You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q and with our audited financial statements for the year endedDecember 31, 2020 , included in our 2020 Annual Report. Some of the information contained in this discussion and analysis, including information with respect to our plans and strategy for our business and related financing, include forward-looking statements that involve risks, uncertainties, and assumptions. These statements are based on our beliefs and expectations about future outcomes and are subject to risks and uncertainties that could cause our actual results to differ materially from anticipated results. We undertake no obligation to publicly update these forward-looking statements, whether as a result of new information, future events, or otherwise. You should read the "Risk Factors" section included in our 2020 Annual Report and the "Risk Factors" and "Disclosure Regarding Forward-Looking Statements" sections of this Quarterly Report on Form 10-Q for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Overview We are a biopharmaceutical company focused on developing gene therapies to cure blindness diseases and developing a vaccine to save lives from COVID-19. Our cutting-edge technology pipeline includes: â¢COVID-19 Vaccine - COVAXIN is a whole-virion inactivated COVID-19 vaccine candidate being developed to prevent COVID-19 infection in humans. We are co-developing COVAXIN with Bharat Biotech for theU.S. and Canadian markets. â¢Modifier Gene Therapy Platform - Based on NHRs, we believe our gene therapy platform has the potential to address many retinal diseases, including RP, LCA, and dry AMD. â¢Novel Biologic Therapy for Retinal Diseases - We are developing OCU200, a novel biologic product candidate, to treat DME, DR, and wet AMD. COVID-19 Vaccine InFebruary 2021 , we entered into the Covaxin Agreement with Bharat Biotech, pursuant to which we obtained an exclusive right and license under certain of Bharat Biotech's intellectual property rights, with the right to grant sublicenses to develop, manufacture, and commercialize COVAXIN for the prevention of COVID-19 in humans inthe United States , its territories, and possessions. The Covaxin Agreement was subsequently amended inJune 2021 by which we and Bharat Biotech agreed to expand our rights to develop, manufacture, and commercialize COVAXIN to includeCanada in addition tothe United States , its territories, and possessions. COVAXIN is a whole-virion inactivated COVID-19 vaccine candidate and is formulated with the inactivated SARS-CoV-2 virus, an antigen, and an adjuvant. COVAXIN requires a two-dose vaccination regimen given 28 days apart and is stored in standard vaccine storage conditions (2-8°C). COVAXIN has been granted approval for emergency use inIndia and over 45.0 million doses globally have been administered to date. InJuly 2021 , we announced that COVAXIN demonstrated an overall vaccine efficacy against COVID-19 disease of 77.8%, with efficacy against severe COVID-19 disease of 93.4%, and efficacy against asymptomatic COVID-19 disease of 63.6% in the Phase 3 clinical trial conducted by Bharat Biotech inIndia . The aforementioned efficacy results represent point estimates of vaccine efficacy with a 95% confidence interval of 65.2% to 86.4% against COVID-19 disease, 57.1% to 99.8% against severe COVID-19 disease, and 29.0% to 82.4% against asymptomatic COVID-19 disease. The Phase 3 clinical trial enrolled 25,798 participants over the age of 18 inIndia , including 10.7% of participants over the age of 60 and 27.5% of participants with at least one pre-existing condition. Adverse events in the COVAXIN and control arms of the Phase 3 clinical trial were observed in 12.4% of subjects, with less than 0.5% of subjects experiencing serious adverse side effects. The majority of the symptomatic cases identified in aggregate in the COVAXIN and controls arms in the Phase 3 clinical trial were COVID-19 variants, the majority of which were identified to be the Delta variant, B.1.617.2. Subjects vaccinated with COVAXIN in the Phase 3 clinical trial showed protection against the emerging Delta variant, B.1.617.2, showing a vaccine efficacy of 65.2%, which represents a point estimate of vaccine efficacy with a 95% confidence interval of 33.1% to 83.0%. Additionally, in in-vitro studies conducted by the ICMR -National Institute of Virology , COVAXIN demonstrated potential effectiveness against the Zeta variant, B.1.1.28.2, which contains the E484K mutation found inNew York , as well as potential effectiveness against the Alpha variant, B.1.1.7, and the Beta variant, B.1.351. 24
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Table of Contents We are currently evaluating the clinical and regulatory pathway to market for COVAXIN inthe United States . InJune 2021 , the FDA provided feedback to us regarding the data and information contained in a "Master File" that was previously submitted to the FDA and recommended that we pursue a BLA submission instead of an EUA application for COVAXIN inthe United States . As part of the feedback provided by the FDA regarding the "Master File", the FDA also requested additional information and data. We are currently in discussions with the FDA regarding the appropriate regulatory pathway for COVAXIN inthe United States . We are additionally in discussions with the FDA regarding the data requirements for COVAXIN under a BLA submission and anticipate that data from an additional clinical trial will be required to support a BLA submission. We are pursuing authorization for COVAXIN inCanada and have had discussions withHealth Canada regarding the regulatory pathway for COVAXIN under the Interim Order. InJuly 2021 , we announced that we had completed our rolling submission toHealth Canada for COVAXIN. The rolling submission process, which permits companies to submit safety and efficacy data and information as they become available, was recommended and accepted under the Interim Order and transitioned to a New Drug Submission for COVID-19. The submission was conducted through our Canadian affiliate, Vaccigen. We are evaluating our commercialization strategy for COVAXIN inthe United States andCanada , if authorized or approved in either jurisdiction. InJune 2021 , we selectedJubilant HollisterStier as our manufacturing partner for COVAXIN to prepare for the potential commercial manufacturing for theOcugen Covaxin Territory. We expect to enter into a master services agreement withJubilant HollisterStier for the manufacture of COVAXIN and the technology transfer process toJubilant HollisterStier has been initiated. Modifier Gene Therapy Platform We are developing a breakthrough modifier gene therapy platform to generate therapies designed to fulfill unmet medical needs in the area of retinal diseases, including IRDs and dry AMD. Our modifier gene therapy platform is based on NHRs, which have the potential to restore homeostasis, the basic biological processes in the retina. Unlike single-gene replacement therapies, which only target one genetic mutation, we believe that our gene therapy platform, through its use of NHRs, represents a novel approach in that it may address multiple retinal diseases with one product. IRDs such as RP, a group of rare genetic disorders that involve a breakdown and loss of cells in the retina and can lead to visual impairment and blindness, affect over 2.0 million people worldwide. Over 150 gene mutations have been associated with RP and this number represents only 60% of the RP population. The remaining 40% of RP patients cannot be genetically diagnosed, making it difficult to develop individual treatments. We believe that OCU400, our first product candidate being developed with our modifier gene therapy platform, has the potential to be broadly effective in restoring retinal integrity and function across a range of genetically diverse IRDs, including RP and LCA. For example, we believe OCU400 has the potential to eliminate the need for developing more than 150 individual products and provide one treatment option for all RP patients. OCU400 has received four ODDs from the FDA for the treatment of certain disease genotypes: NR2E3, CEP290, RHO, and PDE6Ã mutation-associated inherited retinal degenerations. We are planning to initiate two parallel Phase 1/2a clinical trials for OCU400 inthe United States later this year. OCU400 additionally has received OMPD from the EC, based on the recommendation of the EMA, for RP and LCA, which we believe further supports the potential broad spectrum application of OCU400 to treat many IRDs. We are currently evaluating options to commence OCU400 clinical trials inEurope in 2022. Our second gene therapy candidate, OCU410, is being developed to utilize the nuclear receptor genes RORA for the treatment of dry AMD. This candidate is currently in preclinical development. We are planning to initiate a Phase 1/2a clinical trial for OCU410 in 2022. Novel Biologic Therapy for Retinal Diseases We are also conducting preclinical development for our biologic product candidate, OCU200. OCU200 is a novel fusion protein designed to treat DME, DR, and wet AMD. We had a pre-IND meeting with the FDA inNovember 2020 and received guidance on IND-enabling preclinical studies to support the Phase 1/2a study. We have completed the technology transfer of manufacturing processes to our CDMO for the manufacture of OCU200. We expect to initiate a Phase 1/2a clinical trial in 2022. Our CDMO will manufacture the clinical supplies for the Phase 1/2a clinical trial. Product Candidate for the Treatment of Ocular Graft-Versus-Host Disease We were developing OCU300, a small molecule therapeutic for the treatment of symptoms associated with ocular graft-versus-host disease. The Phase 3 clinical trial for OCU300 was discontinued in 2020 based on results of a pre-planned interim sample size analysis conducted by an independent Data Monitoring Committee, which indicated the trial was unlikely to meet its co-primary endpoints upon completion. 25
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Table of Contents Impact of COVID-19 on our Business The COVID-19 pandemic is continually evolving and we are closely monitoring the situation. Impacts from the COVID-19 pandemic remain highly uncertain and subject to change and, as such, we cannot predict the specific duration or impact that the COVID-19 pandemic may have on our operations including our preclinical activities, future clinical trials, and potential commercialization. The extent to which the COVID-19 pandemic may impact our operations is dependent on future developments, including but not limited to: (i) the duration of the spread of the SARS-CoV-2 virus, including the spread of variants, (ii) the future actions taken by governmental authorities and regulators with respect to the COVID-19 pandemic, and (iii) the impact on our partners, collaborators, and suppliers. We will continue to monitor the situation closely as these effects could have a material impact on our operations. Financial Operations Overview We have no products approved for commercial sale and have not generated significant revenue to date. We have never been profitable and have incurred net losses in each year since inception. We incurred net losses of approximately$33.0 million and$7.6 million for the six months endedJune 30, 2021 and 2020, respectively. As ofJune 30, 2021 , we had an accumulated deficit of$106.3 million and a cash, cash equivalents, and restricted cash balance of$115.8 million . Research and development expense Research and development costs are expensed as incurred. These costs consist of internal and external expenses, as well as depreciation on assets used within our research and development activities. Internal expenses include the cost of salaries, benefits, severance, and other related costs, including stock-based compensation, for personnel serving in our research and development functions, as well as allocated rent and utilities expenses. External expenses include development, clinical trials, patent costs, and regulatory compliance costs incurred with research organizations, contract manufacturers, and other third-party vendors. License fees paid to acquire access to proprietary technology are expensed to research and development unless it is determined that the technology is expected to have an alternative future use. All patent-related costs incurred in connection with filing and prosecuting patent applications are expensed as incurred to research and development expense due to the uncertainty about the recovery of the expenditure. We record costs for certain development activities, such as preclinical studies and clinical trials, based on our evaluation of the progress to completion of specific tasks. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the condensed consolidated financial statements as prepaid or accrued research and development expense, as applicable. Our recording of costs for certain development activities requires us to use estimates. We believe our estimates and assumptions are reasonable under the current conditions; however, actual results may differ from these estimates. Research and development expenses account for a significant portion of our operating expenses. We plan to incur research and development expenses for the foreseeable future as we expect to continue the development of our product candidates. We anticipate that our research and development expenses will be higher in 2021 and subsequent periods as compared to prior periods as we evaluate the regulatory and commercialization path for COVAXIN inthe United States andCanada as well as conduct preclinical and clinical activities with respect to our other product candidates. Our research and development expenses are not currently tracked on a program-by-program basis for indirect and overhead costs. We use our personnel and infrastructure resources across multiple research and development programs directed toward identifying, developing, and commercializing product candidates. At this time, due to the inherently unpredictable nature of preclinical and clinical development as well as regulatory approval and commercialization, we are unable to estimate with any certainty the costs we will incur and the timelines we will require in our continued development and commercialization efforts. As a result of these uncertainties, successful development and completion of clinical trials as well as regulatory approval and commercialization are uncertain and may not result in approved products. Completion dates and completion costs can vary significantly for each product candidate and are difficult to predict. We will continue to make determinations as to which product candidates to pursue and how much funding to direct to each product candidate on an ongoing basis in response to our ability to enter into collaborations with respect to each product candidate, the scientific and clinical success of each product candidate as well as ongoing assessments as to the commercial potential of each product candidate. General and administrative expense General and administrative expense consists primarily of personnel expenses, including salaries, benefits, severance, insurance, and stock-based compensation expense, for employees in executive, accounting, and other administrative functions. General 26
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Table of Contents and administrative expense also includes corporate facility costs, including allocated rent and utilities, insurance premiums, legal fees related to corporate matters, and fees for auditing, accounting, and other consulting services. We anticipate that our general and administrative expenses will be higher in 2021 as compared to prior periods as a result of higher corporate infrastructure costs including, but not limited to, accounting, legal, human resources, consulting, and investor relations fees. Additionally, if and when we believe a regulatory approval of a product candidate appears likely, we anticipate an increase in payroll and expense as a result of our preparation for commercial operations, especially as it relates to the sales and marketing of our product candidates. Severance-related expense InJune 2020 , we communicated notice to five employees of the termination of their employment as a result of the discontinuation of a product candidate. This reduction represented one-third of our workforce at the time of communication. All terminations were "without cause" and each employee received termination benefits upon departure. The termination dates varied for each employee and ranged fromJune 30, 2020 toDecember 31, 2020 . As a result of the workforce reduction, we expect to pay severance benefits of$0.2 million throughout the remainder of 2021. We made severance payments of$0.2 million and$0.5 million during the three and six months endedJune 30, 2021 , respectively. We made a de minimis amount of severance payments during the three and six months endedJune 30, 2020 . Critical Accounting Policies and Significant Judgments and Estimates The preparation of financial statements in conformity with GAAP requires us to make judgments, estimates, and assumptions in the preparation of our condensed consolidated financial statements. Actual results could differ from those estimates. There were no material changes to our critical accounting policies and estimates as reported in our 2020 Annual Report. Results of Operations Comparison of the Three Months EndedJune 30, 2021 and 2020 The following table summarizes the results of our operations for the three months endedJune 30, 2021 and 2020 (in thousands): Three months ended June 30, 2021 2020 Change Revenues Collaboration revenue $ -$ 43 $ (43) Total revenues - 43 (43) Operating expenses Research and development 18,853 1,630 17,223 General and administrative 6,757 1,779 4,978 Total operating expenses 25,610 3,409 22,201 Loss from operations (25,610) (3,366) (22,244) Other income (expense) Interest income 10 - 10 Interest expense (20) (248) 228 Other income (expense) (332) - (332) Total other income (expense) (342) (248) (94) Net loss$ (25,952) $ (3,614) $ (22,338)
Research and development costs Research and development costs increase by
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Table of Contents COVAXIN development and regulatory activities,$0.5 million in stock-based compensation expense, and$0.4 million in employee-related expenses offset by a$0.5 million decrease for the discontinuation of OCU300 clinical trial activities in 2020. General and administrative expense General and administrative expense increased by$5.0 million for the three months endedJune 30, 2021 compared to the three months endedJune 30, 2020 . The increase was primarily due to$2.0 million of expenses for stockholder meetings and proxy solicitation as well as increases of$1.5 million in stock-based compensation expense,$1.0 million in professional fees, and$0.4 million in employee-related expenses. Interest expense Interest expense decreased by$0.2 million for the three months endedJune 30, 2021 compared to the three months endedJune 30, 2020 . Interest expense for the three months endedJune 30, 2021 primarily includes debt coupon interest and amortization of debt issuance costs. Interest expense for the three months endedJune 30, 2020 primarily related to the accretion of the debt discount on the Warrant Exchange Promissory Notes. Other income (expense) Other income (expense) increased by$0.3 million for the three months endedJune 30, 2021 compared to the three months endedJune 30, 2020 . The increase was primarily due to$0.8 million related to a loss on the write-off of the Promissory Note deemed uncollectible, partially offset by a gain on loan extinguishment of$0.4 million for PPP Note forgiveness obtained inMay 2021 . Comparison of the Six Months EndedJune 30, 2021 and 2020 The following table summarizes the results of our operations for the six months endedJune 30, 2021 and 2020 (in thousands): Six months ended June 30, 2021 2020 Change Revenues Collaboration revenue $ -$ 43 $ (43) Total revenues - 43 (43) Operating expenses Research and development 21,725 3,282 18,443 General and administrative 10,942 4,056 6,886 Total operating expenses 32,667 7,338 25,329 Loss from operations (32,667) (7,295) (25,372) Other income (expense) Interest income 10 - 10 Interest expense (40) (263) 223 Other income (expense) (332) - (332) Total other income (expense) (362) (263) (99) Net loss$ (33,029) $ (7,558) $ (25,471)
Research and development costs Research and development costs increase by
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Table of Contents General and administrative expense General and administrative expense increased by$6.9 million for the six months endedJune 30, 2021 compared to the six months endedJune 30, 2020 . The increase was primarily due to an increase of$3.2 million in expenses for stockholder meetings and proxy solicitation,$2.0 million in stock-based compensation expense,$0.5 million in employee-related expenses, and$0.8 million in professional fees. Interest expense Interest expense decreased by$0.2 million for the six months endedJune 30, 2021 compared to the six months endedJune 30, 2020 . Interest expense for the six months endedJune 30, 2021 primarily includes debt coupon interest and amortization of debt issuance costs. Interest expense for the six months endedJune 30, 2020 primarily related to the accretion of the debt discount on the Warrant Exchange Promissory Notes. Other income (expense) Other income (expense) increased by$0.3 million for the six months endedJune 30, 2021 compared to the six months endedJune 30, 2020 . The increase was primarily due to$0.8 million related to a loss on the write-off of the Promissory Note deemed uncollectible, partially offset by a gain on loan extinguishment of$0.4 million for PPP Note forgiveness obtained inMay 2021 . Liquidity and Capital Resources As ofJune 30, 2021 , we had$115.8 million in cash, cash equivalents, and restricted cash. We have not generated significant revenue to date and have primarily funded our operations to date through the sale of common stock, warrants to purchase common stock, the issuance of convertible notes, debt, and grant proceeds. Specifically, since our inception and throughJune 30, 2021 , we have raised an aggregate of$218.7 million to fund our operations, of which$206.1 million was from gross proceeds from the sale of our common stock and warrants,$10.3 million was from the issuance of convertible notes,$2.1 million was from debt, and$0.2 million was from grant proceeds. InFebruary 2021 , we issued and sold 3.0 million shares of our common stock at an offering price of$7.65 per share in theFebruary 2021 Registered Direct Offering pursuant to a securities purchase agreement entered into with certain institutional investors. We received net proceeds of$21.2 million . InApril 2021 , we issued and sold 10.0 million shares of our common stock at an offering price of$10.00 per share in theApril 2021 Registered Direct Offering pursuant to a securities purchase agreement with certain institutional investors. We received net proceeds of$93.4 million . For additional information about theFebruary 2021 Registered Direct Offering and theApril 2021 Registered Direct Offering, see Note 9 in the notes to the condensed consolidated financial statements included in this report. Additionally, during the six months endedJune 30, 2021 , we sold 1.0 million shares of our common stock under theAugust 2020 ATM and received net proceeds of$4.8 million . The offering was made pursuant to our effective "shelf" registration statement on Form S-3 filed with theSEC onMarch 27, 2020 , the base prospectus contained therein datedMay 5, 2020 , and the prospectus supplement related to the offering datedAugust 17, 2020 . Since our inception, we have devoted substantial resources to research and development and have incurred significant net losses and may continue to incur net losses in the future. We incurred net losses of approximately$33.0 million and$7.6 million for the six months endedJune 30, 2021 and 2020, respectively. As ofJune 30, 2021 , we had an accumulated deficit of$106.3 million . 29
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Table of Contents The following table presents a summary of our cash flows for the six months ended.
Six months ended June 30, 2021 2020 Net cash used in operating activities$ (27,084) $ (7,773) Net cash used in investing activities (1,274) (34) Net cash provided by financing activities 119,961 15,331
Net increase in cash, cash equivalents and restricted cash
Operating activities Cash used in operating activities was$27.1 million for the six months endedJune 30, 2021 compared to$7.8 million for the six months endedJune 30, 2020 . The increase in cash used in operating activities was primarily driven by the$15.0 million up-front payment to Bharat Biotech in connection with the amendment to the Covaxin Agreement to add rights to the Canadian market inJune 2021 , an increase in our research and development expenses for product candidates, including COVAXIN, and expenses for stockholder meetings and proxy solicitation during the six months endedJune 30, 2021 compared to the six months endedJune 30, 2020 . Investing activities Cash used in investing activities was$1.3 million for the six months endedJune 30, 2021 compared to$34.5 thousand for the six months endedJune 30, 2020 . The increase in cash used in investing activities was primarily driven by the receipt of the Promissory Note of$0.8 million inApril 2021 and a$0.5 million increase in purchases of property and equipment during the six months endedJune 30, 2021 compared to the six months endedJune 30, 2020 . Financing activities Cash provided by financing activities was$120.0 million for the six months endedJune 30, 2021 compared to$15.3 million for the six months endedJune 30, 2020 . During the six months endedJune 30, 2021 , cash provided by financing activities primarily consisted of gross proceeds of$100.0 million and$22.9 million received from theApril 2021 Registered Direct Offering and theFebruary 2021 Registered Direct Offering, respectively. During the six months endedJune 30, 2020 , cash provided by financing activities primarily consisted of gross proceeds of$16.2 million received underMay 2020 andJune 2020 ATMs. Indebtedness InApril 2020 , we were granted a loan from SVB in the aggregate amount of$0.4 million , pursuant to the PPP of the CARES Act. The PPP Note was in the form of a promissory note datedApril 30, 2020 in favor of SVB, bore interest at a rate of 1.0% per annum, and had a maturity date ofApril 30, 2022 . InMay 2021 , we received notice from the SBA that the PPP Note was forgiven in its entirety, including both principal and accrued interest. InSeptember 2016 , pursuant to the EB-5 program, we entered into the EB-5 Loan Agreement to borrow up to$10.0 million from EB-5 Life Sciences in$0.5 million increments. Borrowings are at a fixed interest rate of 4.0% and are to be utilized in the clinical development, manufacturing, and commercialization of our product candidates and for our general working capital needs. Outstanding borrowings pursuant to the EB-5 Program become due upon the seventh anniversary of the final disbursement. Amounts repaid cannot be re-borrowed. As ofJune 30, 2021 , there was$1.5 million of principal outstanding under the EB-5 Loan Agreement. Funding requirements We expect to continue to incur significant expenses in connection with our ongoing activities, particularly as we continue research and development, including preclinical and clinical development of our product candidates, contract to manufacture our product candidates, prepare for potential commercialization of our product candidates, add operational, financial, and information systems to execute our business plan, maintain, expand, and protect our patent portfolio, and operate as a public company. 30
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Table of Contents For additional information regarding our commitments and contingencies, see Note 13 in the notes to the condensed consolidated financial statements included in this Quarterly Report. Factors impacting our future funding requirements include, without limitation, the following: â¢the initiation, progress, timing, costs, and results of clinical trials for our product candidates, including the additional clinical trial in support of a BLA submission for COVAXIN; â¢the outcome, timing, and cost of the regulatory approval process for our product candidates; including with respect to COVAXIN inthe United States andCanada ; â¢future costs of manufacturing and commercialization, including with respect to COVAXIN, if authorized or approved; â¢costs related to doing business internationally with respect to our proposed development and commercialization of COVAXIN inCanada ; â¢the cost of filing, prosecuting, defending, and enforcing our patent claims and other intellectual property rights; â¢the cost of defending intellectual property disputes, including patent infringement actions brought by third parties against us; â¢the costs of expanding infrastructure, as well as the higher corporate infrastructure costs associated with operating as a public company; â¢the expenses needed to attract and retain skilled personnel; â¢the extent to which we in-license or acquire other products, product candidates, or technologies; and â¢the impact of the COVID-19 pandemic. As ofJune 30, 2021 , we had$115.8 million in cash, cash equivalents, and restricted cash. This amount will not meet our capital requirements over the next 12 months. Our management is currently evaluating different strategies to obtain the required funding for future operations. These strategies may include, but are not limited to: public and private placements of equity and/or debt, payments from potential strategic research and development arrangements, sale of assets, government grants, licensing and/or collaboration arrangements with pharmaceutical companies or other institutions, or other funding from the government or other third parties. There can be no assurance that these funding efforts will be successful. If we cannot obtain the necessary funding, we will need to delay, scale back, or eliminate some or all of our research and development programs? consider other various strategic alternatives, including a merger or sale? or cease operations. If we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, financial condition, and results of operations could be materially adversely affected. As a result of these factors, together with the anticipated increase in spending that will be necessary to continue to develop and commercialize our product candidates, there is substantial doubt about our ability to continue as a going concern within one year after the date that the condensed consolidated financial statements included in this report are issued. See Note 1 to our condensed consolidated financial statements included in this report for additional information. Off-Balance Sheet Arrangements We do not have off-balance sheet arrangements during the periods presented, and we do not currently have any off-balance sheet arrangements as defined in the rules and regulations of theSEC . Recently Adopted Accounting Pronouncements For a discussion of recently adopted accounting pronouncements, see Note 2 in the notes to the condensed consolidated financial statements included in this Quarterly Report. Other Company Information None. Item 3. Quantitative and Qualitative Disclosures about Market Risk. Not applicable. 31
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