other Income (Expense), net consists of interest and investment income

and other income.

Interest and investment income consists of interest and dividend income on our cash and cash equivalents and marketable

debt securities and amortization of premiums and/or accretion of discounts.

Critical Accounting Policies and Significant Judgments and Estimates

Our management’s discussion

and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared

in accordance with accounting principles generally accepted in the United States of America, or GAAP.

The preparation of consolidated

financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported in the financial

statements and accompanying notes.

We base our estimates on historical experience and other market-specific or other relevant assumptions

that we believe to be reasonable under the circumstances.

Actual results may differ materially from those estimates or assumptions.

our significant accounting policies are described in more detail in the notes to our consolidated financial statements and related notes

appearing elsewhere in this Annual Report on 10-K, we believe the following accounting policies to be most critical to the judgments

and estimates used in the preparation of our financial statements.

Our critical accounting policy is the accounting for accrued research

and development expenses.

During the year ended December 31, 2022, goodwill was also considered a critical accounting estimate.

and Development Accruals

record accruals for estimated costs of research, preclinical, clinical and manufacturing development within accrued expenses which are

significant components of research and development expenses.

A substantial portion of our ongoing research and development activities

are conducted by third-party service providers.

We accrue costs incurred under these third-party arrangements based on estimates of actual

work completed in accordance with the respective agreements.

We determine the estimated costs to accrue through discussions with internal

personnel and our external service providers as to the percentage of completion of the services and the agreed-upon fees to be paid for

such services.

Payments made to third parties under these arrangements in advance of performance of the related services are recorded

as prepaid expenses until the services are rendered.

represents the excess of purchase price over the fair value of identifiable net assets acquired in a business combination.

an indefinite useful life.

Goodwill is assessed annually for impairment as of December 31, or more frequently if an event occurs or circumstances

change that would indicate that it is more likely than not that the fair value of a reporting unit or the fair value of an indefinite-lived

intangible asset has declined below its carrying value.

In performing its annual goodwill impairment assessment, we have the option under

GAAP to qualitatively assess whether it is more likely than not that the fair value of a reporting unit is less than its carrying value;

if the conclusion of the qualitative assessment is that there are no indicators of impairment, then we would not perform a quantitative

Otherwise, a quantitative assessment is performed and the fair value of the reporting unit is determined.

was evaluated for impairment at the reporting unit level, which is defined as an operating segment, or one level below an operating segment.

We have determined that we operate as one reporting unit and had selected December 31 as the date to perform our annual impairment test.

As of December 31, 2022, we elected to forego the qualitative screen and performed a quantitative annual goodwill impairment test for

our single reporting unit.

of December 31, 2022, our stock price and market capitalization declined approximately 60% from December 31, 2021.

Although we believed

this decline reflects the overall performance of similar life science companies with less than $250 million in market capitalizations,

or microcap companies, we do not believe it reflects the progress made in advancing our product candidate pipeline.

The life sciences

sector, which includes pre-commercialization and therefore net operating loss generating companies, relies heavily on the capital markets

to finance their operations and fund pre-clinical and clinical trials for their existing development programs.

As a result of a shift

in risk appetite in the overall financial markets, the availability of capital for life science companies decreased significantly in

Industry reports highlighted a decline of more than 50 percent in both the number of healthcare follow-on financings as well as

the amount of capital raised in 2022 compared to 2021.

These challenging financing conditions had a significantly negative impact on

stock prices and respective market capitalizations, particularly for microcap companies.

We considered the heightened financing risk

that impacted the life sciences sector during 2022 to be one of the key macroeconomic factors that led to a sustained decrease in our

stock price and market capitalization leading up to our annual goodwill impairment assessment date in late 2022.

fair value of our reporting unit was determined using an income approach based on discounted cash flows, or DCF, as we elected to forgo

the qualitative screen.

Determining fair value using a DCF analysis required the exercise of significant judgment with respect to several

assumptions and estimates, including the amount and timing of expected future cash flows and appropriate discount rate to be applied.

The expected cash flows used in the DCF analyses are based on our most recent internal long-range forecast and budget and, for years

beyond the budget, our estimates, which are based, in part, on industry benchmarks and forecasted growth rates.

discount rate used in the DCF analysis was intended to reflect the risks inherent in the expected future cash flows of the respective

programs within our portfolio.

Assumptions used in the DCF analysis, including the discount rate, were assessed based on our current

results and forecasted future performance, as well as macroeconomic and industry specific factors, including the aforementioned market

factors influenced by financing risk discussed above.

determined the estimated fair value of our single reporting unit by utilizing a discount rate of 36%, which reflects these market factors.

Based upon this discount rate, the fair value of our single reporting unit was below its carrying value by an amount greater than the

carrying value of goodwill, and we recorded an impairment charge of $29.5 million in the fourth quarter of 2022 to fully write off the

of Operations

of the Years Ended December 31, 2023 and 2022

following table summarizes our results of operations for the years ended December 31, 2023 and 2022 (in thousands):

Year Ended December 31,

While our significant accounting policies are described in more detail

in the notes to our consolidated financial statements and related notes appearing elsewhere in this Annual Report on this Form 10-K, we

believe the following accounting policies to be most critical to the judgments and estimates used in the preparation of our financial

Our critical accounting policy is the accounting for prepaid and accrued

research and development expenses.

Research and Development Prepaid and Accrued

We record accruals for estimated costs of research, preclinical,

non-clinical, clinical and manufacturing development within accrued expenses which are significant components of research and development

A substantial portion of our ongoing research and development activities are conducted by third-party service providers.

accrue costs incurred under these third-party arrangements based on estimates of actual work completed in accordance with the respective

We determine the estimated costs to accrue through discussions with internal personnel and our external service providers

as to the percentage of completion of the services and the agreed-upon fees to be paid for such services.

Payments made to third parties

under these arrangements in advance of performance of the related services are recorded as prepaid expenses until the services are rendered.

Results of Operations

Comparison of the Years Ended December 31,

2024 and 2023

The following table summarizes our results of operations (in thousands):

For the Years Ended

Operating expenses:

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General and administrative

Loss on impairment of goodwill

Total operating expenses

Loss from operations

Income (Loss) from operations

Other income (expense), net:

1 unchanged sentence

Other income (expense), net

Net income (loss)

Research and development

During the year ended December 31, 2023, our research and development expenses were approximately $25.0 million, which represented

an increase of approximately $8.2 million as compared to the year ended December 31, 2022.

This was primarily due to an increase in expenses

related to clinical trial and non-clinical activities for TARA-002 of $7.3 million as well as an increase of $0.8 million in personnel-related

The following table summarizes our research and development expenses

(in thousands):

For the Years Ended

Direct expenses by product candidate:

TARA-002 in NMIBC

TARA-002 in LM

IV Choline Chloride

Total direct expenses by product candidate

Indirect research and development expenses

Total research and development expenses

Research and development expenses were $31.7 million for the year ended

December 31, 2024, which represented an increase of approximately $6.7 million as compared to the year ended December 31, 2023.

This increase

was primarily due to a $6.1 million increase in direct expenses for our product candidates and a $0.6 million increase in indirect expenses.

The increase in indirect expenses was primarily due to a $1.0 million increase in personnel-related expenses offset by a decrease of $0.3

million in indirect clinical manufacturing expenses.

General and administrative

During the year ended December 31, 2023, our general and administrative expenses were approximately $18.6 million, which

represented a decrease of approximately $2.1 million as compared to the year ended December 31, 2022.

This decrease was primarily due

to a reduction of $1.6 million in personnel-related expenses (inclusive of $0.7 million of stock-based compensation) and lower premiums

of $1.2 million for directors and officers liability insurance.

These cost reductions were partially offset by an increase of $0.8 related

to legal and market development activities.

on impairment of goodwill.

During the year ended December 31, 2022, we recorded a non-cash impairment charge of $29.5 million to

fully impair goodwill.

There was no impairment charge during the year ended December 31, 2023.

General and administrative expenses were $17.5 million for the year

ended December 31, 2024, which represented a decrease of approximately $1.2 million as compared to the year ended December 31, 2023.

decrease was primarily due to a net decrease of $1.2 million in personnel-related expenses.

Other income (expense),

During the year ended December 31, 2023, our other income (expense), net was approximately $3.2 million, which represented an

increase of approximately $2.1 million as compared to the year ended December 31, 2022, due primarily to higher market interest rates

obtained from money market funds and corporate debt securities held as marketable securities.

and Capital Resources

of December 31, 2023 and 2022, our cash, cash equivalents, and marketable debt securities were $65.6 million and $102.3 million, respectively.

We have not generated revenues since our inception and have incurred net losses of approximately $40.4 million and $66.0 million for

the years ended December 31, 2023 and 2022, respectively.

As of December 31, 2023, we had working capital of approximately $62.6 million

and stockholder’s equity of approximately $68.3 million.

During the year ended December 31, 2023, cash flows used in operating

activities were approximately $37.6 million, consisting primarily of a net loss of approximately $40.4 million, which includes non-cash

activities of approximately $7.0 million, inclusive of $6.1 million in stock-based compensation charges, as well as working capital adjustments

of $4.1 million.

Since inception, we have met our liquidity requirements principally through the sale of our common stock and preferred

stock in private placements and underwritten offerings.

On November 3, 2023, we filed

a shelf registration statement on Form S-3, or the Shelf Registration Statement, which became effective in November 2023.

The Shelf Registration

Statement permits the offering, issuance and sale by us of up to a maximum aggregate offering price of $300 million of common stock,

preferred stock, debt securities and warrants in one or more offerings and in any combination.

No securities have been sold to date under

the Shelf Registration Statement.

For so long as the public float of our common stock held by non-affiliates is below $75 million, our

ability to use the Shelf Registration Statement will be limited by “baby shelf” rules, which limit us to sales in an amount

not to exceed one-third of such public float.

Such amounts may not be adequate for meeting our capital needs.

are in the business of developing biopharmaceuticals and have no current or near-term revenues.

We have incurred substantial clinical

and other costs in our drug development efforts.

We will need to raise additional capital in order to fully realize management’s

believe that our current financial resources, as of the date of the issuance of our consolidated financial statements included elsewhere

in this Annual Report on Form 10-K, are sufficient to satisfy our estimated liquidity needs for at least 12 months.

Other income (expense), net was $4.6 million for the year ended December

31, 2024, which represented an increase of approximately $1.4 million as compared to the year ended December 31, 2023, due primarily to

higher investment returns on a higher invested balance as well as a $0.4 million increase in other income.

Liquidity and Capital Resources

As of December 31, 2024 and 2023, our cash and cash equivalents, and

marketable debt securities were $170.3 million and $65.6 million, respectively.

We have not generated revenues since our inception and

have incurred net losses of approximately $44.6 million and $40.4 million for the years ended December 31, 2024 and 2023, respectively.

As of December 31, 2024, we had working capital of approximately $161.2 million and stockholder’s equity of approximately $167.1

During the year ended December 31, 2024, cash flows used in operating activities were approximately $35.8 million, consisting

primarily of a net loss of approximately $44.6 million, which includes non-cash activities of approximately $4.8 million, inclusive of

$4.1 million in stock-based compensation expense, as well as working capital adjustments of $4.0 million.

Since inception, we have met

our liquidity requirements principally through the sale of our common stock, preferred stock and pre-funded warrants in private placements

and public offerings.

In addition, we may receive proceeds upon the exercise of the common warrants issued in the April 2024 private placement

described below.

On November 3, 2023, we filed a shelf registration statement on Form

S-3, or the Shelf Registration Statement, which became effective in November 2023.

The Shelf Registration Statement permits the offering,

issuance and sale by us of up to a maximum aggregate offering price of $300.0 million of common stock, preferred stock, debt securities

and warrants in one or more offerings and in any combination.

In December 2024, we sold and issued approximately $100.1 million in gross

proceeds of common stock and pre-funded warrants in a public offering, or the December 2024 Public Offering, under the Shelf Registration

The net proceeds were approximately $93.4 million.

In January 2025, the underwriters partially exercised their option, or the

Underwriters’ Option, to purchase a portion of the additional shares of common stock pursuant to the underwriting agreement,

or the Underwriting Agreement, which resulted in gross proceeds of approximately $2.7 million and net proceeds of approximately $2.5 million.

In April 2024, the Company entered into a private placement transaction,

or the April 2024 Private Placement, whereby the Company sold and issued common stock, warrants and in, in some circumstances, pre-funded

warrants to certain purchasers.

At the close of the April 2024 Private Placement, the Company received net proceeds of approximately $42.0

million after deducting placement agent fees and offering expenses.

We are in the business of

developing biopharmaceuticals and have no current or near-term revenues.

We have incurred substantial clinical and other costs in our

drug development efforts.

We will need to raise additional capital in order to fully realize management’s plans.

We believe that our current

financial resources, as of the date of the issuance of our consolidated financial statements included elsewhere in this Annual Report

on this Form 10-K, are sufficient to satisfy our estimated liquidity needs for at least 12 months.

As a result of volatility

4 unchanged sentences

or other factors, we may need to curtail planned development activities.

The sustained elevated interest rates in recent years have had,

and may continue to have, a negative effect on market prices for common stock of public companies, especially those in the pharmaceutical

industry and those that have no current or near-term revenue.

Further, a recession or market correction, supply chain disruptions and/or

continued inflation could materially affect our business and the value of our common stock.

following table summarizes our sources and uses of cash for the years ended December 31, 2023 and 2022 (in thousands):

Years Ended December 31,

Despite recent moderation, the sustained elevated interest rates

in recent years have had, and may continue to have, a negative effect on market prices for common stock of public companies, especially

those in the biotech industry and those that have no current or near-term revenue.

Further, a recession or market correction, supply chain

disruptions and/or continued inflation could materially affect our business and the value of our common stock.

The following table summarizes our sources and uses of cash (in thousands):

For the Years Ended

Net cash provided by/(used in) operating activities

2 unchanged sentences

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

of the Years Ended December 31, 2023 and 2022

Net cash used in operating

activities was approximately $37.6 million for the year ended December 31, 2023 compared to approximately $26.5 million for the year ended

December 31, 2022.

The increase of approximately $11.1 million in cash used in operating activities was primarily driven by a decrease

in net loss of $25.5 million which includes a $32.0 million decrease in non-cash items including goodwill, stock-based compensation, operating

lease right-of-use asset, depreciation, and amortization of premium on marketable debt securities and a $4.7 million increase in working

capital adjustments, primarily related to changes in prepaid expenses and other current assets, accounts payable, and accrued expenses

resulting from the timing of payments to our service providers.

cash provided by investing activities was approximately $53.1 million for the year ended December 31, 2023 compared to net cash provided

by investing activities of approximately $15.0 million for the year ended December 31, 2022.

The increase of $38.2 million resulted primarily

from maturities and redemptions of marketable debt securities of $65.3 million for the year ended December 31, 2023 as compared to $58.6

million for the year ended December 31, 2022 and the purchase of marketable debt securities of $12.2 million for the year ended December

31, 2023 as compared to $43.6 million for the year ended December 31, 2022.

cash used in financing activities was approximately $0.1 million for the years ended December 31, 2023 and 2022.

and Other Obligations

lease obligations

operating lease obligations primarily consist of lease payments on our corporate headquarters in New York, New York, as well as lease

payments for our development laboratory, a manufacturing facility and an additional manufacturing space, all located in North America

which are described in further detail in Note 9 of our consolidated financial statements included in this Annual Report on Form 10-K.

Future contractual payments on operating lease obligations due within one year of December 31, 2023 are $1.3 million, and future contractual

payments on operating lease obligations due greater than one year from December 31, 2023 are $5.1 million.

time to time, we enter into certain types of contracts that contingently require us to indemnify parties against third-party claims,

supply agreements, and agreements with directors and officers.

The terms of such obligations vary by contract and in most instances a

maximum dollar amount is not explicitly stated therein.

Generally, amounts under these contracts cannot be reasonably estimated until

a specific claim is asserted, thus no liabilities have been recorded for these obligations on our consolidated balance sheet for the

periods presented.

enter into contracts in the normal course of business with CROs and clinical sites for the conduct of clinical trials, non-clinical research

studies, professional consultants for expert advice and other vendors for clinical supply manufacturing or other services.

These contracts

generally provide for termination on notice, and therefore are cancelable contracts.

of these agreements require us to pay milestones to such third parties upon achievement of certain development, regulatory or commercial

milestones as further described in Note 10 of our consolidated financial statements included in this Annual Report on Form 10-K.

related to contingent milestone payments are not considered contractual obligations as they are contingent on the successful achievement

of certain development, regulatory approval and commercial milestones, which may not be achieved.

also have obligations to make future payments to third parties that become due and payable on the achievement of certain milestones,

including future payments to third parties with whom we have entered into research, development and commercialization agreements.

have not included these commitments on our consolidated balance sheet for the periods presented because the achievement and timing of

these milestones is not fixed and determinable.

Comparison of the Years Ended December 31, 2024 and 2023

Net cash provided by (used in) operating activities was approximately

$(35.8) million for the year ended December 31, 2024 compared to approximately $(37.6) million for the year ended December 31, 2023.

decrease of approximately $1.7 million in cash used in operating activities was primarily driven by a decrease in working capital adjustments,

primarily related to changes in prepaid expenses and other current assets, accounts payable, and accrued expenses resulting from the timing

of payments to our service providers of $8.1 million, offset in part by an increase in net loss of $4.2 million and by a $2.2 million

decrease in non-cash items, consisting principally of stock-based compensation expense.

Net cash provided by (used

in) investing activities was approximately $19.2 million for the year ended December 31, 2024 compared to approximately $53.1 million

for the year ended December 31, 2023.

The decrease of $34.0 million resulted primarily from an increase of $17.2 million of marketable

debt securities purchased as well as a decrease of $16.7 million of proceeds from marketable debt securities matured.

Net cash provided by (used in) financing activities was $139.9 million

for the year ended December 31, 2024 compared to $(0.1) million for the year ended December 31, 2023.

The increase of approximately $140.0

million resulted primarily from the net proceeds of the December 2024 Public Offering of $94.0 million and the April 2024 Private Placement

of $42.0 million, as well as proceeds from the exercise of common warrants of $3.8 million.

Contractual and Other Obligations

Operating lease obligations

Our operating lease obligations

primarily consist of lease payments on our corporate headquarters in New York, New York, as well as lease payments for our development

laboratory, a manufacturing facility and an additional manufacturing space, all located in North America which are described in further

detail in Note 9 of our consolidated financial statements included in this Annual Report on Form 10-K.

Future contractual payments on

operating lease obligations due within one year of December 31, 2024 are $1.4 million, and future contractual payments on operating lease

obligations due greater than one year from December 31, 2024 are $3.7 million.

Other obligations

From time to time, we enter

into certain types of contracts that contingently require us to indemnify parties against third-party claims, supply agreements, and agreements

with directors and officers.

The terms of such obligations vary by contract and in most instances a maximum dollar amount is not explicitly

stated therein.

Generally, amounts under these contracts cannot be reasonably estimated until a specific claim is asserted, thus no liabilities

have been recorded for these obligations on our consolidated balance sheet for the periods presented.

We enter into contracts in

the normal course of business with CROs and clinical sites for the conduct of clinical trials, non-clinical research studies, professional

consultants for expert advice and other vendors for clinical supply manufacturing or other services.

These contracts generally provide

for termination on notice, and therefore are cancelable contracts.

Certain of these agreements

require us to pay milestones to such third parties upon achievement of certain development, regulatory or commercial milestones as further

described in Note 10 of our consolidated financial statements included in this Annual Report on Form 10-K.

Amounts related to contingent

milestone payments are not considered contractual obligations as they are contingent on the successful achievement of certain development,

regulatory approval and commercial milestones, which may not be achieved.

We also have obligations

to make future payments to third parties that become due and payable on the achievement of certain milestones, including future payments

to third parties with whom we have entered into research, development and commercialization agreements.

We have not included these commitments

on our consolidated balance sheet for the periods presented because the achievement and timing of these milestones is not fixed and determinable.

Quantitative and Qualitative Disclosures About Market Risk .

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What changed 10-K

Item 7. Management’s Discussion and Analysis