Celularity Inc

Previous wording

On January 12, 2024, we entered into a second amended and restated senior secured loan agreement, or the RWI Second Amended Bridge Loan, with Resorts World Inc Pte Ltd, or RWI, to amend and restate the previously announced senior secured loan agreement with RWI dated as of May 16, 2023, as amended on June 20, 2023, in its entirety. The RWI Second Amended Bridge Loan provided for an additional loan in the aggregate principal amount of $15.0 million net of an original issue discount of $3.75 million, which bears interest at a rate of 12.5% per year, with the first year of interest being paid in kind on the last day of each month, and matures July 16, 2025. In addition, the RWI Second Amended Bridge Loan provides for the issuance of a 5-year immediately exercisable warrant to acquire up to 1,650,000 shares of our Class A common stock, or the Tranche #1 Warrant, and a warrant to acquire up to 1,350,000 shares of our Class A common stock, which will only be exercisable upon the later of (x) stockholder approval for Nasdaq purposes of its exercise price, (y) CFIUS clearance and (z) six months from issuance date, or the Tranche #2 Warrant, and will expire 5 years after it becomes exercisable. The Tranche #1 Warrant and Tranche #2 Warrant were each issued on January 16, 2024, and the Tranche #1 Warrant has an exercise price of $2.4898 per share, and the Tranche #2 Warrant will have an exercise price equal to "Minimum Price” (as determined pursuant to Nasdaq 5635(d)) on the date it becomes exercisable. We closed the RWI Second Amended Bridge Loan and the sale and purchase of the Tranche #1 Warrant and Tranche #2 Warrant on January 16, 2024. The Tranche #2 Warrant initial exercise date was determined to be July 17, 2024 (i.e., six months from the issuance date) and the exercise price was set at $3.076 based on the 5-day trailing average stock price.

Current wording

On January 12, 2024, we entered into a second amended and restated senior secured loan agreement, or the RWI Second Amended Bridge Loan, with Resorts World Inc Pte Ltd, or RWI, to amend and restate the previously announced senior secured loan agreement with RWI dated as of May 16, 2023, as amended on June 20, 2023, in its entirety. The RWI Second Amended Bridge Loan provided for an additional loan in the aggregate principal amount of $15.0 million net of an original issue discount of $3.75 million, which bears interest at a rate of 12.5% per year, with the first year of interest being paid in kind on the last day of each month, and matures July 16, 2025. In addition, the RWI Second Amended Bridge Loan provides for the issuance of a 5-year immediately exercisable warrant to acquire up to 1,650,000 shares of our Class A common stock, or the Tranche #1 Warrant, and a warrant to acquire up to 1,350,000 shares of our Class A common stock, which will only be exercisable upon the later of (x) stockholder approval for Nasdaq purposes of its exercise price, (y) CFIUS clearance and (z) six months from issuance date, or the Tranche #2 Warrant, and will expire 5 years after it becomes exercisable. The Tranche #1 Warrant and Tranche #2 Warrant were each issued on January 16, 2024, and the Tranche #1 Warrant has an exercise price of $2.4898 per share. The Company closed the RWI Second Amended Bridge Loan and the sale of the Tranche #1 Warrant and Tranche #2 Warrant on January 16, 2024. The Tranche #2 Warrant became exercisable on July 15, 2024 (i.e., six months from the issuance date) and has an exercise price of $2.988.

Previous wording

On August 22, 2024, Nasdaq provided formal notice to us that as a result of our failure to timely file our quarterly reports on Form 10-Q for the periods ended March 31, 2024 (Q1 2024 Form 10-Q) and June 30, 2024 (Q2 2024 Form 10-Q), we were not in compliance with the continued listing requirements under Nasdaq Listing Rule 5250(c)(1). On September 5, 2024, we submitted an updated compliance plan to Nasdaq, and Nasdaq subsequently granted us an extension until October 14, 2024, to file our Q1 2024 Form 10-Q and Q2 2024 Form 10-Q. On October 16, 2024, upon filing the Q1 2024 Form 10-Q, Nasdaq notified us that, as the Q2 2024 Form 10-Q had not been filed, we would be suspended from trading on October 25, 2024, unless we appealed Nasdaq's determination by October 23, 2024. On October 23, 2024, we filed an appeal requesting an oral hearing with a Nasdaq Hearings Panel pursuant to the procedures set forth in the Nasdaq Listing Rule 5800 Series. On October 25, 2024, Nasdaq notified us that the oral hearing date has been set for December 11, 2024, and that the delisting action has been stayed through November 7, 2024, unless the Nasdaq Hearings Panel grants us an extension of the stay, pending the hearing. There can be no assurance that the Nasdaq Hearings Panel will grant us an extension of the stay, that the appeal will be successful, or that we will maintain compliance with the Nasdaq listing requirements. If relief is not granted by the Nasdaq Hearings Panel or we are unable maintain compliance, our securities will be delisted from the Nasdaq, which such delisting could have a materially adverse effect on our ability to continue as a going concern.

Current wording

As a result of our failure to timely file our quarterly reports on Form 10-Q for the periods ended March 31, 2024 and June 30, 2024, we no longer complied with the continued listing requirements under the timely filing criteria outlined in Nasdaq Listing Rule 5250(c)(1). We had regained compliance with the Nasdaq listing requirements upon filing our Form 10-Q for the period ended June 30, 2024 on November 7, 2024. On November 21, 2024, Nasdaq provided formal notice to us that as a result of our failure to timely file our quarterly report on Form 10-Q for the period ended September 30, 2024, we were not in compliance with the continued listing requirements under Nasdaq Listing Rule 5250(c)(1). We have 60 days to submit a plan to Nasdaq to regain compliance with the continued listing requirements. If Nasdaq accepts our plan, it may grant an exception of up to 180 days from the filing's due date, or May 13, 2025, to regain compliance. There can be no assurance that Nasdaq will grant us an extension or that we will maintain compliance with the Nasdaq listing requirements. If we are unable to regain compliance, our securities will be delisted from the Nasdaq, which such delisting could have a materially adverse effect on our ability to continue as a going concern.

Previous wording

Since inception, we have incurred significant operating losses and cash used in operating activities. For the six months ended June 30, 2024, we incurred a net operating loss of $17.6 million and net cash used in operating activities of $7.9 million. As of June 30, 2024, we had an accumulated deficit of $870.3 million. We expect to continue to incur significant operating losses and use net cash in operations for the foreseeable future.

Current wording

Since inception, we have incurred significant operating losses and cash used in operating activities. For the nine months ended September 30, 2024, we incurred a net operating loss of $29.1 million and net cash used in operating activities of $8.0 million. As of September 30, 2024, we had an accumulated deficit of $886.4 million. We expect to continue to incur significant operating losses and use net cash in operations for the foreseeable future.

Previous wording

We expect to incur substantial expenditures to fund our investments for the foreseeable future. In order to fund these investments, we will need to secure additional sources of outside capital. While we are actively seeking to secure additional outside capital (and have historically been able to successfully secure such capital), as of the issuance date, no additional outside capital has been secured or was deemed probable of being secured. In addition, management can provide no assurance that we will be able to secure additional outside capital in the future or on terms that are acceptable to us. Absent an ability to secure additional outside capital in the very near term, we will be unable to meet our obligations as they become due over the next 12 months beyond the issuance date.

Current wording

We expect to incur substantial expenditures to fund our investments for the foreseeable future. In order to fund these investments, we will need to secure additional sources of outside capital. While we are actively seeking to secure additional outside capital (and have historically been able to successfully secure such capital), as of the issuance date, additional outside capital sufficient to fund operations for the next 12 months has not been secured or was deemed probable of being secured. In addition, management can provide no assurance that we will be able to secure additional outside capital in the future or on terms that are acceptable to us. Absent an ability to secure additional outside capital in the very near term, we will be unable to meet our obligations as they become due over the next 12 months beyond the issuance date.

Previous wording

As of the issuance date, we had approximately $44.7 million of debt outstanding, all of which is currently due or due within one year of the issuance date. As disclosed in Note 7 to the accompanying unaudited condensed consolidated financial statements, substantially all of our debt is subject to a forbearance agreement. In the event the terms of the forbearance agreements are not met and/or the outstanding borrowings are not repaid, the lenders may, at their discretion, exercise all of their rights and remedies under the loan agreements which may include, among other things, seizing our assets and/or forcing us into liquidation.

Current wording

As of the issuance date, we had approximately $46.1 million of debt outstanding, all of which is currently due or due within one year of the issuance date. As disclosed in Note 7 to the accompanying unaudited condensed consolidated financial statements, a substantial portion of our debt is subject to forbearance agreements. In the event the terms of the forbearance agreements are not met and/or the outstanding borrowings are not repaid, the lenders may, at their discretion, exercise all of their rights and remedies under the loan agreements which may include, among other things, seizing our assets and/or forcing us into liquidation.

Previous wording

On August 22, 2024, Nasdaq provided formal notice to us that as a result of our failure to timely file our Q2 2024 Form 10-Q, and because at the time we remained delinquent on the Q1 2024 Form 10-Q, we were not in compliance with the continued listing requirements under the timely filing criteria outlined in Nasdaq Listing Rule 5250(c)(1). On September 5, 2024, we submitted a plan to Nasdaq to regain compliance and on September 17, 2024, received notification from Nasdaq that the compliance plan was accepted. Under the plan, Nasdaq granted us an extension until October 14, 2024, to file the Q1 2024 Form 10-Q and the Q2 2024 Form 10-Q. On October 16, 2024, upon filing the Q1 2024 Form 10-Q, Nasdaq notified us that, as the Q2 2024 Form 10-Q had not been filed, we would be suspended from trading on October 25, 2024 unless we appealed Nasdaq's determination to a Nasdaq Hearings Panel by October 23, 2024. On October 23, 2024, we filed an appeal requesting an oral hearing with a Nasdaq Hearings Panel pursuant to the procedures set forth in the Nasdaq Listing Rule 5800 Series. On October 25, 2024, Nasdaq notified us that the oral hearing date has been set for December 11, 2024, and that the delisting action has been stayed through November 7, 2024, unless the Nasdaq Hearings Panel grants us an extension of the stay, pending the hearing. There can be no assurance that the Nasdaq Hearings Panel will grant us an extension of the stay, that the appeal will be successful, or that we will maintain compliance with the Nasdaq listing requirements. If relief is not granted by the Nasdaq Hearings Panel or we are unable to maintain compliance, our securities will be delisted from the Nasdaq, which such delisting could have a materially adverse effect on our ability to continue as a going concern.

Current wording

As a result of our failure to timely file our quarterly reports on Form 10-Q for the periods ended March 31, 2024 and June 30, 2024, we no longer complied with the continued listing requirements under the timely filing criteria outlined in Nasdaq Listing Rule 5250(c)(1). We had regained compliance with the Nasdaq listing requirements upon filing our Form 10-Q for the period ended June 30, 2024 on November 7, 2024. On November 21, 2024, Nasdaq provided formal notice to us that as a result of our failure to timely file our quarterly report on Form 10-Q for the period ended September 30, 2024, we were not in compliance with the continued listing requirements under Nasdaq Listing Rule 5250(c)(1). We have 60 days to submit a plan to Nasdaq to regain compliance with the continued listing requirements. If Nasdaq accepts our plan, it may grant an exception of up to 180 days from the filing's due date, or May 13, 2025, to regain compliance. There can be no assurance that Nasdaq will grant us an extension or that we will maintain compliance with the Nasdaq listing requirements. If we are unable to regain compliance, our securities will be delisted from the Nasdaq, which such delisting could have a materially adverse effect on our ability to continue as a going concern.

Previous wording

Net revenues include: (i) sales of biomaterial products, including Biovance, Biovance 3L, Interfyl, and CentaFlex of which our direct sales are included in Product Sales while sales through our network of distribution partners are included in License, royalty and other; and (ii) the collection, processing and storage of umbilical cord and placental blood and tissue after full-term pregnancies, collectively, Services.

Current wording

Net revenues include: (i) sales of biomaterial products, including Biovance, Biovance 3L, Rebound TM, Interfyl, and CentaFlex of which our direct sales are included in Product Sales while sales through our network of distribution partners are included in License, royalty and other; and (ii) the collection, processing and storage of umbilical cord and placental blood and tissue after full-term pregnancies, collectively, Services.

Previous wording

There were no software cease-use costs for the three months ended June 30, 2024, a decrease of $0.2 million, or 100%, from the prior year period, which reflected the recognition of the remaining contract value associated with the Palantir platform fees in connection with our cease of use of the platform. We subsequently reached a settlement with Palantir and no software cease-use costs were incurred in the current period. See Note 9, "Commitments and Contingencies" to our unaudited condensed consolidated financial statements included elsewhere in this quarterly report on Form 10-Q for additional information related to the Palantir agreement.

Current wording

Software cease-use costs were $0.2 million for the three months ended September 30, 2023, which reflected the recognition of the remaining contract value associated with the Palantir platform that we terminated. We subsequently reached a settlement with Palantir and as a result, no software cease-use costs were incurred in the current year period. See Note 9, "Commitments and Contingencies" to our unaudited condensed consolidated financial statements included elsewhere in this quarterly report on Form 10-Q for additional information related to the Palantir agreement.

Previous wording

Selling, general and administrative expenses for the three months ended June 30, 2024 were $15.9 million, an increase of $3.1 million, or 24% compared to the prior year period. The increase was primarily due to higher selling expenses partially offset by lower personnel expenses.

Current wording

Selling, general and administrative expenses for the three months ended September 30, 2024 were $12.7 million, an increase of $1.9 million, or 17.7% compared to the prior year period. The increase was primarily due to higher selling expenses driven by an increase in biomaterial sales.

Previous wording

There were no IPR&D impairments for the three months ended June 30, 2024, compared to a charge of $107.8 million in the prior year period resulting from the decline in future revenue projections in the Cell Therapy business driven by discontinuation of clinical trials and changes in our strategy and pipeline.

Current wording

There were no goodwill impairments for the three months ended September 30, 2024, compared to a charge of $82.7 million in the prior year period resulting from a decline in future revenue projections in the Cell Therapy business driven by discontinuation of clinical trials and changes in our strategy and pipeline.

Previous wording

For the three months ended June 30, 2024, other income was $3.7 million compared to $5.5 million of expense in the prior year period. The $9.2 million change was primarily related to a change in the fair value of the warrant liabilities due to a decrease in the price of our Class A common stock during the quarter ended June 30, 2024 (see Note 3, “Fair Value of Financial Assets and Liabilities” in our unaudited condensed consolidated financial statements included elsewhere in this quarterly report on Form 10-Q). Included in the three months ended June 30, 2023 was expense of $1.1 million for changes in fair value of debt related to the September 15, 2022 Yorkville Pre-Paid Advance Agreement, or Yorkville PPA, which we elected to account for at fair value. The Yorkville PPA was subsequently repaid in full on January 17, 2024. Other expense, net included a loss of $2.2 million in the three months ended June 30, 2023 related to the RWI Loan and RWI Warrant transactions (see Note 7, "Debt" in our unaudited condensed consolidated financial statements included elsewhere in this quarterly report on Form 10-Q). This loss is not present in the comparable period for 2024, highlighting the year-over-year change.

Current wording

For the three months ended September 30, 2024, total other expense was $4.6 million compared to total other income of $5.4 million in the prior year period. The change of $10.0 million was primarily related to changes in the fair value of warrant liabilities of $4.5 million, change in the fair value of debt of $2.7 million and an increase in other expenses, net of $2.0 million. The change in fair value of warrant liability for the three months ended September 30, 2023, was $5.2 million of income mainly due to decreases in the price of our Class A common stock during the quarter ended September 30, 2023 (see Note 3, “Fair Value of Financial Assets and Liabilities” in our unaudited condensed consolidated financial statements included elsewhere in this quarterly report on Form 10-Q). The change in fair value of debt for the three months ended September 30, 2023, was $2.0 million of income and reflects changes in fair value of the September 15, 2022 Yorkville Pre-Paid Advance Agreement, or Yorkville PPA, which we elected to account for at fair value. The Yorkville PPA was subsequently repaid in full on January 17, 2024. Other expense, net for the three months ended September 30, 20 24, was $2.9 million and included a loss of $2.5 million related to an accrual for liquidated damages resulting from our failure to satisfy certain public information conditions pursuant to the securities purchase agreement dated May 18, 2022.

Previous wording

Comparison of Six Months Ended June 30, 2024 to June 30, 2023

Current wording

Comparison of Nine Months Ended September 30, 2024 to September 30, 2023

Previous wording

Cost of revenues for the six months ended June 30, 2024 was $3.8 million, an increase of $1.0 million, or 34.2% compared to the prior year period. The increase was primarily due to a $1.4 million increase in product sales costs driven by increased Biovance 3L direct to customer sales, partially offset by lower costs for biomaterial product sales through distributors and Biobanking collection, processing and storage fees. As a percentage of revenues, cost of revenues decreased to 14% for the six months ended June 30, 2024 compared to 41% in the prior year period due to an increase in Biovance 3L sales, which has a higher gross profit margin than other biomaterial products.

Current wording

Cost of revenues for the nine months ended September 30, 2024 was $7.6 million, an increase of $1.2 million, or 19.3% compared to the prior year period. The increase was primarily due to a $1.4 million increase in product sales costs driven by higher Biovance 3L direct to customer sales. As a percentage of revenues, cost of revenues decreased to 21% for the nine months ended September 30, 2024 compared to 60% in the prior year period due to an increase in Biovance 3L sales, which has a higher gross profit margin than other biomaterial products.

Previous wording

Research and development expenses for the three months ended June 30, 2024 were $3.8 million, a decrease of $4.8 million, or 55.8% compared to the prior year period. The decrease was primarily due to lower personnel costs resulting from our March 2023 reduction in force, lower clinical trial costs as a result of discontinuing certain clinical trials of our cell therapy candidates and lower allocated indirect overhead costs.

Current wording

Research and development expenses for the nine months ended September 30, 2024 were $13.6 million, a decrease of $17.2 million, or 55.9% compared to the prior year period. The decrease was primarily due to $3.4 million lower personnel costs resulting from our March 2023 reduction in force, $9.1 million lower outside services driven by lower clinical trial costs as a result of discontinuing certain clinical trials of our cell therapy candidates and $3.8 million of lower technical operation allocated costs.

Previous wording

There were no software cease-use costs for the six months ended June 30, 2024, compared to $23.9 million in the prior year period, which reflected the recognition of the remaining contract value associated with the Palantir platform fees in connection with our cease of use of the platform. We subsequently reached a settlement with Palantir and no software cease-use costs were incurred in the current period. See Note 9, "Commitments and Contingencies" to our unaudited condensed consolidated financial statements included elsewhere in this quarterly report on Form 10-Q for additional information related to the Palantir agreement.

Current wording

Software cease-use costs were $24.2 million for the nine months ended September 30, 2023, which reflected the recognition of the remaining contract value associated with the Palantir platform that we terminated. We subsequently reached a settlement with Palantir and as a result, no software cease-use costs were incurred in the current period. See Note 9, "Commitments and Contingencies" to our unaudited condensed consolidated financial statements included elsewhere in this quarterly report on Form 10-Q for additional information related to the Palantir agreement.

Previous wording

Selling, general and administrative expenses for the six months ended June 30, 2024 were $29.9 million, an increase of $3.2 million, or 11.9%, compared to the prior year period. The increase was primarily due to higher selling expenses, partially offset by lower personnel expenses resulting from our March 2023 reduction in force.

Current wording

Selling, general and administrative expenses for the nine months ended September 30, 2024 were $42.6 million, an increase of $5.1 million, or 13.5%, compared to the prior year period. The increase was primarily due to higher selling expenses driven by an increase in biomaterial sales.

Previous wording

There was no change in the fair value of contingent consideration liability for the six months ended June 30, 2024, compared to a credit of $104.3 million in the prior year period. We discontinued our Cell Therapy clinical trials during 2023. Consequently, there was a de minimus change in the fair value of contingent consideration liability in the current year period. During the six months ended June 30, 2023, changes in market-based assumptions and underlying projections resulted in a decrease to the fair value of the contingent consideration liability (for more information about changes in the fair value of contingent consideration liability refer to Note 3, “Fair Value of Financial Assets and Liabilities” in our unaudited condensed consolidated financial statements included elsewhere in this quarterly report on Form 10-Q).

Current wording

In 2023, we discontinued our Cell Therapy clinical trials and as a result, during the nine months ended September 30, 2023, we recorded a decrease in the fair value of the contingent consideration liability of $104.3 million driven by changes in market-based assumptions and underlying projections. Changes in the contingent consideration liability market-based assumptions and underlying projections were de minimums in the current year period. Consequently, there was no change in the fair value of contingent consideration liability for the nine months ended September 30, 2024. For more information about changes in the fair value of contingent consideration liability refer to Note 3, “Fair Value of Financial Assets and Liabilities” in our unaudited condensed consolidated financial statements included elsewhere in this quarterly report on Form 10-Q.

Previous wording

There were no impairment charges for the six months ended June 30, 2024. Goodwill and IPR&D impairment charges for the six months ended June 30, 2023 were $29.6 million and $107.8 million, respectively, due to the decline in future revenue projections in the Cell Therapy business driven by discontinuation of clinical trials and changes in our strategy and pipeline.

Current wording

There were no impairment charges for the nine months ended September 30, 2024. Goodwill and IPR&D impairment charges for the nine months ended September 30, 2023 were $112.3 million and $107.8 million, respectively, due to the decline in future revenue projections in the Cell Therapy business driven by discontinuation of clinical trials and changes in our strategy and pipeline.

Previous wording

For the six months ended June 30, 2024, other expense increased by $5.3 million compared to the prior year period. The increase was primarily related to a $3.5 million change in the fair value of the warrant liabilities (see Note 3, “Fair Value of Financial Assets and Liabilities” in our unaudited condensed consolidated financial statements included elsewhere in this quarterly report on Form 10-Q). Included in the six months ended June 30, 2024 was a $3.9 million loss on debt extinguishment recorded in connection with the January 12, 2024 RWI Second Amended Bridge Loan (for more information about the RWI Second Amended Bridge Loan refer to Note 7, “Debt” in our unaudited condensed consolidated financial statements included elsewhere in this quarterly report on Form 10-Q). Included in the six months ended June 30, 2023, was expense of $2.4 million for changes in fair value of debt related to the Yorkville PPA, which we elected to account for at fair value. The Yorkville PPA was subsequently repaid in full on January 17, 2024.

Current wording

For the nine months ended September 30, 2024, total other expense was $15.5 million compared to $0.2 million in the prior year period. The increase was primarily related to changes in the fair value of warrant liabilities of $7.9 million, loss on debt extinguishment of $3.9 million, an increase in interest expense of $2.1 million and an increase in other expense, net of $1.0 million. Change in fair value of warrant liability for the nine months ended September 30, 2023, was $6.8 million of income mainly due to decreases in the price of our Class A common stock during the prior year period (see Note 3, “Fair Value of Financial Assets and Liabilities” in our unaudited condensed consolidated financial statements included elsewhere in this quarterly report on Form 10-Q). Included in the nine months ended September 30, 2024 was a $3.9 million loss on debt extinguishment recorded in connection with the January 12, 2024 RWI Second Amended Bridge Loan (for more information about the RWI Second Amended Bridge Loan refer to Note 7, “Debt” in our unaudited condensed consolidated financial statements included elsewhere in this quarterly report on Form 10-Q). The $2.1 million increase in interest expense was primarily driven by interest on the January 12, 2024, RWI Second Amended Bridge Loan.

Previous wording

As of June 30, 2024, we had $0.5 million of unrestricted cash and cash equivalents and an accumulated deficit of $870.3 million. Our primary use of our capital resources is funding our operating expenses, which consist primarily of funding selling, general and administrative expenses, and to a lesser extent, the research and development of our cellular therapeutic candidates.

Current wording

As of September 30, 2024, we had $0.1 million of unrestricted cash and cash equivalents and an accumulated deficit of $886.4 million. Our primary use of our capital resources is funding our operating expenses, which consist primarily of funding selling, general and administrative expenses, and to a lesser extent, the research and development of our cellular therapeutic candidates.

Previous wording

The following table summarizes our cash flows for the six months ended June 30, 2024 and 2023:

Current wording

The following table summarizes our cash flows for the nine months ended September 30, 2024 and 2023:

Previous wording

Net cash used in operations for the six months ended June 30, 2024 was $18.2 million lower than the prior year period, primarily due to higher net revenues, partially offset by an increase in accounts receivable and lower operating expenses mainly due to our March 2023 reduction in force and lower clinical trial costs from discontinuation of certain clinical trials of our cell therapy candidates.

Current wording

Net cash used in operations for the nine months ended September 30, 2024 was $26.3 million lower than the prior year period, primarily due to higher net revenues, partially offset by an increase in accounts receivable, lower operating expenses mainly due to our March 2023 reduction in force and lower clinical trial costs from discontinuation of certain clinical trials of our cell therapy candidates and increases in accounts payable and accrued expenses.

Previous wording

We received $2.1 million and used $3.2 million of net cash in investing activities for the six months ended June 30, 2024 and 2023, respectively. Net cash provided by investing activities for the six months ended June 30, 2024 included the $2.2 million settlement of the convertible note receivable from Sanuwave, offset by $0.1 million of capital expenditures. Net cash used in investing activities for the six months ended June 30, 2023, included $0.2 million of capital expenditures and $3.0 million used to acquire in-process research and development.

Current wording

We received $2.1 million and used $3.5 million of net cash in investing activities for the nine months ended September 30, 2024 and 2023, respectively. Net cash provided by investing activities for the nine months ended September 30, 2024 included the $2.2 million settlement of the convertible note receivable from Sanuwave, offset by $0.1 million of capital expenditures. Net cash used in investing activities for the nine months ended September 30, 2023, included $0.5 million of capital expenditures and $3.0 million used to acquire in-process research and development.

Previous wording

Net cash provided by financing activities was $6.1 million for the six months ended June 30, 2024, which consisted of $15.0 million from the RWI second amended and restated senior secured loan agreement entered into on January 12, 2024, $6.0 million from the January 2024 private placement agreement with Dragasac and $3.0 million, net from the March 13, 2024 convertible promissory note issued to Yorkville, partially offset by $17.4 million for the payment in full of the Yorkville PPA. For the six months ended June 30, 2023 we generated $18.4 million of net cash from financing activities, which consisted primarily of $12.4 million from the March 2023 and May 2023 private placements, $5.0 million of proceeds from the Starr Bridge Loan, $12.8 million of proceeds from the RWI Loans, $6.0 million from the April 2023 registered direct offering, offset by principal repayments on the Yorkville PPA of $16.8 million and $1.4 million of issuance costs.

Current wording

Net cash provided by financing activities was $6.1 million for the nine months ended September 30, 2024, which consisted of $15.0 million from the RWI Second Amended Bridge Loan entered into on January 12, 2024, $6.0 million from the January 2024 private placement with Dragasac and $3.0 million, net from the March 13, 2024 convertible promissory note issued to Yorkville, partially offset by $17.4 million for the payment in full of the Yorkville PPA. For the nine months ended September 30, 2023, we generated $24.1 million of net cash from financing activities which consisted primarily of $12.8 million from the March 2023 and May 2023 private placements, $5.0 million of proceeds from the Starr Bridge Loan, $12.4 million of proceeds from the RWI Loans, $3.0 million of other short-term debt proceeds, $9.0 million from the April and July 2023 registered direct offerings, offset by principal repayments on the Yorkville PPA of $16.8 million and $1.5 million of issuance costs.

Previous wording

There have been no significant changes in our critical accounting policies during the six months ended June 30, 2024 as compared with those previously disclosed in the 2023 Form 10-K.

Current wording

There have been no significant changes in our critical accounting policies during the nine months ended September 30, 2024 as compared with those previously disclosed in the 2023 Form 10-K.