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." OverviewZosano 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, which can result in 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 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 penetrate the stratum corneum to allow the drug to be absorbed into the microcapillary system of the skin. We are focused on developing products for indications in which we believe rapid onset, ease of use and stability may offer significant therapeutic and practical advantages, and on developing products where rapid administration of approved drugs with established safety and efficacy profiles provides an increased benefit to patients, in markets where patients remain underserved by existing therapies. We anticipate that many of our current and future development programs may enable us to utilize a regulatory pathway that would streamline clinical development and accelerate the path towards potential commercialization. Our development efforts are currently focused on our product candidate, M207, our proprietary formulation of zolmitriptan delivered utilizing our System. Previously, M207 was known as Qtrypta, which we no longer intend to use as the proprietary name of M207. We are currently in the process of identifying an alternative proprietary name for M207. 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 for 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 theU.S. Food and Drug Administration (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 clinical 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 facilities were not able to be conducted but would be required before the application may be approved. 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. Based on feedback from the Type A meeting held with the Division, we are conducting an additional PK study for inclusion in an NDA resubmission package. During the meeting, the Division did not request that we conduct any further clinical efficacy studies to support the resubmission. OnFebruary 19, 2021 , we received the official Type A 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. This assessment was included in the proposed study protocol submitted to the FDA for review. 22
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OnApril 12, 2021 , we received FDA comments and recommendations to our proposed PK study protocol for M207. We have made the recommended changes to the study protocol 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. The study is expected to involve 48 healthy volunteers to generate comparative PK and safety data. We initiated the PK study inJune 2021 and expect to complete it during the third quarter of 2021. Subject to positive data, we expect to resubmit the NDA for M207 by the end of 2021. There is no guarantee that we will be able to adequately address the issues raised to theFDA's satisfaction. Recent Developments OnJuly 20, 2021 , we were granted an additional patent covering method of use of M207 with the issuance ofU.S. Patent No. 11,058,630 titled Method of Rapidly Achieving Therapeutic Concentrations of Triptans for the Treatment of Migraines. The newly issued patent covers methods for the release of active drug from our microneedle system in about one minute and reaching potentially therapeutic levels as quickly as 30 minutes upon application. This latest patent adds to our M207 patent portfolio, which now includes twoU.S. patents with claims covering composition of matter and method of use for M207 with expirations in 2037. InOctober 2019 , we announced that we had begun enrolling patients in our Acute Treatment of Cluster Headache placebo-controlled Phase 2/3 clinical trial to evaluate the efficacy of C213 for the acute treatment of cluster headache. Like M207 for the potential acute treatment of migraine, C213 for the potential acute treatment of cluster headache consists of our investigational proprietary formulation of zolmitriptan delivered utilizing our proprietary transdermal microneedle system. Due to the COVID-19 pandemic, new enrollment into the clinical trial was temporarily suspended betweenMarch 2020 andJune 2020 . Subject enrollment resumed inJuly 2020 , however, at a rate slower than originally anticipated. InNovember 2020 , we decided to end enrollment of new subjects into the clinical trial as ofDecember 31, 2020 . Subjects enrolled in the Phase 2/3 trial prior toDecember 31, 2020 , were randomized to receive 1.9 mg of C213, 3.8 mg of C213, or placebo in a 1:1:1 fashion. The co-primary endpoints of the study are the proportion of patients who achieve pain relief at 15 minutes and the proportion of patients whose pain relief is sustained from 15 minutes to 60 minutes. A total of 42 subjects were randomized in the trial. Of the subjects randomized, 23 subjects treated a cluster attack with C213 and of those who treated, 22 had post-treatment self-reported diary data. Of the treated subjects, eight received placebo, nine received 1.9 mg of C213 and five received 3.8 mg of C213. The percentage of subjects who were positive for both co-primary endpoints (pain relief at 15 minutes and pain relief at 15 minutes sustained to 60 minutes) were 37.5% placebo, 44.4% C213 1.9 mg and 100% C213 3.8 mg. There were five adverse events, all mild in intensity, reported by one placebo subject and three C213 1.9 mg subjects. The number of subjects who treated a cluster attack was not sufficient to perform pre-planned statistical comparisons. 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. There have been no changes to our 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, 2020 , filed with theU.S. Securities and Exchange Commission (the "SEC") onMarch 11, 2021 . Financial Operations Overview General As ofJune 30, 2021 , we had an accumulated deficit of approximately$346.5 million . We have incurred significant losses and expect to incur significant and increasing losses in the foreseeable future as we advance our M207 product candidate into later stages of development and, if approved, commercialization. We cannot assure you that we will receive additional capital or collaboration revenue in the future, as a result of any partnership that we might pursue. 23
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We expect our pre-commercialization expenses related to our M207 product candidate to increase as we continue to advance this program towards regulatory approval and, if approved, commercialization. Because of the numerous risks and uncertainties associated with our technology and drug development, we cannot forecast with any degree of certainty the timing or amount of expenses incurred or when, or if, we will be able to achieve profitability. We do not anticipate realizing product revenues unless and until the FDA approves our M207 NDA and we begin commercializing M207, which may never occur. We will require additional capital to undertake our planned research and development activities, pre-commercialization activities, and to meet our operating requirements in and beyond 2021. We intend to raise such capital through the issuance of additional equity through public or private offerings, debt financings, strategic alliances, or any combination of the above. However, if such financing is not available at adequate levels or on acceptable terms, we could be required to further reduce our operating expenses and suspend, delay or reduce the scope of our M207 development program, 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. We are actively seeking opportunities to evaluate collaborations with strategic partners to further the clinical and commercial development of our technology. We cannot forecast with any degree of certainty if we will enter into collaborations for M207 or any other 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 our research and development projects or if, when and to what extent we will generate revenue from their commercialization and sale. Additionally, a future collaborative partner may only be interested in applying our technology in the development and advancement of their own product candidates. The process of conducting the necessary clinical trials to obtain regulatory approval is costly and time consuming. We consider the active management and development of our clinical pipeline to be crucial to our long-term success. The actual probability of success for each product candidate and clinical program may be affected by a variety of factors, including, but not limited to: the quality of the product candidate, early clinical data, investment in the program, competition, manufacturing capability and commercial viability. In situations in which third parties have control over the clinical development of a product candidate, the estimated completion dates are largely under the control of such third parties and not under our control. 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. In the three and six months endedJune 30, 2021 , we recognized revenue on agreements with three pharmaceutical companies for such studies. We expect service revenue to fluctuate based on the volume and activity of the feasibility studies. Cost of service revenue Cost of service revenue consists of personnel and material costs associated with feasibility studies. In the three and six months endedJune 30, 2021 , we incurred costs related to three such studies. We expect cost of service revenue to fluctuate in 2021 based on the volume and activity of the 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 contract manufacturing organizations; •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 and six months endedJune 30, 2021 , our research and development efforts and resources focused primarily on advancing the development of M207. 24
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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 will increase as we move toward commercialization of our product candidate, M207, if approved. 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. 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 endedJune 30, 2021 and 2020 Three Months Ended June 30, Change 2021 2020 Amount % (unaudited; in thousands, except percentages) Service revenue $ 188 $ -$ 188 N/A Operating expenses: Cost of service revenue $ 202 $ -$ 202 N/A Research and development $ 5,000$ 4,932 $ 68 1 % General and administrative $ 2,958$ 2,766 $ 192 7 % Other income (expense): Interest income $ -$ 5 $ (5) (100) % Interest expense $ (22)$ (190) $ 168 (88) % Other income (expense), net $ 1,850$ (12) $ 1,862 * * Not meaningful. Service revenue For the three months endedJune 30, 2021 , service revenue related to agreements with three pharmaceutical companies for feasibility studies. We expect service revenue to fluctuate based on the volume and activity of feasibility studies. Cost of service revenue For the three months endedJune 30, 2021 , cost of service revenue related to three feasibility studies. We expect cost of service revenue to fluctuate in 2021 based on the volume and activity of feasibility studies. Research and development expenses Research and development expenses increased approximately$0.1 million , or 1%, for the three months endedJune 30, 2021 , as compared to the same period in 2020. The increase was primarily due to an increase of$0.2 million in manufacturing costs related to the scale up and technology transfer to our commercial manufacturing organizations and$0.2 million in increased spending for clinical trials. These increases were partially offset by a decrease of$0.3 million in employee and consulting costs. 25
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General and administrative expenses General and administrative expenses increased approximately$0.2 million , or 7%, for the three months endedJune 30, 2021 , as compared to the same period in 2020. The increase was primarily due to an increase of$0.2 million in employee costs, primarily due to stock compensation. Other income and expense Interest income. For the three months endedJune 30, 2020 , interest income resulted primarily from interest recognized related to investments in marketable securities. The decrease for the three months endedJune 30, 2021 as compared to the same period in 2020 resulted from lower interest rates. Interest expense. For the three months endedJune 30, 2021 and 2020, interest expense consisted primarily of interest and amortization of debt discount. The decrease in interest expense resulted from a lower outstanding balance on our build-to-suit obligation with Trinity Funding 1, LLC (successor toTrinity Capital Fund III, L.P. ) ("Trinity") during the three months endedJune 30, 2021 as compared to the three months endedJune 30, 2020 . For the three months endedJune 30, 2021 and 2020, we capitalized a portion of interest paid to Trinity as construction-in-progress. Other income (expense), net. Other income (expense), net consists of miscellaneous income and expenses that are not included in other categories of the statement of operations. For the three months endedJune 30, 2021 , other income (expense), net consisted primarily of a gain on the forgiveness of our loan issued under the Paycheck Protection Program ("PPP Loan"). Comparison of the six months endedJune 30, 2021 and 2020 Six Months Ended June 30, Change 2021 2020 Amount % (unaudited; in thousands, except percentages) Service revenue$ 446 $ -$ 446 N/A Operating expenses: Cost of service revenue$ 364 $ -$ 364 N/A Research and development$ 10,330 $ 10,446 $ (116) (1) % General and administrative$ 5,772 $ 5,848 $ (76) (1) % Other income (expense): Interest income $ 1$ 15 $ (14) (93) % Interest expense$ (119) $ (396) $ 277 (70) % Other income (expense), net$ 1,852 $ 91 $ 1,761 * * Not meaningful. Service revenue For the six months endedJune 30, 2021 , service revenue related to agreements with three pharmaceutical companies for feasibility studies. We expect service revenue to fluctuate based on the volume and activity of feasibility studies. Cost of service revenue For the six months endedJune 30, 2021 , cost of service revenue related to three feasibility studies. We expect cost of service revenue to fluctuate in 2021 based on the volume and activity of the feasibility studies. Research and development expenses Research and development expenses decreased approximately$0.1 million , or 1%, for the six months endedJune 30, 2021 , as compared to the same period in 2020. The decrease was primarily due to a reduction of$0.9 million in employee and temporary employee costs due to lower employee and consulting costs and employee costs recorded as cost of service for work performed on our feasibility agreements. This decrease was partially offset by increases of$0.4 million of additional depreciation related to assets placed into service at our contract manufacturing organizations,$0.3 million in production and 26
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manufacturing costs due to the scale up and technology transfer to our commercial manufacturing organizations and$0.1 million in clinical trial costs. General and administrative expenses General and administrative expenses decreased approximately$0.1 million , or 1%, for the six months endedJune 30, 2021 , as compared to the same period in 2020. The decrease was primarily due to a decrease of$0.3 million in professional service fees, partially offset by increases of$0.1 million in employee costs, primarily due to stock compensation and$0.1 million in increased insurance costs. Other income and expense Interest income. For the six months endedJune 30, 2021 and 2020, interest income resulted primarily from interest recognized related to investments in marketable securities. The decrease for the six months endedJune 30, 2021 as compared to the same period in 2020 resulted from lower interest rates. Interest expense. For the six months endedJune 30, 2021 and 2020, 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 during the six months endedJune 30, 2021 as compared to the six months endedJune 30, 2020 . For the six months endedJune 30, 2021 and 2020, we capitalized a portion of interest paid to Trinity as construction-in-progress. Other income (expense), net. Other income (expense), net consists of miscellaneous income and expenses that are not included in other categories of the statement of operations. For the six months endedJune 30, 2021 , other income (expense), net consisted primarily of a gain on the forgiveness of our PPP Loan. Liquidity and Capital Resources Our liquidity and capital resources are summarized as follows: June 30, 2021 December 31, 2020 (unaudited; in thousands) (in thousands) Cash and cash equivalents $ 22,058 $ 35,263 Working capital* $ 12,430 $ 21,205 Accumulated deficit $ (346,476) $ (332,190) * 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 ofJune 30, 2021 , we had approximately$22.1 million in cash and cash equivalents,$12.4 million of working capital and an accumulated deficit of$346.5 million . The decrease in cash and cash equivalents and working capital as ofJune 30, 2021 as compared toDecember 31, 2020 was primarily the result of our loss from operations, investments made in property and equipment and our payments to Trinity, offset primarily by cash received from the sale of shares of our common stock through our at-the-market offering program with BTIG and warrant exercises. Presently, we do not have sufficient cash and cash equivalents to enable us to fund our anticipated level of operations and meet our obligations as they become due during the twelve months following the date of filing of this Quarterly Report on Form 10-Q, and we will need to obtain additional capital resources through equity offerings, debt financings, a license or collaboration agreement, or through a combination of such sources of capital. The aforementioned factors raise substantial doubt about our ability to continue as a going concern. We filed a shelf registration statement on Form S-3 with theSEC , which was declared effective by theSEC onApril 16, 2020 (the "2020 Shelf Registration Statement"). The 2020 Shelf Registration Statement provides us with the ability to issue common stock and other securities as described in the registration statement from time to time up to an aggregate amount of$74.5 million , of which approximately$3.7 million was available atJune 30, 2021 . Additionally, we filed a shelf registration statement on Form S-3 with theSEC , which was declared effective by theSEC onJuly 14, 2021 ("2021 Shelf Registration Statement"). The 2021 Shelf Registration Statement provides us with the ability to issue common stock and other securities as described in the registration statement from time to time up to an aggregate amount of$150.0 million . 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 27
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favorable to us or our stockholders, or that such offering will be successful at all. Our inability to obtain required funding in the near future or our inability to obtain funding on favorable terms will have a material adverse effect on our operations and strategic development plan for future growth. If we cannot successfully raise additional capital and implement our strategic development plan, our liquidity, financial condition and business prospects will be materially and adversely affected, and we may have to cease operations. We expect to incur additional losses in the future and will require additional financing to develop our M207 product candidate, conduct pre-commercialization manufacturing activities and fund our operations. If we are unable to raise additional funds when needed, we may be required to suspend, delay, reduce or terminate our development programs and clinical trials. We may also be required to sell or license our technologies, clinical product candidates, or programs, if any, that we would prefer to develop and commercialize ourselves. We anticipate that we will need to raise substantial additional capital, the requirements of which will depend on many factors, including: •the scope, progress, expansion and costs of manufacturing our product candidates; •the timing of and costs involved in obtaining regulatory approvals; •the scope, progress, expansion, costs and results of our clinical trials; •the type, number, costs and results of the product candidate development programs which we are pursuing or may choose to pursue in the future; •our ability to establish and maintain development partnering arrangements; •the timing, receipt and amount of contingent, royalty and other payments from any of our future development partners; •the emergence of competing technologies and other adverse market developments; •the costs of maintaining, expanding and protecting our intellectual property portfolio, including potential litigation costs and liabilities; •the economic and global financial market uncertainty resulting from the COVID-19 pandemic; •the resources we devote to marketing and commercializing our product candidates, if approved; and •the costs associated with being a public company. The COVID-19 pandemic has caused volatility in the global financial markets and threatened a slowdown in the global economy, which may adversely affect our ability to raise additional capital on attractive terms or at all. A recession, depression or other sustained adverse market event resulting from the spread of COVID-19 may also limit our ability to obtain financing for our operations. Cash Flows Six Months Ended June 30, 2021 2020 (unaudited; in thousands) Net cash provided by (used in): Operating activities$ (15,444) $ (16,443) Investing activities (4,423) (4,707) Financing activities 6,662 25,381
Net (decrease) increase in cash, cash equivalents, and restricted cash $
(13,205)
Operating Cash Flow: Net cash used in the six months endedJune 30 in both 2021 and 2020 was primarily related to personnel, manufacturing, facility and technology transfer and development costs in conjunction with services performed by our contract manufacturers, clinical development and trial costs, other 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 six months endedJune 30, 2021 of$15.4 million was primarily due to our net loss of$14.3 million , adjusted for non-cash items of$0.8 million , consisting primarily of a gain on forgiveness of debt of$1.6 28
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million offset by$0.9 million of stock-based compensation,$0.9 million of depreciation and amortization and$0.6 million of change in operating lease right-of-use assets. Additionally, we used cash of$1.3 million for changes in prepaid expenses and$0.7 million for changes in operating lease liabilities. Net cash used in operating activities for the six months endedJune 30, 2020 of$16.4 million was primarily due to our net loss of$16.6 million , adjusted for non-cash items of$1.9 million consisting primarily of$0.7 million of stock-based compensation,$0.5 million of depreciation and amortization and$0.5 million of change in operating lease right-of-use assets. Additionally, we used cash of approximately$2.0 million for changes in accounts payable and operating lease liabilities. Investing Cash Flow: Net cash used in investing activities of$4.4 million and$4.7 million for the six months endedJune 30, 2021 and 2020, 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$6.7 million for the six months endedJune 30, 2021 was primarily due to the proceeds from the issuance of common stock under our 2020 at-the-market offering program of$5.6 million and from the exercise of warrants of$3.4 million . These proceeds were offset by repayments on the Trinity build-to-suit obligation of$2.3 million . See below for a further discussion of our equity activity during the first six months of 2021. Net cash provided by financing activities for the six months endedJune 30, 2020 was primarily due to$10.2 million of net proceeds from a registered direct offering,$8.4 million of net proceeds from a public underwritten offering,$4.0 million of net proceeds from an at-the-market offering program,$2.6 million from the exercise of warrants and$1.6 million of proceeds from a PPP loan offset by$1.5 million in principal payments on our build-to-suit obligation with Trinity. 2021 Issuance of Shares 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 ("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 will be issued pursuant to our 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. As ofJune 30, 2021 , we had sold no shares under the 2021 ATM. FromJuly 1, 2021 throughAugust 6, 2021 , we issued and sold 2,261,458 shares of our common stock at an average price of$0.81 per share under the 2021 ATM for aggregate net proceeds of$1.7 million after deducting commissions and offering expenses payable by us. As of the date of this Quarterly Report on Form 10-Q, we have approximately$28.2 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 endedJune 30, 2021 , we issued and sold 6,848,672 shares of our common stock at an average price of$0.83 per share under the 2020 ATM for aggregate net proceeds of$5.5 million after deducting commissions and offering expenses payable by us. During the six months endedJune 30, 2021 , we issued and sold 6,931,607 shares of our common stock at an average price of$0.84 per share under the 2020 ATM for aggregate net proceeds of$5.5 million after deducting commissions and offering expenses payable by us. The shares were sold pursuant to our 2020 Shelf Registration Statement and a prospectus supplement datedJune 8, 2020 . As ofJune 30, 2021 , no shares remain available for sale under the 2020 ATM. Registered Direct Offering -March 2020 OnMarch 4, 2020 , we entered into a securities purchase agreement with certain institutional investors for the issuance and sale in a registered direct offering (the "March 2020 Offering") of (i) 11,903,506 shares of our common stock and (ii) Series E Warrants to purchase up to a total of 11,903,506 shares of common stock at an offering price of$0.9275 per share and accompanying warrant. The Series E Warrants have an exercise price of$0.8025 per share, were immediately exercisable and expire five years from the date of issuance. During the six months endedJune 30, 2021 , Series E Warrants to purchase 4,078,667 shares of common stock were exercised at an exercise price of$0.8025 per share for aggregate proceeds of approximately$3.3 million . No Series E Warrants were exercised during the three months endedJune 30, 2021 . The shares were sold pursuant to an effective shelf registration statement and a prospectus supplement datedMarch 4, 2020 . As of the date of this Quarterly Report on Form 10-Q, we have Series E Warrants to purchase 630,835 shares of our common stock outstanding. 29
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Public Offering -February 2020 OnFebruary 14, 2020 , we closed an underwritten offering (the "February 2020 Offering") for the issuance and sale of (i) 10,146,154 Class A Units, each consisting of one share of common stock and one Series C Warrant to purchase one share of common stock, at a public offering price of$0.65 per Class A Unit, and (ii) 2,161,539 ClassB Units , each consisting of one Series D Pre-Funded Warrant to purchase one share of common stock and one Series C Warrant to purchase one share of common stock, at a public offering price of$0.6499 per ClassB Unit . The Series C Warrants have an exercise price of$0.65 per share, were immediately exercisable and will expire five years from the date of issuance. The Series D Pre-Funded Warrants had an exercise price of$0.0001 per share and were fully exercised in connection with the closing of the offering. We granted the underwriter a 30-day option to purchase up to an additional 1,846,153 shares of common stock and/or additional Series C Warrants to purchase up to 1,846,153 shares of common stock. The underwriter fully exercised its option to purchase the shares and the Series C Warrants. During the six months endedJune 30, 2021 , Series C Warrants to purchase 145,000 shares of common stock were exercised at an exercise price of$0.65 per share for aggregate proceeds of approximately$0.1 million . No Series C Warrants were exercised during the three months endedJune 30, 2021 . The shares were sold pursuant to an effective shelf registration statement and a prospectus supplement datedFebruary 12, 2020 . As of the date of this Quarterly Report on Form 10-Q, we have Series C Warrants to purchase 22,700 shares of our common stock outstanding. Contractual Obligations During the six months endedJune 30, 2021 , 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, 2020 , filed with theSEC onMarch 11, 2021 , other than the fulfillment of existing obligations in the ordinary course of business. See Note 10. Commitments and Contingencies of the Notes to Financial Statements included in Item 1 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 of this Quarterly Report on Form 10-Q for a summary of Recent Accounting Pronouncements. 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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