Financial Performance - For the three months ended September 30, 2023, net product revenue was $5.0 million, an increase of $1.9 million from $3.1 million in the same period of 2022, primarily due to improved net price realization and a decrease in discounts[134]. - The company incurred a net loss of $13.8 million for the three months ended September 30, 2023, compared to a net loss of $31.1 million in the same period of 2022, representing an improvement of $17.3 million[133]. - Net product revenue increased to $16.0 million for the nine months ended September 30, 2023, compared to $7.6 million for the same period in 2022, an increase of $8.4 million[145]. - The company reported a net loss of $51.2 million for the nine months ended September 30, 2023, an improvement of $32.0 million compared to a net loss of $83.3 million in the same period of 2022[144]. - Other income (expense), net was income of $11.7 million for the nine months ended September 30, 2023, compared to an expense of $7.3 million for the same period in 2022, an increase of $19.0 million[154]. Expenses - The cost of goods sold for the same period was $2.2 million, compared to $1.5 million in 2022, reflecting manufacturing and packing costs associated with Trudhesa products sold[135]. - Research and development expenses decreased to $0.3 million for the three months ended September 30, 2023, down from $3.2 million in 2022, due to a strategic shift in focus towards commercial operations[137]. - Selling, general and administrative expenses were $56.6 million for the nine months ended September 30, 2023, down from $57.6 million in the same period of 2022, a decrease of $1.0 million[151]. - Research and development expenses decreased to $3.5 million for the nine months ended September 30, 2023, from $10.8 million in the same period of 2022, a reduction of $7.3 million[148]. - Total research and development expenses for the three months ended September 30, 2023, were $252,000, down from $3.2 million in the same period of 2022, a decrease of $2.9 million[150]. Cash Flow and Liquidity - As of September 30, 2023, the company had an accumulated deficit of $372.3 million and a cash balance of $0.2 million[125]. - The company estimates that its cash and cash equivalents as of September 30, 2023, are insufficient to fund operations for the next twelve months, raising substantial doubt about its ability to continue as a going concern[159]. - Cash used in operating activities was $61.1 million for the nine months ended September 30, 2023, compared to $75.7 million for the same period in 2022, a decrease of $14.6 million[162]. - Cash provided by financing activities for the nine months ended September 30, 2023, was $7.1 million, related to proceeds from issuance of debt and common stock[166]. - Cash used in investing activities for the nine months ended September 30, 2023, was $1.9 million, compared to $0.4 million in 2022, related to purchases of property and equipment[165]. Strategic Actions - The company has secured managed care contracts providing access to Trudhesa for over 80% of commercial lives in the United States[121]. - Approximately 122,000 prescriptions of Trudhesa have been generated since its launch, accounting for approximately 4.9% of total branded acute migraine prescriptions[122]. - The company has entered into amended senior credit agreements with Oaktree, providing $20.0 million in term loans to address current and anticipated noncompliance with covenants[119]. - The company plans to reduce its workforce by approximately 16%, incurring a charge of approximately $1.5 million primarily for severance costs[123]. - The company is exploring strategic alternatives, including potential restructuring or refinancing of debt, to maximize stockholder value given its current liquidity position[118]. Risks and Assumptions - The company faces risks related to dilution of existing stockholders' ownership if substantial additional capital is raised through equity offerings[169]. - The management's estimates and assumptions for financial statements are based on historical experience and various factors, including commercialization costs for Trudhesa[170]. - There have been no material changes to critical accounting policies from those described in the Annual Report for the year ended December 31, 2022[172]. - The company will need substantial additional funding to support operations absent a strategic transaction, with potential bankruptcy protection under Chapter 11 being considered[168].

Financial Performance - Net product revenue for the three months ended June 30, 2023, was $6.6 million, an increase of $3.8 million from $2.8 million in the same period of 2022, driven by increased Trudhesa sales volume and improved net price realization [116]. - Net product revenue for the six months ended June 30, 2023, was $11.0 million, an increase of $6.4 million compared to $4.6 million for the same period in 2022, driven by increased Trudhesa sales volume and improved net price realization [128]. - The net loss for the three months ended June 30, 2023, was $7.4 million, a significant improvement from a net loss of $25.2 million in the same period of 2022 [115]. - Net loss for the six months ended June 30, 2023, was $37.4 million, an improvement of $14.8 million compared to a net loss of $52.2 million for the same period in 2022 [127]. - Other income for the six months ended June 30, 2023, was $9.1 million, compared to an expense of $0.6 million for the same period in 2022, an increase of $9.6 million primarily due to changes in the fair value of derivatives [137]. Expenses - Cost of goods sold for the three months ended June 30, 2023, was $3.2 million, compared to $1.7 million for the same period in 2022, reflecting manufacturing and packing costs related to Trudhesa [117]. - Cost of goods sold for the six months ended June 30, 2023, was $5.5 million, up from $2.8 million in the same period in 2022, including a $1.1 million charge related to excess and obsolescence reserves associated with Trudhesa [129]. - Research and development expenses decreased to $0.2 million for the three months ended June 30, 2023, from $4.0 million in the same period of 2022, primarily due to a strategic shift in focus towards commercial operations [119]. - Research and development expenses decreased to $3.2 million for the six months ended June 30, 2023, from $7.6 million in the same period in 2022, a reduction of $4.4 million due to decreased personnel and program costs [131]. - Selling, general and administrative expenses increased to $19.3 million for the three months ended June 30, 2023, compared to $18.1 million in the same period of 2022, mainly due to higher promotional and marketing spending [121]. - Selling, general and administrative expenses increased to $41.3 million for the six months ended June 30, 2023, compared to $37.9 million in the same period in 2022, an increase of $3.4 million primarily due to higher commercial operations and marketing spend [134]. Cash and Liquidity - As of June 30, 2023, the company had an accumulated deficit of $358.5 million and a cash balance of $15.2 million [107]. - Cash used in operating activities for the six months ended June 30, 2023, was $44.6 million, a decrease from $53.0 million in the same period in 2022 [143]. - The company is currently negotiating a potential $20.0 million bridge financing facility with Oaktree to address liquidity issues and noncompliance with covenants [102]. - The company is currently in default of its liquidity covenant requiring a minimum of $12.5 million in unrestricted cash, and is negotiating with Oaktree for a forbearance agreement [141]. - The company estimates that its cash and cash equivalents as of June 30, 2023, are insufficient to fund operations for the next twelve months, raising substantial doubt about its ability to continue as a going concern [140]. - Company requires substantial additional funding to support operations, with potential bankruptcy protection under Chapter 11 being considered [148]. Strategic Actions - The company plans to reduce its workforce by approximately 16%, incurring a charge of approximately $1.5 million primarily for severance costs [105]. - Company plans to reduce workforce by approximately 16% to reprioritize spending and capitalize on positive momentum in Trudhesa uptake [148]. - The company is exploring strategic alternatives, including potential restructuring or refinancing of debt, to maximize stockholder value given its current liquidity position [101]. - Company is exploring strategic alternatives, including potential transactions that may not deliver anticipated benefits [148]. - The timing and amount of operating expenditures will depend on the ability to raise additional capital, which may dilute existing stockholders' ownership [149]. Accounting and Reporting - Management's estimates for financial statements are based on historical experience and various factors, which may lead to actual results differing from estimates [151]. - No material changes to critical accounting policies have occurred since the last annual report [152]. - Company is classified as an "emerging growth company" under the JOBS Act, allowing for delayed adoption of new accounting standards [154]. - The extended transition period under the JOBS Act may result in financial statements that are not comparable to those of companies complying with new accounting pronouncements [155]. - Restructuring charges recorded in Q1 2023 amounted to $1.5 million, primarily for severance and related costs [148]. Product Performance - Approximately 102,000 prescriptions of Trudhesa have been generated since its launch, accounting for approximately 4.5% of total branded acute migraine prescriptions [104]. - Significant commercialization expenses are incurred for Trudhesa, impacting overall financial condition [148].

Financial Performance - Net product revenue for the three months ended March 31, 2023, was $4.4 million, an increase of $2.6 million from $1.8 million in the same period of 2022, driven by increased Trudhesa sales volume and improved net price realization [112]. - Cost of goods sold for the three months ended March 31, 2023, was $2.3 million, compared to $1.0 million for the same period in 2022, reflecting manufacturing and packing costs associated with Trudhesa [113]. - Gross profit for the three months ended March 31, 2023, was $2.1 million, up from $726,000 in the same period of 2022, representing an increase of $1.4 million [111]. - The net loss for the three months ended March 31, 2023, was $30.1 million, compared to a net loss of $27.0 million for the same period in 2022, reflecting an increase in loss of $3.1 million [111]. Expenses - Research and development expenses decreased to $3.0 million for the three months ended March 31, 2023, from $3.7 million in the same period of 2022, a reduction of $0.7 million due to a strategic reprioritization [115]. - Selling, general and administrative expenses increased to $22.0 million for the three months ended March 31, 2023, from $19.8 million in the same period of 2022, an increase of $2.2 million primarily due to higher commercial operations and marketing spend [118]. - The company incurred a restructuring charge of $1.5 million for the three months ended March 31, 2023, related to severance costs and impairment charges [119]. - The company recorded restructuring charges of $1.5 million in Q1 2023 due to a workforce reduction of approximately 16% [132]. Cash Flow and Capital - As of March 31, 2023, the company had an accumulated deficit of $351.2 million and a cash balance of $35.5 million [103]. - For the three months ended March 31, 2023, cash used in operating activities was $24.1 million, compared to $24.2 million for the same period in 2022 [126][128]. - The company plans to address its cash flow needs by raising additional capital in the second quarter of 2023 to avoid defaulting under the Senior Credit Agreement [133]. - The Senior Credit Agreement requires the company to maintain a minimum unrestricted cash balance of $12.5 million at all times [125]. - As of March 31, 2023, the company had cash and cash equivalents of $35.5 million and an accumulated deficit of $351.2 million [122]. - Cash used in investing activities for the three months ended March 31, 2023, was $1.0 million, primarily for purchases of property and equipment [129]. - The company has an effective shelf registration statement allowing for the sale of up to $200 million in various securities, with $45.0 million remaining eligible for sale under the 2022 ATM Program [123]. Product Development and Strategy - Approximately 81,400 prescriptions of Trudhesa have been generated since its launch, accounting for approximately 4.7% of total branded acute migraine prescriptions among over 2,700 unique prescribers [100]. - The company plans to reprioritize spending to capitalize on the positive momentum in payor and prescriber uptake of Trudhesa while halting research and development efforts on the prior product candidate INP105 [101]. - The company halted research and development efforts on INP105 to focus on the commercialization of Trudhesa [132]. - The company expects to continue incurring significant expenses and operating losses for the foreseeable future [133].

Financial Performance - The company incurred net losses of $106.3 million and $76.7 million for the years ended December 31, 2022, and 2021, respectively, with an accumulated deficit of $321.1 million as of December 31, 2022[159]. - As of December 31, 2022, the company had $60.7 million in cash and cash equivalents, which is insufficient to fund operations for the next twelve months, raising substantial doubt about its ability to continue as a going concern[164]. - The company anticipates continuing to incur substantial operating losses for the foreseeable future and may never achieve or sustain profitability[157]. - The company expects to incur significant legal, accounting, and compliance costs as a public entity, which were not present as a private company[286]. - The company has incurred substantial losses and does not expect to achieve profitability in the near future, which may limit the utilization of net operating loss carryforwards[298]. Market and Product Development - The commercialization of Trudhesa and the development of future product candidates depend on obtaining significant market acceptance among healthcare payors, physicians, and patients[170]. - Market acceptance of Trudhesa may be lower than expected due to competition from other approved migraine treatments[171]. - The market opportunity for Trudhesa may be smaller than expected, potentially leading to lower product revenues and stock price decline[172]. - The company intends to market Trudhesa and future product candidates internationally, requiring separate regulatory approvals in each jurisdiction, which may be costly and time-consuming[233]. - The company may face significant negative consequences if undesirable side effects are identified, potentially preventing market acceptance and increasing commercialization costs[229]. Regulatory and Compliance Risks - The FDA has imposed labeling restrictions for Trudhesa, which may also apply to future product candidates, affecting their marketability[174]. - Regulatory approval processes are expensive and uncertain, with a small percentage of drugs successfully completing the FDA approval process[202]. - The company may need to conduct additional clinical trials if it cannot establish a bridge between future product candidates and listed drugs, which could delay approval[207]. - Changes in FDA policies or additional regulations could delay or prevent regulatory approval for future product candidates, adversely affecting the company's business[236]. - The company is subject to various federal and state laws that regulate healthcare practices, including the Physician Payments Sunshine Act, which requires reporting of payments to healthcare providers[245]. Manufacturing and Supply Chain Challenges - The company relies entirely on third parties for the manufacturing of Trudhesa and any future candidates, which could impair commercialization efforts if difficulties arise[156]. - Manufacturing complexities could lead to delays, increased costs, or shortages of Trudhesa and future product candidates[177]. - The company does not own manufacturing facilities and lacks the expertise for large-scale production, which could affect its ability to meet market demand[188]. - Supply chain disruptions due to the pandemic may hinder the manufacturing of future product candidates[305]. - The company relies on third-party manufacturers for the production of its POD device and active pharmaceutical ingredients, which poses risks of delays and increased costs if issues arise with these suppliers[192]. Intellectual Property Risks - The company holds 8 U.S. issued patents and 34 patents issued in ex-U.S. jurisdictions, with 13 U.S. pending applications and 80 patent applications pending in ex-U.S. jurisdictions[253]. - The company may not be able to obtain or enforce patent protection effectively, which could adversely affect the development and commercialization of its technologies[253]. - The evolving landscape of upper nasal space therapeutics makes it difficult to assess the company's freedom to operate without infringing on third-party rights[268]. - The company may face claims regarding inventorship disputes related to patents and trade secrets, which could lead to costly litigation and loss of valuable intellectual property rights[256]. - Patent terms may not provide adequate protection against competition from generics or biosimilars once the patents expire[275]. Clinical Trial and Development Risks - The company may face delays in clinical trials or regulatory approvals, which could increase costs and hinder commercialization efforts[160]. - Delays in clinical trial commencement or completion could result in increased costs and hinder the ability to obtain regulatory approval[209]. - The company may face delays in clinical trials due to patient recruitment challenges, including those related to COVID-19[211]. - The cost of planned clinical trials may exceed initial estimates, impacting financial projections[219]. - The company plans to conduct future clinical trials using an "open-label" design, similar to the STOP 301 trial for Trudhesa, which may introduce biases affecting the perceived therapeutic effects[227]. Competition and Market Dynamics - Competition in the pharmaceutical market is substantial, with many companies targeting the same markets as Trudhesa[182]. - The company faces significant competition in establishing strategic partnerships, which are crucial for the development and commercialization of product candidates[199]. - The company may face substantial damages if found to infringe third-party patents, which could force it to abandon technology or seek licenses[268]. - Legislative initiatives at the state level are increasingly aimed at controlling pharmaceutical pricing, which may affect the company's revenue[251]. - The company may face enforcement actions or lawsuits if found to have engaged in improper promotion of its products, leading to significant liability and reputational harm[237]. Operational and Environmental Risks - The company is located in Seattle, Washington, an earthquake-prone area, which poses a risk of operational disruption due to natural disasters[319]. - The company and its Contract Manufacturing Organizations (CMOs) must comply with numerous environmental, health, and safety laws, with potential significant costs or liabilities for non-compliance[321]. - Increasingly stringent environmental, health, and safety regulations may lead to substantial compliance costs that could impair research, development, or production efforts[322]. - Cybersecurity risks are heightened due to remote work arrangements, and breaches could lead to significant costs and operational disruptions[293]. - The company maintains insurance for cybersecurity incidents, but coverage may be insufficient for all liabilities incurred[294]. Impact of COVID-19 - The ongoing COVID-19 pandemic has significantly impacted the company's business operations, including clinical trials and commercialization efforts for Trudhesa[301]. - Delays in clinical trials may occur due to changes in hospital policies and resource prioritization towards pandemic efforts, potentially affecting cash reserves and capital raising plans[302]. - Commercialization efforts for Trudhesa could be adversely affected by government-imposed restrictions, limiting the ability to hire and train sales personnel[304]. - The overall impact of the pandemic on the company's financial condition and operations remains highly uncertain and could be material[306]. - The company may need to implement new clinical trial policies based on evolving FDA guidance, which could delay the development of future product candidates[303].

Revenue and Sales Performance - Trudhesa generated net product revenue of $3.1 million for the three months ended September 30, 2022, compared to $0.1 million for the same period in 2021, reflecting a significant increase in sales following its launch [165]. - Net product revenue for the nine months ended September 30, 2022, was $7.6 million, a significant increase from $0.1 million in the same period in 2021, reflecting the commercial launch of Trudhesa [175]. - Approximately 42,775 prescriptions of Trudhesa have been generated since its launch, capturing about 5.2% of total branded acute migraine prescriptions among over 2,000 unique prescribers [146]. Costs and Expenses - The cost of goods sold for Trudhesa was $1.5 million for the three months ended September 30, 2022, up from $0.3 million in the same period in 2021, due to manufacturing and packing costs post-FDA approval [166]. - Cost of goods sold rose to $4.3 million for the nine months ended September 30, 2022, compared to $0.3 million for the same period in 2021, primarily due to manufacturing costs associated with Trudhesa [177]. - Selling, general and administrative expenses increased to $19.7 million for the three months ended September 30, 2022, from $16.3 million in the same period in 2021, reflecting higher costs associated with commercialization efforts [164]. - Selling, general and administrative expenses for the nine months ended September 30, 2022, were $57.6 million, up from $31.0 million in the same period in 2021, an increase of $26.6 million [181]. - Research and development expenses for the three months ended September 30, 2022, were $3.2 million, down from $5.9 million in the same period in 2021, showing a reduction in R&D spending [164]. - Total research and development expenses for the nine months ended September 30, 2022, were $10.8 million, down from $16.1 million in the same period in 2021, a decrease of $5.3 million [179]. Financial Losses and Deficits - The net loss for the three months ended September 30, 2022, was $31.1 million, compared to a net loss of $25.0 million for the same period in 2021, indicating an increase in losses year-over-year [164]. - The company has an accumulated deficit of $298.1 million as of September 30, 2022, indicating significant operating losses since inception [149]. - Other income (expense), net was an expense of $18.3 million for the nine months ended September 30, 2022, compared to an expense of $4.6 million for the same period in 2021, an increase of $13.7 million [182]. Cash Flow and Financing - Cash used in operating activities was $75.7 million for the nine months ended September 30, 2022, compared to $43.2 million for the same period in 2021 [187]. - As of September 30, 2022, the company had available cash and cash equivalents of $79.7 million and an accumulated deficit of $298.1 million [184]. - The company plans to address liquidity concerns through additional equity or debt financings, with substantial doubt about its ability to continue as a going concern [186]. - Cash provided by financing activities for the nine months ended September 30, 2022, was $67.5 million, a decrease of 54.3% compared to $147.6 million for the same period in 2021 [192][193]. - The cash inflow for 2022 primarily came from net proceeds of $95.9 million from Oaktree Financing and Revenue Interest Financing, offset by a loan repayment of $32.9 million [192]. Future Plans and Development - The company plans to expand its sales force for Trudhesa to approximately 120 representatives in early 2023 to support its targeted launch strategy [146]. - The company initiated the CALM-201 study in July 2022 for INP105, with results expected in the first half of 2023, indicating ongoing development of new product candidates [148]. - The company expects to continue incurring significant research and development expenses as clinical programs progress and new studies are initiated [159]. - The company plans to continue incurring significant research and development expenses for Trudhesa and other product candidates, indicating ongoing investment in commercialization efforts [194]. - Future operating expenditures will depend on the success of raising additional capital, which may dilute existing stockholders' ownership [195]. Accounting and Compliance - The company has not reported any material changes to its critical accounting policies since the last annual report [198]. - The company is classified as an "emerging growth company" under the JOBS Act, allowing it to delay adopting new accounting standards [200]. - The financial statements may not be comparable to those of companies that comply with new accounting pronouncements as of public company effective dates due to the extended transition period [201]. - The company expects to finance its cash needs primarily through equity or debt financings until substantial product revenue is generated [194]. Commercialization Efforts - The costs and timing of commercialization activities for Trudhesa will significantly impact financial performance [196]. - The company has incurred significant commercialization expenses related to product sales, marketing, and outsourced manufacturing for Trudhesa [194].

Financial Performance - For the three months ended June 30, 2022, net product revenue was $2.8 million, with a gross profit of $1.1 million [170][171]. - The company incurred a net loss of $25.2 million for the three months ended June 30, 2022, compared to a net loss of $15.5 million for the same period in 2021 [170]. - Net product revenue recognized for the six months ended June 30, 2022, was $4.6 million related to sales of Trudhesa, following its FDA approval in September 2021 [181]. - The net loss for the six months ended June 30, 2022, was $52.2 million, compared to a net loss of $26.8 million for the same period in 2021, representing an increase of 94.8% [187]. - Cash used in operating activities for the six months ended June 30, 2022, was $53.0 million, compared to $25.9 million for the same period in 2021, an increase of 104.3% [192]. - Other income (expense), net was an expense of $8.5 million for the six months ended June 30, 2022, compared to an expense of $2.0 million for the same period in 2021, an increase of 325% [187]. - Total operating expenses for the six months ended June 30, 2022, were $45.5 million, up from $24.8 million in the same period of 2021, an increase of 83.4% [179]. Expenses - Research and development expenses for the three months ended June 30, 2022, were $3.9 million, a decrease of $2.1 million from $6.1 million in the prior year [170]. - Selling, general and administrative expenses increased by $9.2 million to $18.1 million for the three months ended June 30, 2022, compared to $8.9 million in 2021 [170]. - Research and development expenses decreased to $4.0 million for the three months ended June 30, 2022, from $6.1 million in the same period of 2021, a reduction of 34.4% [174]. - Selling, general and administrative expenses increased to $18.1 million for the three months ended June 30, 2022, compared to $8.9 million in the same period of 2021, an increase of 103.4% [176]. Cash Position - As of June 30, 2022, the company had an accumulated deficit of $267.0 million and a cash balance of $97.8 million [153]. - As of June 30, 2022, the company had available cash and cash equivalents of $97.8 million and an accumulated deficit of $267.0 million [188]. - The company recorded a cash increase of $9.6 million for the six months ended June 30, 2022, compared to a cash increase of $53.9 million for the same period in 2021 [191]. Strategic Plans - The company plans to expand its sales force for Trudhesa to approximately 120 representatives in early 2023 [150]. - The company plans to continue incurring significant commercialization expenses for Trudhesa and expects to finance cash needs primarily through equity or debt financings [198]. - The company is assessing costs and timing for commercialization activities related to Trudhesa and other product candidates pending marketing approval [202]. - The company is focused on establishing strategic collaborations and managing costs associated with patent applications and intellectual property rights [202]. Research and Development - The CALM-201 study for INP105, a nasal olanzapine product, was initiated in July 2022, with results expected in the first half of 2023 [152]. Financing and Capital - The company entered into a senior secured loan agreement for $50.0 million and a Revenue Interest Financing Agreement to receive payments based on future net revenues of Trudhesa [154][155]. - The company may face dilution of existing stockholders' ownership if additional capital is raised through public or private equity or convertible debt offerings [199]. Accounting and Compliance - The management's financial analysis is based on condensed consolidated financial statements prepared in accordance with GAAP, requiring estimates and assumptions that may differ from actual results [200]. - There have been no material changes to the company's critical accounting policies from the previous year [201]. - The company qualifies as an "emerging growth company" under the JOBS Act, allowing it to delay adopting new accounting standards [204]. - The company has elected to use the extended transition period under the JOBS Act, which may affect the comparability of its financial statements with other public companies [205]. - As a smaller reporting company, the company is not required to provide detailed market risk disclosures [206]. Product Performance - Trudhesa generated approximately 26,150 prescriptions since its launch, accounting for about 4.3% of total branded acute migraine prescriptions among prescribers [150]. - Approximately 68% of new Trudhesa patients eligible for a refill have received a second prescription, indicating strong patient retention [150].

Financial Performance - Trudhesa generated approximately $1.8 million in net product revenue during the three months ended March 31, 2022, following its full launch in October 2021[160]. - The net loss for the three months ended March 31, 2022, was $27.0 million, compared to a net loss of $11.3 million for the same period in 2021, reflecting an increase of $15.7 million[159]. - Other income (expense), net was an expense of $4.3 million for the three months ended March 31, 2022, compared to $1.4 million for the same period in 2021, reflecting a change of $2.9 million[167]. - Cash used in operating activities was $24.2 million for the three months ended March 31, 2022, compared to $9.9 million for the same period in 2021, indicating a significant increase in cash outflow[171]. - The company incurred a loss of $27.0 million for the three months ended March 31, 2022, which contributed to the cash used in operating activities[171]. Expenses - The cost of goods sold for Trudhesa was $1.0 million for the same period, primarily related to conversion and packing costs[161]. - Research and development expenses decreased by $696,000 to $3.65 million for the three months ended March 31, 2022, compared to $4.35 million in the prior year[159]. - Selling, general and administrative expenses increased significantly by $14.3 million to $19.8 million for the three months ended March 31, 2022, compared to $5.5 million in 2021[159]. - Research and development expenses decreased to $3.7 million for the three months ended March 31, 2022, from $4.4 million in the same period of 2021, a reduction of approximately 16%[163]. - Selling, general and administrative expenses increased significantly to $19.8 million for the three months ended March 31, 2022, compared to $6.0 million for the same period in 2021, representing an increase of approximately 230%[166]. - The total research and development expenses for the three months ended March 31, 2022, were $3.65 million, down from $4.35 million in the same period of 2021, a decrease of approximately 16%[165]. Cash Position - The accumulated deficit as of March 31, 2022, was $241.8 million, with a cash balance of $129.8 million[143]. - As of March 31, 2022, the company had available cash and cash equivalents of $129.8 million and an accumulated deficit of $241.8 million[168]. - Cash provided by financing activities was $65.8 million for the three months ended March 31, 2022, compared to $7.3 million for the same period in 2021, showing a substantial increase in financing[174]. Future Plans - The company plans to expand its sales team for Trudhesa from 60 to 120 representatives in early 2023 to support its commercialization efforts[139]. - The company expects to continue incurring significant research and development expenses as it progresses its clinical programs and seeks regulatory approvals[153]. - The company plans to continue incurring research and development expenses for the foreseeable future as it advances clinical trials and product candidate development[176]. - The company expects to finance its cash needs primarily through a combination of equity or debt financings until it can generate substantial product revenue[176]. Prescription Data - Approximately 16,750 prescriptions of Trudhesa were generated since its launch, accounting for about 4.9% of total branded acute migraine prescriptions among prescribers[139]. Financing Activities - The company has entered into a senior secured loan agreement with Oaktree for $50.0 million to support its operations[144].

Financial Performance and Projections - The company incurred net losses of $76.5 million and $45.8 million for the years ended December 31, 2021 and 2020, respectively, with an accumulated deficit of $214.8 million as of December 31, 2021[200]. - The company expects to continue incurring substantial operating losses for the foreseeable future and may never achieve profitability[198]. - As of December 31, 2021, the company had $88.2 million in cash and cash equivalents, which is projected to fund operations into 2024[205]. - The company anticipates significant increases in expenses and net losses as it commercializes Trudhesa and develops additional product candidates[202]. - Market acceptance of Trudhesa and other product candidates is critical for generating significant revenue and achieving profitability[213]. - The company may require substantial additional financing to achieve its goals, and failure to secure this capital could delay or terminate product development efforts[204]. - The company’s future capital requirements will depend on various factors, including commercialization costs and regulatory approval timelines[208]. - Quarterly operating results may fluctuate significantly, potentially impacting stock price and investor expectations[209]. Regulatory and Compliance Challenges - The FDA has imposed labeling restrictions on Trudhesa, which may extend to other product candidates, potentially limiting their use in certain patient populations[215]. - Regulatory compliance is critical, and reliance on third parties for clinical trials may reduce control over the process, impacting approval timelines[234]. - The FDA approval process is expensive and uncertain, with a small percentage of drugs successfully completing the regulatory process[248]. - Delays in clinical trials could result in increased costs and hinder the ability to obtain regulatory approval or commercialize future product candidates[255]. - Regulatory authorities may impose additional requirements for clinical trials or withdraw approvals, which could adversely affect business operations[254]. - The FDA may require additional studies or data to support the approval of product candidates, which could delay commercialization and adversely affect competitive positioning[258]. - Changes in FDA policies or new government regulations could prevent or delay regulatory approval of product candidates, adversely affecting profitability[288]. - The company may need to conduct additional clinical trials if the FDA does not accept the current data or if the approval pathway is blocked by patent exclusivity[275]. Manufacturing and Supply Chain Risks - The company relies on third parties for manufacturing and may face challenges in negotiating agreements, which could impair commercialization efforts[197]. - The company relies entirely on third parties for the manufacturing of Trudhesa and other product candidates, which poses risks to commercialization if agreements are not favorable[229]. - The company faces potential limitations in manufacturing and supply due to reliance on single facilities for production, which could impair the ability to respond to supply issues[237]. - Any production shortfall of the POD device or active ingredients could adversely affect clinical trials, regulatory approvals, and commercialization efforts, impacting overall business performance[238]. - Increased impurities were identified in drug vials during the Trudhesa STOP 301 trial, leading to removal from the trial and potential delays in commercial manufacturing[241]. Intellectual Property and Legal Risks - The company has 8 U.S. issued patents and 34 patents issued in ex-U.S. jurisdictions, with 13 U.S. pending applications and 80 patent applications pending in ex-U.S. jurisdictions as of February 1, 2022[313]. - The company faces risks related to the enforcement of patent protection for its technologies, which could adversely affect development and commercialization efforts[313]. - The company may need to engage in costly and time-consuming litigation to protect its patents, which could divert management's attention and resources from core business activities[325]. - The company may face significant challenges in protecting its intellectual property rights globally, particularly in jurisdictions with less robust patent laws, potentially leading to increased competition[324]. - If the company is found to infringe on third-party patents, it may be required to pay substantial damages, including potentially treble damages for willful infringement[329]. Market and Competitive Landscape - The market for Trudhesa may not be as large as expected, affecting potential revenue and profitability[214]. - The company faces substantial competition from various pharmaceutical and biotechnology firms, which may hinder its market position[226]. - Price controls in foreign markets could adversely affect future profitability and pricing strategies[225]. - The company may remain an emerging growth company until December 31, 2026, unless it exceeds a market value of $700 million or total annual gross revenue of $1.07 billion[363]. Human Resources and Management - The company is highly dependent on key personnel, and the loss of any senior management could impede its research and commercialization objectives[342]. - Recruiting and retaining qualified personnel in a competitive market is critical for the company's success, and failure to do so may hinder its growth[344]. - There is a risk of employee misconduct, including noncompliance with regulatory standards, which could lead to significant penalties and reputational harm[347]. Cybersecurity and Operational Risks - Cybersecurity risks are heightened due to potential breaches of information technology systems, which could lead to unauthorized disclosure of confidential information and significant remediation costs[351]. - The company has experienced phishing attacks in the past, and the shift to remote work due to the COVID-19 pandemic has increased cybersecurity risks[352]. - The company maintains insurance for cybersecurity incidents, but coverage may be insufficient to cover all liabilities, potentially affecting financial condition[353]. Financial and Tax Considerations - The company has incurred substantial losses and does not expect to achieve profitability in the near future, which may limit the utilization of net operating loss carryforwards[356]. - Changes in U.S. tax laws could adversely affect the company's financial condition and results of operations, particularly regarding net operating losses and tax attributes[357]. - The market price of the company's common stock has been volatile, influenced by various factors including regulatory developments and competitive product success[358]. Environmental and Safety Compliance - Compliance with environmental, health, and safety laws is critical, and failure to comply could result in significant liabilities and costs[372][373].

Financial Performance - The company reported a net loss of $25.0 million for the three months ended September 30, 2021, compared to a net loss of $9.1 million for the same period in 2020, representing an increase in loss of $15.9 million[152]. - The net loss for the nine months ended September 30, 2021, was $51.8 million, compared to a net loss of $31.8 million for the same period in 2020, an increase of $20 million[160]. - Cash used in operating activities was $43.2 million for the nine months ended September 30, 2021, compared to $28.9 million in 2020, indicating a higher cash burn[177]. - Cash used in operating activities for the nine months ended September 30, 2020 was $28.9 million, consisting of a net loss of $31.8 million[179]. Revenue and Product Launch - Product revenue for the third quarter of 2021 was $0.1 million, following the launch of Trudhesa in September 2021[153]. - Net product revenue of $0.1 million was recognized in Q3 2021 following the FDA approval of Trudhesa in September 2021, with shipments commencing in the same month[161]. - Revenue from product sales is recognized when the customer obtains control of the product, which occurs upon transfer of title[192]. Expenses - Research and development expenses decreased to $5.9 million in Q3 2021 from $6.1 million in Q3 2020, primarily due to reduced program-specific costs for clinical development[155]. - Selling, general and administrative expenses increased significantly to $16.3 million in Q3 2021 from $2.9 million in Q3 2020, reflecting costs associated with the commercialization of Trudhesa[152]. - Selling, general and administrative expenses increased to $16.3 million for Q3 2021, up from $2.9 million in Q3 2020, a rise of $13.4 million due to increased commercial and marketing activities for Trudhesa[157]. - Selling, general and administrative expenses for the nine months ended September 30, 2021, totaled $31.0 million, up from $12.2 million in 2020, an increase of $18.8 million[165]. - Total operating expenses for the nine months ended September 30, 2021, were $47.1 million, compared to $31.8 million in 2020, reflecting an increase of $15.3 million[160]. Cash Position and Financing - The company had an accumulated deficit of $190.1 million and a cash balance of $111.3 million as of September 30, 2021[134]. - The company completed an IPO in April 2021, raising approximately $72.0 million in net proceeds, and a follow-on public offering in September 2021, raising approximately $48.3 million[136][137]. - The company completed a follow-on public offering in September 2021, issuing 3,450,000 shares at $15.00 per share, resulting in net proceeds of approximately $48.3 million[170]. - For the nine months ended September 30, 2021, cash provided by financing activities was $147.6 million, primarily from the IPO and follow-on offering[181]. - The company entered into a loan agreement in July 2021, borrowing $20 million initially, with the potential to borrow an additional $30 million based on future milestones[171]. - The company expects to finance its cash needs primarily through a combination of equity or debt financings until substantial product revenue is generated[183]. Operational Considerations - The company is actively monitoring the impact of COVID-19 on its operations and has implemented strategies to minimize disruptions to the commercialization of Trudhesa[139]. - The company has retained all development and commercial rights to Trudhesa and other product candidates, aiming for independent commercialization[132]. - The company plans to incur significant commercialization expenses for Trudhesa, including sales, marketing, and outsourced manufacturing[183]. - The company has not engaged in any off-balance sheet arrangements since its inception[185]. Inventory and Cost of Goods Sold - The cost of goods sold for Q3 2021 was $0.3 million, related to conversion and packing costs for Trudhesa products sold[154]. - Cost of goods sold for the three months ended September 30, 2021 included a charge of $0.1 million related to the write down of inventory to net realizable value[204]. - As of September 30, 2021, the company determined that an allowance for doubtful accounts was not required based on its review of contractual payment terms[201]. Research and Development - The company expects to continue incurring significant research and development expenses as clinical programs progress and new studies are initiated[147]. - Research and development expenses decreased to $16.1 million for the nine months ended September 30, 2021, down from $19.5 million in the same period of 2020, a reduction of $3.4 million[163].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-40353 IMPEL NEUROPHARMA, INC. (Exact name of Registrant as specified in its Charter) (State or other jurisdiction of incorporatio ...