Plus Therapeutics(PSTV) - 2022 Q2 - Quarterly Report

Cautionary Statement Regarding Forward-Looking Statements This section outlines the nature and inherent risks of forward-looking statements, identifying key areas covered and referencing relevant risk factor disclosures - Forward-looking statements are identified by terms such as "intend," "expect," "project," "believe," "anticipate," and similar expressions, or their negatives[8] - These statements are subject to material risks and uncertainties, including those detailed in "Part I – Item 1A – Risk Factors" of the Annual Report on Form 10-K for 2021 and "Part II – Item 1A – Risk Factors" in this Quarterly Report[9][10] - Key areas covered by forward-looking statements include anticipated expenditures, strategic collaborations, FDA approvals, market size, R&D efforts, clinical trial results, product candidate efficacy/safety, competition, and liquidity/capital resources[9] PART I. FINANCIAL INFORMATION This part presents the Company's unaudited condensed financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures for the reporting period Item 1. Financial Statements (Unaudited) This section provides the unaudited condensed financial statements, including the balance sheets, statements of operations, stockholders' equity, and cash flows, along with detailed notes explaining the basis of presentation, significant accounting policies, and specific financial line items Condensed Balance Sheets This section presents a snapshot of the Company's financial position, detailing assets, liabilities, and stockholders' equity at specific reporting dates Condensed Balance Sheet Highlights (in thousands) | Metric | June 30, 2022 | December 31, 2021 | | :-------------------------- | :-------------- | :---------------- | | Cash and cash equivalents | $18,090 | $18,400 | | Total current assets | $18,889 | $19,724 | | Total assets | $21,271 | $21,981 | | Total current liabilities | $6,971 | $5,870 | | Total liabilities | $11,592 | $11,145 | | Total stockholders' equity | $9,679 | $10,836 | Condensed Statements of Operations This section details the Company's financial performance over specific periods, highlighting revenues, expenses, and net loss Condensed Statements of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :---------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development | $2,831 | $1,106 | $4,615 | $2,233 | | General and administrative | $2,289 | $1,469 | $4,431 | $2,821 | | Total operating expenses | $5,120 | $2,575 | $9,046 | $5,054 | | Operating loss | $(5,120) | $(2,575) | $(9,046) | $(5,054) | | Net loss | $(5,282) | $(2,800) | $(9,398) | $(5,520) | | Net loss per share, basic and diluted | $(0.24) | $(0.25) | $(0.43) | $(0.56) | - Research and development expenses increased significantly by $1.7 million (154.6%) for the three months ended June 30, 2022, and by $2.4 million (107.5%) for the six months ended June 30, 2022, compared to the same periods in 2021[16] - General and administrative expenses increased by $0.8 million (54.5%) for the three months ended June 30, 2022, and by $1.6 million (56.4%) for the six months ended June 30, 2022, compared to the same periods in 2021[16] Condensed Statements of Stockholders' Equity This section tracks changes in the Company's equity accounts, including common stock, additional paid-in capital, and accumulated deficit Condensed Statements of Stockholders' Equity Highlights (in thousands, except share data) | Metric | Balance at Dec 31, 2021 | Balance at Jun 30, 2022 | | :-------------------------- | :---------------------- | :---------------------- | | Common stock shares | 15,510,025 | 22,468,682 | | Common stock amount | $16 | $22 | | Additional paid-in capital | $457,730 | $465,965 | | Accumulated deficit | $(446,910) | $(456,308) | | Total stockholders' equity | $10,836 | $9,679 | - The company issued 6,687,610 shares of common stock for net proceeds of $7,742 thousand during the six months ended March 31, 2022, and an additional 271,047 shares for $152 thousand during the three months ended June 30, 2022[18] - Stock-based compensation expense contributed $347 thousand to additional paid-in capital for the six months ended June 30, 2022[18] Condensed Statements of Cash Flows This section reports the cash inflows and outflows from operating, investing, and financing activities over specific periods Condensed Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(6,516) | $(5,405) | | Net cash used in investing activities | $(715) | $(80) | | Net cash provided by financing activities | $6,921 | $14,300 | | Net increase (decrease) in cash | $(310) | $8,815 | | Cash and cash equivalents at end of period | $18,090 | $17,161 | - The decrease in net cash provided by financing activities was primarily due to lower proceeds from the sale of common stock ($7.7 million in 2022 vs. $12.3 million in 2021) and no proceeds from warrant exercises in 2022 compared to $2.0 million in 2021[20] - Investing activities saw a significant increase in cash used, primarily due to purchases of intangible assets ($117k) and in-process R&D acquired ($250k) in 2022, which were not present in 2021[20] Notes to Condensed Financial Statements This section provides detailed explanations and additional information supporting the condensed financial statements, including accounting policies, estimates, and specific financial line items 1. Basis of Presentation and New Accounting Standards This note describes the basis for preparing the interim financial statements and the expected impact of new accounting standards - The unaudited condensed financial statements are prepared in accordance with U.S. GAAP for interim financial information and do not include all annual financial statement disclosures[23] - The Company plans to adopt ASU 2016-13 (Credit Losses) on January 1, 2023, and does not expect a material impact on its financial statements[24] 2. Use of Estimates This note explains management's reliance on estimates and assumptions in financial reporting and the potential for actual results to differ - Financial statement preparation requires management to make estimates and assumptions, particularly for asset impairment and stock-based compensation expense[25] - Actual results may differ from these estimates, and revisions are reflected prospectively[26] 3. Liquidity This note assesses the Company's ability to meet its short-term and long-term financial obligations, including cash resources and potential capital needs Liquidity Metrics (in thousands) | Metric | June 30, 2022 | December 31, 2021 | | :-------------------------- | :-------------- | :---------------- | | Net loss (six months) | $(9,398) | $(5,520) | | Accumulated deficit | $(456,308) | $(446,910) | | Net cash used in operating activities (six months) | $(6,516) | $(5,405) | | Cash and cash equivalents | $18,090 | $18,400 | - The Company believes its current cash and cash equivalents are sufficient to fund operations for at least the next 12 months[28] - The Company received a Nasdaq notice on May 24, 2022, for non-compliance with the minimum bid price requirement ($1.00 per share) and has until November 21, 2022, to regain compliance[30][31] - Failure to raise additional capital could necessitate significant reductions in R&D and other operations, negatively impacting growth goals[29] 4. Fair Value Measurements This note details the methodology and hierarchy used for measuring the fair value of financial instruments, particularly liability-classified warrants - Fair value measurements are categorized into a three-level hierarchy based on input observability (Level 1: active market quotes, Level 2: similar active market quotes or observable inputs, Level 3: unobservable inputs)[34] - Series U Warrants are classified as Level 3 liability instruments and are marked to market, with changes in fair value recorded as non-operating income or loss[34][35] - The fair value of Series U Warrants and the change in fair value were immaterial for the three and six months ended June 30, 2022 and 2021[35] 5. Term Loan Obligations This note outlines the Company's term loan agreement, including principal amount, interest rates, repayment terms, and compliance with covenants - The Company has a Term Loan with Oxford Finance, LLC, with an aggregate principal amount of $17.7 million, accruing interest at a floating rate of at least 8.95% per annum[36] - Principal and interest payments are required monthly through the maturity date of June 1, 2024, with a final payment of approximately $3.2 million[36] - As of June 30, 2022, $3.1 million principal was outstanding, and the Company was in compliance with all debt covenants[40] Interest Expense (in thousands) | Period | 2022 | 2021 | | :-------------------------- | :--- | :--- | | Three Months Ended June 30, | $181 | $229 | | Six Months Ended June 30, | $379 | $476 | 6. Loss per Share This note explains the calculation of basic and diluted loss per share, identifying anti-dilutive securities excluded from the diluted calculation - Basic and diluted loss per share are calculated by dividing net loss by the weighted average number of common shares outstanding[43] - Potential common shares from outstanding stock options, preferred stock, and warrants were excluded from diluted loss per share calculations as their effect would be anti-dilutive[44] Anti-Dilutive Securities (as of June 30) | Security Type | 2022 | 2021 | | :-------------------- | :--------- | :--------- | | Outstanding stock options | 1,183,873 | 1,090,890 | | Preferred stock | 422,867 | 422,867 | | Outstanding warrants | 2,141,189 | 2,141,378 | | Total | 3,747,929 | 3,655,135 | 7. Commitments and Contingencies This note details the Company's contractual obligations and potential liabilities, including leases, service agreements, and legal proceedings Leases This section details the Company's operating lease agreements, including lease costs and future minimum annual payments - The Company leases laboratory, office, and storage facilities under operating lease agreements, with the primary San Antonio lease expiring in 2025[48] Lease Costs (in thousands) | Lease Expense | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Operating lease expense | $46 | $58 | $92 | $108 | | Finance lease expense | $0 | $3 | $0 | $7 | | Total lease expense | $46 | $61 | $92 | $115 | Future Minimum Annual Lease Payments (in thousands) | Year | Operating Leases | | :-------------------- | :--------------- | | Remainder of 2022 | $68 | | 2023 | $137 | | 2024 | $113 | | 2025 | $17 | | Total minimum lease payments | $335 | Services Agreement and Sales Order with Medidata This section describes the agreement with Medidata for developing a Synthetic Control Arm® platform for a Phase 2 clinical trial - On March 31, 2022, the Company entered into a Sales Order with Medidata to build a Synthetic Control Arm® (SCA) platform for its Phase 2 clinical trial of Rhenium-186 NanoLiposome (186RNL) in recurrent glioblastoma (GBM)[54] - The Sales Order has a six-month term and can be terminated for material breach or if the clinical study is terminated or its authorization withdrawn[55] Piramal Master Services Agreement This section outlines the master services agreement with Piramal Pharma Solutions for drug product development and supply - On January 8, 2021, the Company entered into a Master Services Agreement (MSA) with Piramal Pharma Solutions for the development, manufacture, and supply of the Company's RNL-Liposome Intermediate Drug Product[56] - The MSA has a five-year term with automatic one-year renewals and can be terminated for convenience with thirty days' notice or for material breach/insolvency[57] Other commitments and contingencies This section covers other contractual obligations with research organizations and confirms no clinical research study obligations as of the reporting date - The Company has agreements with research organizations for pre-clinical and clinical development studies, which include cancellation provisions[58] - As of June 30, 2022, the Company had no clinical research study obligations[58] Legal proceedings This section details an ongoing lawsuit against the Company, including allegations, claimed damages, and the Company's defense stance - The Company is a defendant in a lawsuit filed by Lorem Vascular, Pte. Ltd. on June 22, 2021, alleging false representations regarding a UK manufacturing facility and its certifications[59] - Lorem claims at least $6.0 million in compensatory damages and operational costs; the Company believes the claim is without merit and is vigorously defending the case, with no liability accrued as of June 30, 2022[59] 8. License Agreements This note describes the Company's key license agreements for intellectual property related to its therapeutic development programs UT Health Science Center at San Antonio ("UTHSA") License Agreement This section details the exclusive license agreement with UTHSA for biodegradable alginate microspheres technology - On December 31, 2021, the Company entered into an exclusive, perpetual, fully paid-up license agreement with UTHSA for patents, know-how, and technology related to biodegradable alginate microspheres (BAM)[61] - An upfront payment of $250 thousand was made in January 2022, recorded as in-process research and development acquired[62] NanoTx License Agreement This section outlines the exclusive license agreement with NanoTx, Corp. for radiolabeled nanoliposomes technology - On March 29, 2020, the Company entered into an exclusive, perpetual, fully paid-up license agreement with NanoTx, Corp. for patents, know-how, and technology related to radiolabeled nanoliposomes[63] 9. Stockholders' Equity This note provides details on the Company's preferred stock, warrants, and common stock activities, including recent financing efforts Preferred Stock This section details the authorized and outstanding shares of preferred stock, including their conversion features - The Company has 5,000,000 authorized shares of preferred stock ($0.001 par value)[64] - As of June 30, 2022, there were 938 shares of Series C Preferred Stock (convertible into 416,889 common shares) and 1,014 shares of Series B Convertible Preferred Stock (convertible into 5,978 common shares) outstanding[65] Warrants This section describes the outstanding Series U Warrants, their exercisability, and classification changes - As of June 30, 2022, there were 2,141,000 outstanding Series U Warrants, exercisable into an aggregate of 2,141,000 shares of common stock[68] - Series U Warrants were initially classified as liabilities due to contingent cash settlement obligations but were mostly amended in 2020 to be classified within stockholder's equity[67] Common Stock This section details the Company's common stock activities, including shares issued under purchase and at-the-market agreements Lincoln Park Purchase Agreement This section describes the agreement with Lincoln Park for common stock purchases and the shares issued under it - Under the 2020 Purchase Agreement, Lincoln Park committed to purchase up to $25.0 million of common stock over 36 months, with the Company having the discretion to sell[69][70] - During the six months ended June 30, 2022, the Company issued 5,665,000 shares for net proceeds of approximately $7.0 million[74] - The Company no longer has additional shares registered to sell under this agreement and does not intend to register more at this time[74] At-the-market Issuances This section details the at-the-market equity distribution agreements and the common shares issued through them - On January 14, 2022, the Company entered into a 2022 Equity Distribution Agreement with Canaccord Genuity LLC to sell up to $5.0 million of common stock via "at-the-market" offerings[75] - During the six months ended June 30, 2022, 1,293,657 shares were issued under the 2022 Distribution Agreement for net proceeds of approximately $0.9 million[75] - The 2020 Distribution Agreement with Canaccord was terminated after all registered shares were fully utilized, yielding $6.3 million from 2,179,193 shares in 2021[77] 10. Stock-based Compensation This note details the Company's stock incentive plans, unrecognized compensation costs, and stock option activity - The Company has two active stock incentive plans: the 2015 New Employee Incentive Plan (90,389 shares available) and the 2020 Stock Incentive Plan (3,500,000 shares authorized, 627,212 available)[79][80] - Total unrecognized stock-based compensation cost is approximately $1.2 million, expected to be recognized over a weighted average period of 2.63 years[82] Stock Option Activity (Six Months Ended June 30, 2022) | Metric | Options | Weighted Average Exercise Price | | :-------------------------- | :-------- | :------------------------------ | | Balance as of Dec 31, 2021 | 1,170,890 | $5.01 | | Granted | 13,000 | $0.53 | | Cancelled/forfeited | (17) | $24,705.88 | | Balance as of Jun 30, 2022 | 1,183,873 | $4.60 | 11. COVID-19 Pandemic and CARES Act This note assesses the impact of the COVID-19 pandemic on the Company's operations and the material impact of the CARES Act - The Company has not experienced a significant impact on its business and operations from the COVID-19 pandemic as of June 30, 2022, but acknowledges potential future disruptions[83] - The CARES Act had no material impact on the Company's income tax provision for the year ended December 31, 2021, or the six months ended June 30, 2022[84] 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 performance, operational trends, and future outlook, detailing its strategic focus on targeted radiotherapeutics, pipeline progress, recent developments, and liquidity management Overview This section introduces Plus Therapeutics, Inc. as a pharmaceutical company developing targeted radiotherapeutics for rare cancers, outlining its core technology and lead candidates - Plus Therapeutics, Inc. is a U.S. pharmaceutical company developing innovative, targeted radiotherapeutics for rare and difficult-to-treat cancers in adults and children[86] - The Company's approach involves encapsulating radionuclides (e.g., Rhenium isotopes) within nanoliposomes and microspheres to deliver high, targeted radiation doses to tumors while minimizing exposure to healthy tissues[86][88] - The lead candidate, Rhenium-186 NanoLiposome (186RNL), targets CNS cancers, and Rhenium-188 NanoLiposome Biodegradable Alginate Microsphere (188RNL-BAM) is designed for solid organ cancers[89] Pipeline This section details the Company's clinical development pipeline, focusing on its lead candidates and their applications in various cancer types 186RNL versus External Beam Radiation Therapy This section compares 186RNL's targeted radiation delivery to standard external beam radiotherapy, highlighting its potential advantages - 186RNL is a novel injectable radiotherapy designed for targeted, high-dose radiation delivery directly into glioblastoma tumors via convection-enhanced delivery (CED)[94] - Potential benefits of 186RNL over standard external beam radiotherapy (EBRT) include up to 20 times greater radiation dose, real-time visualization, more effective treatment of bulk and microscopic disease, reduced healthy tissue exposure, and single-visit treatment[100] ReSPECT-GBM Trial for Recurrent GBM This section provides an update on the ReSPECT-GBM trial for glioblastoma, including interim results, regulatory designations, and patient survival data - Glioblastoma (GBM) is the most common, aggressive primary adult brain cancer, with a poor prognosis (average life expectancy <24 months) and high recurrence rate (>90%)[95] - Interim Phase 1/2a ReSPECT-GBM trial results suggest 186RNL can deliver up to 740 Gy of absorbed radiation to tumor tissue without significant toxicities, compared to typical EBRT doses of about 35 Gy[98] - The FDA granted Orphan Drug and Fast Track designations to 186RNL for glioblastoma in September 2020[99] ReSPECT-GBM Trial OS (as of Nov 2021) | Patient Group | Mean OS (weeks) | Median OS (weeks) | Patients Alive | | :------------------------------------------------ | :-------------- | :---------------- | :------------- | | All 22 patients | 48.1 | 33.1 | 7 | | Therapeutic dose (>100 Gy) (13 patients) | 64.8 | 47.1 | 7 | | Sub-therapeutic dose (<100 Gy) (9 patients) | 23.9 | 22.3 | 0 | ReSPECT-LM Clinical Trial for Leptomeningeal Metastases This section details the ReSPECT-LM clinical trial for leptomeningeal metastases, including regulatory clearances and patient enrollment progress - Leptomeningeal metastases (LM) is a rare, highly lethal complication of late-stage cancer, with an average 1-year survival of 7%[104] - The FDA cleared the IND application for 186RNL for LM in October 2021 and granted Fast Track designation in November 2021[106] - The first patient in the ReSPECT-LM Phase 1 clinical trial was treated in Q1 2022, and the first cohort was completed in Q2 2022[106] ReSPECT-PBC Clinical Trial for Pediatric Brain Cancer This section outlines plans for investigating 186RNL in pediatric brain cancers, including target indications and regulatory considerations - The Company plans to investigate 186RNL for pediatric brain cancers, specifically high-grade glioma (HGG) and ependymoma, with an IND submission anticipated in late 2022 or early 2023[108][111] - The FDA has indicated that no additional preclinical or toxicology studies are required for this indication[108] - HGG affects 360-400 children annually in North America with a 5-year survival rate of ~20%; Ependymoma affects ~250 children annually in the U.S[109][110] Rhenium-188 NanoLiposome Biodegradable Alginate Microsphere Technology This section introduces the new 188RNL-BAM technology, its licensing, and its intended application for solid organ cancers - In January 2022, the Company licensed Biodegradable Alginate Microsphere (BAM) patents and technology from UT Health Science Center at San Antonio to combine with Rhenium NanoLiposome technology[112] - The new 188RNL-BAM technology is intended for intra-arterial embolization and local delivery of high-dose targeted radiation for solid organ cancers, with liver cancer as the likely initial clinical target[112][113] - Preclinical data showed Technetium-99m-BAM successfully delivered, embolized, and retained radiation in a target organ[113] Recent Developments This section highlights key recent corporate and clinical developments, including new agreements and financing activities Services Agreement and Sales Order with Medidata This section details the Company's engagement with Medidata for a Synthetic Control Arm® platform in a clinical trial - On March 31, 2022, the Company engaged Medidata to develop a Synthetic Control Arm® (SCA) platform for its Phase 2 186RNL clinical trial in GBM[114] UT Health Science Center San Antonio (UTHSA) License Agreement This section describes the exclusive global license agreement with UTHSA for 188RNL-BAM technology - On December 31, 2021, the Company secured an exclusive global license from UTHSA for 188RNL-BAM development and commercialization, with future milestone and earn-out payments[116] Recent Financings This section refers to the liquidity and capital resources section for details on the Company's recent financing activities - This section refers to the "Liquidity and Capital Resources" section for details on recent financing activities[117] Results of Operations This section analyzes the Company's financial performance by detailing changes in key operating and financing expenses over the reporting periods Research and development expenses This section analyzes the changes in research and development expenses, attributing increases to specific development costs Research and Development Expenses (in thousands) | Expense Type | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | R&D | $2,808 | $1,085 | $4,567 | $2,191 | | Share-based compensation | $23 | $21 | $48 | $42 | | Total R&D expenses | $2,831 | $1,106 | $4,615 | $2,233 | - Total R&D expenses increased by $1.7 million (154.6%) for the three months and $2.4 million (107.5%) for the six months ended June 30, 2022, primarily due to increased development costs for cGMP 186RNL drug and SCA development[119][120] - The Company expects aggregate R&D expenditures to increase in absolute dollars for the remainder of 2022 due to 186RNL and 188RNL-BAM development[121] General and administrative expenses This section analyzes the changes in general and administrative expenses, primarily due to higher legal and professional fees General and Administrative Expenses (in thousands) | Expense Type | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | G&A | $2,145 | $1,352 | $4,132 | $2,618 | | Share-based compensation | $144 | $117 | $299 | $203 | | Total G&A expenses | $2,289 | $1,469 | $4,431 | $2,821 | - Total G&A expenses increased by $0.8 million (54.5%) for the three months and $1.6 million (56.4%) for the six months ended June 30, 2022, mainly due to higher legal fees, intellectual property, and other professional expenses[122] - G&A expenditures are expected to remain generally consistent in 2022, excluding unpredictable litigation costs[123] Stock-based compensation expense This section details the stock-based compensation expenses, noting increases due to more grants and higher fair values of awards Stock-based Compensation Expenses (in thousands) | Expense Type | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development | $23 | $21 | $48 | $42 | | General and administrative | $144 | $117 | $299 | $203 | | Total share-based compensation | $167 | $138 | $347 | $245 | - Increases in stock-based compensation were primarily due to more grants of stock-based options and higher grant-date fair value of awards[124] Financing items This section reviews the Company's financing-related income and expenses, including interest income and expense, and changes in liability instrument fair value Financing Items (in thousands) | Item | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Interest income | $19 | $4 | $26 | $8 | | Interest expense | $(181) | $(229) | $(379) | $(476) | | Change in fair value of liability instruments | $0 | $0 | $1 | $2 | | Total other expense | $(162) | $(225) | $(352) | $(466) | - Interest expense decreased for both periods due to scheduled debt principal repayments that commenced on November 1, 2021[126][127] Liquidity and Capital Resources This section assesses the Company's financial liquidity, capital needs, and recent financing activities to support ongoing operations and future development Short-term and long-term liquidity This section evaluates the Company's current liquidity position, including cash and working capital, and its ability to fund operations for the next twelve months Key Liquidity Measures (in thousands) | Metric | June 30, 2022 | December 31, 2021 | | :-------------------------- | :-------------- | :---------------- | | Cash and cash equivalents | $18,090 | $18,400 | | Current assets | $18,889 | $19,724 | | Current liabilities | $6,971 | $5,870 | | Working capital | $11,918 | $13,854 | - The Company believes its current cash and cash equivalents are sufficient to fund operations for at least the next twelve months[128] - The Company has an ongoing need for additional capital to fund future clinical development and operations, with an inability to raise funds having a material adverse impact and potentially leading to loan default[129] - Recent financing activities include $0.9 million net proceeds from the 2022 Distribution Agreement (1,293,657 shares) and $7.0 million net proceeds from the 2020 Purchase Agreement (5,665,000 shares) during the six months ended June 30, 2022[130][132] Material Cash Obligations This section outlines the Company's significant cash commitments, including service agreements, term loan repayments, and operating leases - The Company has cash obligations related to the Medidata Sales Order for the SCA platform, ongoing principal and interest payments for the Term Loan with Oxford (until June 2024), and operating lease payments[136][137] Operating activities This section analyzes the net cash used in operating activities, primarily driven by increased research and development expenditures - Net cash used in operating activities increased to $6.5 million for the six months ended June 30, 2022, from $5.4 million in the same period of 2021, primarily due to increased research and development expenditures[138][135] Investing activities This section details the net cash used in investing activities, highlighting increased spending on intangible assets and in-process R&D - Net cash used in investing activities significantly increased to $715 thousand for the six months ended June 30, 2022, from $80 thousand in 2021[139][135] - This increase was driven by $250 thousand for in-process R&D assets from UTHSA and $500 thousand for purchases of fixed and intangible assets[139] Financing Activities This section reviews the net cash provided by financing activities, noting decreases due to lower proceeds from common stock sales and warrant exercises - Net cash provided by financing activities decreased to $6.9 million for the six months ended June 30, 2022, from $14.3 million in 2021[140][135] - The decrease was primarily due to lower proceeds from common stock sales ($7.8 million in 2022 vs. $12.3 million in 2021) and no warrant exercise proceeds in 2022 (vs. $2.0 million in 2021)[140][141] Critical Accounting Policies and Significant Estimates This section identifies the Company's critical accounting policies and significant estimates, noting no material changes from the prior annual report - Key estimates involve goodwill impairment and fair value measurement of liability-classified warrants using an option pricing model[144][145] - There have been no material changes to critical accounting policies and estimates during the six months ended June 30, 2022, as compared to the Annual Report on Form 10-K for December 31, 2021[146] Item 3. Quantitative and Qualitative Disclosures about Market Risk This item is marked as "Not applicable" for the reporting period, indicating no material quantitative or qualitative disclosures regarding market risk - This item is marked as "Not applicable" for the reporting period[147] Item 4. Controls and Procedures This section confirms the effectiveness of the Company's disclosure controls and procedures and reports no material changes in internal control over financial reporting during the quarter - Management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2022[149] - There have been no material changes in internal control over financial reporting during the quarter ended June 30, 2022[150] PART II. OTHER INFORMATION This part provides additional information beyond the financial statements, covering legal proceedings, updated risk factors, and a comprehensive list of exhibits Item 1. Legal Proceedings This section provides an update on the ongoing legal proceeding where the Company is a defendant in a lawsuit alleging false representations regarding a UK manufacturing facility, with the Company vigorously defending the case - The Company is a defendant in a lawsuit filed by Lorem Vascular, Pte. Ltd. on June 22, 2021, alleging false representations regarding a UK manufacturing facility and its certifications[151] - Lorem claims at least $6.0 million in compensatory damages; the Company believes the claim is without merit and is vigorously defending the case[151] Item 1A. Risk Factors This section highlights additional and updated risk factors, primarily focusing on the Company's non-compliance with Nasdaq's minimum bid price requirement and the potential consequences of delisting - The Company received a Nasdaq notice on May 24, 2022, for non-compliance with the minimum bid price requirement ($1.00 per share) and has until November 21, 2022, to regain compliance[155] - Failure to regain compliance could lead to delisting from Nasdaq, which would seriously harm stock liquidity, market price, and the Company's ability to raise capital[154][156] - This section supplements the risk factors discussed in the Annual Report on Form 10-K for the year ended December 31, 2021, with no other material changes noted[152][153] Item 6. Exhibits This section provides a comprehensive index of exhibits filed with the Form 10-Q, including corporate governance documents, incentive plans, and certifications, detailing their filing status and incorporation by reference - This section provides a comprehensive index of exhibits filed with the Form 10-Q, including corporate governance documents, incentive plans, and certifications (e.g., Sarbanes-Oxley Act certifications)[159] - Certifications furnished in Exhibit 32.1 are deemed to accompany the Form 10-Q but are not "filed" for Section 18 purposes unless specifically incorporated by reference[160]