SCYNEXIS INC

Previous wording

Operating results for the three months ended March 31, 2024, are not necessarily indicative of results that may occur in future interim periods or future fiscal years. Some of the statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” are forward-looking statements. These forward-looking statements are based on management’s beliefs and assumptions and on information currently available to our management and involve significant elements of subjective judgment and analysis. Words such as “expects,” “will,” “anticipate,” “target,” “goal,” “intend,” “plan,” “seek,” “estimate,” “potential,” “should,” “could,” variations of such words, and similar expressions are intended to identify forward-looking statements. Our actual results and the timing of events may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such a difference include those discussed under the heading “Risk Factors” in Item 1A of Part I of our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 28, 2024, and in Part II, Item 1A of this Quarterly Report on Form 10-Q. These and many other factors could affect our future financial and operating results. We undertake no obligation to update any forward-looking statement to reflect events after the date of this Quarterly Report on Form 10-Q. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Quarterly Report on Form 10-Q. While we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into or review of, all relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely on these statements.

Current wording

Operating results for the three and six months ended June 30, 2024, are not necessarily indicative of results that may occur in future interim periods or future fiscal years. Some of the statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” are forward-looking statements. These forward-looking statements are based on management’s beliefs and assumptions and on information currently available to our management and involve significant elements of subjective judgment and analysis. Words such as “expects,” “will,” “anticipate,” “target,” “goal,” “intend,” “plan,” “seek,” “estimate,” “potential,” “should,” “could,” variations of such words, and similar expressions are intended to identify forward-looking statements. Our actual results and the timing of events may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such a difference include those discussed under the heading “Risk Factors” in Item 1A of Part I of our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 28, 2024, and in Part II, Item 1A of this Quarterly Report on Form 10-Q. These and many other factors could affect our future financial and operating results. We undertake no obligation to update any forward-looking statement to reflect events after the date of this Quarterly Report on Form 10-Q. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Quarterly Report on Form 10-Q. While we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into or review of, all relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely on these statements.

Previous wording

SCYNEXIS, Inc. is pioneering innovative medicines to overcome and prevent difficult-to-treat and drug-resistant infections. We are developing our proprietary antifungal platform “fungerps”, a novel class of antifungal agents called triterpenoids, that are a structurally distinct glucan synthase inhibitors and have generally shownin vitro andin vivo activity against a broad range of human fungal pathogens such as Candida and Aspergillus genera, including multidrug-resistant strains, as well as Pneumocystis, Coccidioides, Histoplasma and Blastomyces genera and most common mucorales species.

Current wording

SCYNEXIS, Inc. is pioneering innovative medicines to overcome and prevent difficult-to-treat and drug-resistant infections. We are developing our proprietary antifungal platform “fungerps”, a novel class of antifungal agents called triterpenoids, that are a structurally distinct glucan synthase inhibitors and have generally shownin vitro andin vivo activity against a broad range of human fungal pathogens such as Candida and Aspergillus genera, including multidrug-resistant strains, as well as Pneumocystis, Coccidioides, Histoplasma and Blastomyces genera andin vivo activity against most common mucorales species.

Previous wording

Ibrexafungerp is the first representative of this novel class of antifungals. In June 2021 and December 2022, we announced that the United States (U.S.) Food and Drug Administration (FDA) approved BREXAFEMME (ibrexafungerp tablets) for treatment of patients with vulvovaginal candidiasis (VVC), also known as vaginal yeast infection, and for the reduction in the incidence of recurrent vulvovaginal candidiasis (RVVC), respectively. Oral ibrexafungerp is also under development for other systemic fungal diseases. SCY-247, a second-generation antifungal compound from this novel class, is in preclinical development stage. We anticipate initiating a Phase 1 study for SCY-247 in the second half of 2024.

Current wording

Ibrexafungerp is the first representative of this novel class of antifungals. In June 2021 and December 2022, we announced that the United States (U.S.) Food and Drug Administration (FDA) approved BREXAFEMME (ibrexafungerp tablets) for treatment of patients with vulvovaginal candidiasis (VVC), also known as vaginal yeast infection, and for the reduction in the incidence of recurrent vulvovaginal candidiasis (RVVC), respectively. Oral ibrexafungerp is also under development for other systemic fungal diseases. SCY-247, a second-generation antifungal compound from this novel class, is in preclinical development stage. We anticipate initiating a Phase 1 study for SCY-247 in the fourth quarter of 2024.

Previous wording

In March 2023, we entered into a license agreement (the GSK License Agreement) with GlaxoSmithKline Intellectual Property (No. 3) Limited (GSK) in which we granted GSK an exclusive (even as to us and our affiliates), royalty-bearing, sublicensable license for the development and commercialization of ibrexafungerp, including the approved product BREXAFEMME, for all indications, in all countries other than Greater China and certain other countries already licensed to third parties.

Current wording

In March 2023, we entered into a license agreement (the GSK License Agreement) with GlaxoSmithKline Intellectual Property (No. 3) Limited (GSK) in which we granted GSK an exclusive (even as to us and our affiliates), royalty-bearing, sublicensable license for the development and commercialization of ibrexafungerp, including the approved product BREXAFEMME, for all indications, in all countries other than Greater China and certain other countries already licensed to third parties. In July 2024, we delivered to GSK the final clinical study reports for the completed FURI, CARES, and NATURE clinical studies and we expect to collect a $10.0 million development milestone in the third quarter of 2024. As of June 30, 2024, we have received $115.0 million in upfront and development milestones under the GSK License Agreement. See further details of the GSK License Agreement, including financial terms, as described in Note 11 of Item 1 on this Quarterly Report on Form 10-Q.

Previous wording

The patient-level and clinical product recall has been initiated and we are working with an experienced vendor to manage the process. In September 2023, after we announced our voluntary clinical hold, the FDA concurred with our voluntary hold and placed a clinical hold. We are working with the FDA to discuss paths for resolution of this issue. The clinical hold and recall affected two ongoing clinical studies: the Phase 3 MARIO study and a Phase 1 lactation study. The clinical hold does not impact the recently completed FURI, CARES, VANQUISH and SCYNERGIA clinical studies, for which dosing is complete. The NATURE study, which is an observational study in patients with IC treated with standard of care antifungals (not ibrexafungerp), is also not affected by this hold. The FDA determined that the compassionate use program for ibrexafungerp, which provides ibrexafungerp to patients with limited or no other treatment options, can continue provided the patient’s treating physician concludes a favorable benefit-risk assessment and the patient is made aware of and consents to the risk. This applies to patients currently in the program as well as for new patients, pending confirmation of available supply. Our preclinical stage compound, SCY-247, is not affected by these developments.

Current wording

The patient-level and clinical product recall is ongoing and we are working with an experienced vendor to manage the process. In September 2023, after we announced our voluntary clinical hold, the FDA concurred with our voluntary hold and placed a clinical hold. We are working with the FDA to discuss paths for resolution of this issue. The clinical hold and recall affected two ongoing clinical studies: the Phase 3 MARIO study and a Phase 1 lactation study. The clinical hold does not impact the completed FURI, CARES, VANQUISH and SCYNERGIA clinical studies. The NATURE study, which is an observational study in patients with IC treated with standard of care antifungals (not ibrexafungerp), is also not affected by this hold. The FDA determined that the compassionate use program for ibrexafungerp, which provides ibrexafungerp to patients with limited or no other treatment options, can continue provided the patient’s treating physician concludes a favorable benefit-risk assessment and the patient is made aware of and consents to the risk. This applies to patients currently in the program as well as for new patients, pending confirmation of available supply. Our preclinical stage compound, SCY-247, is not affected by these developments.

Previous wording

On November 7, 2023, a securities class action was filed by Brian Feldman against us and certain of our executives in the United States District Court, District of New Jersey, alleging that, during the period from March 31, 2023 to September 22, 2023, we made materially false and/or misleading statements, as well as failed to disclose material adverse facts about our business, operations, and prospects, alleging specifically that we failed to disclose to investors: (1) that the equipment used to manufacture ibrexafungerp was also used to manufacture a non-antibacterial beta-lactam drug substance, presenting a risk of cross-contamination; (2) that we did not have effective internal controls and procedures, as well as adequate internal oversight policies to ensure that its vendor complied with current Good Manufacturing Practices (cGMP); (3) that, due to the substantial risk of cross-contamination, we were reasonably likely to recall its ibrexafungerp tablets and halt its clinical studies; and (4) as a result of the foregoing, our statements about our business, operations, and prospects were materially misleading and/or lacked a reasonable basis. The complaint seeks unspecified damages, interest, fees and costs on behalf of all persons and entities who purchased and/or acquired shares of our common stock between March 31, 2023 to September 22, 2023. On May 1, 2024, a purported shareholder derivative complaint was filed in the United States District Court, District of New Jersey. The complaint names the Company’s directors and certain of its officers and asserts state and federal claims based on the same alleged misstatements as the securities class action complaint. We disagree with the allegations and intend to defend these litigations vigorously.

Current wording

On November 7, 2023, a securities class action was filed by Brian Feldman against us and certain of our executives in the United States District Court, District of New Jersey, alleging that, during the period from March 31, 2023 to September 22, 2023, we made materially false and/or misleading statements, as well as failed to disclose material adverse facts about our business, operations, and prospects, alleging specifically that we failed to disclose to investors: (1) that the equipment used to manufacture ibrexafungerp was also used to manufacture a non-antibacterial beta-lactam drug substance, presenting a risk of cross-contamination; (2) that we did not have effective internal controls and procedures, as well as adequate internal oversight policies to ensure that its vendor complied with current Good Manufacturing Practices (cGMP); (3) that, due to the substantial risk of cross-contamination, we were reasonably likely to recall its ibrexafungerp tablets and halt its clinical studies; and (4) as a result of the foregoing, our statements about our business, operations, and prospects were materially misleading and/or lacked a reasonable basis. The complaint seeks unspecified damages, interest, fees and costs on behalf of all persons and entities who purchased and/or acquired shares of our common stock between March 31, 2023 to September 22, 2023. On May 1, 2024, and again on June 4, 2024, purported shareholder derivative complaints were filed in the United States District Court, District of New Jersey. The complaints name our directors and certain of our officers and assert state and federal claims based on the same alleged misstatements as the securities class action complaint. We disagree with the allegations and intend to defend these litigations vigorously.

Previous wording

We have operated as a public entity since we completed our initial public offering in May 2014, which we refer to as our IPO. We also completed a follow-on public offering of our common stock in April 2015 and public offerings of our common stock and warrants in June 2016, March 2018, December 2019, December 2020, and April 2022. Our principal source of liquidity is cash, cash equivalents, and investments which totaled $94.2 million as of March 31, 2024.

Current wording

We have operated as a public entity since we completed our initial public offering in May 2014, which we refer to as our IPO. We also completed a follow-on public offering of our common stock in April 2015 and public offerings of our common stock and warrants in June 2016, March 2018, December 2019, December 2020, and April 2022. Our principal source of liquidity is cash, cash equivalents, and investments which totaled $83.7 million as of June 30, 2024.

Previous wording

As of March 31, 2024, our accumulated deficit was $354.8 million. We expect we will continue to incur significant research and development expense as we continue to execute our research and drug development strategy. Consistent with our operating plan, we also expect that we will continue to incur significant selling, general and administrative expenses to support our public reporting company operations and ongoing operations. As a result, we will need additional capital to fund our operations, which we may obtain through one or more of equity offerings, debt financings, other non-dilutive third-party funding (e.g., grants), strategic alliances and licensing or collaboration arrangements. We may offer shares of our common stock pursuant to our effective shelf registration statements.

Current wording

As of June 30, 2024, our accumulated deficit was $369.3 million. We expect we will continue to incur significant research and development expense as we continue to execute our research and drug development strategy. Consistent with our operating plan, we also expect that we will continue to incur significant selling, general and administrative expenses to support our public reporting company operations and ongoing operations. As a result, we will need additional capital to fund our operations, which we may obtain through one or more of equity offerings, debt financings, other non-dilutive third-party funding (e.g., grants), strategic alliances and licensing or collaboration arrangements. We may offer shares of our common stock pursuant to our effective shelf registration statements.

Previous wording

Revenue consists of license agreement revenue associated with GSK and product sales of BREXAFEMME. For the three months ended March 31, 2023, our product revenue, net comprised of sales of BREXAFEMME that we sold as principal given we control BREXAFEMME product until delivery to our wholesalers at which point control is transferred.

Current wording

Revenue consists of license agreement revenue associated with GSK and product sales of BREXAFEMME. For the three and six months ended June 30, 2023, our product revenue, net comprised of sales of BREXAFEMME that we sold as principal given we control BREXAFEMME product until delivery to our wholesalers at which point control is transferred.

Previous wording

All of our other income recognized in the three months ended March 31, 2024 and 2023, consists of amortization of debt issuance costs and discount, interest income, interest expense, the warrant liabilities fair value adjustment, and the derivative liabilities fair value adjustment.

Current wording

All of our other expense (income) recognized in the three and six months ended June 30, 2024 and 2023, consists of amortization of debt issuance costs and discount, interest income, interest expense, the warrant liabilities fair value adjustment, and the derivative liabilities fair value adjustment.

Previous wording

For the three months ended March 31, 2024, our income tax expense recognized consists primarily of an expense for U.S. federal income tax.

Current wording

For the six months ended June 30, 2024, our income tax expense recognized consists primarily of an expense for U.S. federal income tax.

Previous wording

Revenue. For the three months ended March 31, 2024, revenue consists of the $1.4 million in license agreement revenue associated with the License Agreement with GSK. For the three months ended March 31, 2023, revenues consists of product sales of BREXAFEMME.

Current wording

Revenue. For the three months ended June 30, 2024, revenue consists of the $0.7 million in license agreement revenue associated with the License Agreement with GSK. For the three months ended June 30, 2023, revenue primarily consists of the $130.1 million recognized upon the transfer of the license associated with the License Agreement with GSK in May 2023.

Previous wording

Research and Development. For the three months ended March 31, 2024, research and development expenses increased to $7.2 million compared to $6.8 million for the three months ended March 31, 2023. The increase of $0.4 million, or 6%, for the three months ended March 31, 2024, was primarily driven by an increase of $1.6 million in chemistry, manufacturing, and controls (CMC) expense and a $0.3 million increase in preclinical expense, offset in part by a $0.8 million decrease in clinical expense and a decrease of $0.5 million in salaries primarily associated with medical affairs.

Current wording

Research and Development. For the three months ended June 30, 2024, research and development expenses decreased to $6.8 million compared to $7.0 million for the three months ended June 30, 2023. The decrease of $0.2 million, or 3%, for the three months ended June 30, 2024, was primarily driven by a decrease of $1.1 million in clinical expense and a decrease of $0.3 million in salaries primarily associated with medical affairs, offset in part by an increase of $0.7 million in chemistry, manufacturing, and controls (CMC) expense and an increase of $0.5 million in preclinical expense.

Previous wording

Amortization of Debt Issuance Costs and Discount. For the three months ended March 31, 2024 and 2023, we recognized $0.4 million and $0.3 million in amortization of debt issuance costs and discount. The debt issuance costs and discount for our March 2019 convertible notes primarily consisted of an allocated portion of advisory fees and other issuance costs and the initial fair value of the derivative liability.

Current wording

Amortization of Debt Issuance Costs and Discount. For the three months ended June 30, 2024 and 2023, we recognized $0.4 million and $2.0 million in amortization of debt issuance costs and discount, respectively. The decrease of $1.6 million, or 79%, was primarily driven by the recognition, in the prior period, of $1.7 million in amortization for the remaining debt issuance costs and discount associated with the Loan Agreement which was fully paid in May 2023. The debt issuance costs and discount for our March 2019 convertible notes primarily consisted of an allocated portion of advisory fees and other issuance costs and the initial fair value of the derivative liability.

Previous wording

Interest Income. For the three months ended March 31, 2024 and 2023, we recognized $1.3 million and $0.6 million, respectively, in interest income; the increase was primarily due to the increase in the interest rates on our money market funds and investments.

Current wording

Interest Income. For the three months ended June 30, 2024 and 2023, we recognized $1.1 million and $0.7 million, respectively, in interest income; the increase was primarily due to the increase in the interest rates on our money market funds and investments.

Previous wording

Interest Expense. For the three months ended March 31, 2024 and 2023, we recognized $0.2 million and $1.4 million, respectively. The decrease in interest expense was primarily due to the repayment of the loan agreement in May 2023.

Current wording

Interest Expense. For the three months ended June 30, 2024 and 2023, we recognized $0.2 million and $1.2 million, respectively. The decrease in interest expense was primarily due to the repayment of the Loan Agreement in May 2023.

Previous wording

Warrant Liabilities Fair Value Adjustment. For the three months ended March 31, 2024 and 2023, we recognized a gain of $9.6 million and a loss of $21.7 million, respectively, in the fair value adjustment related to the warrant liabilities primarily due to the decrease and increase in our stock price during the periods, respectively.

Current wording

Warrant Liabilities Fair Value Adjustment. For the three months ended June 30, 2024 and 2023, we recognized a loss of $5.8 million and a gain of $8.2 million, respectively, in the fair value adjustment related to the warrant liabilities primarily due to the increase and decrease in our stock price during the periods, respectively.

Previous wording

The $1.6 million increase in CMC expense is primarily associated with a $1.1 million expense for drug product purchased in the current period. The $0.3 million increase in preclinical expense for the three months ended March 31, 2024 was primarily associated with certain preclinical costs associated with SCY-247. The $0.8 million decrease in clinical expense was primarily due to a $0.7 million decrease associated with a Phase 1 study of oral ibrexafungerp that was substantially completed in the prior period and is intended to support the potential NDA filing for the treatment of IC and a $0.4 million decrease in in clinical expense for the MARIO study, off set in part by an increase of $0.3 million in other clinical expense.

Current wording

The $2.2 million increase in CMC expense is primarily associated with a $1.1 million expense for drug product purchased in the current period and a $1.4 million increase in expense associated with manufacturing costs for SCY-247 and ibrexafungerp. The $0.8 million increase in preclinical expense for the three months ended June 30, 2024 was primarily associated with certain preclinical costs associated with SCY-247. The $1.9 million decrease in clinical expense was primarily due to a $0.8 million decrease in expense associated with a Phase 1 study of oral ibrexafungerp that was substantially completed in the prior period and is intended to support the potential NDA filing for the treatment of IC, a $0.8 million decrease in clinical expense for the MARIO study, and a $0.3 million decrease in other clinical expense.

Previous wording

Selling, General & Administrative. For the three months ended March 31, 2024, selling, general and administrative expenses decreased to $3.7 million from $4.8 million for the three months ended March 31, 2023. The decrease of $1.2 million, or 24%, for the three months ended March 31, 2024, was primarily driven by a decrease of $0.8 million in professional fees and a decrease of $0.4 million in commercial expense due to the costs incurred in the prior comparable period associated with BREXAFEMME. The $0.8 million decrease in professional fees was primarily due to a $0.5 million expense recognized in the prior period to write off a deferred asset for certain commitment fees and a $0.2 million decrease in legal expenses as a result of legal costs incurred in the prior period associated with the GSK License Agreement.

Current wording

Selling, General & Administrative. For the six months ended June 30, 2024, selling, general and administrative expenses decreased to $6.8 million from $12.3 million for the six months ended June 30, 2023. The decrease of $5.5 million, or 44%, for the six months ended June 30, 2024, was primarily driven by a decrease of $4.2 million in professional fees and a decrease of $0.7 million in commercial expense due to the costs incurred in the prior comparable period associated with BREXAFEMME. The $4.2 million decrease in professional fees was primarily due to a $3.1 million expense incurred during the prior period for business development associated with the GSK License Agreement, a $0.7 million decrease in legal costs associated with the GSK License Agreement, and a $0.5 million expense recognized in the prior period to write off a deferred asset for certain commitment fees associated with the Loan Agreement.

Previous wording

Derivative Liabilities Fair Value Adjustment. For the three months ended March 31, 2024 and 2023, we recognized a gain of $0.2 million and a loss of $0.4 million, respectively, in the fair value adjustment related to the derivative liabilities primarily due to the decrease and increase in our stock price during the periods, respectively.

Current wording

Derivative Liabilities Fair Value Adjustment. For the six months ended June 30, 2024 and 2023, we recognized a gain of $0.2 million and a loss of $0.4 million, respectively, in the fair value adjustment related to the derivative liabilities primarily due to the decrease and increase in our stock price during the periods, respectively.

Previous wording

As of March 31, 2024, we had cash and cash equivalents and investments of $94.2 million, compared to cash and cash equivalents and short-term investments of $98.0 million as of December 31, 2023. We believe our capital resources are sufficient to fund our on-going operations for a period of at least 12 months subsequent to the issuance of the accompanying unaudited condensed consolidated financial statements. As of March 31, 2024, our accumulated deficit was $354.8 million.

Current wording

As of June 30, 2024, we had cash and cash equivalents and investments of $83.7 million, compared to cash and cash equivalents and short-term investments of $98.0 million as of December 31, 2023. We believe our capital resources are sufficient to fund our on-going operations for a period of at least 12 months subsequent to the issuance of the accompanying unaudited condensed consolidated financial statements. As of June 30, 2024, our accumulated deficit was $369.3 million.

Previous wording

The following table sets forth the significant sources and uses of cash for the three months ended March 31, 2024 and 2023 (in thousands):

Current wording

The following table sets forth the significant sources and uses of cash for the six months ended June 30, 2024 and 2023 (in thousands):

Previous wording

The $14.9 million decrease in net cash used in operating activities for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023, was primarily due to the continued development costs associated with ibrexafungerp and SCY-247, offset in part by the collection of the $2.5 million license agreement receivable and the $4.4 million unbilled receivable from GSK in the current period.

Current wording

The $70.3 million decrease in net cash (used in) provided by operating activities for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023 was primarily due to the $90.0 million upfront receipt from the closing of the GSK License Agreement in the prior period, the continued development costs associated with SCY-247 and ibrexafungerp, and the payment of the deferred fees associated with Amplity in the current period.

Previous wording

Net cash used in operating activities of $4.0 million for the three months ended March 31, 2024, primarily consisted of the $0.4 million net income adjusted for non-cash charges that included the gain on change in fair value of the warrant liabilities of $9.6 million, stock-based compensation expense of $0.7 million, and amortization of debt issuance costs and discount of $0.4 million, partially offset by a net favorable change in operating assets and liabilities of $4.4 million. The net favorable change in operating assets and liabilities was due to a net decrease in operating liabilities of $1.9 million and by a net decrease of $6.3 million in operating assets. The net $6.3 million decrease in operating assets is primarily due to a $2.5 million decrease in the license agreement receivable associated with the License Agreement with GSK which was collected in the current period and a $4.0 million decrease in prepaid expenses, other assets, deferred costs, and other. The $4.0 million decrease in prepaid expenses, other assets, deferred costs, and other was primarily due to the collection of a $4.4 million unbilled receivable in the current period from GSK.

Current wording

Net cash used in operating activities of $14.9 million for the six months ended June 30, 2024, primarily consisted of the $14.0 million net loss adjusted for non-cash charges that included the gain on change in fair value of the warrant liabilities of $3.8 million, stock-based compensation expense of $1.5 million, and amortization of debt issuance costs and discount of $0.8 million, partially offset by a net favorable change in operating assets and liabilities of $1.4 million. The net favorable change in operating assets and liabilities was due to a net decrease in operating liabilities of $4.8 million and by a net decrease of $6.2 million in operating assets. The net $6.2 million decrease in operating assets is primarily due to a $2.2 million decrease in the license agreement receivable associated with the License Agreement with GSK which was collected in the current period and a $4.1 million decrease in prepaid expenses, other assets, deferred costs, and other. The $4.1 million decrease in prepaid expenses, other assets, deferred costs, and other was primarily due to the collection of a $4.4 million unbilled receivable in the current period from GSK.

Previous wording

Net cash used in operating activities of $18.9 million for the three months ended March 31, 2023, primarily consisted of the $33.9 million net loss adjusted for non-cash charges that included the loss on change in fair value of the warrant liabilities of $21.7 million, the loss on change in fair value of the derivative liabilities of $0.4 million, stock-based compensation expense of $0.7 million, and amortization of debt issuance costs and discount of $0.3 million, partially offset by a net unfavorable change in operating assets and liabilities of $8.6 million. The net unfavorable change in operating assets and liabilities was due to a decrease in accounts payable, accrued expenses, other liabilities and other of $6.7 million and by an increase in prepaid expenses, accounts receivable, inventory, and other of $1.9 million. The $6.7 million decrease in accounts payable, accrued expenses, other liabilities, and other was primarily due to the decrease of $5.8 million in other liabilities associated with the deferred fees due to Amplity that were fully paid as of February 2023 and a $0.9 million decrease in accrued expenses primary due to the bonus and separation payments made during the current period for 2022. The increase in prepaid expenses, accounts receivable, inventory, and other of $1.9 million was primarily due to a $2.1 million increase in inventory for raw material purchased in the current period.

Current wording

Net cash provided by operating activities of $55.5 million for the six months ended June 30, 2023, primarily consisted of the $88.4 million net income adjusted for non-cash charges that included the loss on change in fair value of the warrant liabilities of $13.5 million, stock-based compensation expense of $1.4 million, and amortization of debt issuance costs and discount of $2.3 million, partially offset by a net unfavorable change in operating assets and liabilities of $51.7 million. The net unfavorable change in operating assets and liabilities was due to a net decrease in operating liabilities of $2.5 million and by a net increase of $49.2 million in operating assets. The net $49.2 million increase in operating assets is primarily due to a $19.2 million increase in license agreement contract asset associated with the License Agreement with GSK, an increase of $25.0 million in license agreement receivable associated with the License Agreement with GSK, a $4.6 million increase in inventory for raw material purchased in the current period, and a net increase in prepaid expenses, other assets, and other and accounts receivable of $0.4 million. The $2.5 million decrease in accounts payable, accrued expenses, deferred revenue, other liabilities, and other was primarily due to the decrease of $5.8 million in other liabilities associated with the deferred fees due to Amplity that were fully paid as of February 2023, offset by a $4.4 million increase in deferred revenue associated with the License Agreement with GSK.

Previous wording

Net cash provided by investing activities of $5.5 million for the three months ended March 31, 2024 consisted of purchases and maturities of investments of $2.5 million and $8.0 million, respectively.

Current wording

Net cash provided by investing activities of $6.8 million for the six months ended June 30, 2024 consisted of purchases and maturities of investments of $10.7 million and $17.5 million, respectively.

Previous wording

Net cash used in financing activities of $15,000 for the three months ended March 31, 2024, consisted primarily of deferred financing costs of $40,000.

Current wording

Net cash used in financing activities of $15,000 for the six months ended June 30, 2024, consisted primarily of deferred financing costs of $40,000.