Matinas BioPharma(MTNB) - 2021 Q3 - Quarterly Report

PART I - FINANCIAL INFORMATION This section presents Matinas BioPharma Holdings, Inc.'s unaudited condensed consolidated financial statements for the quarter ended September 30, 2021, along with management's discussion and analysis of financial condition and results of operations, market risk disclosures, and controls and procedures Item 1. FINANCIAL STATEMENTS This item includes the company's condensed consolidated balance sheets, statements of operations and comprehensive loss, statements of stockholders' equity, and statements of cash flow, along with detailed notes explaining significant accounting policies, liquidity, and specific financial line items Condensed Consolidated Balance Sheets Condensed Consolidated Balance Sheets (in thousands) | Metric | Sep 30, 2021 | Dec 31, 2020 | Change | | :--------------------------------- | :----------- | :----------- | :----- | | Total Current Assets | $56,481 | $61,555 | $(5,074) | | Total Non-Current Assets | $10,504 | $9,412 | $1,092 | | Total Assets | $66,985 | $70,967 | $(3,982) | | Total Current Liabilities | $4,099 | $3,568 | $531 | | Total Non-Current Liabilities | $4,632 | $3,669 | $963 | | Total Liabilities | $8,731 | $7,237 | $1,494 | | Total Stockholders' Equity | $58,254 | $63,731 | $(5,477) | | Total Liabilities and Stockholders' Equity | $66,985 | $70,967 | $(3,982) | Condensed Consolidated Statements of Operations and Comprehensive Loss Condensed Consolidated Statements of Operations (in thousands) | Metric | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :--------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Revenue: R&D | $0 | $96 | $33 | $96 | | R&D Expenses | $4,621 | $3,336 | $10,343 | $10,833 | | G&A Expenses | $2,257 | $2,364 | $7,711 | $6,980 | | Total Costs and Expenses | $6,878 | $5,700 | $18,054 | $17,814 | | Loss from Operations | $(6,878) | $(5,605) | $(18,021) | $(17,718) | | Sale of NJ NOL & Tax Credits | $0 | $0 | $1,328 | $1,073 | | Other Income, net | $41 | $155 | $108 | $538 | | Net Loss | $(6,837) | $(5,450) | $(16,584) | $(16,106) | | Net Loss Attributable to Common Shareholders | $(6,837) | $(5,677) | $(16,980) | $(16,681) | | Net Loss Per Share (Basic & Diluted) | $(0.03) | $(0.03) | $(0.08) | $(0.09) | | Weighted Average Common Shares Outstanding | 215,179,949 | 198,909,016 | 208,130,431 | 196,070,952 | Condensed Consolidated Statements of Stockholders' Equity Changes in Stockholders' Equity (in thousands) | Item | Balance Dec 31, 2020 | 9 Months Ended Sep 30, 2021 Changes | Balance Sep 30, 2021 | | :--------------------------------- | :------------------- | :-------------------------------- | :------------------- | | Redeemable Convertible Preferred Stock B | $3,797,705 | $(3,797,705) | $0 | | Common Stock (Shares) | 200,113,431 | 16,134,097 | 216,247,528 | | Common Stock (Amount) | $20,010 | $1,615 | $21,625 | | Additional Paid-in Capital | $167,192,003 | $15,976,984 | $183,168,987 | | Accumulated Deficit | $(107,507,193) | $(17,427,575) | $(124,934,768) | | Accumulated Other Comprehensive Income (loss) | $228,172 | $(229,766) | $(1,594) | | Total Stockholders' Equity | $63,730,697 | $(5,476,447) | $58,254,250 | - The company converted all 4,361 shares of Series B Preferred Stock into 8,722,000 shares of common stock during the nine months ended September 30, 2021, eliminating the preferred stock balance[16] - Issued 3,023,147 shares of common stock in a public offering, generating net proceeds of approximately $5.6 million[16] Condensed Consolidated Statements of Cash Flow Condensed Consolidated Statements of Cash Flow (in thousands) | Cash Flow Activity | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | Change | | :--------------------------------- | :-------------------------- | :-------------------------- | :----- | | Net Cash Used in Operating Activities | $(11,266) | $(13,060) | $1,794 | | Net Cash Provided by/(Used in) Investing Activities | $16,713 | $(49,756) | $66,469 | | Net Cash Provided by Financing Activities | $6,957 | $47,497 | $(40,540) | | Net Increase/(Decrease) in Cash, Cash Equivalents and Restricted Cash | $12,404 | $(15,319) | $27,723 | | Cash, Cash Equivalents and Restricted Cash at End of Period | $25,173 | $7,437 | $17,736 | Notes to Unaudited Condensed Consolidated Financial Statements These notes provide detailed explanations and breakdowns of the financial statement line items, significant accounting policies, and other relevant financial information, including business description, liquidity, fair value measurements, lease obligations, collaboration agreements, income taxes, stockholders' equity, and stock-based compensation Note 1 – Description of Business Matinas BioPharma Holdings Inc. is a clinical-stage biopharmaceutical company focused on developing novel pharmaceutical products, including its lipid nanocrystal (LNC) platform delivery technology and associated product candidates - Matinas BioPharma Holdings Inc. is a clinical-stage biopharmaceutical company[21] - Focuses on identifying and developing novel pharmaceutical products[21] Note 2 – Liquidity and Plan of Operations The company has a history of net losses and negative cash flows from operations, with an accumulated deficit of $124.9 million as of September 30, 2021. It expects to continue incurring substantial losses as it develops product candidates but believes its current cash and marketable securities are sufficient to fund operations into 2024 - Accumulated deficit of approximately $124.9 million as of September 30, 2021[22] Net Loss (in millions) | Period | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :-------------------------- | :-------------------------- | :-------------------------- | | Net Loss | $(16.6) | $(16.1) | - The company has not obtained regulatory approval for any product candidates nor generated revenue from product sales[23] - Cash and cash equivalents of approximately $24.9 million and marketable securities of approximately $28.9 million as of September 30, 2021, are believed sufficient to fund operations into 2024[26] Note 3 – Summary of Significant Accounting Policies This note outlines the basis of presentation for the unaudited condensed consolidated financial statements, which adhere to U.S. GAAP and SEC interim reporting requirements, and includes a specific discussion on the impact of COVID-19 COVID-19 - Financial results for the three and nine months ended September 30, 2021, were not significantly impacted by COVID-19[31] - The company cannot predict the future impact of COVID-19 on results or capital raising ability due to various factors[31] Note 4 – Cash, Cash Equivalents, Restricted Cash and Marketable Securities This note details the company's cash, cash equivalents, restricted cash, and marketable securities, including their classification, fair value measurements, and changes in unrealized gains/losses on available-for-sale securities Cash, Cash Equivalents and Restricted Cash Cash, Cash Equivalents and Restricted Cash (in thousands) | Metric | Sep 30, 2021 | Dec 31, 2020 | Sep 30, 2020 | Dec 31, 2019 | | :--------------------------------- | :----------- | :----------- | :----------- | :----------- | | Cash and cash equivalents | $24,923 | $12,432 | $7,051 | $22,170 | | Restricted cash | $250 | $336 | $386 | $586 | | Total | $25,173 | $12,768 | $7,437 | $22,756 | Marketable Securities - Marketable securities are classified as available-for-sale and carried at fair value[35] Unrealized Gains/(Losses) on Marketable Securities (in thousands) | Period | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2020 | | :--------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Unrealized (Loss)/Gain | $(53) | $(230) | $(114) | $367 | Marketable Securities Composition (in thousands) | Type | Sep 30, 2021 Fair Value | Dec 31, 2020 Fair Value | | :------------------------ | :---------------------- | :---------------------- | | U.S. Treasury Bonds | $3,505 | $18,429 | | U.S. Government Notes | $16,010 | $22,230 | | Corporate Debt Securities | $9,142 | $4,306 | | State and Municipal Bonds | $250 | $1,282 | | Total | $28,907 | $46,247 | Note 5 - Fair Value Measurements The company uses a fair value hierarchy (Level 1, 2, and 3) to measure financial instruments. Most marketable securities are classified as Level 2, valued using quoted market prices in inactive markets, while U.S. Treasury bonds are Level 1 - Fair value hierarchy categorizes inputs into Level 1 (active markets), Level 2 (inactive markets or observable inputs), and Level 3 (unobservable inputs)[37][38] Fair Value Hierarchy of Marketable Securities (in thousands) | Type (Sep 30, 2021) | Total | Level 1 | Level 2 | Level 3 | | :------------------------ | :---- | :------ | :------ | :------ | | U.S. Treasury Bonds | $3,505 | $3,505 | $0 | $0 | | U.S. Government Notes | $16,010 | $0 | $16,010 | $0 | | Corporate Debt Securities | $9,142 | $0 | $9,142 | $0 | | State and Municipal Bonds | $250 | $0 | $250 | $0 | | Total | $28,907 | $3,505 | $25,402 | $0 | Note 6 – Leasehold Improvements and Equipment Leasehold improvements and equipment, net, increased slightly to $1.569 million as of September 30, 2021, from $1.524 million at December 31, 2020, driven by new purchases Leasehold Improvements and Equipment, Net (in thousands) | Category | Sep 30, 2021 | Dec 31, 2020 | | :--------------------------------- | :----------- | :----------- | | Equipment | $1,610 | $1,443 | | Leasehold improvements | $935 | $878 | | Total | $2,545 | $2,321 | | Less: accumulated depreciation and amortization | $976 | $797 | | Leasehold improvements and equipment, net | $1,569 | $1,524 | - Depreciation and amortization expense for the nine months ended September 30, 2021, was approximately $179 thousand, up from $173 thousand in the prior year period[41] Note 7 – Accrued Expenses and Other Liabilities Total accrued expenses increased to $2.894 million as of September 30, 2021, from $2.795 million at December 31, 2020, primarily due to an increase in deferred revenue and other deferred liabilities, including a significant deferred liability under the Cystic Fibrosis Foundation agreement Accrued Expenses (in thousands) | Category | Sep 30, 2021 | Dec 31, 2020 | | :--------------------------------- | :----------- | :----------- | | Payroll and incentives | $944 | $1,094 | | General and administrative expenses | $217 | $280 | | Research and development expenses | $501 | $778 | | Deferred revenue and other deferred liabilities | $1,232 | $643 | | Total | $2,894 | $2,795 | - Deferred liability under the Cystic Fibrosis Foundation agreement increased to approximately $1,199 thousand at September 30, 2021, from $577 thousand at December 31, 2020[42] Note 8 – Leases The company has various operating and finance lease agreements, with a significant amendment to its Bedminster office lease extending the term for seven years from August 2021. Lease liabilities are recognized based on the present value of payments using incremental borrowing rates Operating lease obligations - The Bedminster office lease was amended, extending the term for seven years from August 1, 2021, and adding 3,034 rentable square feet[45] Operating Lease Liabilities (in thousands) | Maturity of Lease Liabilities | Sep 30, 2021 | Dec 31, 2020 | | :--------------------------------- | :----------- | :----------- | | Total undiscounted operating lease payments | $6,146 | $4,920 | | Present value of operating lease liabilities | $4,803 | $3,696 | | Weighted average remaining lease term (years) | 6.3 | 6.7 | | Weighted average discount rate | 7.7% | 8.4% | Note 9 - Collaboration Agreements, Licenses and Other Research and Development Agreements The company has collaboration agreements, including a Therapeutics Development Award from the Cystic Fibrosis Foundation for MAT2501 development and a feasibility study agreement with Genentech for LNC platform technology, which generate contract research revenue and offset R&D expenses Cystic Fibrosis Foundation Therapeutics Development Award - Received a Therapeutics Development Award of up to $4.2 million from the CFF to support preclinical development of MAT2501[52] - Recognized approximately $1.558 million as credits to R&D expenses for the nine months ended September 30, 2021, related to the Award[53] Genentech Feasibility Study Agreement - Agreement with Genentech involves developing oral formulations using the company's LNC platform technology for a total of $100 thousand across three molecules[54] - Recognized approximately $33 thousand of revenue for the nine months ended September 30, 2021, upon fulfilling obligations for the second molecule[54] Note 10 – Income Taxes The company recognized income from the sale of New Jersey Net Operating Losses (NOLs) and Research and Development (R&D) tax credits under a state program Sale of net operating losses (NOLs) & tax credits Sale of NOLs & Tax Credits (in millions) | Period | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :-------------------------- | :-------------------------- | :-------------------------- | | Income from NOLs & Tax Credits | $1.3 | $1.1 | Note 11 – Stockholders' Equity This note details changes in stockholders' equity, including common stock issuances from an ATM sales agreement and the Aquarius Merger Agreement, the conversion of all Series B Preferred Stock into common stock, and information on outstanding warrants and diluted EPS Common Stock - Issued 1,500,000 unregistered shares of common stock on September 3, 2021, related to the Aquarius Merger Agreement, recorded as a $1.2 million R&D expense[56] - Sold 3,023,147 shares of common stock under its At-The-Market Sales Agreement, generating net proceeds of approximately $5.6 million for the nine months ended September 30, 2021[57] Preferred Stock - All 4,361 shares of Series B Preferred Stock were automatically converted into 8,436,000 shares of common stock on June 19, 2021[59] - The company made dividend payments totaling 1,687,200 and 1,365,600 shares of common stock on June 19, 2021, and 2020, respectively, to Series B Preferred Stockholders[60] Warrants - As of September 30, 2021, the company had outstanding warrants to purchase 988,000 shares of common stock, with exercise prices ranging from $0.50 to $0.75 per share[62] Warrants Activity (in thousands) | Item | Dec 31, 2019 | Dec 31, 2020 | Sep 30, 2021 | | :--------------------------------- | :----------- | :----------- | :----------- | | Outstanding | 5,397 | 1,328 | 988 | | Exercised | (2,576) | (320) | N/A | | Expired | (1,493) | (20) | N/A | Basic and diluted net loss per common share - Diluted EPS is the same as basic EPS due to net losses, making potentially dilutive securities anti-dilutive[64] Potentially Dilutive Securities Excluded from Diluted EPS (in thousands) | Security Type | As of Sep 30, 2021 | As of Sep 30, 2020 | | :--------------------------------- | :----------------- | :----------------- | | Stock options | 22,242 | 22,260 | | Preferred Stock and accrued dividend upon conversion | 0 | 9,104 | | Warrants | 988 | 1,328 | | Total | 23,230 | 32,692 | Note 12 – Accumulated Other Comprehensive (Loss)/Income Accumulated other comprehensive income shifted from a gain of $228 thousand at December 31, 2020, to a loss of $2 thousand at September 30, 2021, primarily due to net unrealized losses on available-for-sale securities during the period Accumulated Other Comprehensive (Loss)/Income (in thousands) | Metric | Dec 31, 2020 | 9 Months Ended Sep 30, 2021 | Sep 30, 2021 | | :--------------------------------- | :----------- | :-------------------------- | :----------- | | Balance | $228 | N/A | $(2) | | Net unrealized loss on securities available-for-sale | N/A | $(230) | N/A | Note 13 – Stock-based Compensation The company's equity compensation plan allows for various awards, with stock-based compensation expense totaling $3.217 million for the nine months ended September 30, 2021. Unrecognized compensation costs for unvested awards amount to $8.4 million Stock Options Stock Options Activity (in thousands) | Item | Outstanding at Jan 1, 2021 | Granted | Exercised | Forfeited | Expired | Outstanding at Sep 30, 2021 | | :--------------------------------- | :------------------------- | :------ | :-------- | :-------- | :------ | :-------------------------- | | Stock Options | 22,551 | 4,796 | (1,063) | (2,701) | (1,341) | 22,242 | Restricted Stock Awards - Granted 24 thousand restricted stock awards for the nine months ended September 30, 2021, primarily to Board members or vendors[71] - Recorded general and administrative expense of approximately $85 thousand for restricted stock awards for the nine months ended September 30, 2021[71] 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, results of operations, and liquidity for the periods presented, including forward-looking statements, an overview of strategy, detailed financial operations, current operating trends, and a comparison of financial results CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This section warns readers that the report contains forward-looking statements subject to various known and unknown risks and uncertainties, including those related to funding, product development, regulatory approvals, and the impact of the COVID-19 pandemic, which could cause actual results to differ materially - The report contains forward-looking statements that involve known and unknown risks and uncertainties[74] - Key risk factors include the ability to raise additional capital, timing of clinical trials and approvals, history of operating losses, dependence on early-stage product candidates, and the impact of COVID-19[75] Overview The company's strategy focuses on improving intracellular delivery of therapeutics via its lipid nanocrystal (LNC) drug delivery platform and seeking a partner for LYPDISO, a proprietary omega-3 drug. Key strategic elements include advancing clinical-stage LNC assets, delivering efficacy data for MAT2203, progressing MAT2501 preclinical development, and expanding LNC platform applications through collaborations - Focused on improving intracellular delivery of therapeutics using its lipid nanocrystal (LNC) drug delivery platform[77] - Seeking a partner for LYPDISO, a proprietary, next-generation prescription omega-3 drug[77] - Strategic goals include advancing clinical-stage LNC assets (MAT2203, MAT2501) and expanding LNC platform utilization through collaborations[79][82] Financial Operations Overview This section provides an overview of the company's revenue, research and development expenses, general and administrative expenses, income from NOLs and tax credits, and other income, highlighting the significant R&D investments and the expectation of continued operating losses Revenue Contract Research Revenue (in thousands) | Period | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :-------------------------- | :-------------------------- | :-------------------------- | | Revenue | $33 | $96 | - The company does not expect to generate product revenue until 2023 at the earliest, if ever[81] Research and Development Expenses - R&D expenses consist of costs for MAT2203, MAT2501, LYPDISO, and LNC delivery technology, including preclinical work, clinical trial materials, consultants, CROs, and employee-related expenses[82][83] Direct Research and Development Expenses (in thousands) | Category | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :--------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Manufacturing process development | $844 | $318 | $1,572 | $928 | | Preclinical trials | $99 | $119 | $101 | $598 | | Clinical development | $586 | $1,295 | $1,652 | $3,994 | | Regulatory | $44 | $39 | $129 | $73 | | Internal staffing, overhead and other | $3,048 | $1,565 | $6,889 | $5,240 | | Total R&D | $4,621 | $3,336 | $10,343 | $10,833 | - R&D expenses are expected to increase as product candidates advance to later clinical stages and the drug platform technology expands[84] General and Administrative Expenses - G&A expenses primarily include salaries for executive and finance functions, facility costs, insurance, investor relations, and professional fees[85] - Anticipates G&A expenses to remain relatively consistent with the prior year in 2021[86] Sale of Net Operating Losses (NOLs) & Tax Credits Income from Sale of NOLs & Tax Credits (in millions) | Period | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :-------------------------- | :-------------------------- | :-------------------------- | | Income | $1.3 | $1.1 | Other Income, net - Primarily consists of interest income/(expense), dividends, and franchise taxes[88] Application of Critical Accounting Policies and Accounting Estimates - Critical accounting policies include Stock-based compensation, Fair value measurements, Research and development costs, Goodwill and other intangible assets, and Basic and diluted net loss per common share[90] Current Operating Trends The company's R&D efforts are focused on advancing MAT2203 and MAT2501 through clinical and preclinical development, respectively, and expanding its LNC platform technology through collaborations. Significant investment in product development is expected to continue, with R&D expenses primarily supporting preclinical and clinical programs - R&D efforts are focused on advancing MAT2203 (clinical development for CM), accelerating MAT2501 (preclinical development with CFF assistance), and expanding LNC platform technology through collaborations[92] - Expects all near-term R&D expenses to support current and future preclinical and clinical development programs[93] Results of Operations This section compares the company's revenues and operating expenses for the three and nine months ended September 30, 2021, against the corresponding periods in 2020, detailing changes in R&D, G&A, and other income Comparison of the three months ended September 30, 2021 to the three months ended September 30, 2020 Revenues and Operating Expenses (in thousands) | Metric | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | Change | | :--------------------------------- | :-------------------------- | :-------------------------- | :----- | | Revenues | $0 | $96 | $(96) | | Research and development | $4,621 | $3,336 | $1,285 | | General and administrative | $2,257 | $2,364 | $(107) | | Operating Expenses | $6,878 | $5,700 | $1,178 | - R&D expenses increased by approximately $1.3 million, primarily due to a $1.2 million expense from the Aquarius Merger Agreement common stock issuance and increased compensation, partially offset by decreased clinical trial expenses[96] - G&A expenses decreased due to lower compensation, professional fees, and consulting expenses[97] Comparison of the nine months ended September 30, 2021 to the nine months ended September 30, 2020 Revenues and Operating Expenses (in thousands) | Metric | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | Change | | :--------------------------------- | :-------------------------- | :-------------------------- | :----- | | Revenues | $33 | $96 | $(63) | | Research and development | $10,343 | $10,834 | $(491) | | General and administrative | $7,711 | $6,980 | $731 | | Operating Expenses | $18,054 | $17,814 | $240 | | Sale of net operating losses (NOLs) | $1,328 | $1,073 | $255 | - R&D expenses decreased by approximately $0.5 million, mainly due to the completion of the LYPDISO clinical trial and $1.6 million in expense reimbursement for MAT2501, partially offset by the $1.2 million Aquarius Merger Agreement expense and increased compensation[99] - G&A expenses increased by approximately $0.7 million, primarily due to higher compensation from stock option exercises and increased insurance, partially offset by lower professional fees[100] Liquidity and capital resources The company has historically funded operations through equity offerings and had $53.8 million in unrestricted cash, cash equivalents, and marketable securities as of September 30, 2021. It details cash flow activities (operating, investing, financing) and outlines future funding requirements, expecting existing funds to last into 2024 Sources of Liquidity - Funded operations since inception through private placements and public offerings of equity securities, raising approximately $156.7 million in gross proceeds[102] - As of September 30, 2021, had unrestricted cash, cash equivalents, and marketable securities totaling approximately $53.8 million[103] 2020 At-The-Market Sales Agreement - Sold 3,023,147 shares of common stock under the ATM Sales Agreement for the nine months ended September 30, 2021, generating net proceeds of approximately $5.6 million[105] 2020 Common Stock Offering - Closed an underwritten public offering of approximately 32.3 million shares of common stock in January 2020, generating net proceeds of approximately $46.7 million[106] Cash Flows This section provides a summary of cash flows from operating, investing, and financing activities for the nine-month periods ended September 30, 2021 and 2020, highlighting significant changes in each category Operating Activities Net Cash Used in Operating Activities (in thousands) | Period | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | Change | | :-------------------------- | :-------------------------- | :-------------------------- | :----- | | Net Cash Used | $(11,266) | $(13,060) | $1,794 | - The decrease in cash used in operating activities was primarily due to a $1.0 million decrease in working capital adjustments and $0.8 million lower expenses[108] Investing Activities Net Cash Provided by/(Used in) Investing Activities (in thousands) | Period | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | Change | | :-------------------------- | :-------------------------- | :-------------------------- | :----- | | Net Cash Provided/(Used) | $16,713 | $(49,756) | $66,469 | - The significant increase in cash provided by investing activities was mainly due to a $10.3 million increase in proceeds from marketable securities maturities and a $56.4 million decrease in marketable securities purchases compared to the prior year[109] Financing Activities Net Cash Provided by Financing Activities (in thousands) | Period | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | Change | | :-------------------------- | :-------------------------- | :-------------------------- | :----- | | Net Cash Provided | $6,957 | $47,497 | $(40,540) | - The decrease in cash from financing activities was primarily due to lower net proceeds from equity offerings ($5.6 million from ATM sales in 2021 vs. $46.6 million from public offering in 2020)[110] Funding Requirements and Other Liquidity Matters - Expects existing cash and cash equivalents to fund operating expenses and capital expenditures into 2024[111] - Anticipates significant expenses and increasing operating losses due to further preclinical and clinical studies, new product candidate development, regulatory approvals, manufacturing, and intellectual property maintenance[111] - Future funding needs will be met through equity offerings, debt financings, government funding, collaborations, and licensing arrangements, with no committed external sources other than limited grant funding[112] Contractual Obligations and Commitments - The amendment to the Bedminster lease, effective August 1, 2021, extends the term for seven years with a total lease commitment of approximately $1.8 million[114] Off-Balance Sheet Arrangements - The company did not have any off-balance sheet arrangements during the periods presented[115] Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The company's market risk exposure is limited to its cash, cash equivalents, and marketable securities, which are primarily interest-earning instruments. Due to the short-term nature of its portfolio, a sudden change in interest rates is not expected to materially impact its financial condition - Market risk exposure is limited to cash, cash equivalents, and marketable securities, totaling $53.8 million as of September 30, 2021[116] - Primary exposure is interest income sensitivity, but the short-term nature of instruments limits material impact from interest rate changes[116] Item 4. CONTROLS AND PROCEDURES The company's management, including its principal executive and financial officers, evaluated the effectiveness of its disclosure controls and procedures as of September 30, 2021, concluding they were effective at a reasonable assurance level. No material changes in internal control over financial reporting were identified during the third quarter of 2021 Evaluation of Disclosure Controls and Procedures - Disclosure controls and procedures were evaluated and deemed effective at the reasonable assurance level as of September 30, 2021[117] Changes in Internal Control Over Financial Reporting - No material changes in internal control over financial reporting were identified during the third quarter of 2021[119] PART II - OTHER INFORMATION This section covers other required disclosures, including legal proceedings, risk factors, unregistered sales of equity securities, defaults under senior securities, mine safety disclosures, and a list of exhibits Item 1. LEGAL PROCEEDINGS - No legal proceedings to report[121] Item 1A. RISK FACTORS - No material changes from the risk factors reported in the Annual Report on Form 10-K for the fiscal year ended December 31, 2020[122] Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS - Issued 1,500,000 unregistered shares of common stock on September 3, 2021, under the Aquarius Merger Agreement, exempt from registration under Section 4(a)(2) of the Securities Act[123] Item 3. DEFAULTS UNDER SENIOR SECURITIES - No defaults under senior securities[124] Item 4. MINE SAFETY DISCLOSURES - Not applicable[125] Item 5. OTHER INFORMATION - No other information to report[126] Item 6. EXHIBITS - Refers to the Exhibit Index for a list of exhibits filed or furnished with the report[127] SIGNATURES The report is duly signed on behalf of Matinas BioPharma Holdings, Inc. by its Chief Executive Officer, Jerome D. Jabbour, and Chief Financial Officer, Keith A. Kucinski, on November 8, 2021 EXHIBIT INDEX This section lists the exhibits filed or furnished with the Quarterly Report on Form 10-Q, including certifications and Inline XBRL documents