Cadrenal Therapeutics Inc

Previous wording

We are developing tecarfarin, a late-stage novel oral and reversible anticoagulant (blood thinner), to prevent heart attacks, strokes, and deaths due to blood clots in patients with certain rare medical conditions requiring chronic anticoagulation. Tecarfarin has orphan drug and Fast Track designations from the United States Food and Drug Administration (the “FDA”) for the prevention of systemic thromboembolism (blood clots) of cardiac origin in patients with ESKD and AFib. and just recently received orphan drug designation for the prevention of thrombosis and thromboembolism in patients with an implanted mechanical circulatory support device (left ventricular assist devices, right ventricular assist devices, biventricular assist device, total artificial heart (collectively, “VADs”)) in April 2024. We are also pursuing additional regulatory strategies for unmet needs in anticoagulation therapy for patients with thrombotic antiphospholipid syndrome (“APS”). These patients have historically been treated with warfarin, which has been shown to be challenging and unreliable. The direct oral anticoagulants, which are an alternative to warfarin for certain indications, are contraindicated for VADs patients and have been associated with an increased risk for recurrent thrombosis in patients with APS.

Current wording

We are developing tecarfarin, a new-generation Vitamin K Antagonist (VKA) oral and reversible anticoagulant (blood thinner) to prevent heart attacks, strokes, and deaths due to blood clots in patients with rare cardiovascular conditions who require lifelong anticoagulation. Tecarfarin has orphan drug designation from the U.S. Food and Drug Administration (the “FDA”) for the prevention of thrombosis and thromboembolism (blood clots) in patients with an implanted mechanical circulatory support device, which includes the left ventricular assist device (LVAD). Tecarfarin also has orphan drug and fast-track designations from the FDA for the prevention of systemic thromboembolism of cardiac origin in patients with end-stage kidney disease (ESKD) and atrial fibrillation (AFib). Tecarfarin is specifically designed to use a different metabolism pathway than the oldest and most commonly prescribed VKA warfarin.

Previous wording

Tecarfarin is specifically designed to target a different metabolism pathway than the most commonly prescribed drugs used in the treatment of thrombosis and AFib. Tecarfarin has been evaluated in eleven (11) human clinical trials in over 1,000 individuals (269 patients were treated for at least six months and 129 patients were treated for one year or more). In Phase 1, Phase 2 and Phase 2/3 clinical trials, tecarfarin has generally been well-tolerated in both healthy adult subjects and patients with chronic kidney disease (“CKD”). In the Phase 2/3 trial, EMBRACE-AC, the largest tecarfarin trial with 607 patients having completed it, only 1.6% of the blinded tecarfarin subjects suffered from major bleeding and there were no thrombotic events.

Current wording

Tecarfarin has been evaluated in eleven (11) human clinical trials in over 1,000 individuals (269 patients were treated for at least six months and 129 patients were treated for one year or more). In Phase 1, Phase 2 and Phase 2/3 clinical trials, tecarfarin has generally been well-tolerated in both healthy adult subjects and patients with chronic kidney disease (“CKD”). In the Phase 2/3 trial, EMBRACE-AC, the largest tecarfarin trial with 607 patients having completed it, only 1.6% of the blinded tecarfarin subjects suffered from major bleeding and there were no thrombotic events.

Previous wording

General and administrative expenses were $1,125,993 for the three months ended March 31, 2024 compared to $964,732 for the three months ended March 31, 2023. The $161,261, or 17%, increase can be attributed to a $115,977 increase in personnel-related expenses as we added a Chief Operating Officer in January 2024, a $105,376 increase in public company expenses, and a $41,175 increase in consulting fees. These increases were partially offset by a $127,110 decrease in stock-based compensation due to the timing of vesting.

Current wording

General and administrative expenses were $1,212,437 for the three months ended June 30, 2024 compared to $784,623 for the three months ended June 30, 2023. The $427,814, or 55%, increase can be attributed to a $279,767 increase in personnel-related expenses as we hired a Chief Operating Officer in February 2024, a $109,146 increase in public company expenses, and a $118,356 increase in professional fees and other expenses. These increases were partially offset by a $89,428 decrease in consulting expenses.

Previous wording

Interest and dividend income was $92,327 for the three months ended March 31, 2024. This represents the interest and dividend income earned from our investments in money market funds from the proceeds of our IPO and July 2023 PIPE financing. We did not earn interest or dividend income during the three months ended March 31, 2023.

Current wording

Interest and dividend income was $73,636 for the three months ended June 30, 2024. This represents the interest and dividend income earned from our investments in money market funds from the proceeds of our IPO and July 2023 Private Placement. Interest and dividend income was $23,176 for the three months ended June 30, 2023. The increase in interest and dividend income can be attributed to the proceeds received from the July 2023 Private Placement financing.

Previous wording

Research and development expenses were $629,025 for the three months ended March 31, 2024 compared to $3,235,317 for the three months ended March 31, 2023. The $2,606,292, or 81%, decrease can be primarily attributed to the issuance of 600,000 shares of common stock (valued at $3.0 million) in January 2023 to HESP LLC, pursuant to the terms of an Amendment to the Asset Purchase Agreement. This decrease was partially offset by a $48,568 increase in personnel-related expenses, a $165,077 increase in consulting fees, and a $129,263 increase in expenses associated with chemistry, manufacturing and controls (“CMC”).

Current wording

Research and development expenses were $1,882,736 for the six months ended June 30, 2024 compared to $3,476,274 for the six months ended June 30, 2023. The prior period included a $3.0 million expense for the issuance of 600,000 shares of common stock (valued at $3.0 million) in January 2023 to HESP LLC, pursuant to the terms of an Amendment to the Asset Purchase Agreement. This $3.0 million decrease was partially offset by a $803,265 increase in expenses associated with chemistry, manufacturing and controls (“CMC”), a $452,955 increase in consulting fees, a $85,970 increase in personnel-related expenses and a $57,585 increase in professional fees.

Previous wording

The derivative liabilities were considered a level 3 fair value financial instrument and were remeasured up to January 24, 2023 which was the date of derecognition. We recorded a non-cash charge of $216,095 in January 2023. This charge represented the increase in the fair value of the derivative liabilities since the previous measurement date of December 31, 2022. We did not have such activity during the three months ended March 31, 2024.

Current wording

The derivative liabilities were considered a level 3 fair value financial instrument and were remeasured up to January 24, 2023 which was the date of derecognition. We recorded a non-cash charge of $216,095 in January 2023. This charge represented the increase in the fair value of the derivative liabilities since the previous measurement date of December 31, 2022. We did not have such activity during the six months ended June 30, 2024.

Previous wording

We recorded a $740,139 loss on the extinguishment of debt during the three months ended March 31, 2023. This loss represented the unamortized debt discount associated with the convertible notes and the November promissory notes, which were settled concurrent with the IPO. We did not have such activity during the three months ended March 31, 2024.

Current wording

We recorded a $740,139 loss on the extinguishment of debt during the six months ended June 30, 2023. This loss represented the unamortized debt discount associated with the convertible notes and the November promissory notes, which were settled concurrent with the IPO. We did not have such activity during the six months ended June 30, 2024.

Previous wording

Since inception, we have incurred losses and negative cash flows from operations. To date, we have funded our operations from the proceeds of the sale of convertible notes, and the nonconvertible notes and warrants issued in November 2022, as well as our IPO completed in January 2023 and our Private Placement consummated in July 2023. We had a net loss of $1,663,288 for the three months ended March 31, 2024 which included $163,223 of non-cash expenses. Cash used in operating activities for the three months ended March 31, 2024 totaled $1,836,380. As of March 31, 2024, we had cash and cash equivalents of approximately $6.6 million and no debt. Our current cash and cash equivalents balance as of May 9, 2024 of approximately $6.1 million, is sufficient to fund our operations for at least the next twelve months; however, we expect to require additional funding to complete our planned Phase 3 clinical trial and submit our New Drug Application (“NDA”). In order to fund the commencement and completion of our Phase 3 clinical trial, we intend to raise additional funds through equity and debt financings as well as potential partnering relationships. However, there can be no assurance that we will be able to complete any additional financings or partnering relationships on terms acceptable to us or at all. If we are unable to raise additional funding to meet our working capital needs in the future, we will be forced to delay or reduce the scope of our research programs and/or limit or cease our operations.

Current wording

Since inception, we have incurred losses and negative cash flows from operations. To date, we have funded our operations from the proceeds of the sale of convertible notes, and the nonconvertible notes and warrants issued in November 2022, as well as our IPO completed in January 2023 and our Private Placement consummated in July 2023. We had a net loss of $4,056,270 for the six months ended June 30, 2024 which included $356,707 of non-cash expenses. Cash used in operating activities for the six months ended June 30, 2024 totaled $3,365,624. As of June 30, 2024, we had cash and cash equivalents of approximately $5.0 million and no debt. Our current cash and cash equivalents balance as of August 7, 2024 of approximately $4.2 million, is not sufficient to fund our operations for at least the next twelve months

Previous wording

During the three months ended March 31, 2024, cash used in operating activities was $1,836,380. Net loss adjusted for the non-cash items as detailed on the statement of cash flows, used $1,500,065 in cash, and the changes in operating assets and liabilities, as detailed on the statement of cash flows, used $336,315 in cash primarily from a $197,431 decrease in accrued liabilities partially, a $204,094 increase in prepaid expenses, and a $167,844 increase in deferred offering costs partially offset by a $233,054 increase in accounts payable.

Current wording

During the six months ended June 30, 2024, cash used in operating activities was $3,365,624. Net loss adjusted for the non-cash items as detailed on the statement of cash flows, used $3,699,563 in cash, and the changes in operating assets and liabilities, as detailed on the statement of cash flows, provided $333,939 in cash primarily from a $592,199 increase in accounts payable partially offset by a $171,384 increase in deferred offering costs, and a $145,273 increase in prepaid expenses.

Previous wording

During the three months ended March 31, 2023, cash used in operating activities was $1,412,794. Net loss adjusted for the non-cash items as detailed on the statement of cash flows, used $917,099 in cash, and the changes in operating assets and liabilities, as detailed on the statement of cash flows, used $495,695 in cash primarily from a $285,330 decrease in accounts payable and a $604,945 decrease in accrued liabilities partially offset by a $672,295 decrease in deferred equity offering costs.

Current wording

During the six months ended June 30, 2023, cash used in operating activities was $2,208,102. Net loss adjusted for the non-cash items as detailed on the statement of cash flows, used $1,751,614 in cash, and the changes in operating assets and liabilities, as detailed on the statement of cash flows, used $456,488 in cash primarily from a decrease in accrued liabilities of $591,745 and a decrease in accounts payable of $326,758, partially offset by a $459,820 decrease in deferred equity offering costs and other prepaid expenses.

Previous wording

During the three months ended March 31, 2024, net cash provided by financing activities totaled $298 from the exercise of Pre-Funded Warrants.

Current wording

During the six months ended June 30, 2024, net cash provided by financing activities totaled $298 from the exercise of Pre-Funded Warrants.

Previous wording

During the three months ended March 31, 2023, net cash provided by financing activities totaled $5,408,575 as we completed our IPO of 1,400,000 shares of our common stock at a public offering price of $5.00 per share, generating gross proceeds of $7,000,000 and net proceeds of $5,408,575. We also received $250,000 from the exercise of warrants that we issued in November 2022, which proceeds were used to repay the notes that were issued in November 2022, with accrued interest on the notes being paid in cash.

Current wording

During the six months ended June 30, 2023, net cash provided by financing activities totaled $5,408,575 as we completed our IPO of 1,400,000 shares of our common stock at a public offering price of $5.00 per share, generating gross proceeds of $7,000,000 and net proceeds of $5,408,575. We also received $250,000 from the exercise of warrants that we issued in November 2022, which proceeds were used to repay the notes that were issued in November, with accrued interest on the notes being paid in cash.

Previous wording

This discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States, or GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses incurred during the reporting periods. Significant estimates and assumptions made in the accompanying financial statements include but are not limited to the fair value of financial instruments, the fair value of stock-based awards, deferred tax assets and valuation allowance, income tax uncertainties, and certain accruals. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, that 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 from these estimated under different assumption or conditions.

Current wording

This discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States, or GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses incurred during the reporting periods. Significant estimates and assumptions made in the accompanying financial statements include but are not limited to the fair value of financial instruments, the fair value of stock-based awards, deferred tax assets and valuation allowance, income tax uncertainties, and certain accruals. Our estimates are based on our historical experience and on various other factors that we believe are 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 from these estimated under different assumption or conditions.

Previous wording

We did not have during the period presented, and we do not currently have, any off-balance sheet arrangements, as defined under SEC rules.

Current wording

We did not have during the period presented, and we do not currently have, any off-balance sheet arrangements, as defined under the U.S. Securities and Exchange Commission (the “SEC”) rules.