TriSalus Life Sciences Inc

Previous wording

We are dedicated to the research, development, and commercialization of an innovative drug delivery technology platform and an immuno-oncology therapeutic, aimed at improving outcomes for patients with difficult-to-treat liver and pancreatic cancers. Our advanced technology is designed for use by interventional radiologists to enhance the delivery of therapeutics and improve patient outcomes.

Current wording

We are dedicated to the research, development, and commercialization of an innovative drug delivery technology platform and an immuno-oncology therapeutic, aimed at improving outcomes for patients with difficult-to-treat liver and pancreatic cancers. Our advanced technology is designed for use by interventional radiologists to enhance the delivery of therapeutics and improv0e patient outcomes.

Previous wording

We are currently in our early stage of development and have yet to generate revenues sufficient to drive positive cash flows from operations. Beginning in 2020, we began a strategic transformation from a company focused solely on the sale of our infusion systems to a therapeutic company whereby our medical devices are marketed alongside the pharmaceutical drugs and other treatments that the devices deliver to patients. This transformation led us to acquire our first immune-oncology drug, nelitolimod, in July 2020, and to begin clinical development of nelitolimod for the treatment of liver and pancreatic cancers.

Current wording

We are currently in our early stage of development and have yet to generate revenues sufficient to drive positive cash flows from operations. Beginning in 2020, we began a strategic transformation from a company focused solely on the sale of our infusion systems to a therapeutic company whereby our medical devices are marketed alongside the pharmaceutical drugs and other treatments that the devices deliver to patients. This transformation led us to acquire our first immune-oncology drug, nelitolimod, in July 2020, and to begin clinical development of nelitolimod for the treatment of liver and pancreatic cancers. We have initiated Phase 1 and Phase 1b clinical trials for this nelitolimod, each of which are focused on a different target indication, specifically: uveal melanoma, intrahepatic cholangiocarcinoma and hepatocellular carcinoma ("ICC" and "HCC"), and pancreatic cancer. Based on our review of the preliminary data regarding the ICC/HCC studies, we do not intend to proceed to Phase II trials for those indications. Based on the changing landscape for second line treatment of uveal melanoma, we do not intend to proceed to Phase II trials for that indication on our own, but we are looking for potential partners to advance that indication. Our PERIO-3 clinical trial in pancreatic cancer is continuing with additional patient enrollment and we anticipate data from the study will be available in sometime in 2025, depending on when patient enrollment and treatment is completed.

Previous wording

During the six months ended June 30, 2024, we sold 750,000 shares of common stock under the SEPA, raising $6.7 million.

Current wording

During the nine months ended September 30, 2024, we sold 1,874,867 shares of common stock under the SEPA, raising $12.4 million.

Previous wording

In connection with the closing of the Initial commitment Amount, we also issued OrbiMed a warrant to purchase 130,805 shares of our common stock, with an exercise price of $9.5562. The Initial OrbiMed Warrant expires on April 30, 2031. On each of the closings of the Delayed Draw Commitment Amounts, if any, we agreed to issue additional warrants to purchase a number of shares of our common stock determined by dividing 5% of the applicable Delayed Draw Commitment Amount by the 10-day volume weighted average sale price of our common stock as of the issue date. The Subsequent Warrants will expire seven years from each applicable issuance date, if any. In connection with the OrbiMed Warrants, we entered into a Registration Rights Agreement with OrbiMed, whereby OrbiMed will have certain customary registration rights with respect to the shares of common stock underlying the OrbiMed Warrants.

Current wording

In connection with the closing of the Initial commitment Amount, we also issued OrbiMed a warrant to purchase 130,805 shares of our common stock, with the initial exercise price of $9.5562 per share, or approximately $1.25 million in the aggregate, assuming none of the Initial OrbiMed Warrant is exercised through a "cashless" exercise. In the three months ended September 30, 2024, the exercise price was adjusted pursuant to the terms of the Initial OrbiMed Warrant to $9.4487 per share, or approximately $1.24 million in the aggregate. The Initial OrbiMed Warrant expires on April 30, 2031. On each of the closings of the Delayed Draw Commitment Amounts, if any, we agreed to issue additional warrants to purchase a number of shares of our common stock determined by dividing 5% of the applicable Delayed Draw Commitment Amount by the 10-day volume weighted average sale price of our common stock as of the issue date. The Subsequent Warrants will expire seven years from each applicable issuance date, if any. In connection with the OrbiMed Warrants, we entered into a Registration Rights Agreement with OrbiMed, whereby OrbiMed will have certain customary registration rights with respect to the shares of common stock underlying the OrbiMed Warrants.

Previous wording

General and administrative expense includes executive management, finance, information technology, human resources, business development, legal, one-time costs associated with the Business Combination, and the administrative and professional costs associated with those activities. General and administrative costs also include corporate facility costs, including rent, utilities, depreciation, and maintenance, not otherwise included in production or

Current wording

General and administrative expense includes executive management, finance, information technology, human resources, business development, legal, one-time costs associated with the Business Combination, and the administrative and professional costs associated with those activities. General and administrative costs also include corporate facility costs, including rent, utilities, depreciation, and maintenance, not otherwise included in production or R&D expenses, as well as regulatory and professional fees for legal, accounting and other consulting services. We also record public company costs in general and administrative, including board expenses, insurance, audit fees, NASDAQ fees, and costs associated with public company financial reporting.

Previous wording

Loss on equity issuance represents the excess of the fair value of the warrants to purchase Series B-3 preferred stock and the Series B-2 tranche liabilities over the proceeds received from the Initial Preferred Stock Financing and subsequent tranche closings.

Current wording

Loss on equity issuance represents the excess of the fair value of the warrants to purchase Series B-3 preferred stock and the Series B-2 tranche liabilities over the proceeds received in a preferred stock financing and its subsequent tranche closings.

Previous wording

Revenue increased by $2.8 million, or 59.7% for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023. The increase in revenue was due to an increase of $2.8 million in sales of TriNav.

Current wording

Revenue increased by $2.2 million, or 41.5% for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The increase in revenue was due to an increase of $2.2 million in sales of TriNav.

Previous wording

Cost of goods sold increased by $0.1 million, or 18.1% for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023. The increase in cost of goods sold was primarily due to higher production volumes to support our increased revenue.

Current wording

Cost of goods sold increased by $0.4 million, or 70.5% for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The increase in cost of goods sold was primarily due to higher production volumes to support our increased revenue.

Previous wording

Gross profit increased by $2.6 million, or 68.0% for the three months ended June 30, 2024, and gross margin increased to 87.6% from 83.3% for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023. The increase in gross profit was due primarily to the increase in sales volume. The increase in gross margin percentage was driven principally by increased manufacturing efficiencies due to improved production yields and additional production volume absorbing fixed overhead costs.

Current wording

Gross profit increased by $1.7 million, or 37.8% for the three months ended September 30, 2024, and gross margin decreased to 86.3% from 88.7% for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The increase in gross profit was due primarily to the increase in sales volume. The decrease in gross margin percentage was driven principally by decreased manufacturing efficiencies due to lower production volume.

Previous wording

R&D expenses decreased by $2.2 million, or 32.2% for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023. The decrease was primarily driven by a $2.2 million reduction of clinical trial expenses related to nelitolimod. Higher payroll and travel expenses of $0.3 million were offset by lower expenses for consultants and production of nelitolimod.

Current wording

R&D expenses decreased by $5.3 million, or 55.6% for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The decrease was primarily driven by a $4.5 million reduction of clinical trial expenses related to nelitolimod and a decrease in headcount-related expenses of $0.4 million.

Previous wording

Sales and marketing expenses increased by $2.5 million, or 71.9%, for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023. The increase was primarily driven by higher payroll and travel expenses of $2.1 million due to increased headcount of sales and marketing personnel and $0.5 million due to increased consulting and professional fees.

Current wording

Sales and marketing expenses increased by $1.4 million, or 30.9%, for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The increase was primarily driven by higher payroll and travel expenses of $1.1 million due to increased headcount of sales and marketing personnel and $0.3 million due to increased consulting and professional fees.

Previous wording

General and administrative expenses decreased by $0.9 million, or 19.2%, for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023. The decrease was primarily due to expenses of $1.7 million incurred in the prior period for legal and consulting work in connection with the Business Combination that was not repeated this year. This decrease was partially offset by an increase of $0.8 million in headcount-related expenses, including travel.

Current wording

General and administrative expenses decreased by $4.3 million, or 47.6%, for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The decrease was primarily due to expenses of $4.8 million incurred in the prior period for legal and consulting work in connection with the Business Combination that was not repeated this year, partially offset by an increase in insurance expenses of $0.3 million and an increase in headcount-related expenses of $0.3 million.

Previous wording

Interest income increased by $0.1 million, or 169.4%, for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023. The increase was due to additional interest received from the investment of our excess cash in short-term money market funds.

Current wording

Interest income increased by $42 thousand, or 36.2%, for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The increase was due to additional interest received from the investment of our excess cash in short-term money market funds.

Previous wording

Interest expense increased by $0.9 million for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023. The increase was due to interest we began incurring on the OrbiMed loan.

Current wording

Interest expense increased by $1.1 million for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The increase was due to interest we incurred on the OrbiMed loan in the current period that we did not incur in the prior quarter.

Previous wording

There was no loss on equity issuance for the three months ended June 30, 2024, as compared to $4.2 million reported for the three months ended June 30, 2023.

Current wording

There was no loss on equity issuance for the three months ended September 30, 2024 and 2023.

Previous wording

The change in fair value of SEPA, warrant, and revenue base redemption liabilities resulted in a loss of $9.0 million in the three months ended June 30, 2024, compared to a gain of $1.1 million in the three months ended June 30, 2023, a difference of $10.1 million. The difference was primarily due to an increase in our projected use of the SEPA, an increase in the fair value of our warrant liabilities, which includes the issuance of the Initial OrbiMed Warrant, and additional embedded features in the Term Loan including revenue base redemption liability.

Current wording

The change in fair value of the SEPA, warrant, and revenue base redemption liabilities resulted in a gain of $5.0 million in the three months ended September 30, 2024, compared to a loss of $2.8 million in the three months ended September 30, 2023, a difference of $7.8 million. The difference was primarily due to the addition of the SEPA and the fair value change for warrant liabilities, which includes the Initial OrbiMed Warrant for the current period.

Previous wording

The change in fair value of earnout liability resulted in a gain of $13.7 million in the three months ended June 30, 2024, due to the lower market price of the underlying common stock. There was no contingent earnout liability for the three months ended June 30, 2023.

Current wording

The change in fair value of earnout liability resulted in a gain of $2.4 million in the three months ended September 30, 2024, compared to a gain of $19.9 million for the three months ended September 30, 2023. This is mainly due to the higher market price of the underlying common stock.

Previous wording

Revenue increased by $6.2 million, or 82.0%, for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023. The increase in revenue was due to an increase of $6.2 million in sales of TriNav.

Current wording

Revenue increased by $8.4 million, or 65.5%, for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The increase in revenue was due to an increase of $8.4 million in sales of TriNav.

Previous wording

Cost of goods sold increased by $0.4 million, or 31.3%, for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023. The increase in cost of goods sold was primarily due to higher production volumes to support our increased revenue.

Current wording

Cost of goods sold increased by $0.9 million, or 42.7%, for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The increase in cost of goods sold was primarily due to higher production volumes to support our increased revenue.

Previous wording

Gross profit increased by $5.8 million, or 93.7%, for the six months ended June 30, 2024, and gross margin percent increased to 86.4% from 81.1% for the six months ended June 30, 2024, in each case as compared to the six months ended June 30, 2023. The increase in gross profit was due primarily to the increase in sales volume. The increase in gross margin percentage was driven principally by increased manufacturing efficiencies due to improved production yields and additional production volume absorbing fixed overhead costs.

Current wording

Gross profit increased by $7.5 million, or 69.8%, for the nine months ended September 30, 2024, and gross margin percent increased to 86.4% from 84.2% for the nine months ended September 30, 2024, in each case as compared to the nine months ended September 30, 2023. The increase in gross profit was due primarily to the increase in sales volume. The increase in gross margin percentage was driven principally by higher production volumes and increased manufacturing efficiencies.

Previous wording

R&D expenses decreased by $2.0 million, or 15.8%, for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023. The decrease was primarily driven by a $3.0 million reduction in clinical trial expenses related to nelitolimod, which was partially offset by a $0.9 million increase in headcount-related expenses due to additional personnel in our R&D staff.

Current wording

R&D expenses decreased by $7.3 million, or 33.3%, for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The decrease was primarily driven by an $8.1 million reduction in clinical trial expenses related to nelitolimod, partially offset by an increase in headcount-related expenses of $0.6 million and additional other expenses of $0.2 million.

Previous wording

Sales and marketing expenses increased by $6.0 million, or 88.3%, for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023. The increase was primarily driven by higher payroll and travel expenses of $5.5 million due to increased headcount of sales and marketing personnel and $0.4 million of consulting expenses.

Current wording

Sales and marketing expenses increased by $7.4 million, or 64.7%, for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The increase was primarily driven by higher payroll and travel expenses of $6.6 million due to increased headcount of sales and marketing personnel and $0.8 million of consulting expenses.

Previous wording

Interest income increased by $0.1 million, or 166.2%, for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023. The increase was due to additional interest received from the investment of our excess cash in short-term money market funds.

Current wording

Interest income increased by $0.2 million, or 85.6%, for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The increase was due to additional interest received from the investment of our excess cash in short-term money market funds.

Previous wording

Interest expense increased by $0.9 million for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023. The increase was due to interest we began incurring on the OrbiMed loan.

Current wording

Interest expense increased by $2.0 million for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The increase was due to interest we incurred on the OrbiMed loan in the current period that we did not incur in the prior period.

Previous wording

There was no loss on equity issuance for the six months ended June 30, 2024, as compared to $4.2 million reported for the six months ended June 30, 2023. The prior year loss was attributable to the issuance of Series B-2 preferred stock and the accompanying warrants to purchase Series B-3 preferred stock and related tranche obligations, which were valued in excess of the proceeds received as part of the transaction in 2023.

Current wording

There was no loss on equity issuance for the nine months ended September 30, 2024, as compared to $5.7 million reported for the nine months ended September 30, 2023. The prior year loss was attributable to the issuance of Series B-2 preferred stock and the accompanying warrants to purchase Series B-3 preferred stock and related tranche obligations, which were valued in excess of the proceeds received as part of the transaction in 2023.

Previous wording

The change in fair value of SEPA and warrant liabilities resulted in a loss of $6.5 million in the six months ended June 30, 2024, compared to a gain of $3.5 million in the six months ended June 30, 2023, a difference of $10.0 million. The difference was primarily due to an increase in our projected use of the SEPA, an increase in the fair value of our warrant liabilities, which includes the issuance of the Initial OrbiMed Warrant and additional embedded features in the Term Loan including revenue base redemption liabilities.

Current wording

The change in fair value of SEPA and warrant liabilities resulted in a loss of $1.5 million in the nine months ended September 30, 2024, compared to a gain of $0.7 million in the nine months ended September 30, 2023, a difference of $2.2 million. The difference was primarily due to the addition of the SEPA and the associated fair value change during the current period, which includes the issuance of the Initial OrbiMed Warrant and additional embedded features in the Term Loan including revenue base redemption liabilities.

Previous wording

The change in fair value of earnout liability resulted in a gain of $9.7 million in the six months ended June 30, 2024, due to the lower market price of the underlying common stock. There was no contingent earnout liability for the six months ended June 30, 2023.

Current wording

The change in fair value of earnout liability resulted in a gain of $12.1 million in the nine months ended September 30, 2024, compared to a gain of $19.9 million for the nine months ended September 30, 2023. This is mainly due to the higher market price of the underlying common stock.

Previous wording

Since inception, we have incurred significant net losses and expect to continue to incur net losses for the foreseeable future due to the investments we will continue to make in R&D and sales and marketing, and due to additional general and administrative costs we expect to incur as a public company. We incurred net losses of $17.6 million for the six months ended June 30, 2024. We had cash and cash equivalents of approximately $16.5 million at June 30, 2024. Since inception, we have financed operations primarily through the issuance and sales of common and preferred stock, convertible notes, and term loans. We are still in our early stages of development and have yet to generate revenues sufficient to fund cash flows from operations. Our ability to fund future operations and execute our long-term business plan and strategy will require that we raise additional capital. There can be no assurance that we will be able to raise such additional capital on satisfactory terms, if at all. If additional capital is not secured when required, we may need to delay or curtail our operations until such funding is received.

Current wording

Since inception, we have incurred significant net losses and expect to continue to incur net losses for the foreseeable future due to the investments we will continue to make in R&D and sales and marketing, and due to additional general and administrative costs we expect to incur as a public company. We incurred net losses of $19.9 million for the nine months ended September 30, 2024. We had cash and cash equivalents of approximately $11.3 million at September 30, 2024. Since inception, we have financed operations primarily through the issuance and sales of common and preferred stock, convertible notes, and term loans. We are still in our early stages of development and have yet to generate revenues sufficient to fund cash flows from operations. Our ability to fund future operations and execute our long-term business plan and strategy will require that we raise additional capital. There can be no assurance that we will be able to raise such additional capital on satisfactory terms, if at all. If additional capital is not secured when required, we may need to delay or curtail our operations until such funding is received.

Previous wording

During the six months ended June 30, 2024, we raised $6.7 million from the sale of 750,000 shares of common stock under the SEPA. In addition, in April 2024, we entered into the OrbiMed Credit Agreement providing for up to $50.0 million in senior secured term debt, of which we immediately drew $25.0 million, before expenses, Unless we are able to secure additional capital on favorable terms, we anticipate that we will have to further rely on the SEPA to continue to fund our operations. We expect that our existing cash and cash equivalents will not be sufficient to fund our projected liquidity requirements for at least the next 12 months from the date of this Quarterly Report. If we are able to achieve certain targets specified in the Credit Agreement and are then able to draw the remainder of the funds available, and if market conditions allow us to sell additional shares under the SEPA, we believe we can fund our operations through the end of 2025. We have based these estimates on assumptions that may prove to be wrong and we could use our available capital resources sooner than we currently expect, and future capital requirements and the adequacy of available funds will depend on many factors, including those described in the section titled “Risk Factors” in this Quarterly Report. See also “Funding Requirements” below.

Current wording

During the nine months ended September 30, 2024, we raised $12.4 million from the sale of 1,874,867 shares of common stock under the SEPA. In addition, in April 2024, we entered into the OrbiMed Credit Agreement providing for up to $50.0 million in senior secured term debt, of which we immediately drew $25.0 million, before expenses, Unless we are able to secure additional capital on favorable terms, we anticipate that we will have to further rely on the SEPA to continue to fund our operations. We expect that our existing cash and cash equivalents will not be sufficient to fund our projected liquidity requirements for at least the next 12 months from the date of this Quarterly Report. If we are able to achieve certain targets specified in the Credit Agreement and are then able to draw the remainder of the funds available, and if market conditions allow us to sell additional shares under the SEPA, we believe we can fund our operations through the end of 2025. We have based these estimates on assumptions that may prove to be wrong and we could use our available capital resources sooner than we currently expect, and future capital requirements and the adequacy of available funds will depend on many factors, including those described in the section titled “Risk Factors” in this Quarterly Report. See also “Funding Requirements” below.

Previous wording

For the six months ended June 30, 2024, net cash used in operating activities was $24.3 million. The net cash used in operating activities consisted of net loss of $17.6 million, adjusted for non-cash charges totaling $0.1 million, primarily related to a loss on the adjustment of the fair value of warrants to purchase common stock of $6.9 million, depreciation of $0.4 million and share-based compensation of $2.4 million, partially offset by a gain on the adjustment of the fair value of the contingent earnout liability of $9.7 million. The change in net operating assets and liabilities decreased $6.9 million, due primarily to an increase in accounts receivable and inventory, an increase in prepaid expenses, and a decrease in accounts payable and accrued liabilities.

Current wording

For the nine months ended September 30, 2024, net cash used in operating activities was $35.1 million. The net cash used in operating activities consisted of net loss of $19.9 million, adjusted for non-cash charges totaling $5.6 million, primarily related to a loss on the adjustment of the fair value of the contingent earnout liability of $12.1 million, depreciation of $0.6 million and share-based compensation of $3.7 million, offset by a gain on the adjustment of the fair value of warrants to purchase common stock of $2.3 million,. The change in net operating assets and liabilities decreased $10.0 million, due primarily to an increase in accounts receivable and inventory, an increase in prepaid expenses, and a decrease in accounts payable and accrued liabilities.

Previous wording

For the six months ended June 30, 2023, net cash used in operating activities was $19.7 million. The net cash used in operating activities consisted of net loss of $22.2 million, adjusted for non-cash charges totaling $1.2 million, primarily related to a loss on equity issuance of $4.2 million, depreciation and amortization of $0.3 million and stock-based compensation expense of $0.1 million, partially offset by a gain from the change in fair value of warrants to purchase preferred stock of $3.5 million. In addition, net operating assets and liabilities decreased $1.3 million driven by an increase in accounts payable and accrued liabilities.

Current wording

For the nine months ended September 30, 2023, net cash used in operating activities was $41.4 million. The net cash used in operating activities consisted of net loss of $23.7 million, adjusted for non-cash charges totaling $15.3 million, primarily related to a gain on the adjustment of the fair value of the contingent earnout liability of $19.9 million, and a gain from the change in fair value of warrants to purchase preferred stock of $0.7 million, partially offset by a loss on equity issuance of $5.7 million, depreciation and amortization of $0.5 million and stock-based compensation expense of $0.4 million. In addition, net operating assets and liabilities decreased $3.4 million driven by an increase in accounts payable and accrued liabilities.

Previous wording

Net cash used in investing activities of $0.1 million for the six months ended June 30, 2024, was primarily due to purchases of property and equipment of $0.1 million.

Current wording

Net cash used in investing activities of $0.3 million for the nine months ended September 30, 2024, was primarily due to purchases of property and equipment of $0.3 million.

Previous wording

Net cash provided by financing activities of $29.1 million for the six months ended June 30, 2024, consisted of $6.7 million from the sale of 750,000 shares of common stock under the SEPA and $22.4 million, net of expenses, from the initial draw down under the OrbiMed Credit Agreement.

Current wording

Net cash provided by financing activities of $34.9 million for the nine months ended September 30, 2024, consisted of $12.6 million from the sale of 1,874,867 shares of common stock under the SEPA and $22.4 million, net of expenses, from the initial draw down under the OrbiMed Credit Agreement.

Previous wording

Net cash provided by financing activities of $14.3 million for the six months ended June 30, 2023, consisted principally of proceeds from the issuance of Series B-2 preferred stock of $9.2 million, and proceeds from the exercise of warrants to purchase Series B-3 preferred stock of $5.1 million.

Current wording

Net cash provided by financing activities of $54.6 million for the nine months ended September 30, 2023, consisted principally of proceeds from the merger of $36.9 million, consisted principally of proceeds from the issuance of Series B-2 preferred stock of $9.2 million, and proceeds from the exercise of warrants to purchase Series B-3 preferred stock of $9.6 million, partially offset by expenses incurred related to the Business Combination of $1.1 million.

Previous wording

Our primary use of cash is to fund our operating expenses, which consist of sales and marketing expenses related to the growth of our sole commercial product TriNav, research, development and clinical expenses related to both TriNav and nelitolimod, as well as general and administrative expenses. If we obtain approval for our product candidates, we expect to incur commercialization expenses, which may be significant, related to establishing sales, marketing, manufacturing capabilities, distribution and other commercial infrastructure to commercialize such products. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations. Inflation and rising interest rates may result in an economic recession globally or in the U.S., which could lead to a reduction in product demand, a decrease in corporate capital expenditures, prolonged unemployment, labor shortages, reduction in consumer confidence, adverse geopolitical and macroeconomic events, or any similar negative economic condition. Economic conditions in some parts of the world have been worsening, with disruptions to, and volatility and uncertainty in, the credit and financial markets in the U.S. and worldwide resulting from the effects of inflation and rising interest rates. These conditions have been further exacerbated by recent and potential future disruptions in access to bank deposits or lending commitments due to bank failures, the war in Ukraine and conflicts in the Middle East. It is not possible at this time to estimate the long-term impact that these and related events could have on our business, as the impact will depend on future developments, which are highly uncertain and cannot be predicted. If these conditions persist and deepen, we could experience an inability to access additional capital, or our liquidity could otherwise be impacted. If we are unable to raise capital when needed and on attractive terms, we would be forced to delay, reduce or eliminate our research and development programs and/or other efforts.

Current wording

Our primary use of cash is to fund our operating expenses, which consist of sales and marketing expenses related to the growth of our sole commercial product TriNav, research, development and clinical expenses related to both TriNav and nelitolimod, as well as general and administrative expenses. If we obtain approval for our product candidates, we expect to incur commercialization expenses, which may be significant, related to establishing or expanding sales, marketing, manufacturing capabilities, distribution and other commercial infrastructure to commercialize such products. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations. Inflation and rising interest rates may result in an economic recession globally or in the U.S., which could lead to a reduction in product demand, a decrease in corporate capital expenditures, prolonged unemployment, labor shortages, reduction in consumer confidence, adverse geopolitical and macroeconomic events, or any similar negative economic condition. Economic conditions in some parts of the world have been worsening, with disruptions to, and volatility and uncertainty in, the credit and financial markets in the U.S. and worldwide resulting from the effects of inflation and rising interest rates. These conditions have been further exacerbated by recent and potential future disruptions in access to bank deposits or lending commitments due to bank failures, the war in Ukraine and conflicts in the Middle East. It is not possible at this time to estimate the long-term impact that these and related events could have on our business, as the impact will depend on future developments, which are highly uncertain and cannot be predicted. If these conditions persist and deepen, we could experience an inability to access additional capital, or our liquidity could otherwise be impacted. If we are unable to raise capital when needed and on attractive terms, we would be forced to delay, reduce or eliminate our research and development programs and/or other efforts.

Previous wording

Our contractual obligations as of June 30, 2024, include lease obligations of $1.5 million, reflecting the minimum commitments for our principal administrative and production facility and other office spaces.

Current wording

Our contractual obligations as of September 30, 2024, include lease obligations of $2.5 million, reflecting the minimum commitments for our principal administrative and production facility and other office spaces.

Previous wording

Our significant accounting policies are summarized in Note(2) Summary of Significant Accounting Policies in the unaudited condensed consolidated financial statements accompanying this Quarterly Report. There have been no significant changes in our critical accounting policies during the six months ended June 30, 2024, as compared to the critical accounting policies disclosed in Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on April 11, 2024. While all of these significant accounting policies affect the reporting of our financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our financial statements and require us to use a greater degree of judgment and/or estimates. Actual results may differ from those estimates. Additionally, changes in accounting estimates could occur in the future from period to period.

Current wording

Our significant accounting policies are summarized in Note(2) Summary of Significant Accounting Policies in the unaudited condensed consolidated financial statements accompanying this Quarterly Report. There have been no significant changes in our critical accounting policies during the nine months ended September 30, 2024, as compared to the critical accounting policies disclosed in Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on April 11, 2024. While all of these significant accounting policies affect the reporting of our financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our financial statements and require us to use a greater degree of judgment and/or estimates. Actual results may differ from those estimates. Additionally, changes in accounting estimates could occur in the future from period to period.