You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the notes to those statements included elsewhere in this Quarterly Report on Form 10-Q. In addition to historical financial information, this discussion and analysis contains forward-looking statements that reflect our plans, estimates and beliefs. You should not place undue reliance on these forward-looking statements, which involve risks and uncertainties. As a result of many factors, including but not limited to those set forth under ''Risk Factors,'' our actual results may differ materially from those anticipated in these forward-looking statements. See "Cautionary Note Regarding Forward-Looking Statements."
Overview
Zosano Pharma Corporation is a clinical-stage biopharmaceutical company focused on providing rapid systemic administration of therapeutics and other bioactive molecules to patients using our proprietary transdermal microneedle system (the "System"). Our System is designed to facilitate rapid drug absorption into the bloodstream, and to provide an improved pharmacokinetic ("PK") profile compared to original dosage forms. The System consists of a 3cm2 to 6cm2 array of titanium microneedles approximately 200-350 microns in length, coated with a hydrophilic formulation of drug, mounted on an adhesive patch. The patch is designed to be applied with a reusable hand-held applicator that presses the microneedles into the skin to a uniform depth in each application, close to the capillary bed, allowing for dissolution and absorption of the drug, but not deep enough to contact the nerve endings in the skin. The microneedles are designed to penetrate the stratum corneum in an effort to allow the drug to be absorbed into the microcapillary system of the skin. We have no product sales to date, and we will not have product sales unless and until we receive approval from theU.S. Food and Drug Administration (the "FDA"), or equivalent foreign regulatory bodies, to market and sell any product candidates. Accordingly, our success depends not only on the development, but also on our ability to finance the development of any product candidates. We will require substantial additional funding to complete development and seek regulatory approval for any products. In addition, our clinical and pre-commercial manufacturing activities have been suspended following ourMarch 2022 andApril 2022 workforce reductions.
M207 for Migraine
Our recent development efforts were focused on our product candidate, M207, our proprietary formulation of zolmitriptan delivered utilizing our System. Zolmitriptan is one of a class of serotonin receptor agonists known as triptans and is used as an acute treatment for migraine. Migraine is a debilitating neurological disease, symptoms of which include moderate to severe headache pain, nausea and vomiting, and abnormal sensitivity to light and sound. M207 was developed with the intent of providing faster onset of efficacy and sustained freedom from migraine symptoms. M207 is designed to provide rapid absorption of zolmitriptan into the bloodstream without dependence on the gastrointestinal ("GI") tract. We submitted a 505(b)(2) New Drug Application ("NDA") for M207 to the FDA onDecember 20, 2019 , and onOctober 20, 2020 , we received a Complete Response Letter ("CRL") from the FDA with respect to the NDA. The CRL cited inconsistent zolmitriptan exposure levels observed across clinical pharmacology studies, which had been previously identified in theFDA's discipline review letter that we received onSeptember 29, 2020 . Specifically, the CRL noted differences in zolmitriptan exposures observed between subjects receiving different lots of M207 in our trials and inadequate PK bridging between the lots that made interpretation of some safety data unclear. The CRL referenced unexpected high plasma concentrations of zolmitriptan observed in five study subjects enrolled in our PK studies. The FDA recommended that we conduct a repeat bioequivalence study comparing lots manufactured with the equipment used during development. The CRL noted that additional product quality validation data, which were planned to be submitted following approval, if received, were required to be submitted with the application. In addition, the CRL mentioned that due toU.S. Government and/or Agency-wide restrictions on travel, inspections of our contract manufacturing and/or critical subcontractor facilities were not able to be conducted before theFDA's goal date for completing its review of the original NDA, but that such inspections would be required and would have to be conducted before the application may be approved. In addition, a pre-approval inspection of ourFremont, California facility by the FDA is expected. However, following aMarch 2022 workforce reduction, we would need to hire additional employees to support any pre-approval inspection. OnJanuary 29, 2021 , we held a Type A meeting with theFDA Division of Neurology II (the "Division") regarding the requirements for resubmission of the M207 NDA and, inFebruary 2021 , we received the final meeting minutes from the FDA. The Type A meeting minutes were generally consistent with our expectations to conduct an additional PK study for inclusion in an NDA resubmission package. In a post-meeting comment, the FDA recommended a skin assessment on patients in the PK study to generate additional safety information, which was included in the proposed study protocol submitted to the FDA for 21
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review. After the receipt of FDA comments and recommendations to our proposed PK study protocol for M207, we made the recommended changes and established an agreement with a contract research organization to conduct the PK study required to support the resubmission of the M207 505(b)(2) NDA. OnOctober 4, 2021 , we announced that we had received preliminary top-line results from the PK study and had been granted a Type C written response-only meeting with the FDA regarding the resubmission of the M207 NDA. The study included 48 healthy volunteers and evaluated approximately 2,500 samples utilizing lots of M207 produced with two different pieces of manufacturing equipment. The study was designed to evaluate safety and the pharmacokinetics of M207 compared to a control of two 5 mg doses of intranasal zolmitriptan. The safety assessment showed that M207 was generally well tolerated, consistent with previous studies. The PK study data showed that there were no outliers with unexpected high plasma concentrations of zolmitriptan, which was a focus of the FDA as identified in the CRL for the original M207 NDA. The FDA had also raised questions regarding differences in zolmitriptan exposures observed between subjects receiving different lots of M207 in our clinical trials. The PK study data showed that drug plasma concentration levels of M207 produced on manufacturing equipment at ourFremont, California facility, which produced M207 patches for our long-term safety study, were lower compared to control and to M207 produced by alternative equipment, that was the basis for our Phase 2/3 clinical efficacy data in our original NDA submission, but within ranges consistent with approved therapeutic dose levels of zolmitriptan. OnOctober 25, 2021 , we received full data tables from our PK study, which were consistent with the top-line results announced onOctober 4, 2021 . OnOctober 27, 2021 , we submitted a briefing package to the FDA in advance of the Type C written-response-only meeting previously granted by the FDA to obtain feedback on our strategy for resubmitting the M207 505(b)(2) NDA. We received Type C written responses from the FDA with respect to our strategy for resubmitting the M207 505(b)(2) NDA, which, among other things, noted concerns regarding our approach for establishing a PK bridge to ZOMIG® nasal spray (NDA 21-450) (the "Listed Drug") through comparisons across multiple PK studies of M207, particularly Study CP-2019-002, which included PK outliers. OnJanuary 18, 2022 , we resubmitted our NDA to the FDA. In line with our previously disclosed resubmission strategy, the NDA was resubmitted under Section 505(b)(2) of the Food, Drug, and Cosmetic Act. The 505(b)(2) submission relies on theFDA's findings of safety and efficacy of the Listed Drug. The resubmitted NDA relied primarily on data from the recently completed Phase 1 PK study (CP 2021-001), along with previous PK studies evaluating M207 (CP-2018-002 and CP-2019-002), with the goal of establishing comparative bioavailability to the Listed Drug. OnFebruary 17, 2022 , we received a response letter from the FDA (the "FDA Notice") with regard to ourJanuary 18, 2022 NDA resubmission. The FDA Notice stated that the FDA did not consider the resubmitted M207 NDA to be a complete response to the deficiencies identified in theFDA's October 20, 2020 CRL, and that the FDA will not begin substantive review of the application until a complete response is received. Among other things, the FDA Notice stated that our strategy for establishing a PK bridge to the Listed Drug by relying primarily on data from the Study CP-2021-001 was not acceptable, due in part to differences between the design of Study CP-2021-001, which compared the PK of M207 to two sequential doses of the Listed Drug, and the criteria for re-dosing set forth in the labeling instructions for the Listed Drug. The FDA Notice described alternative methods through which we may establish a PK bridge to the Listed Drug, including: (i) by demonstrating bioequivalence to the Listed Drug using standard criteria for all PK exposure metrics, including through a combination of relevant PK data and modeling or simulation procedures; or (ii) by conducting a relative bioavailability study in healthy volunteer subjects. OnApril 14, 2022 , the FDA granted us a twelve-month extension untilApril 20, 2023 to resubmit our M207 NDA without considering the application to have been withdrawn. However, in order to preserve our capital and cash resources, we have suspended our M207 program, manufacturing operations at ourFremont, California facility and activities at our third-party contract manufacturing organizations ("CMOs") related to the qualification of commercial manufacturing equipment. We currently do not have capital or resources to continue with the development of M207 or resubmission of the M207 NDA.
Reverse Stock Split
OnApril 8, 2022 , at a special meeting of stockholders, our stockholders approved a proposal authorizing our board of directors, in its discretion, to effect a reverse stock split of our outstanding shares of common stock at a ratio ranging from 1-for-5 to 1-for-50 to be determined by the board of directors and effected, if at all, no later thanMay 16, 2022 . OnApril 8, 2022 , our board of directors approved a 1-for-35 reverse stock split of our outstanding common stock. A Certificate of Amendment to the Amended and Restated Certificate of Incorporation effecting the reverse stock split was filed with the Secretary of State of theState of Delaware onApril 11, 2022 and the reverse stock split became effective. At the effective time, every thirty-five shares of common stock issued and outstanding were automatically combined into one share of issued and outstanding common stock. The par value remained unchanged at$0.0001 per share. No fractional shares of common stock were issued in the 22
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reverse stock split, but in lieu thereof, each holder of common stock who would otherwise have been entitled to a fraction of a share in the reverse stock split received a cash payment. A proportionate adjustment was made to the per share exercise price, if applicable, and the number of shares issuable upon the exercise or vesting of outstanding equity awards, options and warrants to purchase shares of our common stock and to the number of shares reserved for issuance pursuant to our equity incentive compensation plans. The reverse stock split affected all stockholders of our common stock uniformly, and did not affect any stockholder's percentage of ownership interest. As a result of the reverse stock split, the number of our outstanding shares of common stock as ofApril 11,2022 decreased from 171,579,255 (pre-split) shares to 4,902,260 (post-split) shares. Unless otherwise noted, all share and per share information included in this Quarterly Report on Form 10Q have been retroactively adjusted to give effect to the reverse stock split.
The reverse stock split did not affect the number of shares of common stock authorized for issuance under our certificate of incorporation, which remained at 250,000,000 shares.
Critical Accounting Policies and Significant Judgments and Estimates
Our management's discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance withUnited States generally accepted accounting principles ("U.S. 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 results of operations during the reporting periods. 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 values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates under different assumptions or conditions. While there have been no significant changes to our existing critical accounting policies which are included in Note 2. Summary of Significant Accounting Policies to the financial statements included in our Annual Report on Form 10-K for the year endedDecember 31, 2021 , filed with theU.S. Securities and Exchange Commission (the "SEC") onMarch 17, 2022 , we believe that beginning with the quarter endedMarch 31, 2022 , the accounting policy discussed below is critical to understanding our historical and future performance, as this policy relates to a significant area involving management's judgments and estimates.
Impairment of Long-Lived Assets
We evaluate our long-lived assets for indications of possible impairment annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets is measured by a comparison of the carrying amount of the asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of the asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset.
Financial Operations Overview
General
Since inception, we have incurred recurring operating losses and negative cash flows from operating activities, and expect to incur significant losses in the foreseeable future. As ofMarch 31, 2022 , we had an accumulated deficit of$395.5 million and approximately$13.5 million in cash and cash equivalents. As ofMay 11, 2022 , we had approximately$9.9 million of cash and cash equivalents, which is not sufficient to fund our anticipated level of operations and meet our obligations as they become due within twelve months following the date of filing of this Quarterly Report on Form 10-Q. If we are not able to obtain required funding in the near future or obtain funding on favorable terms it will have a material adverse effect on our operations. Without additional capital, our liquidity, financial condition and business prospects will be materially and adversely affected, and we may have to cease operations. Our ability to raise capital is limited by the significant decline in our market capitalization and current market conditions. We do not have capital or resources to continue with the development of M207 or resubmission of the M207 NDA and we have suspended our M207 program, manufacturing operations at ourFremont, California facility and activities at our third-party CMO"s related to the qualification of commercial manufacturing equipment. We have retainedSierraConstellation Partners, LLC , as an independent financial advisor to assist in exploring financial and strategic alternatives to maximize value, which may include, but not be limited to, asset or equity sales, joint venture and partnership opportunities, and restructuring, amendment or refinancing of existing liabilities. We are also evaluating various alternatives to improve our liquidity, including but not limited to, further reductions of operating expenditures and other contractual obligations. 23
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There can be no assurances that we will be able to successfully raise capital, improve our financial position and liquidity, restructure our obligations, enter into any asset or equity sale, joint venture or partnership opportunity and/or otherwise achieve any of these objectives. We are seeking opportunities to evaluate collaborations with strategic partners to further the clinical development of our technology. However, we cannot forecast with any degree of certainty if we will receive additional capital or collaboration revenue in the future, as a result of any partnership that we might pursue for any potential future use of our technology or how such arrangements would affect our development plans or capital requirements. As a result of these uncertainties, we are unable to determine the duration and completion of costs of research and development projects or if, when and to what extent we will generate revenue. Additionally, a future collaborative partner may only be interested in applying our technology in the development and advancement of their own product candidates. The aforementioned factors raise substantial doubt about our ability to continue as a going concern for a period of one year from the issuance of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Service revenue
Service revenue is related to feasibility studies in which we provide research and development services to customers to determine the feasibility of using our System in connection with the customers' pharmaceutical agents.
Cost of service revenue
Cost of service revenue consists of personnel and material costs associated with feasibility studies.
Research and development expenses
Research and development expenses consist primarily of:
•Salaries and related expenses for personnel in research and development functions, including stock-based compensation;
•Expenses related to the production of our System, including the purchase of active pharmaceutical ingredients and raw materials as well as fees paid to CMOs;
•Expenses related to the performance of drug formulation and clinical trials and studies, including fees paid to CROs, clinical consultants, clinical trial sites and vendors, including Institutional Review Boards, in conjunction with implementing and monitoring our clinical trials and acquiring and evaluating clinical trial data, including all related fees, such as for investigator grants, patient screening fees, laboratory work and statistical compilation and analysis; and
•Allocation of certain shared costs, such as facilities-related costs.
In the three months ended
General and administrative expenses
General and administrative expenses consist principally of personnel-related costs, professional fees for legal, consulting, audit and tax services and other general operating expenses not otherwise included in research and development. We expect that our general and administrative expenses may increase as we pursue strategic options. Impairment loss We evaluate our long-lived assets for indications of possible impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets is measured by a comparison of the carrying amount of the asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of the asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset. Other income and expense Interest income. Interest income consists primarily of interest, amortization of purchase premiums and accretion of purchase discounts, if any, related to our investments in marketable securities. 24
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Interest expense. Interest expense consists primarily of interest costs and associated amortization of debt discounts and issuance costs, if any, related to debt financing.
Other income (expense). Other income (expense), net consists of miscellaneous income and expenses that are not included in other categories of the statement of operations. Results of Operations
Comparison of the three months ended
Three Months Ended March 31, Change 2022 2021 Amount % (unaudited; in thousands, except percentages) Service revenue $ 132$ 258 $ (126) (49) % Operating expenses: Cost of service revenue $ 86$ 162 $ (76) (47) % Research and development $ 4,481$ 5,330 $ (849) (16) % General and administrative $ 2,942$ 2,814 $ 128 5 % Impairment Loss $ 25,941 $ -$ 25,941 N/A Other income (expense): Interest income $ 2$ 1 $ 1 100 % Interest expense $ (73)$ (97) $ 24 (25) % Other income (expense), net $ (20)$ 2 $ (22) * * Not meaningful. Service revenue For the three months endedMarch 31, 2022 , service revenue decreased approximately$0.1 million , or 49% as compared to the same period in 2021. The decrease is a result of only one remaining active feasibility study related to an agreement with a pharmaceutical company as compared to three such active studies in the three months endedMarch 31, 2021 . We expect this study to be complete in the second quarter of 2022. We do not anticipate having additional service revenue unless and until we enter into new agreements.
Cost of service revenue
For the three months endedMarch 31, 2022 , cost of service revenue decreased approximately$0.1 million , or 47% as compared to the same period in 2021. The decrease is a result of only one remaining active feasibility study related to an agreement with a pharmaceutical company as compared to three such active studies in the three months endedMarch 31, 2021 . We expect this study to be completed in the second quarter of 2022. We do not anticipate having additional cost of service revenue unless and until we enter into new agreements.
Research and development expenses
Research and development expenses decreased approximately$0.8 million , or 16%, for the three months endedMarch 31, 2022 , as compared to the same period in 2021. The decrease was primarily due to a decrease of$0.6 million in employee and consulting expenses and$0.3 million in spending for clinical trials, offset by a$0.1 million increase in pre-commercial activities.
General and administrative expenses
General and administrative expenses increased approximately$0.1 million , or 5%, for the three months endedMarch 31, 2022 , as compared to the same period in 2021. The change was primarily due to an increase of$0.5 million in professional service fees to our financial and legal advisors and$0.2 million for services related to our special stockholders' meeting, offset by$0.6 million in lower employee related expenses. 25
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Table of Contents Impairment loss Impairment loss of$25.9 million for the three months endedMarch 31, 2022 was triggered by the receipt of the FDA Notice onFebruary 17, 2022 . The impairment loss was primarily related to the write-down of specialized equipment and related manufacturing space for the commercial manufacture of our suspended M207 program. Other income (expense) Interest income. For the three months endedMarch 31, 2022 and 2021, interest income resulted primarily from interest recognized related to investments in marketable securities classified as cash equivalents. Interest expense. For the three months endedMarch 31, 2022 and 2021, interest expense consisted primarily of interest and amortization of debt discount. The decrease in interest expense resulted from a lower outstanding balance on our build-to-suit obligation with Trinity Funding 1, LLC (successor toTrinity Capital Fund III, L.P. ) ("Trinity") during the three months endedMarch 31, 2022 as compared to the same period in 2021. For the three months endedMarch 31, 2022 and 2021, we capitalized a portion of interest paid to Trinity as construction-in-progress. Capitalization of interest ended upon the receipt of theFebruary 2022 FDA Notice.
Liquidity and Capital Resources
Our liquidity and capital resources are summarized as follows:
March 31, 2022 December 31, 2021 (unaudited; in thousands) (in thousands) Cash and cash equivalents $ 13,529 $ 11,043 Working capital* $ 5,902 $ 476 Accumulated deficit $ (395,524) $ (362,115) * We define working capital as current assets less current liabilities. See our financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q for further details regarding our current assets and current liabilities. As ofMarch 31, 2022 , we had approximately$13.5 million in cash and cash equivalents,$5.9 million of working capital and an accumulated deficit of$395.5 million . The increase in cash and cash equivalents and working capital as ofMarch 31, 2022 as compared toDecember 31, 2021 was primarily the result of cash received from the sale of shares of our common stock and warrants, offset by our loss from operations and our payments to Trinity. As ofMay 11, 2022 , we had approximately$9.9 million of cash and cash equivalents which is not sufficient to fund our anticipated level of operations and meet our obligations as they become due within twelve months following the date of filing of this Quarterly Report on Form 10-Q. The aforementioned factors raise substantial doubt about our ability to continue as a going concern for a period of one year from the issuance of these financial statements. If we are not able to obtain required funding in the near future or obtain funding on favorable terms it will have a material adverse effect on our operations. Without additional capital, our liquidity, financial condition and business prospects will be materially and adversely affected, and we may have to cease operations. Additionally, our ability to raise capital is limited by the significant decline in our market capitalization and current market conditions. We have retainedSierraConstellation Partners, LLC , as an independent financial advisor to assist in exploring financial and strategic alternatives to maximize value, which may include, but not be limited to, asset or equity sales, joint venture and partnership opportunities, and restructuring, amendment or refinancing of existing liabilities. We are also evaluating various alternatives to improve our liquidity, including but not limited to, further reductions of operating expenditures and other contractual obligations. However, there can be no assurances that we will be able to successfully raise capital, improve our financial position and liquidity, restructure our obligations, enter into any asset or equity sale, joint venture or partnership opportunity and/or otherwise achieve any of these objectives. In 2020 and 2021, we filed shelf registration statements on Form S-3 with theSEC to provide us with the ability to issue common stock and other securities as described in the registration statements. We currently have approximately$120.6 million available on the two outstanding shelf registration statements. However, our ability to complete the sale of equity securities and access the market as a source of liquidity is dependent on investor demand, market conditions and other factors. Therefore, we can provide no assurance that any such offering will be on terms favorable to us or our stockholders, or that such offering will be successful at all. In addition, our ability to raise capital will be limited by the significant decline in our market capitalization. 26
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As of
We expect to incur additional significant losses in the future and without additional capital, we may be required to further reduce our operating expenses, sell or license our technologies, clinical product candidate, or programs, if any, out-license intellectual property rights to our transdermal delivery technology, or a combination of the above, which may have a material adverse effect on our business, results of operations, financial condition and/or our ability to fund our scheduled obligations on a timely basis or at all. Currently, we do not have capital or resources to continue with the development of M207 or resubmission of the M207 NDA and we have suspended our M207 program, manufacturing operations at ourFremont, California facility and activities at our third-party CMOs related to the qualification of commercial manufacturing equipment, which may limit our ability to obtain financing for our operations. Cash Flows Three Months Ended March 31, 2022 2021 (unaudited; in thousands) Net cash provided by (used in): Operating activities$ (8,540) $ (7,460) Investing activities (65) (3,236) Financing activities 11,091 2,315
Net increase (decrease) in cash, cash equivalents, and restricted cash $
2,486
Operating Cash Flow: Net cash used in operating activities for the three months endedMarch 31 in both 2022 and 2021 was primarily related to personnel, manufacturing, facility and technology transfer and development costs in conjunction with services performed by our contract manufacturers, pre-commercial activities and other administrative expenses incurred in the course of our continuing operations. The changes in net cash used in operating activities were primarily related to our net loss, working capital fluctuations and changes in our non-cash expenses, all of which are highly variable. Net cash used in operating activities for the three months endedMarch 31, 2022 of$8.5 million was primarily due to our net loss of$33.4 million , adjusted for non-cash items of$27.2 million , consisting primarily of a$25.9 million impairment loss,$0.4 million of stock-based compensation,$0.3 million of depreciation and amortization,$0.3 million of change in operating lease right-of-use assets and$0.2 million for accretion of an asset retirement obligation. Additionally, we used cash of$1.5 million for changes in prepaid and other assets and$0.8 million for current liabilities. Net cash used in operating activities for the three months endedMarch 31, 2021 of$7.5 million was primarily due to our net loss of$8.1 million adjusted for non-cash stock-based compensation of$0.4 million and depreciation and amortization of$0.4 million and an increase in our prepaid expenses of$1.1 million , offset by an increase in accounts payable and accrued compensation and other accrued liabilities of approximately$1.0 million . Investing Cash Flow: Net cash used in investing activities of$0.1 million and$3.2 million for the three months endedMarch 31, 2022 and 2021, respectively was the result of property and equipment purchases to support our pre-commercialization activities. Financing Cash Flow: Net cash provided by financing activities of$11.1 million for the three months endedMarch 31, 2022 was primarily due to the net cash proceeds of$14.2 million from the public offering of common stock and warrants. These proceeds were offset by repayments on the Trinity build-to-suit obligation of$3.1 million . See below for further discussion of our financing activities during the first three months of 2022. Net cash provided by financing activities of$2.3 million for the three months endedMarch 31, 2021 was primarily due to the proceeds from the issuance of common stock from the exercise of warrants of$3.4 million . These proceeds were offset by repayments on the Trinity build-to-suit obligation of$1.2 million . 27
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Table of Contents Offering -February 2022 OnFebruary 8, 2022 , we entered into an underwriting agreement (the "Underwriting Agreement") withMaxim Group LLC ("Maxim") related to the public offering by us of 1,464,284 units ("Units"), each consisting of one share of our common stock and one Series F Common Stock Purchase Warrant ("Series F Warrant") to purchase one share of our common stock, at a public offering price of$10.50 per Unit (the "February 2022 Offering"). We also granted Maxim an option for a period of 30 days to purchase up to an additional 219,642 shares of common stock and/or additional Series F Warrants to purchase up to 219,642 shares of common stock. Maxim partially exercised the option and purchased the additional Series F Warrants to purchase up to 219,642 shares of common stock. The option to purchase additional shares of common stock expired unexercised. The net proceeds from the offering and the exercise by Maxim of the option to purchase the additional Series F Warrants were approximately$14.1 million after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. The offering was made pursuant to a 2021 shelf registration statement and a prospectus supplement and accompanying prospectus filed with theSEC .
At-the-Market Offering Programs
At-the-Market Offering Program - 2021
OnJune 28, 2021 , we entered into a Controlled Equity Offering Sales Agreement withCantor Fitzgerald & Co. andH.C. Wainwright & Co., LLC (together, the "Sales Agents") to establish an at-the-market offering program (the "2021 ATM"), under which we may sell from time to time, at our option, up to an aggregate of$30.0 million of shares of our common stock. Shares sold under the 2021 ATM are issued pursuant to a 2020 Shelf Registration Statement and a prospectus supplement datedJune 28, 2021 . We are required to pay the Sales Agents a commission of 3% of the gross proceeds from the sale of shares and have also agreed to provide the Sales Agents with customary indemnification rights. During the three months endedMarch 31, 2022 , no shares of our stock were sold under the program. As ofMarch 31, 2022 , we have up to approximately$25.0 million available to be offered and sold under the 2021 ATM.
At-the-Market Offering Program - 2020
OnJune 8, 2020 , we entered into a sales agreement withBTIG, LLC ("BTIG") as sales agent, to establish an at-the-market offering program ("2020 ATM"), under which we were permitted to offer and sell, from time to time, shares of common stock having a maximum aggregate offering price of up to$20.0 million . We were required to pay BTIG a commission of 3% of the gross proceeds from the sale of shares and also agreed to provide BTIG with customary indemnification rights. During the three months endedMarch 31, 2021 , we issued and sold 2,369 shares of our common stock at an average price of$45.82 per share under the 2020 ATM with aggregate net proceeds of less than$1,000 after deducting commissions and offering expenses payable by us. The shares were sold pursuant to the 2020 shelf registration statement and a prospectus supplement datedJune 8, 2020 . No shares remain available for sale under the 2020 ATM.
Trinity Second Amendment
OnMarch 11, 2022 , we entered into a Second Amendment to Lease Documents (the "Second Amendment") with Trinity. The Second Amendment, among other things, provided for an upfront payment of$2.0 million in lease payments to Trinity on the date of the Second Amendment, modified the remaining monthly lease payments and Purchase Option Fee payments due under the Agreement to$215,441 per month fromApril 1, 2022 toDecember 1, 2022 , established a minimum cash covenant equal to three times the remaining aggregate amount of lease payments due, and amended the definition of material adverse event, certain events of default, and certain operating covenants.
Contractual Obligations
During the three months endedMarch 31, 2022 , there were no material changes to our contractual obligations described under Management's Discussion and Analysis of Financial Condition and Results of Operations contained in Part II, Item 7 of our Annual Report on Form 10-K for our fiscal year endedDecember 31, 2021 , filed with theSEC onMarch 17, 2022 , other than the fulfillment of existing obligations in the ordinary course of business. See Note 11. Commitments and Contingencies of the Notes to Financial Statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q for more information regarding our contractual obligations.
Recently Issued Accounting Pronouncements
See Note 2. Summary of Significant Accounting Policies of the Notes to Financial Statements included in Item 1 Part I of this Quarterly Report on Form 10-Q for a summary of Recent Accounting Pronouncements. 28
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Off-Balance Sheet Arrangements
We have not entered into any off-balance sheet arrangements and do not have any holdings in variable interest entities.
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