What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-08-11 compared with 2022-05-12 · 194 added, 122 removed, 171 unchanged (65% of the section changed)

66 unchanged sentences

our ability to implement our business strategy;

our failure to meet the continued listing requirements of the Nasdaq Capital Market;

our need to raise additional working capital in the future for the purpose of further developing our DNase and XCART technologies and to continue as a going concern;

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We are a biopharmaceutical company focused on

advancing innovative immune-oncology technologies addressing hard to treat oncology indications.

The Company’s DNase oncology platform,

in development for the treatment of solid tumors, is aimed at improving outcomes of existing treatments, including immunotherapies, by

targeting NETs.

The Company is also developing its personalized CAR T platform technology, XCART ™ , to develop cell-based

therapeutics targeting the unique B-cell receptor on the surface of an individual patient’s malignant tumor cells for the treatment

of B-cell lymphomas.

We acquired the DNase oncology platform in April 2022 and expect to prioritize our efforts and resources on the development

of this newly acquired technology.

Additionally, we are leveraging our proprietary

drug delivery platform, PolyXen, by partnering with biotechnology and pharmaceutical companies.

PolyXen is an enabling platform technology

which can be applied to protein or peptide therapeutics.

It employs the natural polymer polysialic acid (“PSA”) to prolong

a drug’s circulating half-life and potentially improve other pharmacological properties.

advancing innovative immune-oncology technologies addressing hard to treat cancers.

The Company’s DNase platform is designed to

improve outcomes of existing treatments, including immunotherapies, by targeting NETs.

The Company is also developing its personalized

CAR T platform technology, XCART ™ , to develop cell-based therapeutics targeting the unique B-cell receptor on the surface

of an individual patient’s malignant tumor cells for the treatment of B-cell lymphomas.

We licensed the DNase oncology platform

in April 2022 and expect to prioritize our efforts and resources on the development of this newly acquired technology.

Additionally, we

have partnered with biotechnology and pharmaceutical companies to develop our proprietary drug delivery platform, PolyXen, and receive

royalty payments under an exclusive license arrangement in the field of blood coagulation disorders.

We incorporate our patented and proprietary technologies

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of our PolyXen technology to an industry partner.

Although we hold a broad patent portfolio, the focus of our internal development efforts

during the three months ended March 31, 2022, was on advancing the development of our XCART platform technology.

Although we hold a broad patent portfolio, the focus of our internal efforts during

the three and six months ended June 30, 2022, was on advancing the development of our XCART platform technology and the acquisition of

our DNase oncology platform.

Effects of the COVID-19 Pandemic

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significantly affected economic conditions in the U.S., accelerating during the first half of March 2020 and continuing throughout 2021

and into 2022, as federal, state and local governments react to the public health crisis with mitigation measures, creating significant

and into 2022, as federal, state and local governments reacted to the public health crisis with mitigation measures, creating significant

uncertainties in the U.S.

We continue to evaluate the effects of the COVID-19 pandemic on our business, and while our operations

were not materially affected during the year ended December 31, 2021 despite social distancing and other measures taken in response to

the pandemic, the ultimate impact of the COVID-19 pandemic on our results of operations and financial condition is dependent on future

developments, including the duration of the pandemic and the related extent of its severity, the pace and rate at which vaccines are administered,

and the continued emergence of new strains of COVID-19, such as the Delta and Omicron variants, as well as its impact on macroeconomic

We continue to evaluate the effects of the COVID-19 pandemic on our business, and while there has been

no significant impact to our operations to date despite social distancing and other measures taken in response to the pandemic, the ultimate

impact of the COVID-19 pandemic on our results of operations and financial condition is dependent on future developments, including the

duration of the pandemic and the related extent of its severity, the pace and rate at which vaccines are administered, and the continued

emergence of new strains of COVID-19, such as the Delta and Omicron variants and any subvariants, as well as its impact on macroeconomic

conditions, which are uncertain and cannot be predicted at this time.

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RESULTS OF OPERATIONS

Comparison of Quarter Ended March 31, 2022

Comparison of Quarter Ended June 30, 2022

The comparison of our historical results of operations

for the fiscal quarter ended March 31, 2022 to the fiscal quarter ended March 31, 2021 is as follows:

for the fiscal quarter ended June 30, 2022 to the fiscal quarter ended June 30, 2021 is as follows:

Quarter Ended

March 31, 2022

June 30, 2022

Quarter Ended

March 31, 2021

June 30, 2021

Royalty revenue

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Loss from operations

Other income:

Interest income

$ (1,593,611 )

$ (1,345,945 )

Revenue for the three months ended March 31, 2022

increased by $0.2 million, or 103.4%, to $0.4 million from approximately $0.2 million for the three months ended March 31, 2021.

increase represents an increase in royalty revenue related to our sublicense agreement with Takeda Pharmaceuticals Co.

Other income (expense):

Other income (expense)

Interest income, net

Revenue for the three months ended June 30, 2022

increased by $0.1 million, or 44.9%, to $0.4 million from approximately $0.3 million for the three months ended June 30, 2021.

This increase

represents an increase in royalty revenue related to our sublicense agreement with Takeda Pharmaceuticals Co.

as compared to the same period in 2021 as Takeda’s sublicensee continued its worldwide launch of the product.

Research and Development Expenses

Research & development (“R&D”)

expenses for the three months ended March 31, 2022 increased by $0.5 million, or 74.9%, to approximately $1.1 million from approximately

$0.6 million in the comparable quarter in 2021.

The table below sets forth the R&D costs incurred by the Company by category of expense

for the quarters ended March 31, 2022 and 2021:

Overall, research & development (“R&D”)

expenses for the three months ended June 30, 2022 increased by $1.6 million, or 296.1% to $2.1 million from $0.5 million in the comparable

quarter in 2021 primarily due to in-process research and development (“IPR&D”) expense of $1.3 million.

During the three

months ended June 30, 2022, the Company expensed $1.3 million of IPR&D associated with the Company’s licensing of the DNase

oncology platform.

There was no similar expense in 2021.

Excluding the $1.3 million of IPR&D expense from total R&D expense of

approximately $2.1 million, R&D expense for the three months ended June 30, 2022 increased by approximately $0.3 million, or 47.3%,

to approximately $0.8 million from approximately $0.5 million in the comparable quarter in 2021.

The table below sets forth the R&D

costs incurred by the Company by category of expense for the quarters ended June 30, 2022 and 2021:

Quarter Ended,

Category of Expense

March 31, 2022

March 31, 2021

June 30, 2022

June 30, 2021

IPR&D expense

Outside services and contract research organizations

Personnel costs

Salaries and wages

Share-based expense

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services and contract research organizations expense was primarily due to increased spending related to our XCART platform technology

during the three months ended March 31, 2022 as compared to the same period in the prior year.

Costs related to our XCART program were

significantly higher in 2022 as compared to the same period in 2021 as we continued to invest in our U.S.

pre-clinical developments efforts

to advance the technology.

The increase in other expense was due to consulting costs incurred during the first quarter of 2022 in connection

with the licensing of the DNase oncology platform from CLS.

and, to a lesser extent, spending related to our DNase oncology platform during the three months ended June 30, 2022 as compared to the

same period in the prior year.

Costs related to our XCART program were significantly higher in 2022 as compared to the same period in

2021 as we continued our U.S.

pre-clinical development efforts.

General and Administrative Expenses

General and administrative expenses for the three

months ended March 31, 2022 decreased by approximately $23,000, or 2.5%, to approximately $0.9 million from approximately $0.9 million

months ended June 30, 2022 increased by approximately $0.1 million, or 15.2%, to approximately $1.0 million from approximately $0.9 million

in the comparable quarter in 2021.

The decrease was primarily due to lower consulting costs offset by an increase in legal costs related

to the licensing of the DNase oncology platform from CLS during the three months ended March 31, 2022 compared to the same period in 2021.

Other income was approximately $200 for the three

months ended March 31, 2022 compared to approximately $900 of other income for the same period in 2021.

This decrease in other income

was primarily related to changes in foreign currency exchange rates during the three months ended March 31, 2022 as compared to the same

The increase was primarily due to an increase in legal costs related to the licensing of the DNase

oncology platform from CLS during the three months ended June 30, 2022 compared to the same period in 2021.

Other Income (Expense)

Other expense was approximately $1,100 for the

three months ended June 30, 2022 compared to approximately $200 of other income for the same period in 2021.

This increase in other expense

was primarily related to changes in foreign currency exchange rates during the three months ended June 30, 2022 as compared to the same

period in 2021.

Interest Income

Interest income increased to approximately $26,000

during the three months ended March 31, 2022 as compared to approximately $22,000 for the same period in the prior year.

Interest income decreased to approximately $16,000

during the three months ended June 30, 2022 as compared to approximately $21,000 for the same period in the prior year.

This decrease

is primarily due to no interest income being recorded on the Pharmsynthez Loan during the second quarter of 2022 compared to approximately

$11,000 during the same period in 2021.

Comparison of Six Months Ended June 30,

2022 and 2021

The comparison of our historical results of operations for the six

months ended June 30, 2022 to the six months ended June 30, 2021 is as follows:

Royalty revenue

Operating costs and expenses:

Research and development

General and administrative

Total operating costs and expenses

Loss from operations

Other income (expense):

Other income (expense)

Interest income, net

Revenue for the six months ended June 30, 2022

increased by $0.3 million, or 68.3%, to $0.8 million from approximately $0.5 million for the six months ended June 30, 2021.

This increase

is primarily due to a higher cash balance during the first quarter of 2022 compared to the same period in 2021.

represents an increase in royalty revenue related to our sublicense agreement with Takeda as compared to the same period in 2021, as the

sublicensee continued its worldwide launch of the product.

Research and Development Expenses

Overall, R&D expenses for the six months ended

June 30, 2022 increased by $2.0 million, or 175.4% to $3.2 million from $1.2 million in the comparable period in 2021 primarily due to

IPR&D expense of $1.3 million.

During the six months ended June 30, 2022, the Company expensed $1.3 million of IPR&D associated

with the Company’s licensing of the DNase oncology platform.

There was no similar expense in 2021.

Excluding the $1.3 million of

IPR&D expense from total R&D expense of $3.2 million, R&D expenses increased approximately $0.7 million, or 62.3% to $1.9

million for the six months ended June 30, 2022, from $1.2 million for the six months ended June 30, 2021.

The table below sets forth the

R&D costs incurred by us, by category of expense, for the six months ended June 30, 2022 and 2021:

Six Months Ended,

Category of Expense

June 30, 2022

June 30, 2021

IPR&D expense

Outside services and contract research organizations

Salaries and wages

Share-based expense

Total research and development expense

The increase in outside

services and contract research organizations expense was primarily due to increased spending related to our XCART platform technology

and, to a lesser extent, spending related to our DNase oncology platform during the six months ended June 30, 2022 as compared to the

same period in the prior year.

Costs related to our XCART program were higher in 2022 as compared to the same period in 2021 as we continued

pre-clinical development efforts.

The increase in other expense was due to consulting costs incurred in 2022 in connection with

the licensing of our DNase oncology platform.

General and Administrative Expenses

General and administrative expenses for the six

months ended June 30, 2022 was $1.9 million, increasing $0.1 million, or 6.2%, compared to the same period in the prior year.

was primarily due to an increase in legal costs related to the licensing of the DNase oncology platform from CLS during the six months

ended June 30, 2022 compared to the same period in 2021.

Other Income (Expense)

Other expense was approximately $900 for the six

months ended June 30, 2022 compared to other income of approximately $1,100 for the same period in 2021.

This increase in other expense

was primarily related to changes in foreign currency exchange rates during the six months ended June 30, 2022 as compared to the same

period in 2021.

Interest Income

Interest income decreased to approximately $42,000

during the six months ended June 30, 2022 as compared to approximately $43,000 for the same period in the prior year.

This decrease is

primarily due to a decrease in interest income on the Pharmsynthez Loan substantially offset by an increase in interest income on invested

funds due to a higher cash balance in the first six months of 2022 compared to the same period in 2021.

Liquidity and Capital Resources

We incurred a net loss

of approximately $1.6 million for the three months ended March 31, 2022.

We had an accumulated deficit of approximately $184.1 million

at March 31, 2022, as compared to an accumulated deficit of approximately $182.5 million at December 31, 2021.

of approximately $4.3 million for the six months ended June 30, 2022.

We had an accumulated deficit of approximately $186.8 million at

June 30, 2022, as compared to an accumulated deficit of approximately $182.5 million at December 31, 2021.

Working capital was approximately

$15.8 million at March 31, 2022, and $17.3 million at December 31, 2021, respectively.

During the three months ended March 31, 2022, our

working capital decreased by $1.5 million due to our net loss for the three months ended March 31, 2022.

We expect to continue incurring

losses for the foreseeable future and may need to raise additional capital or pursue other strategic alternatives in the long-term in

order to continue the pursuit of our business plan.

Our principal source

of liquidity consists of cash.

At March 31, 2022, we had approximately $16.2 million in cash and $1.1 million in current liabilities.

At December 31, 2021, we had approximately $18.2 million in cash and $1.4 million in current liabilities.

We have historically relied

upon sales of our equity securities to fund our operations.

We expect the majority of our funding through equity or equity-linked instruments,

debt financings, corporate collaborations, related party funding and/or licensing agreements to continue as a trend for the foreseeable

Management evaluates

whether there are conditions or events, considered in the aggregate that raise substantial doubt about our ability to continue as a going

concern within one year after the date that the financial statements are issued.

We have incurred substantial losses since our inception,

and we expect to continue to incur operating losses in the near-term.

These factors raise substantial doubt about our ability to continue

as a going concern.

We believe that we have access to capital resources through possible public or private equity offerings, debt financings,

corporate collaborations, related party funding, or other means to continue as a going concern.

We believe that our existing resources

will be adequate to fund our operations into the second quarter of 2023.

However, we anticipate we may need additional capital in the

long-term to pursue our business initiatives.

The terms, timing and extent of any future financing will depend upon several factors, including

the achievement of progress in our clinical development programs, our ability to identify and enter into licensing or other strategic

arrangements, and factors related to financial, economic, geo-political, industry and market conditions, many of which are beyond our

The capital markets for the biotech industry can be highly volatile, which make the terms, timing and extent of any future financing

$14.1 million at June 30, 2022, and $17.3 million at December 31, 2021, respectively.

During the six months ended June 30, 2022, our working

capital decreased by $3.2 million primarily due to our net loss for the six months ended June 30, 2022 and cash used of $0.5 million to

obtain a license to the DNase oncology platform.

Our principal source of liquidity consists of cash.

At June 30, 2022, we had approximately

$14.9 million in cash and $1.3 million in current liabilities.

At December 31, 2021, we had approximately $18.2 million in cash and $1.4

million in current liabilities.

We evaluate whether there

are conditions or events, considered in the aggregate that raise substantial doubt about our ability to continue as a going concern within

one year after the date that the financial statements are issued.

We have incurred substantial losses since our inception, and we expect

to continue to incur operating losses in the near-term.

These factors raise substantial doubt about our ability to continue as a going

We believe that we have access to capital resources through possible public or private equity offerings, debt financings, corporate

collaborations, related party funding, or other means to continue as a going concern.

We believe that our existing resources will be adequate

to fund our operations into the third quarter of 2023.

However, we anticipate we may need additional capital in the long-term to pursue

our business initiatives.

The terms, timing and extent of any future financing will depend upon several factors, including the achievement

of progress in our clinical development programs, our ability to identify and enter into licensing or other strategic arrangements, our

continued listing on the Nasdaq Stock Market (“Nasdaq”), and factors related to financial, economic, geo-political, industry

and market conditions, many of which are beyond our control.

The capital markets for the biotech industry can be highly volatile, which

make the terms, timing and extent of any future financing uncertain.

On June 3, 2022, we received a written notification (the “Notice”)

from the Listing Qualifications Department of Nasdaq notifying us that the closing bid price for our common stock had been below $1.00

for 30 consecutive business days and that we therefore are not in compliance with the minimum bid price requirement for continued inclusion

on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Requirement”).

The Notice has no immediate

effect on the listing of our common stock on the Nasdaq Capital Market.

Under the Nasdaq Listing Rules, we have 180 calendar days from

the date of the Notice to regain compliance with the Bid Price Requirement.

Accordingly, we have until November 30, 2022 to regain compliance

with the Bid Price Requirement and may be eligible for an additional 180 calendar day compliance period if certain other criteria are

Cash Flows from Operating Activities

Cash flows used in operating activities for the

three months ended March 31, 2022 totaled approximately $2.1 million, which was primarily due to our net loss for the period, partially

offset by non-cash charges associated with share-based expense.

In addition, prepaid expenses increased and current liabilities decreased

during the three months ended March 31, 2022.

Cash flows used in operating activities for the three months ended March 31, 2021 totaled

approximately $1.5 million, which was primarily due to our net loss for the period, offset by non-cash charges associated with share-based

six months ended June 30, 2022 totaled approximately $2.8 million, which was primarily due to our net loss for the period, partially offset

by non-cash charges associated with acquired IPR&D and share-based expense.

In addition, current liabilities decreased during the

six months ended June 30, 2022.

Cash flows used in operating activities for the six months ended June 30, 2021 totaled approximately $2.2

million, which was primarily due to our net loss for the period, partially offset by non-cash charges associated with share-based expense.

Cash Flows from Investing Activities

There were no cash flows from investing activities

for the three months ended March 31, 2022 and 2021.

Cash flows used in investing activities for the

six months ended June 30, 2022 totaled $500,000, which represented cash paid to license the DNase oncology platform.

There were no cash

flows from investing activities for the six months ended June 30, 2021.

Cash Flow from Financing Activities

There were no cash flows from financing activities

for the three months ended March 31, 2022 and 2021.

for the six months ended June 30, 2022 and 2021.

Contractual Obligations and Commitments

As of March 31, 2022, there were no material changes

As of June 30, 2022, there were no material changes

in our contractual obligations and commitments from those disclosed in our Annual Report on Form 10-K for the year ended December 31,

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We do not have any off-balance sheet financing

arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, change in financial

arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial

condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources.

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the year ended December 31, 2021, filed with the SEC on March 22, 2022, as amended on April 28, 2022, for a discussion of recent accounting

Critical Accounting Estimates

Critical Accounting Policies and Estimates

Our condensed consolidated financial statements

are prepared in accordance with U.S.

generally accepted accounting principles.

The preparation of our condensed consolidated financial

statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenue,

costs and expenses.

We base our estimates and assumptions on historical experience and other factors that we believe to be reasonable

under the circumstances.

We evaluate our estimates and assumptions on an ongoing basis.

The result of these evaluations forms the basis

for making judgments about the carrying values of assets and liabilities and the reported amount of expenses that are not readily apparent

from other sources.

Because future events and their effects cannot be determined with certainty, actual results and outcomes may differ

materially from our estimates, judgments and assumptions.

There have been no material changes in our critical accounting estimates from

those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 22, 2022,

as amended on April 28, 2022.

ITEM 3 – QUANTITATIVE AND QUALITATIVE

DISCLOSURES ABOUT MARKET RISK

The preparation of our condensed consolidated financial statements requires us to make estimates,

assumptions and judgments that affect the reported amounts of assets, liabilities, revenue, costs and expenses.

We base our estimates

and assumptions on historical experience and other factors that we believe to be reasonable under the circumstances.

We evaluate our estimates

and assumptions on an ongoing basis.

Our actual results may differ from these estimates.

There have been no material changes in our critical

accounting policies and estimates from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021, filed

with the SEC on March 22, 2022, as amended on April 28, 2022.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are not required to provide the information

1 unchanged sentence

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