CalciMedica, Inc.

Previous wording

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and related notes for the year ended December 31, 2023 included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 28, 2024. In addition to historical financial information, this discussion and other parts of this report contain forward-looking statements that involve risks and uncertainties. You should carefully read the sections entitled “Special Note Regarding Forward-Looking Statements” and “Risk Factors” to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements.

Current wording

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q and our audited financial statements and related notes for the year ended December 31, 2024 included in our Annual Report on Form 10-K filed with the SEC on March 27, 2025. In addition to historical financial information, this discussion and other parts of this report contain forward-looking statements that involve risks and uncertainties. You should carefully read the sections entitled “Special Note Regarding Forward-Looking Statements” and “Risk Factors” to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements.

Previous wording

We are a company focused on the discovery and development of CRAC channel inhibitors. Clinical and preclinical data have demonstrated that the inhibition of CRAC channels may have a therapeutic effect based on a dual mechanism involving both anti-inflammatory and tissue cell protective activities. Our work has shown compelling evidence of the involvement of CRAC channels in a broad spectrum of both acute critical illnesses and chronic diseases that have the common thread of inflammation or immunologic activity in their pathogenesis. We intend to leverage our CRAC channel inhibitor platform to develop therapeutics for indications where this dual mechanism of action has the potential for clinical benefit.

Current wording

Clinical and preclinical data have demonstrated that the inhibition of CRAC channels may have a therapeutic effect based on a dual mechanism involving both anti-inflammatory and tissue cell protective activities. Our work has shown compelling evidence of the involvement of CRAC channels in a broad spectrum of both acute critical illnesses and chronic diseases that have the common thread of inflammation or immunologic activity in their pathogenesis. We intend to leverage our CRAC channel inhibitor platform to develop therapeutics for indications where this dual mechanism of action has the potential for clinical benefit.

Previous wording

Our lead product candidate is Auxora, a potent and selective intravenous formulated small molecule CRAC channel inhibitor containing the active compound zegocractin (formerly referred to as CM4620) that, in animal models, reduced acute epithelial and/or endothelial cell injury and inflammation in organs, such as the pancreas, lungs and kidneys. Multiple Phase 2 clinical trials with Auxora have been conducted: an open-label Phase 2a trial in acute pancreatitis (“AP”) with accompanying systematic inflammatory response syndrome (“SIRS”), an international, randomized, double-blind placebo-controlled Phase 2b trial in AP with SIRS (which we refer to as “CARPO”), an investigator led open-label Phase 1/2 trial in asparaginase-induced pancreatic toxicity (“AIPT”) (which we also refer to as “CRSPA”) in which the first cohort of patients has been completed, a placebo-controlled double-blind Phase 2 trial in severe COVID-19 pneumonia (which we also refer to as “CARDEA”) and an investigator led open-label Phase 2a trial in COVID-19 pneumonia patients with acute respiratory distress syndrome (“ARDS”). We observed in all of these trials that patients treated with Auxora experienced a reduced time to recovery and a reduction of organ damage. We believe the consistency of the results we observed from these trials in two different acute critical care conditions are mutually supportive and reinforce our plans to further pursue the use of Auxora in several additional acute critical illnesses, including acute kidney injury (“AKI”) with associated acute hypoxemic respiratory failure (“AHRF”) where we are currently conducting a Phase 2 trial (which we also refer to as “KOURAGE”).

Current wording

Our lead product candidate is Auxora, a potent and selective intravenous formulated small molecule CRAC channel inhibitor containing the active compound zegocractin (formerly referred to as CM4620) that, in animal models, reduced acute epithelial and/or endothelial cell injury and inflammation in organs, such as the pancreas, lungs and kidneys. Multiple Phase 2 clinical trials with Auxora have been conducted: an open-label Phase 2a trial in acute pancreatitis (“AP”) with accompanying systematic inflammatory response syndrome (“SIRS”), an international, randomized, double-blind placebo-controlled Phase 2b trial in AP with SIRS (which we refer to as “CARPO”), an investigator led open-label Phase 1/2 trial in asparaginase-induced pancreatic toxicity (“AIPT”) (which we also refer to as “CRSPA”) in which the first cohort of patients has been completed, a placebo-controlled double-blind Phase 2 trial in severe COVID-19 pneumonia (which we also refer to as “CARDEA”) and an investigator led open-label Phase 2a trial in COVID-19 pneumonia patients with acute respiratory distress syndrome (“ARDS”). We observed in all of these trials that patients treated with Auxora experienced a reduction of organ damage and reduced time to recovery. We believe the consistency of the results we observed from these trials in two different acute critical care conditions are mutually supportive and reinforce our plans to further pursue the use of Auxora in several additional acute critical illnesses, including acute kidney injury (“AKI”) with associated acute hypoxemic respiratory failure (“AHRF”), in which we are currently conducting a Phase 2 trial (which we also refer to as “KOURAGE”) with data expected around the end of 2025.

Previous wording

Finally, we have compiled additional preclinical data supporting the potential to use CRAC channel inhibition for both chronic and acute inflammatory and immunologic diseases. We have several available product candidates and have chosen CM6336 for IND-enabling preclinical testing to determine its pharmacokinetics and safety for potential oral dosing. We have animal model data suggesting CRAC channel inhibition may be useful in treating chronic pancreatitis, rheumatoid arthritis, ulcerative colitis, allergic asthma, and traumatic brain injury. We plan to submit an IND to the FDA for CM6336 in 2025 and to pursue developing the drug for treatment of chronic pancreatitis and/or rheumatoid arthritis.

Current wording

Additionally, we have compiled additional preclinical data supporting the potential to use CRAC channel inhibition for both chronic and acute inflammatory and immunologic diseases. We have animal model data suggesting CRAC channel inhibition may be useful in treating chronic pancreatitis, rheumatoid arthritis, ulcerative colitis, allergic asthma, and traumatic brain injury. We have several available product candidates that may be suitable for potential oral dosing. Pending additional funding, we have paused IND enabling preclinical work on these compounds to focus resources on our clinical programs. We expect to continue certain research activities to validate CRAC channel inhibition as a potential mechanism in other promising inflammatory and immunologic diseases.

Previous wording

In August 2023, we filed the Shelf Registration Statement, which contains two prospectuses, a base prospectus and an at the market offering prospectus that covers the offering, issuance and sale of up to $17.3 million of common stock pursuant to the ATM Agreement with Wainwright & Co., acting as sales agent. The Shelf Registration Statement permits the offering, issuance and sale of common stock, preferred stock, debt securities and warrants having an aggregate offering price of up to $100.0 million in one or more offerings and in any combination of the foregoing. As of September 30, 2024, $99.6 million remains available for sale under the Shelf Registration Statement. During the three months ended September 30, 2024, there were no shares were sold under the ATM Facility. As of September 30, 2024, we sold an aggregate of 101,522 shares of common stock for net proceeds of $319,000 after deducting $13,000 of commissions paid under the ATM Facility and approximately $17.0 million remains available for sale under the ATM Facility. On October 30, 2024, we suspended sales under the ATM Facility and will not make any sales thereunder until a new at-the-market offering prospectus supplement is filed with the SEC.

Current wording

In August 2023, we filed a shelf registration statement on Form S-3 (the “Shelf Registration Statement”), which contains two prospectuses, a base prospectus and an at the market offering prospectus, as supplemented on March 29, 2024 (as supplemented, the “Original Prospectus Supplement”) that covered the offering, issuance and sale of up to $17.3 million of common stock pursuant to an at the market offering agreement (the “ATM Agreement”) with H.C. Wainwright & Co., LLC (“Wainwright”) acting as sales agent (the “ATM Facility”). The Shelf Registration Statement permits the offering, issuance and sale of common stock, preferred stock, debt securities and warrants having an aggregate offering price of up to $100.0 million in one or more offerings and in any combination of the foregoing.

Previous wording

The initial closing of the 2024 Private Placement occurred on January 23, 2024 and the second closing occurred on February 5, 2024. Gross proceeds from the transaction were $20.4 million with net proceeds of approximately $19.0 million after deducting $1.4 million in commissions and other transaction costs.

Current wording

The initial closing of the 2024 Private Placement occurred on January 23, 2024 and the second closing occurred on February 5, 2024. Gross proceeds from the transaction were $20.4 million with net proceeds of approximately $19.0 million after deducting $1.4 million in commissions and other transaction costs. The Tranche A Common Warrants expired unexercised on July 27, 2024.

Previous wording

On November 1, 2024, we closed the 2024 Follow-On of 2,720,000 shares of our common stock at a price to the public of $3.75 per share. The gross proceeds from the offering, before deducting underwriting discounts and commissions and offering expenses, were $10.2 million. In addition, we granted the underwriters a 30-day option to purchase up to an additional 408,000 shares of our common stock at the public offering price, less underwriting discounts and commissions.

Current wording

On November 1, 2024, we closed an underwritten public offering of 2,720,000 shares of our common stock at a price to the public of $3.75 per share pursuant to the Shelf Registration Statement (the “2024 Follow-On”). The gross proceeds from the offering, before deducting underwriting discounts and commissions and offering expenses, were $10.2 million.

Previous wording

Our ability to generate revenue from product sales sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our product candidates. Through September 30, 2024, our operations have been funded primarily by aggregate net proceeds of $169.7 million from the issuance of convertible preferred stock, convertible notes, common stock and the Merger. Since inception we have had significant operating losses, except for the three month period ending March 31, 2024. Our net loss was $9.4 million for the nine months ended September 30, 2024. Included in the net loss for the nine months ended September 30, 2024 were total operating expenses of $18.0 million, offset by a gain from the fair value adjustment to our warrant liability of $7.8 million and interest income of $0.8 million. As of September 30, 2024, we had an accumulated deficit of $155.5 million and $14.6 million in cash, cash equivalents and short-term investments.

Current wording

Our ability to generate revenue from product sales sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our product candidates. Through March 31, 2025, our operations have been funded primarily by aggregate net proceeds of $189.4 million from the issuance of convertible preferred stock, convertible promissory notes, promissory notes, common stock, and the Merger. Since inception we have had significant operating losses, except for the three month period ending March 31, 2024. Our net loss was $5.0 million for the three months ended March 31, 2025. Included in the net loss for the three months ended March 31, 2025 were total operating expenses of $6.5 million and interest expense of $0.4 million, offset by a gain from the fair value adjustment to our warrant liability and promissory note of $1.5 million and interest income of $0.2 million. As of March 31, 2025, we had an accumulated deficit of $164.8 million and $24.6 million in cash, cash equivalents and short-term investments.

Previous wording

Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our accounts payable and accrued expenses. We expect to incur net losses for the foreseeable future, and we expect our research and development expenses, general and administrative expenses, and capital expenditures will continue to increase. In particular, we expect our expenses to increase as we continue our development of, and seek regulatory approvals for, our product candidates, as well as hire additional personnel, pay fees to outside consultants, lawyers and accountants, and incur other increased costs associated with being a public company. In addition, if and when we seek and obtain regulatory approval to commercialize any product candidate, we will also incur increased expenses in connection with commercialization and marketing of any such product. Our net income (loss) may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials and our expenditures on other research and development activities.

Current wording

Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our accounts payable and accrued expenses. We expect to continue to incur net losses for the foreseeable future, and we expect our research and development expenses, general and administrative expenses, and capital expenditures will continue to increase. In particular, we expect our expenses to increase as we continue our development of, and seek regulatory approvals for, our product candidates, as well as hire additional personnel, pay fees to outside consultants, lawyers and accountants, and incur other increased costs associated with being a public company. In addition, if and when we seek and obtain regulatory approval to commercialize any product candidate, we will also incur increased expenses in connection with commercialization and marketing of any such product. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials and our expenditures on other research and development activities.

Previous wording

We may never succeed in achieving regulatory approval for any of our remaining product candidates. We may obtain unexpected results from our preclinical studies and subsequent clinical trials, if any. We may elect to discontinue, delay or modify future clinical trials of some product candidates or focus on others. A change in the outcome of any of these factors could mean a significant change in the costs and timing associated with the development of our current preclinical product candidates. For example, if the FDA, or another regulatory authority, were to require us to conduct clinical trials beyond those that we currently anticipate will be required for the completion of clinical development, or if we experience significant delays in execution of or enrollment in any of our preclinical studies or future clinical trials, if any, we could be required to expend significant additional financial resources and time on the completion of preclinical and clinical development.

Current wording

We may never succeed in achieving regulatory approval for any of our remaining product candidates. We may obtain unexpected results from our preclinical studies and subsequent clinical trials, if any. We may elect to discontinue, delay or modify future clinical trials or preclinical activities of some product candidates or focus on others. A change in the outcome of any of these factors could mean a significant change in the costs and timing associated with the development of our current preclinical product candidates. For example, if the FDA, or another regulatory authority, were to require us to conduct clinical trials beyond those that we currently anticipate will be required for the completion of clinical development, or if we experience significant delays in execution of or enrollment in any of our preclinical studies or future clinical trials, if any, we could be required to expend significant additional financial resources and time on the completion of preclinical and clinical development.

Previous wording

Our other income includes (i) interest and change in fair value of convertible promissory notes; (ii) changes in the fair value of our warrant liabilities; and (iii) other non-operating income.

Current wording

Our other income includes (i) interest income and expense and change in fair value of the promissory note; (ii) changes in the fair value of our warrant liabilities; and (iii) other non-operating income.

Previous wording

Research and development expenses were $3.5 million for the three months ended September 30, 2024, compared to $2.8 million for the three months ended September 30, 2023. The increase of $0.7 million was due primarily to an increase of $0.5 million in preclinical activities relating to Auxora and CM6336, our oral compound and an increase in personnel, consultants and other costs of $0.2 million.

Current wording

Research and development expenses were $4.2 million for the three months ended March 31, 2025, compared to $2.9 million for the three months ended March 31, 2024. The increase of $1.3 million was due primarily to an increase in preclinical and clinical trial related activities of $0.5 million, an increase of $0.6 million in chemistry, manufacturing and control activities related to the production of drug and placebo non-recurring batches for the Phase 2 clinical trials of Auxora and an increase in consultants and other costs of $0.2 million.

Previous wording

General and administrative expenses were $2.2 million for the three months ended September 30, 2024, compared to $2.1 million for the three months ended September 30, 2023. The increase of $0.1 million was primarily related an increase in personnel costs of $0.2 million, partially offset by a decrease in consultants and other costs of $0.1 million.

Current wording

General and administrative expenses were $2.3 million for the three months ended March 31, 2025, compared to $2.8 million for the three months ended March 31, 2024. The decrease of $0.5 million was primarily related to a decrease in consultants and other costs of $0.8 million driven by transactions costs associated with the 2024 Private Placement for the three months ended March 31, 2024. These costs were partially offset by an increase in personnel costs of $0.3 million driven by additional headcount for the three months ended March 31, 2025.

Previous wording

Other income for the nine months ended September 30, 2024 was income of $8.5 million, compared to $3.5 million for the nine months ended September 30, 2023. The increase of $5.0 million was due to the fair value adjustments to our warrant liability as a result of the 2024 Private Placement in the first quarter of 2024, which resulted in a gain of $7.8 million for the nine months ended September 30, 2024 compared to the fair value adjustments to our warrant liability and convertible promissory notes for the nine months ended September 30, 2023, which resulted in a $3.2 million gain. We had a decrease in accrued interest of $0.1 million on our convertible notes for the nine months ended September 30, 2023 as well as an increase of $0.3 million of interest income on our cash, cash equivalents and short-term investments for the nine months ended September 30, 2024.

Current wording

Other income for the three months ended March 31, 2025 was income of $1.5 million, compared to $5.9 million for the three months ended March 31, 2024. The decrease of $4.4 million was due to the $5.6 million gain due to the fair value adjustments to our warrant liability as a result of the 2024 Private Placement for the three months ended March 31, 2024, as compared to the $1.7 million gain due to fair value adjustments to the promissory note and warrants for the three months ended March 31, 2025. We had a decrease in interest income of $0.1 million driven by the balances of our cash equivalents and short-term investments as well as an increase in interest expense due to the Company's debt financing in February 2025 of $0.4 million.

Previous wording

As of September 30, 2024 we had cash, cash equivalents and short-term investments of $14.6 million.

Current wording

As of March 31, 2025 we had cash, cash equivalents and short-term investments of $24.6 million.

Previous wording

As further described below, on November 1, 2024, we closed the 2024 Follow-On of 2,720,000 shares of our common stock at a price to the public of $3.75 per share. The gross proceeds from the offering, before deducting underwriting discounts and commissions and offering expenses, were $10.2 million. In addition, we have granted the underwriters a 30-day option to purchase up to an additional 408,000 shares of our common stock at the public offering price, less underwriting discounts and commissions. Based on our current operating plans, we believe our cash, cash equivalents and short-term investments, including the proceeds from the 2024 Follow-On, will be sufficient to fund our current operations for the next twelve months from the date of this report. In particular, we expect that our cash, cash equivalents and short-term investments, including the proceeds from the 2024 Follow-On, will allow us to fund our operations through certain clinical milestones, into the first half of 2026. However, our current cash, cash equivalents and short-term investments will not be sufficient to fund any of our product candidates through regulatory approval, nor will it be sufficient to pursue additional indications for Auxora such as AHRF, nor will it be sufficient to fund clinical work on other product candidates in our portfolio aside from Auxora, and we will need to raise substantial additional capital to complete the development and commercialization of our product candidates.

Current wording

As further described below, on February 28, 2025, the Company entered into the Loan Agreement with Avenue Venture Opportunities Fund II, L.P. and Avenue Capital Management II, L.P. for an initial $10.0 million of gross proceeds. In March 2025, we sold an aggregate of 490,073 shares of common stock for net proceeds of $968,000 after deducting $32,000 of commissions and settlement expenses paid under the ATM Facility. We expect that our cash, cash equivalents and short-term investments will allow us to fund our current operating plan into the middle 2026. However, our current cash, cash equivalents and short-term investments will not be sufficient to fund any of our product candidates through regulatory approval, nor will it be sufficient to pursue additional indications for Auxora such as AHRF, nor will it be sufficient to fund clinical work on other product candidates in our portfolio aside from Auxora, and we will need to raise substantial additional capital to complete the development and commercialization of our product candidates.

Previous wording

If we are unable to maintain sufficient financial resources, our business, financial condition and results of operations will be materially and adversely affected. To fund our operations in both the near term and long term (beyond 18 months), we will need to raise additional capital to develop our product candidates and implement our operating plans. There can be no assurance that we will be able to obtain the needed financing on acceptable terms or at all. Additionally, equity or debt financings may have a dilutive effect on the holdings of our existing stockholders.

Current wording

If we are unable to maintain sufficient financial resources, our business, financial condition and results of operations will be materially and adversely affected. To fund our operations in both the near term and long term, we will need to raise additional capital to develop our product candidates and implement our operating plans. There can be no assurance that we will be able to obtain the needed financing on acceptable terms or at all. Additionally, equity or debt financings may have a dilutive effect on the holdings of our existing stockholders.

Previous wording

Since we commenced operations in October 2006, we have primarily financed our operations through private placements of our preferred stock, convertible promissory notes and common stock. We have used substantial amounts of cash to fund our operations and expect our expenses to increase substantially for the foreseeable future. The development of drug product candidates is highly capital intensive. As our product candidates enter and advance through preclinical studies and clinical trials, we will need substantial additional funds to expand our clinical, regulatory and quality capabilities. In addition, if we obtain marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to marketing, sales, manufacturing and distribution. Furthermore, following the closing of the merger, we expect to incur additional costs associated with operating as a public company. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations. If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or eliminate our research and development programs or any future commercialization efforts. The global credit and financial markets have experienced extreme volatility, including in liquidity and credit availability, declines in consumer confidence, declines in economic growth, and uncertainty about economic stability. There can be no assurance that deterioration in credit and financial markets and confidence in economic conditions will not occur. If equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult to obtain, more costly and/or more dilutive.

Current wording

Since we commenced operations in October 2006, we have primarily financed our operations through private placements of our preferred stock, convertible promissory notes, promissory notes, warrants, common stock, and through the Merger. We have used substantial amounts of cash to fund our operations and expect our expenses to increase substantially for the foreseeable future. The development of drug product candidates is highly capital intensive. As our product candidates enter and advance through preclinical studies and clinical trials, we will need substantial additional funds to expand our clinical, regulatory and quality capabilities. In addition, if we obtain marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to marketing, sales, manufacturing and distribution. Furthermore, we have incurred and expect to continue to incur additional costs associated with operating as a public company. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations. If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or eliminate our research and development programs or any future commercialization efforts. The global credit and financial markets have experienced extreme volatility, including in liquidity and credit availability, declines in consumer confidence, declines in economic growth, and uncertainty about economic stability. There can be no assurance that deterioration in credit and financial markets and confidence in economic conditions will not occur. If equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult to obtain, more costly and/or more dilutive.

Previous wording

In January 2024, we entered into the Purchase Agreement with certain accredited investors, in which we sold the following securities to the accredited investors in a private placement transaction (i) an aggregate of 4,985,610 shares of our common stock; (ii) to certain investors, in lieu of shares, Pre-Funded Warrants to purchase an aggregate of 306,506 shares of our common stock; (iii) Tranche A Common Warrants to purchase an aggregate of up to 2,646,058 shares of our common stock (or Pre-Funded Warrants in lieu thereof and, in such case, shares of our common stock issuable upon exercise of such Pre-Funded Warrants); and (iv) Tranche B Common Warrants to purchase an aggregate of up to 2,646,058 shares of our common stock (or Pre-Funded Warrants in lieu thereof and, in such case, shares of our common stock issuable upon exercise of such Pre-Funded Warrants). The purchase price per share and accompanying Common Warrants was $3.827 (or $4.3915 for directors, employees or consultants participating in the 2024 Private Placement) (or $3.8269 per Pre-Funded Warrant and accompanying Common Warrants, which represented the price of $3.827 per share and accompanying Common Warrants minus the $0.0001 per share exercise price of each such Pre-Funded Warrant).

Current wording

In January 2024, the Company entered into the Purchase Agreement with certain accredited investors, in which the Company sold the following securities to the accredited investors the 2024 Private Placement: (i) an aggregate of 4,985,610 shares of our common stock; (ii) to certain investors, in lieu of shares, Pre-Funded Warrants to purchase an aggregate of 306,506 shares of our common stock; (iii) Tranche A Common Warrants to purchase an aggregate of up to 2,646,058 shares of our common stock (or Pre-Funded Warrants in lieu thereof and, in such case, shares of our common stock issuable upon exercise of such Pre-Funded Warrants); and (iv) Tranche B Common Warrants to purchase an aggregate of up to 2,646,058 shares of our common stock (or Pre-Funded Warrants in lieu thereof and, in such case, shares of our common stock issuable upon exercise of such Pre-Funded Warrants). The purchase price per share and accompanying Common Warrants was $3.827 (or $4.3915 for directors, employees or consultants participating in the 2024 Private Placement) (or $3.8269 per Pre-Funded Warrant and accompanying Common Warrants, which represented the price of $3.827 per share and accompanying Common Warrants minus the $0.0001 per share exercise price of each such Pre-Funded Warrant).

Previous wording

Our operations through September 30, 2024, have been funded primarily by aggregate net proceeds of $169.7 million from the issuance of convertible preferred stock, convertible notes, common stock and the Merger. Since inception, we have had significant operating losses, except for the three month period ending March 31, 2024. Our net loss for the nine months ended September 30, 2024 was $9.4 million and consisted of total operating expenses of $18.0 million offset by a gain from the fair value adjustment to our warrant liability of $7.8 million and interest income of $0.8 million. For the nine months ended September 30, 2023, our net loss was $30.2 million consisting of $33.8 million of operating expenses (including $10.5 million in one-time charges related to the acceleration of vesting of the Graybug stock awards at the date of the Merger and $5.7 million of one-time severance charges as a result of the Merger). As of September 30, 2024, we had an accumulated deficit of $155.5 million and $14.6 million in cash, cash equivalents and short-term investments. During the nine months ended September 30, 2024, cash used in operations was $16.2 million, primarily due to cash outlays for operations. Our primary use of cash is to fund operating expenses, which consist primarily of research and development expenditures, and to a lesser extent, general and administrative expenditures. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.

Current wording

Our operations through March 31, 2025, have been funded primarily by aggregate net proceeds of $189.4 million from the issuance of convertible preferred stock, convertible notes, promissory notes, common stock, and the Merger. Since inception, we have had significant operating losses, except for the three month period ending March 31, 2024. Our net loss for the three months ended March 31, 2025 was $5.0 million and consisted of total operating expenses of $6.5 million and interest expense of $0.4 million offset by a gain from the fair value adjustment to our warrant liability and the promissory note of $1.5 million and interest income of $0.2 million. For the three months ended March 31, 2024, our net income was $0.1 million consisting of $5.8 million of operating expenses offset by a gain from the fair value adjustment to our warrant liability of $5.6 million and interest income of $0.3 million. As of March 31, 2025, we had an accumulated deficit of $164.8 million and $24.6 million in cash, cash equivalents and short-term investments. During the three months ended March 31, 2025, cash used in operations was $4.9 million, primarily due to cash outlays for operations. Our primary use of cash is to fund operating expenses, which consist primarily of research and development expenditures, and to a lesser extent, general and administrative expenditures. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.

Previous wording

Cash used in operating activities of $22.1 million during the nine months ended September 30, 2023 was attributable to our net loss of $30.2 million offset by non-cash items of $9.0 million and a net change in our operating assets and liabilities of $0.9 million. Non-cash items consisted primarily of $12.1 million of stock-based compensation, which includes $10.5 million in one-time charges related to the acceleration of vesting of the Graybug stock awards at the date of the Merger and $0.1 million in accrued interest on our convertible promissory notes, offset by $1.2 million and $2.0 million change in the fair value of our warrant liability and convertible promissory notes, respectively, based on the value the warrant holder and promissory note holder received in common stock.

Current wording

Cash used in operating activities of $4.9 million during the three months ended March 31, 2025 was attributable to our net loss of $5.0 million and non-cash items of $0.9 million offset by a net change in our operating assets and liabilities of $1.0 million. Non-cash items consisted primarily of $1.4 million and $0.3 million due to a change in our warrant liability and promissory note and accretion on our short term investments of $0.1 million offset by $0.6 million of stock-based compensation and debt costs of $0.3 million as result of the debt financing in the first quarter of 2025.

Previous wording

Cash used in operating activities of $16.2 million during the nine months ended September 30, 2024 was attributable to our net loss of $9.4 million, non-cash items of $5.8 million and a net change in our operating assets and liabilities of $1.0 million. Non-cash items consisted primarily of $7.8 million due to a change in our warrant liability as result of the 2024 Private Placement in the first quarter of 2024 and accretion on our short term investments of $0.5 million, offset by $0.8 million of transaction costs allocated to warrants and $1.7 million of stock-based compensation.

Current wording

Cash used in operating activities of $4.7 million during the three months ended March 31, 2024 was attributable to our net income of $0.1 million offset by non-cash items of $4.5 million and a net change in our operating assets and liabilities of $0.3 million. Non-cash items consisted primarily of $5.6 million due to a change in our warrant liability as result of the 2024 Private Placement in the first quarter of 2024 and accretion on our short term investments of $0.1 million, offset by $0.8 million of transaction costs allocated to warrants and $0.4 million of stock-based compensation.

Previous wording

Cash provided by investing activities of $0.8 million for the nine months ended September 30, 2024 consisted of the purchase of short-term investments of $18.8 million, offset by the maturing of short-term investments of $19.6 million.

Current wording

Cash used in investing activities of $1.2 million for the three months ended March 31, 2025 consisted of the purchase of short-term investments of $6.6 million, offset by the maturing of short-term investments of $5.4 million.

Previous wording

Cash provided by investing activities of $11.6 million for the nine months ended September 30, 2023 consisted of the maturing of short-term investments of $14.6 million, offset by the purchase of short-term investments of $2.9 and purchases of property and equipment of $0.1 million.

Current wording

Cash used in investing activities of $13.1 million for the three months ended March 31, 2024 consisted of the maturing of short-term investments of $17.9 million, offset by the purchase of short-term investments of $4.8 million.

Previous wording

Cash provided by financing activities for the nine months ended September 30, 2024 was $19.1 million comprised of the sale and issuance of common stock of $20.4 million in the 2024 Private Placement and $0.1 million as a result of our ATM Facility and exercise of stock options, offset by transaction costs of $1.4 million.

Current wording

Cash provided by financing activities for the three months ended March 31, 2024 was $19.0 million comprised of the sale and issuance of common stock of $20.4 million in the 2024 Private Placement, offset by transaction costs of $1.4 million.

Previous wording

Our material cash requirements from known contractual obligations consisted primarily of our lease obligation. We lease office and laboratory space in La Jolla, California with monthly rent expense of approximately $10,000 pursuant to a 12 month lease agreement that commenced in January 2023 and was amended and renewed in December 2023 for an additional 12 month term with monthly rent expense of approximately $10,000. Over the next three months, we expect cash requirements for our lease obligation to be approximately $30,000.

Current wording

Our material cash requirements from known contractual obligations consisted primarily of our lease obligation. We lease office and laboratory space in La Jolla, California with monthly rent expense of approximately $10,000 pursuant to a 12 month lease agreement that commenced in January 2023 and was amended and renewed in December 2023 for an additional 12 month term with monthly rent expense of approximately $10,000. In December 2024, an amendment was executed for a twelve month term with monthly rent expense of approximately $10,500. Over the next nine months, we expect cash requirements for our lease obligation to be approximately $95,000.

Previous wording

We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

Current wording

We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. We will cease to be an emerging growth company on December 31, 2025. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.