Eledon Pharmaceuticals Inc

Previous wording

The unaudited interim financial statements and this Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read together with our audited financial statements and accompanying notes for the year ended December 31, 2023 included in the Annual Report on Form 10-K filed by the Company with the Securities and Exchange Commission (the “SEC”) on March 28, 2024. In addition to historical information, this discussion and analysis contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Please see Part II, Item 1A. Risk Factors in this Quarterly Report on Form 10-Q for a discussion of certain risk factors applicable to our business, financial condition, and results of operations. Operating results are not necessarily indicative of results that may occur for the full fiscal year or any other future period. See also “Special Note Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q. Unless otherwise indicated, references to the terms “Eledon”, the “Company”, “we”, “our”, and “us” refer to Eledon Pharmaceuticals, Inc.

Current wording

The unaudited interim condensed consolidated financial statements and this Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read together with our audited condensed consolidated financial statements and accompanying notes for the year ended December 31, 2023 included in the Annual Report on Form 10-K filed by the Company with the Securities and Exchange Commission (the “SEC”) on March 28, 2024, as amended on each of April 26, 2024 and August 19, 2024 (together, the “Amended Form 10-K”). In addition to historical information, this discussion and analysis contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Please see Part II, Item 1A. Risk Factors in this Quarterly Report on Form 10-Q for a discussion of certain risk factors applicable to our business, financial condition, and results of operations. Operating results are not necessarily indicative of results that may occur for the full fiscal year or any other future period. See also “Special Note Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q. Unless otherwise indicated, references to the terms “Eledon”, the “Company”, “we”, “our”, and “us” refer to Eledon Pharmaceuticals, Inc.

Previous wording

We reported interim safety and efficacy results from the Phase 1b clinical trial in March 2023, and provided updated data in November 2023. At the time of the November 2023 update, results from 11 participants in the Phase 1b trial demonstrated that tegoprubart was generally safe and well-tolerated in patients undergoing kidney transplantation. There were no cases of hyperglycemia, new onset diabetes, tremor, or cytomegalovirus infection commonly seen with tacrolimus.

Current wording

We reported interim safety and efficacy results from the Phase 1b clinical trial in March 2023, and provided updated data in November 2023 and June 2024. At the time of the June 2024 update, which reported data as of April 3, 2024, results from the 13 participants in the Phase 1b trial support tegoprubart’s potential to protect organ function in patients undergoing kidney transplantation. Data from historical studies using standard of care, calcineurin inhibitor-based, immunosuppression therapy typically report aggregate mean estimated glomerular filtration rates (eGFRs) of approximately 50 mL/min/1.73m2 during the first year after kidney transplant. In the ongoing Phase 1b trial, as of April 3, 2024, mean eGFR was above 60 mL/min/1.73m² at each reported time points after day 30, with an overall mean eGFR of 70.5 mL/min/1.73m² for all the reported time points after day 30 post-transplant. Two participants completed 12 months on therapy post-transplant, and both demonstrated mean eGFRs above 90 mL/min/1.73m² at one-year post-transplant. The interim results demonstrated that tegoprubart is generally safe and well tolerated in patients undergoing de novo kidney transplantation. As of April 3, 2024, three subjects have discontinued the study due to hair loss and fatigue, viral infection, and rejection, respectively. There have been no cases of hyperglycemia, new onset diabetes, or tremor, all of which are side effects often associated with standard of care immunosuppression therapy. There have been no cases of graft loss or death.

Previous wording

In October 2023, the Company enrolled the first participant in a Phase 2 open-label extension (OLE) study which is designed to evaluate the long-term safety, pharmacokinetics, and efficacy of tegoprubart in participants who have completed one year of treatment in the ongoing Phase 1b study, or BESTOW study.

Current wording

In October 2023, the Company enrolled the first participant in a Phase 2 open-label extension (OLE) study which is designed to evaluate the long-term safety, pharmacokinetics, and efficacy of tegoprubart in participants who have completed one year of treatment in both the ongoing Phase 1b and BESTOW studies.

Previous wording

In January 2024, we announced that tegoprubart will be utilized in an investigator-initiated trial, at the University of Chicago for pancreatic ICT in patients with type 1 diabetes. This is a pilot study assessing the safety of using a monoclonal antibody against CD40 ligand to achieve a calcineurin inhibitor-free immunosuppression regimen in patients with type 1 diabetes mellitus and problematic hypoglycemia undergoing islet cell transplantation. The Company is not funding this trial but is supplying tegoprubart.

Current wording

In January 2024, we announced that tegoprubart will be utilized in an investigator-initiated trial, at the University of Chicago Pancreatic and Islet Cell Transplant Program. This is a pilot study assessing the safety of using a monoclonal antibody against CD40 ligand to achieve a calcineurin inhibitor-free immunosuppression regimen in patients with type 1 diabetes mellitus undergoing islet cell transplantation. The Company is not funding this trial but is supplying tegoprubart. In May 2024, the University of Chicago's Pancreatic and Islet Cell Transplant Program announced the first participant was enrolled in this investigator-initiated trial.

Previous wording

On April 28, 2023, we entered into a Securities Purchase Agreement (the “2023 Securities Purchase Agreement”) with certain institutional and accredited investors, pursuant to which we agreed to issue and sell to the investors in a private placement (the “2023 Private Placement”) (i) in an initial closing, (a) an aggregate of 15,151,518 shares (the “Shares”) of our common stock, $0.001 par value per share, or pre-funded warrants in lieu thereof (the “Pre-Funded Warrants”), and (b) common stock warrants exercisable into an aggregate of 15,151,518 shares of common stock (or Pre-Funded Warrants in lieu thereof) (the “Common Warrants” and, together with the Pre-Funded Warrants, the “Warrants”); (ii) in a second closing, upon the satisfaction or waiver of specified conditions set forth in the 2023 Securities Purchase Agreement, an aggregate of 20,202,024 shares of common stock (or Pre-Funded Warrants); and (iii) in a third closing, upon the satisfaction or waiver of specified conditions set forth in the 2023 Securities Purchase Agreement, an aggregate of 25,252,530 shares of common stock (or Pre-Funded Warrants), in each case subject to customary adjustments as provided in the 2023 Securities Purchase Agreement, Pre-Funded Warrant or Common Warrant, as applicable. Each Common Warrant has an exercise price of $3.00 per share and expires five years after issuance. The Pre-Funded Warrants are exercisable immediately and until exercised in full, with an exercise price of $0.001 per share. The Pre-Funded Warrants and Common Warrants are subject to specified beneficial ownership limitations, which are generally set at 9.99% of the total common stock then issued and outstanding immediately following the exercise of such warrants, and provided that any beneficial ownership limitation may not exceed 19.99% unless otherwise permitted. The Shares, the Warrants, and the shares of common stock issuable upon the exercise of the Warrants, have not been registered under the Securities Act of 1933, as amended, and were offered pursuant to the exemption from registration provided in Section 4(a)(2) under the Securities Act of 1933, as amended, and Rule 506(b) promulgated thereunder.

Current wording

On April 28, 2023, we entered into a Securities Purchase Agreement (the “2023 Securities Purchase Agreement”) with certain institutional and accredited investors, pursuant to which we agreed to issue and sell to the investors in a private placement (the “2023 Private Placement”) (i) in an initial closing, (a) an aggregate of 15,151,518 shares (the “Shares”) of our common stock, $0.001 par value per share, or pre-funded warrants in lieu thereof (the “Pre-Funded Warrants”), and (b) common stock warrants exercisable into an aggregate of 15,151,518 shares of common stock (or Pre-Funded Warrants in lieu thereof) (the “Common Warrants” and, together with the Pre-Funded Warrants, the “Warrants”); (ii) in a second closing (the “Second Closing”), upon the satisfaction or waiver of specified conditions set forth in the 2023 Securities Purchase Agreement, an aggregate of 20,202,024 shares of common stock (or Pre-Funded Warrants); and (iii) in a third closing (the “Third Closing”), upon the satisfaction or waiver of specified conditions set forth in the 2023 Securities Purchase Agreement, an aggregate of 25,252,530 shares of common stock (or Pre-Funded Warrants), in each case subject to customary adjustments as provided in the 2023 Securities Purchase Agreement, Pre-Funded Warrant or Common Warrant, as applicable. Each Common Warrant has an exercise price of $3.00 per share and expires five years after issuance. The Pre-Funded Warrants are exercisable immediately and until exercised in full, with an exercise price of $0.001 per share. The Pre-Funded Warrants and Common Warrants are subject to specified beneficial ownership limitations, which are generally set at 9.99% of the total common stock then issued and outstanding immediately following the exercise of such warrants, and provided that any beneficial ownership limitation may not exceed 19.99% unless otherwise permitted. The Shares, the Warrants, and the shares of common stock issuable upon the exercise of the Warrants, have not been registered under the Securities Act of 1933, as amended, and were offered pursuant to the exemption from registration provided in Section 4(a)(2) under the Securities Act of 1933, as amended, and Rule 506(b) promulgated thereunder.

Previous wording

On May 5, 2023, the initial closing occurred and we received $35.0 million, or net proceeds of approximately $33.0 million after deducting offering costs, in exchange for 8,730,168 shares of common stock and Pre-Funded Warrants to purchase 6,421,350 shares of common stock. We may receive an additional $105.0 million upon sale of the shares to be issued in the second and third closings, subject to satisfaction or waiver of specified conditions, including clinical development milestones and volume weighted average share price levels and trading volume conditions, and an additional $45.5 million assuming the exercise of all Common Warrants issued in the initial closing of the 2023 Private Placement.

Current wording

On May 5, 2023, the initial closing occurred and we received $35.0 million, or net proceeds of approximately $33.0 million after deducting offering costs, in exchange for 8,730,168 shares of common stock and Pre-Funded Warrants to purchase 6,421,350 shares of common stock. On July 8, 2024, the Second Closing occurred and we received gross proceeds of approximately $2.1 million, or net proceeds of approximately $2.0 million after deducting offering costs. We may receive an additional $58.3 million upon sale of the shares to be issued in the Third Closing, subject to satisfaction or waiver of specified conditions, including clinical development milestones and volume weighted average share price levels and trading volume conditions, and an additional $45.5 million assuming the exercise of all Common Warrants issued in the initial closing of the 2023 Private Placement.

Previous wording

Our management’s discussion and analysis of our financial condition and results of operations are based on our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The preparation of these financial statements requires us to make estimates and judgments that affect the reported amount of assets, liabilities, and expenses and the disclosure of contingent assets and liabilities as of the date of the financial statements. On an ongoing basis, we evaluate our estimates and judgments. We base our estimates on historical experience, known trends and events, and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates under different assumptions or conditions. In Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 28, 2024, we disclosed our critical accounting estimates, which are those estimates made in accordance with GAAP that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of operation. There have been no significant changes in our critical accounting estimates during the three months ended March 31, 2024, as compared to those disclosed in the Annual Report on Form 10-K for the year ended December 31, 2023, filed by the Company with the SEC on March 28, 2024.

Current wording

Our management’s discussion and analysis of our financial condition and results of operations are based on our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The preparation of these financial statements requires us to make estimates and judgments that affect the reported amount of assets, liabilities, and expenses and the disclosure of contingent assets and liabilities as of the date of the financial statements. On an ongoing basis, we evaluate our estimates and judgments. We base our estimates on historical experience, known trends and events, and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates under different assumptions or conditions. In Part II, Item 7 of our Amended Form 10-K, we disclosed our critical accounting estimates, which are those estimates made in accordance with GAAP that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of operation. There have been no significant changes in our critical accounting estimates during the six months ended June 30, 2024, as compared to those disclosed in the Amended Form 10-K.

Previous wording

Research and development expenses decreased $0.7 million, to $7.4 million for the three months ended March 31, 2024, as compared to $8.1 million for the three months ended March 31, 2023. The decrease in research and development expenses was primarily driven by a decrease in expenses related to the production of clinical trial materials of $0.8 million and a decrease of clinical development expenses with external contract research organizations of $0.3 million. The decrease was partially offset by an increase in employee compensation and benefit expense of $0.4 million.

Current wording

Research and development expenses increased $2.9 million, to $10.1 million for the three months ended June 30, 2024, as compared to $7.2 million for the three months ended June 30, 2023. The increase in research and development expenses was primarily driven by an increase in expenses related to the production of clinical trial materials of $1.6 million, an increase in clinical development expenses with external contract research organizations of $0.7 million, higher non-cash stock-based compensation expenses of $0.4 million and an increase employee compensation and benefit expense of $0.2 million.

Previous wording

General and administrative expenses increased $0.5 million to $3.5 million for the three months ended March 31, 2024, as compared to $3.0 million for the three months ended March 31, 2023. The increase in general and administrative expenses was primarily driven by higher non-cash stock-based compensation expenses of $0.4 million and an increase in general operating expenses of $0.1 million.

Current wording

General and administrative expenses increased $1.2 million to $4.4 million for the three months ended June 30, 2024, as compared to $3.2 million for the three months ended June 30, 2023. The increase in general and administrative expenses was primarily driven by higher non-cash stock-based compensation expenses of $1.0 million and an increase in professional services of $0.1 million and general operating expenses of $0.1 million.

Previous wording

The change in other income, net was primarily due to an increase in interest income associated with higher interest rates on our cash and cash equivalents and short-term investments for the three months ended March 31, 2024.

Current wording

The change in other income, net was primarily due to an increase in interest income attributable to favorable interest rates and higher cash equivalents and short-term investment balances for the three months ended June 30, 2024.

Previous wording

As of March 31, 2024, we had cash and cash equivalents and short-term investments of approximately $42.9 million, and we received approximately $50.0 million of gross proceeds, or net proceeds of approximately $47.6 million after deducting offering costs, in connection with the May 6, 2024 private placement described in Note 12 of the Notes to Financial Statements included in this Quarterly Report on Form 10-Q (the “2024 Private Placement”). The approximate $47.6 million of net proceeds received in conjunction with the 2024 Private Placement, in addition to existing cash and cash equivalents and short-term investments as of March 31, 2024, is expected to provide us with sufficient liquidity through December 2025. To date, our operations have been financed primarily by net proceeds from the sale of preferred and common stock, and the sale of warrants. Additionally, in view of our expectation to incur significant losses for the foreseeable future we will be required to raise additional capital resources in the future in order to fund our operations, although the availability of, and the Company’s access to, such resources is not assured. Accordingly, management believes that there will be substantial doubt regarding our ability to continue operating as a going concern if we are unable to raise additional capital to finance our operations. We have based this estimate on assumptions that may prove to be incorrect, and we could exhaust our available resources sooner than we currently expect. In addition, we may receive up to an additional $105.0 million in tranche financing in a second and a third closing of the 2023 Private Placement, subject to satisfaction or waiver of specified conditions, including clinical development milestones and volume weighted average share price levels and trading volume conditions, and an additional $45.5 million assuming the exercise of all Common Warrants issued in the initial closing of the 2024 Private Placement. There is no assurance that the milestones required for the second and third closings will be satisfied or waived or that the Common Warrants will be exercised. If these events do not occur or if we are unable to secure additional capital on acceptable terms or at all, we will be forced to significantly alter our business strategy, substantially curtail our current operations, or liquidate and cease operations altogether. Further, from time to time, our operating plans may change, and we may need additional funds to meet operational needs for clinical studies sooner than planned or to fund additional clinical studies. For example, we do not currently have sufficient liquidity to fund the continued clinical development of tegoprubart for people with ALS without additional financing, notwithstanding the positive topline results of our Phase 2a study of tegoprubart for adult subjects with ALS. We will continue to monitor our liquidity position in light of various financing alternatives and may pursue additional f…

Excerpt shortened here; the source contains the full paragraph.

Current wording

As of June 30, 2024, we had cash and cash equivalents and short-term investments of approximately $83.6 million, and we received approximately $50.0 million of gross proceeds, or net proceeds of approximately $48.1 million after deducting offering costs, in connection with the May 6, 2024 private placement described in Note 9 of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q (the “2024 Private Placement”). The approximate $48.1 million of net proceeds received in conjunction with the 2024 Private Placement, in addition to existing cash and cash equivalents and short-term investments as of June 30, 2024, is expected to provide us with sufficient liquidity through approximately December 2025. To date, our operations have been financed primarily by net proceeds from the sale of preferred and common stock, and the sale of warrants. Additionally, in view of our expectation to incur significant losses for the foreseeable future we will be required to raise additional capital resources in the future in order to fund our operations, although the availability of, and the Company’s access to, such resources is not assured. Accordingly, management believes that there will be substantial doubt regarding our ability to continue operating as a going concern if we are unable to raise additional capital to finance our operations. We have based this estimate on assumptions that may prove to be incorrect, and we could exhaust our available resources sooner than we currently expect. In addition, we may receive up to an additional $58.3 million in tranche financing in the Third Closing of the 2023 Private Placement, subject to satisfaction or waiver of specified conditions, including clinical development milestones and volume weighted average share price levels and trading volume conditions, and an additional $45.5 million assuming the exercise of all Common Warrants issued in the initial closing of the 2023 Private Placement. There is no assurance that the milestones required for the Third Closing will be satisfied or waived or that the Common Warrants will be exercised. If these events do not occur or if we are unable to secure additional capital on acceptable terms or at all, we will be forced to significantly alter our business strategy, substantially curtail our current operations, or liquidate and cease operations altogether. Further, from time to time, our operating plans may change, and we may need additional funds to meet operational needs for clinical studies sooner than planned or to fund additional clinical studies. For example, we do not currently have sufficient liquidity to fund the continued clinical development of tegoprubart for people with ALS without additional financing, notwithstanding the positive topline results of our Phase 2a study of tegoprubart for adult subjects with ALS. We will continue to monitor our liquidity position in light of various financing alternatives and may pursue ad…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Our primary use of cash is to fund operating expenses, which consist of clinical research and development expenses, manufacturing expenses, legal and compliance expenses, compensation and related expenses, and general overhead costs. Cash used to fund operating expenses is impacted by the timing of when we pay or prepay these expenses. As of March 31, 2024, there have been no changes in our material cash requirements from known contractual and other obligations, including commitments for capital expenditures, as disclosed under “Liquidity and Capital Resources—Material Cash Requirements” in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K.

Current wording

Our primary use of cash is to fund operating expenses, which consist of clinical research and development expenses, manufacturing expenses, legal and compliance expenses, compensation and related expenses, and general overhead costs. Cash used to fund operating expenses is impacted by the timing of when we pay or prepay these expenses. As of June 30, 2024, there have been no changes in our material cash requirements from known contractual and other obligations, including commitments for capital expenditures, as disclosed under “Liquidity and Capital Resources—Material Cash Requirements” in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Amended Form 10-K.

Previous wording

Conditions in the financial and credit markets may also limit the availability of funding or increase the cost of funding. As a result of any of the foregoing factors, adequate additional funding may not be available to us on acceptable terms on a timely basis, or at all. The severity and duration of any such impacts cannot be predicted. Any such failure to raise capital as and when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies or cause us to delay our clinical development plans, research and development programs or commercialization efforts, out-license intellectual property rights to our product candidates or sell unsecured assets, or a combination of the above. Any of these actions could materially harm our business. As a result of the shares of our common stock issued in the 2023 Private Placement and the 2024 Private Placement or that may be issuable in the second or third closings of the 2023 Private Placement or upon the exercise of the Pre-Funded Warrants or the Common Warrants, our stockholders’ ownership interests will be diluted. To the extent that we raise additional capital through the sale of additional equity or convertible debt securities in the future, our stockholders’ ownership interests may be further diluted, and the terms of these securities may also include liquidation or other preferences that adversely affect our stockholders’ rights. Debt financing, if available, would result in fixed payment obligations and may involve agreements that include restrictive covenants that limit our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends, that could adversely impact our ability to conduct our business. If we raise funds through collaborations, licenses and other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us. Please see the section of this Quarterly Report titled “Risk Factors” for additional risks associated with our substantial capital requirements and the challenges we may face in raising capital.

Current wording

Conditions in the financial and credit markets may also limit the availability of funding or increase the cost of funding. As a result of any of the foregoing factors, adequate additional funding may not be available to us on acceptable terms on a timely basis, or at all. The severity and duration of any such impacts cannot be predicted. Any such failure to raise capital as and when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies or cause us to delay our clinical development plans, research and development programs or commercialization efforts, out-license intellectual property rights to our product candidates or sell unsecured assets, or a combination of the above. Any of these actions could materially harm our business. As a result of the shares of our common stock issued in the 2023 Private Placement and the 2024 Private Placement or that may be issuable in the Third Closing of the 2023 Private Placement or upon the exercise of the Pre-Funded Warrants or the Common Warrants, our stockholders’ ownership interests will be diluted. To the extent that we raise additional capital through the sale of additional equity or convertible debt securities in the future, our stockholders’ ownership interests may be further diluted, and the terms of these securities may also include liquidation or other preferences that adversely affect our stockholders’ rights. Debt financing, if available, would result in fixed payment obligations and may involve agreements that include restrictive covenants that limit our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends, that could adversely impact our ability to conduct our business. If we raise funds through collaborations, licenses and other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us. Please see the section of this Quarterly Report titled “Risk Factors” for additional risks associated with our substantial capital requirements and the challenges we may face in raising capital.

Previous wording

The following table provides a summary of our net cash flow activity for the three months ended March 31, 2024 and 2023 (in thousands):

Current wording

The following table provides a summary of our net cash flow activity for the six months ended June 30, 2024 and 2023 (in thousands):

Previous wording

For the three months ended March 31, 2023, operating activities used $9.9 million of cash, which primarily consisted of our net loss of $10.8 million. Operating activities include adjustments for certain non-cash charges including $1.4 million of stock-based compensation and $0.1 million of operating lease amortization. Net operating assets and liabilities changed by $0.6 million, primarily driven by a decrease in prepaid expenses and other assets of $0.5 million, a decrease in operating lease liability of $0.1 million and an increase in accounts payable and accrued expenses of $1.0 million.

Current wording

For the six months ended June 30, 2024, operating activities used $16.5 million of cash, which primarily consisted of our net loss of $68.5 million. Operating activities include adjustments for certain non-cash charges including $44.6 million due to a change in warrant liabilities and fair value of financial instruments issued in excess of proceeds, $4.8 million of stock-based compensation, and $0.2 million of operating lease amortization, partially offset by accretion of investment discounts of $1.0 million and gain on lease termination. Net operating assets and liabilities changed by $3.4 million, primarily driven by an increase in accounts payable and accrued expenses of $2.2 million, a decrease in prepaid expenses and other assets of $1.3 million and an increase in operating lease liability of $0.2 million.

Previous wording

For the three months ended March 31, 2024, operating activities used $8.7 million of cash, which primarily consisted of our net loss of $10.3 million. Operating activities include adjustments for certain non-cash charges including $1.7 million of stock-based compensation, $0.1 million of operating lease amortization, partially offset by accretion of investment discounts of $0.5 million. Net operating assets and liabilities changed by $0.3 million, primarily driven by an increase in accounts payable and accrued expenses of $0.5 million, a decrease in operating lease liability of $0.1 million and an increase in prepaid expenses and other assets of $0.1 million.

Current wording

For the six months ended June 30, 2023, operating activities used $18.1 million of cash, which primarily consisted of our net loss of $44.0 million. Operating activities include adjustments for certain non-cash charges including $23.2 million due to a change in warrant liabilities, $3.1 million of stock-based compensation, and $0.2 million of operating lease amortization, partially offset by accretion of investment discounts of $0.1 million. Net operating assets and liabilities changed by $1.0 million, primarily driven by a decrease in accounts payable and accrued expenses of $1.6 million, an increase in operating lease liability of $0.2 million and a decrease in prepaid expenses and other assets of $0.8 million.