Lisata Therapeutics(LSTA) - 2024 Q2 - Quarterly Report

FORM 10-Q Filing Information This section provides key filing details for LISATA THERAPEUTICS, INC.'s Quarterly Report on Form 10-Q - The registrant, LISATA THERAPEUTICS, INC., filed a Quarterly Report on Form 10-Q for the period ended June 30, 2024[1] - The company is classified as a 'Smaller reporting company' and a 'Non-accelerated filer'[2] Company Information | Detail | Value | | :--- | :--- | | Commission File Number | 001-33650 | | Exact Name of Registrant | LISATA THERAPEUTICS, INC. | | State of Incorporation | Delaware | | IRS Employer Identification No. | 22-2343568 | | Principal Executive Offices Address | 110 Allen Road, 2nd Floor, Basking Ridge, New Jersey 07920 | | Registrant's Telephone Number | 908-842-0100 | | Trading Symbol | LSTA | | Exchange Registered On | The Nasdaq Capital Market | CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This section warns about forward-looking statements, highlighting risks and uncertainties that could impact actual results - This Quarterly Report contains forward-looking statements subject to uncertainties and risks that could cause actual results to differ materially from anticipated results[3] - Key risk factors include obtaining sufficient capital, building management infrastructure, establishing market share, managing scientific/regulatory developments, securing patent rights, realizing strategic benefits from licensing agreements, diversifying the pipeline, completing clinical trials, and managing public health crises[3] - Readers are cautioned not to place undue reliance on these statements, and the company undertakes no obligation to update them, except as required by law[5] PART I - FINANCIAL INFORMATION This part presents the company's unaudited consolidated financial statements and management's financial analysis ITEM 1. FINANCIAL STATEMENTS This section presents the unaudited consolidated financial statements, including balance sheets, statements of operations, comprehensive loss, equity, and cash flows, along with detailed notes explaining the company's business, significant accounting policies, and specific financial accounts Consolidated Balance Sheets This section details the company's financial position, presenting assets, liabilities, and equity Consolidated Balance Sheet Summary (in thousands) | Metric | June 30, 2024 (Unaudited) | December 31, 2023 | | :--- | :--- | :--- | | Total current assets | $41,978 | $53,924 | | Total assets | $42,571 | $54,694 | | Total current liabilities | $4,457 | $6,590 | | Total liabilities | $4,576 | $6,800 | | Total equity | $37,995 | $47,894 | - Total assets decreased by approximately $12.1 million from December 31, 2023, to June 30, 2024, primarily due to a reduction in marketable securities[9] - Total liabilities decreased by approximately $2.2 million, and total equity decreased by approximately $9.9 million during the same period[10] Consolidated Statements of Operations This section details the company's revenues, expenses, and net loss over specific reporting periods Consolidated Statements of Operations Summary (in thousands, except per share data) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $2,601 | $3,162 | $5,842 | $6,341 | | General and administrative | $2,922 | $3,713 | $6,282 | $7,378 | | Total operating expenses | $5,523 | $6,875 | $12,124 | $13,719 | | Operating loss | $(5,523) | $(6,875) | $(12,124) | $(13,719) | | Total other income | $479 | $518 | $881 | $1,175 | | Benefit from income taxes | $— | $(2,330) | $(798) | $(2,330) | | Net loss | $(5,044) | $(4,027) | $(10,445) | $(10,214) | | Basic and diluted loss per share | $(0.61) | $(0.50) | $(1.26) | $(1.28) | - Net loss for the three months ended June 30, 2024, increased to $5.044 million from $4.027 million in the prior year, despite a decrease in total operating expenses[13] - For the six months ended June 30, 2024, net loss slightly increased to $10.445 million from $10.214 million in the prior year, with total operating expenses decreasing by $1.595 million[13] Consolidated Statements of Comprehensive Loss This section presents the total comprehensive loss, including net loss and other comprehensive income or loss Consolidated Statements of Comprehensive Loss Summary (in thousands) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | Net loss | $(5,044) | $(4,027) | $(10,445) | $(10,214) | | Total other comprehensive gain (loss) | $27 | $2 | $(35) | $(21) | | Comprehensive loss attributable to Lisata Therapeutics, Inc. common stockholders | $(5,017) | $(4,025) | $(10,480) | $(10,235) | - The comprehensive loss for the three months ended June 30, 2024, was $(5.017) million, compared to $(4.025) million in the same period last year[15] - For the six months ended June 30, 2024, the comprehensive loss was $(10.480) million, a slight increase from $(10.235) million in the prior year[15] Consolidated Statements of Equity This section details changes in the company's equity, including net loss, share-based compensation, and stock activity Consolidated Statements of Equity Summary (in thousands) | Metric | Balance at Dec 31, 2023 | Net Loss | Share-based Compensation | Net Proceeds from Common Stock Issuances | Unrealized Loss on Marketable Securities | Foreign Currency Translation Adjustment | Balance at June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Common Shares | 8,151 | — | 157 | 14 | — | — | 8,322 | | Stock Amount | $8 | — | — | — | — | — | $8 | | Additional Paid-in Capital | $576,971 | — | $549 | $32 | — | — | $577,552 | | Accumulated Other Comprehensive Loss | $(42) | — | — | — | $(9) | $(26) | $(77) | | Accumulated Deficit | $(528,081) | $(10,445) | — | — | — | — | $(538,526) | | Treasury Stock | $(708) | — | — | — | — | — | $(708) | | Total Lisata Therapeutics, Inc. Stockholders' Equity | $48,148 | $(10,445) | $549 | $32 | $(9) | $(26) | $38,249 | | NonControlling Interest in Subsidiary | $(254) | — | — | — | — | — | $(254) | | Total Equity | $47,894 | $(10,445) | $549 | $32 | $(9) | $(26) | $37,995 | - Total stockholders' equity decreased from $48.148 million at December 31, 2023, to $38.249 million at June 30, 2024, primarily due to the net loss of $10.445 million[21] - Share-based compensation contributed $549 thousand to additional paid-in capital during the six months ended June 30, 2024[21] Consolidated Statements of Cash Flows This section outlines the company's cash flows from operating, investing, and financing activities Consolidated Statements of Cash Flows Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(12,310) | $(12,380) | | Net cash provided by investing activities | $18,149 | $3,564 | | Net cash (used in) provided by financing activities | $(110) | $367 | | Net increase (decrease) in cash and cash equivalents | $5,700 | $(8,464) | | Cash and cash equivalents at end of period | $28,293 | $23,690 | - Net cash provided by investing activities significantly increased to $18.149 million in the first six months of 2024, up from $3.564 million in the prior year, primarily due to net sales of marketable securities[23] - The company experienced a net increase in cash and cash equivalents of $5.700 million for the six months ended June 30, 2024, compared to a decrease of $8.464 million in the same period of 2023[23] Notes to Unaudited Consolidated Financial Statements This section provides detailed explanations and additional information for the unaudited financial statements Note 1 – The Business This note describes Lisata Therapeutics, Inc. as a clinical-stage pharmaceutical company developing solid tumor therapies - Lisata Therapeutics, Inc. is a clinical-stage pharmaceutical company focused on developing innovative therapies for solid tumors and other major diseases[25] - Its investigational product, certepetide (LSTA1), activates a novel uptake pathway to enhance the targeting and penetration of co-administered or tethered anti-cancer drugs into solid tumors[25] - Certepetide is currently undergoing several Phase 2 clinical studies globally for various solid tumor types, including metastatic pancreatic ductal adenocarcinoma (mPDAC), cholangiocarcinoma, and glioblastoma multiforme[25] Note 2 – Summary of Significant Accounting Policies This note outlines the key accounting principles and methods used in preparing the financial statements - The company classifies all marketable securities as available-for-sale, carried at estimated fair values, with unrealized gains and losses reported in accumulated other comprehensive income (loss)[33] - Research and development (R&D) expenses, including salaries, clinical trial costs, and contract fees, are expensed as incurred[41] - Revenue from license and collaboration arrangements is recognized upon the transfer of promised goods or services to customers, with no revenue recognized for the three and six months ended June 30, 2024 and 2023[44][45] Note 3 – Available-for-Sale Securities This note details the company's available-for-sale securities, including fair values and changes over time Available-for-Sale Securities (in thousands) | Type | June 30, 2024 Estimated Fair Value | December 31, 2023 Estimated Fair Value | | :--- | :--- | :--- | | Corporate debt securities | $20,867 | $37,786 | | Commercial paper | $— | $1,981 | | Money market funds | $11,707 | $4,268 | | Municipal debt securities | $1,255 | $622 | | Total | $33,829 | $44,657 | - The total estimated fair value of available-for-sale securities decreased from $44.657 million at December 31, 2023, to $33.829 million at June 30, 2024[49] - All available-for-sale securities as of June 30, 2024, have a contractual maturity of less than one year[50] Note 4 – Property and Equipment This note details the company's property and equipment, including gross values, depreciation, and net book values Property and Equipment, Net (in thousands) | Category | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Computer equipment | $589 | $589 | | Leasehold improvements | $72 | $72 | | Property and equipment, gross | $661 | $661 | | Accumulated depreciation | $(542) | $(486) | | Property and equipment, net | $119 | $175 | - Net property and equipment decreased from $175 thousand at December 31, 2023, to $119 thousand at June 30, 2024[51] - Depreciation expense for the six months ended June 30, 2024, was approximately $56 thousand[51] Note 5 – Income (Loss) Per Share This note explains the calculation of income (loss) per share, including potentially dilutive securities - Due to net losses, no common stock equivalents were utilized in the calculation of diluted loss per share as they were anti-dilutive[53] Potentially Dilutive Securities Excluded (in thousands) | Security Type | June 30, 2024 | June 30, 2023 | | :--- | :--- | :--- | | Stock options | 1,454 | 1,339 | | Warrants | 1,422 | 1,422 | | Restricted stock units | 354 | 252 | Note 6 – Fair Value Measurements This note describes the company's fair value measurements, categorizing financial assets into Level 1, 2, and 3 inputs - The company classifies fair value measurements into Level 1 (quoted prices in active markets), Level 2 (observable inputs other than Level 1), and Level 3 (unobservable inputs)[54] Financial Assets at Fair Value (in thousands) | Asset | June 30, 2024 (Level 1) | June 30, 2024 (Level 2) | December 31, 2023 (Level 1) | December 31, 2023 (Level 2) | | :--- | :--- | :--- | :--- | :--- | | Cash equivalents | $23,860 | $— | $16,715 | $— | | Marketable securities - available-for-sale | $— | $9,969 | $— | $27,942 | | Total | $23,860 | $9,969 | $16,715 | $27,942 | Note 7 – Accrued Liabilities This note provides a breakdown of the company's accrued liabilities, including salaries, R&D, and lease obligations Accrued Liabilities (in thousands) | Category | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Salaries, employee benefits and related taxes | $1,701 | $2,665 | | Clinical and R&D related liabilities | $1,598 | $1,046 | | Accounting & tax consulting liabilities | $126 | $57 | | Operating lease liabilities — current | $176 | $168 | | Other | $128 | $233 | | Total | $3,729 | $4,169 | - Total accrued liabilities decreased from $4.169 million at December 31, 2023, to $3.729 million at June 30, 2024[57] Note 8 – Operating Leases This note details the company's operating lease liabilities and corresponding right-of-use assets Operating Lease Liabilities and Right-of-Use Assets (in thousands) | Category | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Right-of-Use Asset | $225 | $308 | | Total Operating Lease Liabilities | $223 | $305 | - As of June 30, 2024, the weighted average remaining lease term for the operating lease was 1.25 years, with a weighted average discount rate of 9.625%[60] - Future minimum lease payments total $238 thousand, with a present value of lease liabilities of $223 thousand as of June 30, 2024[61] Note 9 – Stockholders' Equity This note provides information on stockholders' equity, including ATM agreements, stock options, warrants, and restricted stock - The company operates under an At The Market Offering Agreement (ATM Agreement) allowing sales of common stock up to $50.0 million, subject to a 'Baby Shelf Limitation' of one-third of public float (currently $8,915,094) due to its public float being below $75.0 million[62][117] - No common stock was issued under the ATM Agreement for the three and six months ended June 30, 2024[62][117] Stock Options and Warrants Activity (Six Months Ended June 30, 2024) | Category | Stock Options (Shares) | Stock Options (Weighted Average Exercise Price) | Warrants (Shares) | Warrants (Weighted Average Exercise Price) | | :--- | :--- | :--- | :--- | :--- | | Outstanding at Dec 31, 2023 | 1,322,501 | $10.81 | 1,421,744 | $42.51 | | Granted | 132,575 | $3.07 | — | — | | Expired | (1,163) | $1,165.50 | — | — | | Outstanding at June 30, 2024 | 1,453,913 | $9.18 | 1,421,744 | $42.51 | Restricted Stock and Restricted Stock Units Issued for Services (Six Months Ended June 30) | Category | 2024 | 2023 | | :--- | :--- | :--- | | Number of restricted stock issued | 203,800 | 159,950 | | Value of restricted stock issued | $628 | $480 | | Number of restricted stock units issued | 205,300 | 188,850 | | Value of restricted stock units issued | $632 | $567 | Note 10 – Share-Based Compensation This note details the company's share-based compensation expense and unrecognized compensation costs Share-Based Compensation Expense (in thousands) | Category | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $37 | $227 | $123 | $414 | | General and administrative | $200 | $357 | $568 | $844 | | Total share-based compensation expense | $237 | $584 | $691 | $1,258 | - Total share-based compensation expense decreased significantly from $1.258 million for the six months ended June 30, 2023, to $691 thousand for the same period in 2024[67] Unrecognized Compensation Cost (in thousands) | Award Type | Unrecognized Compensation Cost | Expected Weighted-Average Period (Years) | | :--- | :--- | :--- | | Stock Options | $323 | 2.09 | | Restricted Stock Units | $206 | 0.69 | | Restricted Stock | $646 | 2.00 | Note 11 – Income Taxes This note discusses the company's income tax position, including valuation allowances and net operating losses - The company has a full valuation allowance against its net deferred tax assets due to uncertainty regarding future utilization[71] - As of December 31, 2023, the company had approximately $43.7 million in Federal Net Operating Losses (NOLs) and various state NOLs, with usage limitations due to an ownership change in September 2022[72][74] - In March 2024, the company sold $8.9 million of its New Jersey NOLs for net proceeds of $0.7 million, resulting in a $0.8 million deferred income tax benefit[76] Note 12 – Australia Research and Development Tax Incentive This note describes the refundable R&D tax incentive for the Australian subsidiary and related receivables - The company's Australian subsidiary is eligible for a refundable tax incentive (43.5% to 48.5%) for qualified R&D activities[78] - As of June 30, 2024, $1.0 million was recorded as an income tax incentive receivable[78] - On July 26, 2024, the Australian subsidiary received a $0.9 million tax refund for the 2023 tax year[78] Note 13 – Contingencies This note outlines the settlement of a litigation threat, including payment terms and court dismissal - The company settled a litigation threat from Lingmed Limited in March 2024, agreeing to pay $0.5 million and 5.0% of any future milestone payments received under the Qilu Agreement, plus an additional $250 thousand for the first future milestone[80][87] - The matter was settled, and a dismissal with prejudice was entered by the Court on April 9, 2024[80] Note 14 – Technology Transfer Agreement This note details the transfer of the TPN platform to Impilo Therapeutics and related equity ownership - In July 2023, the company transferred rights to its tumor penetrating nanocomplex (TPN) platform to Impilo Therapeutics[81] - As consideration, Impilo issued 574,500 shares of its pre-seed preferred stock to the company[82] - The company purchased a Simple Agreement for Future Equity (SAFE) from Impilo for $100,000 in March 2024, and owned 38.6% of Impilo as of June 30, 2024[82] Note 15 – License Agreements (Sanford Burnham Prebys) This note outlines the exclusive license agreement with Sanford Burnham Prebys for certepetide, covering fees, milestones, and royalties - Cend (acquired by Lisata) entered into an exclusive, worldwide, royalty-bearing license agreement with Sanford Burnham Prebys (SBP) in December 2015 for patent rights and know-how related to certepetide[83] - The company is required to pay annual license maintenance fees ($10,000 increasing to $20,000), potential milestone payments up to $10.6 million, and royalties of 4% of net sales[83] - SBP also receives 25% of any sublicensing income, which resulted in SBP receiving 191,500 shares of Impilo's pre-seed preferred stock[83] Note 16 – Research Collaboration and License Agreement (Qilu) This note details the exclusive license and collaboration agreement with Qilu Pharmaceutical for certepetide - Cend entered into an Exclusive License and Collaboration Agreement with Qilu Pharmaceutical, Co., Ltd. (Qilu) in February 2021 for the development and commercialization of certepetide in Greater China[86] - Qilu made an upfront payment of $10.0 million and a $5.0 million development milestone prior to the Cend Merger[86] - The company is eligible for additional developmental and commercial milestone payments up to $96.0 million and $125.0 million, respectively, and tiered royalties on net sales ranging from 10% to 15%[86] ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This section provides management's perspective on the company's financial condition and results of operations, including an overview of its business, detailed analysis of operating expenses, and a discussion of liquidity and capital resources for the three and six months ended June 30, 2024, compared to the prior year Overview This overview introduces Lisata Therapeutics as a clinical-stage pharmaceutical company developing solid tumor therapies - Lisata Therapeutics is a clinical-stage pharmaceutical company focused on discovering, developing, and commercializing innovative therapies for solid tumors and other major diseases[91] - Its lead investigational product, certepetide (LSTA1), is designed to enhance the delivery and penetration of anti-cancer drugs into solid tumors by activating a novel uptake pathway[91] - Certepetide is currently in several Phase 2 clinical studies globally for various solid tumor types, including metastatic pancreatic ductal adenocarcinoma (mPDAC)[91] Targeted Solid Tumor Penetration via CendR Active Transport This section explains the company's strategy to overcome tumor stroma barriers by activating the CendR active transport mechanism - The company's approach addresses the tumor stroma, a dense fibrotic tissue that limits the efficacy of many cancer therapies, by activating the C-end rule (CendR) active transport mechanism[93][94] - Certepetide, an iRGD peptide, activates this tumor-specific transport system, leading to more selective and efficient uptake of systemically administered anti-cancer drugs and enhanced anti-cancer activity without increased side effects[94] - Co-administration of certepetide with anti-cancer therapies is the initial strategy, offering a faster path to market compared to creating new chemical entities[94] Certepetide as a treatment for solid tumor cancers in combination with other anti-cancer agents This section highlights certepetide's role in modifying the tumor microenvironment and its efficacy in solid tumor trials - Certepetide modifies the tumor microenvironment (TME), making it less immunosuppressive and more susceptible to immune system attack, while also inhibiting metastatic cascade[96] - In a completed Phase 1b/2a trial for first-line mPDAC patients, certepetide combined with standard-of-care chemotherapy showed a 59% Objective Response Rate (ORR) and over 79% Disease Control Rate (DCR), significantly higher than the MPACT trial's 23% ORR and 48% DCR[97] - Median progression-free survival was nearly ten months and median overall survival was over thirteen months in the trial, compared to less than six months and less than nine months, respectively, in the MPACT trial[97] Additional Out-licensing Opportunities This section discusses the company's intellectual property portfolio available for out-licensing or partnering - The company's intellectual property portfolio includes programs available for out-licensing or partnering to augment or continue clinical development[99] - The long-term strategy focuses on advancing therapies through development to obtain market authorizations and commercialization, either alone or with partners[99] Results of Operations This section analyzes the company's financial performance, focusing on operating expenses and net loss Three Months Ended June 30, 2024 Compared to Three Months Ended June 30, 2023 This subsection compares the company's operating expenses and net loss for Q2 2024 against Q2 2023 Results of Operations (Three Months Ended June 30, in thousands) | Operating Expenses | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | Research and development | $2,601 | $3,162 | $(561) | | General and administrative | $2,922 | $3,713 | $(791) | | Total operating expenses | $5,523 | $6,875 | $(1,352) | | Net loss | $(5,044) | $(4,027) | $(1,017) | - Net loss increased to $5.0 million in Q2 2024 from $4.0 million in Q2 2023, despite a 19.7% decrease in total operating expenses[100][101] - R&D expenses decreased by $0.6 million (17.7%) due to reduced spending on the Phase 2b ASCEND trial and CMC, partially offset by increased enrollment activities for the certepetide Phase 2a Bolster trial[101] - G&A expenses decreased by $0.8 million (21.3%) primarily due to prior year severance costs, reduced equity expense, and lower directors and officers insurance premiums[102] Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023 This subsection compares the company's operating expenses and net loss for H1 2024 against H1 2023 Results of Operations (Six Months Ended June 30, in thousands) | Operating Expenses | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | Research and development | $5,842 | $6,341 | $(499) | | General and administrative | $6,282 | $7,378 | $(1,096) | | Total operating expenses | $12,124 | $13,719 | $(1,595) | | Net loss | $(10,445) | $(10,214) | $(231) | - Net loss slightly increased to $10.4 million for the six months ended June 30, 2024, from $10.2 million in the prior year, with total operating expenses decreasing by 11.6%[104][105] - R&D expenses decreased by $0.5 million (7.9%) due to reduced spending on the Phase 2b ASCEND trial and CMC, partially offset by increased enrollment activities for the certepetide Phase 2a Bolster trial[106] - G&A expenses decreased by $1.1 million (14.9%) primarily due to prior year severance costs, reduced equity expense, lower insurance premiums, and decreased legal fees, partially offset by settlement-related costs[107] Analysis of Liquidity and Capital Resources This section evaluates the company's ability to meet financial obligations, discussing cash flows and future capital needs Operating Activities This subsection details net cash used in operating activities, driven by net loss and changes in assets and liabilities - Net cash used in operating activities for the six months ended June 30, 2024, was $12.3 million, consistent with $12.4 million in the prior year[112][113] - This was primarily driven by a net loss of $10.4 million, adjusted for $0.6 million in non-cash expenses and $2.5 million in changes in operating assets and liabilities[113] Investing Activities This subsection describes the net cash provided by investing activities, primarily from marketable securities sales - Net cash provided by investing activities for the six months ended June 30, 2024, was $18.1 million, a significant increase from $3.6 million in the prior year[112][114] - This increase was primarily due to net sales of marketable securities, partially offset by a $0.1 million investment in Impilo[114] Financing Activities This subsection details net cash used in financing activities, primarily for tax withholding payments on equity awards - Net cash used in financing activities for the six months ended June 30, 2024, was $0.1 million, primarily due to tax withholding payments on equity awards[112][115] - In the prior year, net cash provided by financing activities was $0.4 million, including proceeds from common stock issuance and option exercises[115] Liquidity and Capital Requirements Outlook This subsection provides an outlook on the company's liquidity, capital resources, and future funding needs - As of June 30, 2024, the company had approximately $38.3 million in cash, cash equivalents, and marketable securities, with working capital of $37.5 million[112] - Management believes existing cash and marketable securities will fund current operating expenses for at least the next 12 months[116] - Future liquidity needs may be met through additional debt or equity issuances, partnerships, or asset sales, but raising capital may be challenging due to operating losses and market volatility[116][118] Off-Balance Sheet Arrangements This section confirms that the company does not have any off-balance sheet arrangements - The company does not have any off-balance sheet arrangements[119] Critical Accounting Policies and Estimates This section states that there have been no material changes to the company's critical accounting policies and estimates - There have been no material changes in the company's critical accounting policies and estimates during the three and six months ended June 30, 2024, compared to those reported in its 2023 Form 10-K[119] ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK This section states that no quantitative and qualitative disclosures about market risk are applicable to the company - This item is not applicable to the company[120] ITEM 4. CONTROLS AND PROCEDURES This section details disclosure controls and procedures and reports on changes in internal control, including a new financial officer (a) Disclosure Controls and Procedures This subsection reports on management's evaluation and conclusion regarding the effectiveness of disclosure controls - As of June 30, 2024, management, including the Chief Executive Officer and the Senior Vice President, Finance and Treasury and Chief Accounting Officer, evaluated the effectiveness of the company's disclosure controls and procedures[122] - Based on this evaluation, the Evaluating Officers concluded that the disclosure controls and procedures were effective, at the reasonable assurance level[123] (b) Changes in Internal Control over Financial Reporting This subsection reports on changes in internal control over financial reporting, specifically a new principal financial officer - On April 15, 2024, James Nisco was appointed as the company's Senior Vice President, Finance and Treasury and Chief Accounting Officer, and began serving as the principal financial officer and principal accounting officer[124] - Other than this appointment, there were no other material changes in internal control over financial reporting during the last quarter[124] PART II - OTHER INFORMATION This part covers various other information, including legal proceedings, risk factors, equity sales, and exhibits ITEM 1. LEGAL PROCEEDINGS This section indicates no material changes to legal proceedings from the 2023 Form 10-K, referring to Note 13 - There are no material changes to the disclosures previously reported in the 2023 Form 10-K, other than those in Note 13 – Contingencies[126] ITEM 1A. RISK FACTORS This section states no material changes to risk factors previously reported in the company's 2023 Form 10-K - There have been no material changes to the risk factors previously reported in the 2023 Form 10-K[126] ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS This section reports no unregistered sales of equity securities or use of proceeds during the period - There were no unregistered sales of equity securities and use of proceeds[126] ITEM 3. DEFAULTS UPON SENIOR SECURITIES This section confirms that there were no defaults upon senior securities - There were no defaults upon senior securities[126] ITEM 4. MINE SAFETY DISCLOSURES This section states that mine safety disclosures are not applicable to the company - This item is not applicable to the company[126] ITEM 5. OTHER INFORMATION This section reports no director or officer adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement - No director or officer adopted, modified, or terminated a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement' during the three and six months ended June 30, 2024[127] ITEM 6. EXHIBITS This section incorporates the Exhibit Index, listing all exhibits filed with the Form 10-Q - The Exhibit Index, appearing immediately after the signature page, is incorporated by reference[128] Selected Exhibits | Exhibit No. | Description | | :--- | :--- | | 31.1 | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | 31.2 | Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | 32.1 | Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | 32.2 | Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | 104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) | SIGNATURES This section provides the official signatures and dates for the Quarterly Report on Form 10-Q filing - The report was signed on August 12, 2024, by David J. Mazzo, PhD, President & Chief Executive Officer, and James Nisco, SVP, Finance and Treasury and Chief Accounting Officer[130]