See Notes to these Unaudited Condensed Financial Statements

ENVVENO MEDICAL CORPORATION

CONDENSED STATEMENTS OF CASH FLOWS (Continued)

(In thousands, unless otherwise indicated)

(Unaudited)

See Notes to these Unaudited Condensed Financial Statements

ENVVENO MEDICAL CORPORATION

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)(Unaudited)

Note 1 – Business Organization and Nature of Operations

enVVeno Medical Corporation is a late clinical-stage med-tech company focused on improvingthe advancement of innovative bioprosthetic (tissue-based) solutions to improve the standard of care infor the treatment of venous disease. We are developing tissue-based solutions that are designed to be life sustaining or life enhancingThe Company’s lead product, the VenoValve®, is a first-in-class surgical replacement venous valve being developed for patients withthe treatment of deep venous Chronic Venous Insufficiency (CVI). The Company is also developing a non-surgical, transcatheter based replacement venous valve for the treatment of deep venous CVI called enVVe™. CVI occurs when valves inside of the veins of the leg fail,become damaged, resulting in insufficientthe backwards flow of blood being returned to(reflux), blood pooling in the heart. Our products are being developed to address large unmet medical needs by either offering treatments where none currently exist or by substantially increasinglower leg, increased pressure in the current standards of care. Our lead product is a porcine based device to be surgically implanted in our deep venous systemveins of the leg (venous hypertension) and is calledin severe cases, venous ulcers that are difficult to heal and become chronic. Both the VenoValve®.VenoValve and enVVe are designed to act as one-way valves, to help assist in propelling blood up the leg, and back to the heart and lungs. The VenoValve is currently being evaluated in the SAVVE U.S. pivotal study and the company is currently waiting for regulatory approval to begin the TAVVE first-in-human trial for the purpose of obtaining approval to market and sell the device from the U.S. Food and Drug Administration (“FDA”).enVVe. Our team of officers and directors has been affiliated with numerous medical devices that have received FDA approval or CE marking and that have been commercially successful. We currently leasedevelop and manufacture our products in a 14,507 sq. ft. leased manufacturing facility in Irvine, California, where we manufacture medical devices for our clinical trials, and which has capacitybeen ISO 13485-2016 certified for commercial manufacturing.the design, development and manufacturing of tissue based implantable medical devices.

Note 2 – Management’s Liquidity Plan

As of JuneSeptember 30, 2022, the Company had a cash balance of $9.12.9 million, investments of $38.139.8 million and working capital of $35.639.4 million. Although the Company expects to continue incurring losses for the foreseeable future and may need to raise additional capital to sustain its operations, pursue its product development initiatives and penetrate markets for the sale of its products, Management believes that our capital resources at JuneSeptember 30, 2022 are sufficient to meet our obligations as they become due within one year after the date of this Quarterly Report, and sustain operations.

ENVVENO MEDICAL CORPORATION

NOTES TO CONDENSED FINANCIAL STATEMENTS

(Unaudited)

Note 3 – Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the unaudited condensed financial statements of the Company as of JuneSeptember 30, 2022 and December 31, 2021, and for the three and sixnine months ended JuneSeptember 30, 2022 and 2021. The results of operations for the three and sixnine months ended JuneSeptember 30, 2022 are not necessarily indicative of the operating results for the full year. These unaudited condensed financial statements should be read in conjunction with the financial statements and notes thereto for the year ended December 31, 2021 included in the Company’s Form 10-K filed with the SEC on March 28, 2022. The condensed balance sheet as of December 31, 2021 has been derived from the Company’s audited financial statements.

Investments

We consider all highly liquid interest-earning investments with a maturity of three months or less at the date of purchase to be cash equivalents. The fair values of these investments approximate their carrying values. Investments with original maturities of greater than three months and remaining maturities of less than one year are classified as short-term investments. Investments with maturities beyond one year are classified as long-term investments.

Debt investments are classified as trading securities and realized gains and losses are recorded using the specific identification method. Changes in fair value, excluding credit losses and impairments, are recorded in unrealized gains (losses) from investments. Fair value is calculated based on publicly available market information. If the cost of an investment exceeds its fair value, we evaluate, among other factors, general market conditions, credit quality of debt instrument issuers, and the extent to which the fair value is less than cost. We recognize interest income based on the stated coupon rate of the investments purchased.

ENVVENO MEDICAL CORPORATION

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

Note 4 – Investments

The components of investments were as follows at JuneSeptember 30, 2022:

Schedule of Investments 

(In thousands)

Unrealized losses from fixed-income securities are primarily attributable to changes in interest rates. Management does not believe any remaining unrealized losses represent impairments based on our evaluation of available evidence. There were no similar investments at December 31, 2021.

ENVVENO MEDICAL CORPORATION

NOTES TO CONDENSED FINANCIAL STATEMENTS

(Unaudited)

Note 5 – Concentrations

The Company maintains cash with major financial institutions. Cash held in United States bank institutions is currently insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250 at each institution. There were aggregate uninsured cash balances of $8.82.6 million and $54.5 million as of JuneSeptember 30, 2022 and December 31, 2021, respectively.

ENVVENO MEDICAL CORPORATION

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

Note 6 – Accrued Expenses and Other Current Liabilities

As of JuneSeptember 30, 2022, and December 31, 2021, accrued expenses and other current liabilities consist of the following:

Schedule of Accrued Expenses and Other Current Liabilities 

Note 7 – Commitments and Contingencies

Litigations Claims and Assessments

In the normal course of business, the Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. The Company records legal costs associated with loss contingencies as incurred and accrues for all probable and estimable settlements.

Robert Rankin Complaints

On July 9, 2020, the Company was served with a civil complaint filed in the Superior Court for the State of California, County of Orange by a former employee, Robert Rankin, who resigned his employment on or about March 30, 2020. The case is entitled Rankin v. Hancock Jaffe Laboratories, Inc. et al., Case No. 30-2020-01146555-CU-WR-CJC and was filed on May 27, 2020. On September 3, 2020 the Company and its Chief Executive Officer were served with a second complaint filed in the Superior Court for the State of California, County of Orange by Mr. Rankin. The case is entitled Rankin v. Hancock Jaffe Laboratories, Inc. et al., Case No. 30-2020-01157857 and was filed on August 31, 2020. The complaints assert several causes of action including a cause of action for failure to timely pay Mr. Rankin’s accrued and unused vacation and three months’ severance under his July 16, 2018 employment agreement, defamation, unlawful labor code violations, sex-based discrimination, and unfair competition, and seeks damages for lost wages, emotional and mental distress, consequential damages, punitive damages and attorney’s fees and costs. The Company has denied all claims in both matters (which have now been consolidated) and has filed a counterclaim asserting that Rankin has breached his employment agreement with the Company to the Company’s damage. The Company continues to believe it has meritorious defenses to both matters which are currently set for trial on October 24, 2022. June 12, 2023.

As of the date of these financial statements, the amount of loss associated with these complaints, if any, cannot be reasonably estimated. Accordingly, no amounts related to these complaints are accrued as of June 30, 2022.

ENVVENO MEDICAL CORPORATION

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)(Unaudited)

Note 8 –Stockholders’ Equity

Stock Options

From time to time, the Company issues options for the purchase of its common stock to employees and others. During the six-monthsnine-months ended JuneSeptember 30, 2022, the Company granted options to employees for the purchase ofoff thirty-thousandforty-three thousand shares with a weighted average exercise price of $6.836.76 per share.

The Company recognized $4.56.6 million and $0.30.7 million of share-based compensation related to stock options during the sixnine months ended JuneSeptember 30, 2022 and 2021, respectively.

As of JuneSeptember 30, 2022, there was $10.68.6 million of unrecognized stock-based compensation expense related to outstanding stock options that will be recognized over the weighted average remaining vesting period of 1.71.6 years.

Note 9 – Net Loss per Share

The following table summarizes the number of potentially dilutive common stock equivalents excluded from the calculation of diluted net loss per common share as of JuneSeptember 30, 2022 and 2021:

Schedule of Dilutive Net Loss Per Common Share

Item 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our unaudited condensed financial statements and notes thereto included herein. In connection with, and because we desire to take advantage of, the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, we caution readers regarding certain forward-looking statements in the following discussion and elsewhere in this report and in any other statement made by, or on our behalf, whether or not in future filings with the Securities and Exchange Commission. Forward-looking statements are statements not based on historical information and which relate to future operations, strategies, financial results or other developments. Such forward-looking statements involve significant risks and uncertainties. Forward looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control and many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward-looking statements made by, or on our behalf. Words such as “anticipate,” “estimate,” “plan,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions are used to identify forward-looking statements. Such forward-looking statements also involve other factors which may cause our actual results, performance or achievements to materially differ from any future results, performance, or achievements expressed or implied by such forward-looking statements and to vary significantly from reporting period to reporting period. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual future results will not be different from the expectations expressed in this Quarterly Report. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

Unless the context requires otherwise, references in this document to “NVNO”, “we”, “our”, “us” or the “Company” are to EnVVeno Medical Corporation

Overview

enVVeno Medical Corporation is a late clinical-stage med-tech company focused on improvingthe advancement of innovative bioprosthetic (tissue-based) solutions to improve the standard of care infor the treatment of venous disease. We are developing tissue-based solutions that are designed to be life sustaining or life enhancingThe Company’s lead product, the VenoValve®, is a first-in-class surgical replacement venous valve being developed for patients withthe treatment of deep venous Chronic Venous Insufficiency (CVI). The Company is also developing a non-surgical, transcatheter based replacement venous valve for the treatment of deep venous CVI called enVVe™. CVI occurs when valves inside of the veins of the leg fail,become damaged, resulting in insufficientthe backwards flow of blood being returned to the heart. We aim to develop products to address large unmet medical needs by either offering treatments where none currently exist or by substantially increasing the current standards of care. Our lead product is a porcine based device to be surgically implanted(reflux), blood pooling in the deep venous systemlower leg, increased pressure in the veins of the leg (venous hypertension) and is calledin severe cases, venous ulcers that are difficult to heal and become chronic. Both the VenoValve®.VenoValve and enVVe are designed to act as one-way valves, to help assist in propelling blood up the leg, and back to the heart and lungs. The VenoValve is currently being evaluated in the SAVVE U.S. pivotal study and the company is currently waiting for regulatory approval to begin the TAVVE first-in-human trial for the purpose of obtaining approval to market and sell the device from the U.S. Food and Drug Administration (“FDA”).enVVe. Our team of officers and directors has been affiliated with numerous medical devices that have received FDA approval or CE marking and that have been commercially successful. We develop and manufacture our products in a 14,507 sq. ft. leased manufacturing facility in Irvine, California, which has been ISO 13485-2016 certified for the design, development and manufacturing of tissue based implantable medical devices.

VenoValve

The VenoValve is a porcine based replacement venous valve developed at enVVeno Medical to be implanted in the deep venous system of the leg to treat severe CVI. By reducing reflux and lowering pressure (venous hypertension) within the deep venous system of the leg, the VenoValve has the potential to reduce or eliminate the symptoms of severe deep venous CVI, including the potential to heal recurring venous leg ulcers. The current version of the VenoValve is designed to be implanted into the femoral vein of the patient in an open surgical procedure via a 5-to-6-inch incision in the upper thigh.

There are presently no FDA approved medical devices to address valvular incompetence in the deep venous system, or effective treatments for deep venous CVI. Current treatment options include compression garments, or constant leg elevation, and wound care for venous ulcers. These treatments are generally ineffective, as they attempt to alleviate the symptoms of CVI without addressing the underlying causes of the disease. In addition, we believe compliance with compression garments and leg elevation is extremely low, especially among the elderly. The premise behind the VenoValve is that by reducing the underlying causes of CVI, reflux and venous hypertension, the debilitating symptoms of CVI will decrease, resulting in improvement in the quality of the lives of CVI sufferers.

We estimate that there are approximately 2.4 million people in the U.S. that suffer from deep venous CVI due to valvular incompetence.who would be candidates for the VenoValve.

VenoValve Clinical Status

After consultation with the FDA, and as a precursor to the U.S. pivotal trial, we conducted a small first-in-human study for the VenoValve in Colombia which included eleven (11) patients. In addition to providing safety and efficacy data, the purpose of the first-in-human study was to provide proof of concept, and to provide valuable feedback to make any necessary product modifications or adjustments to our surgical implantation procedure for the VenoValve prior to conducting the U.S. pivotal trial. Endpoints for the VenoValve first-in-human study included safety (device related adverse events), reflux, measured by doppler, a VCSSan rVCCS score, which is used by the clinician to measure disease severityregression and progress,progression, a VAS score used by the patient to measure pain, and a quality of life measurement.

Final results from the one (1) year first-in-human study were presented at the Charing Cross International Symposium in April of 2021. Among the eleven (11) patients in the study, reflux improved an average of 54%, Venous Clinical Severity Scores (“VCSSs”) improved an average of 56%, and visual analog scale (VAS) scores, which are used by patients to measure pain, improved an average of 76%, all at one (1) year when compared to pre-surgery levels. VCSS scores are commonly used by clinicians in practice and in clinical trials to objectively assess outcomes in the treatment of venous disease, and include ten characteristics including pain, inflammation, skin changes such as pigmentation and induration, the number of active ulcers, and ulcer duration. The improvement in VCSS scores is significant and indicates the VenoValve patients who had severe CVI pre-surgery, had mild CVI or the complete absence of disease at one-year post surgery.

There were no device related safety incidences during the one (1) year first-in-human study. Non-device related safety incidences were minor and included one (1) fluid pocket (which was aspirated), intolerance from Coumadin anticoagulation therapy, three (3) minor wound infections (treated with antibiotics), and one occlusion due to patient non-compliance with anti-coagulation therapy.

In preparation for the VenoValve U.S. pivotal trial, on March 5, 2021, we submitted an investigational device exemption or IDE application with the FDA.

An IDE from the FDA is required before a medical device company can proceed with a pivotal trial for a class III medical device. On April 1, 2021, we received notification from the FDA that our IDE application for the VenoValve U.S. pivotal trial was approved. We have named the U.S. pivotal trial for the VenoValve the SAVVE (Surgical Anti-reflux Veno Valve Endoprosthesis)(Surgical Anti-reflux Venous Valve Endoprosthesis) study. It is a prospective, non-blinded, single arm, multi-center study of seventy-five (75) CVI patients to be enrolled at up to twenty (20) U.S. sites.

No product modifications for the VenoValve were necessary following the first-in-human study and the SAVVE trial is evaluating the same device that was used in the first-in-human study. Endpoints for the SAVVE trial mirror those endpoints used for the first-in-human study. The primary safety endpoint for the pivotal trial is a material adverse safety event (mortality, deep wound infection, major bleeding, ipsilateral deep vein thrombosis, pulmonary embolism) in no more than twenty six percent (26%) of the patients at one (1) month post implantation, and the primary effectiveness endpoint for the pivotal trial is improvement in reflux of at least thirty percent (30%), measured at six (6) months post VenoValve implantation.implantation in at least fifty five percent (55%) of the patients. In the first-in-human study there were no reported material adverse safety events at one (1) month post implantation, and reflux improved an average of fifty six percent (56%) at six (6) months post implantation. VCSSAt least a thirty percent (30%) improvement in reflux occurred in ninety percent (90%) of the patients. rVCSS scoring to measure disease manifestations, VAS scores to measure pain, and quality of life measurements will also be monitored in the study.

On August 3, 2020, we announced that the FDA granted Breakthrough Device Designation status to the VenoValve. The FDA’s Breakthrough Devices Program was established to enable priority review for devices that provide more effective treatment or diagnosis of life threatening or irreversibly debilitating diseases or conditions. The goal of the FDA’s Breakthrough Devices Program is to provide patients and health care providers with timely access to medical devices by speeding up their development, assessment, and review, while preserving the FDA’s mission to protect and promote public health.

At the end of the VenoValve first-in-human study, eight (8) study participants agreed to additional monitoring. In August of 2021, longer termlonger-term two (2) year follow-up data was presented at the Society of Vascular Surgery Conference in San Diego, for the cohort of eight (8) patients. That data indicated no recurrences of the severe CVI that was present pre-VenoValve, including no ulcer recurrences for those patients whose venous ulcers had healed following VenoValve surgery. There were no reported safety issues from the end of one (1) year first-in-human study to the end of the two (2) year reporting period. In addition, the patients continued to improve, reporting 63%, 60%, and 93%, average improvements in reflux, VCSS, and VAS scores, respectively, at an average of two (2) years post VenoValve surgery compared to pre-VenoValve levels.

In October of 2021, we announced that the first patient in the SAVVE pivotal trial underwent successful VenoValve implantation surgery and had been discharged from the hospital. During April 2022 our twentieth site in the SAVVE study became active and is eligible to enroll patients.

The resurgence of COVID and the Omicron variant had both direct andcontinues to have indirect consequences on ourthe SAVVE clinical trial. Several of our clinical sites put elective surgeries on hold and prohibited potential study subjects from coming to the hospital for screening. Further, asAs reported in the media, the effects of COVID resurgencesCOVID have resulted in an exodus of health care providers leaving the profession. These staffing issues continue to put an enormous strain on all hospital resources including clinical staffs. In addition to caring for the influx of COVID patients, hospitals become short staffed due to their own employees’ COVID sicknesses, resulting in clinical staff being reassigned to cover the shortfall. This lack of available clinical personnel continues to slow enrollment at our clinical sites.

Finally, COVID also impacts our patient population. Patients with COVID or who have had COVID within ninety (90) days of their screening, are unwilling to get vaccinated, are currently excluded from our study until after the ninety (90) day period has passed.study. In addition, concerns about getting COVID impact the patients’ willingness to undergo an elective surgical procedure with a one-night hospital stay. As hospital clinical operations returnOur goal continues to more normal levels, our goal isbe to fully enroll the SAVVE pivotal trial by the end of 2022 or the beginningfirst quarter of 2023. We continue to monitor the ongoing overall impact of COVID on the SAVVE clinical trialpatient enrollment and will issue updateschange our enrollment guidance for SAVVE, if necessary, when appropriate.we have sufficient information to do so.

enVVe

On September 21, 2022, we announced the development of a non-surgical transcatheter based replacement venous valve called enVVe™, for the treatment of CVI of the deep veins of the leg. Preliminary bench testing and animal testing for enVVe have already been successfully completed and the Company has filed an application seeking approval to begin first-in-human (FIH) testing in Columbia, which we expect to receive by the end of 2022.

The enVVe first-in-human trial, which will take place in Colombia, will be known as the Transcatheter Anti-reflux, Venous Valve Endoprosthesis (TAVVE) FIH study. The initial phase of the TAVVE-FIH study will seek to enroll 3 to 5 patients across multiple sites. Several parameters will be evaluated over the course of the study including safety and technical success of the enVVe venous valve delivery system, and the safety and clinical performance of the enVVe venous valve.

enVVe is delivered into the femoral vein of the patient via a minimally invasive procedure requiring no general anesthesia and no overnight hospital stay. Due to the minimally invasive nature of the procedure, we estimate the U.S. market for enVVe to be approximately 3.5 million patients.

Capital 

In February of 2021, we raised $41.4 million of capital in a public offering of our common stock. In September of 2021, we raised $20 million dollars of capital in a registered direct offering priced at the market under Nasdaq rules and purchased by a fund managed by Perceptive Advisors, a leading life sciences investment firm. We finished 2021 with approximately $55 million of cash and had approximately $9.1$2.9 million of cash and $38.1$39.8 million of investments at JuneSeptember 30, 2022. At our existing cash burn rate of approximately $4 million per quarter, we should have sufficient cash to fund operations through the end of 2024 and into 2025. With primary endpoints following full enrollment in the SAVVE pivotal trial of thirty (30) days for safety, and six (6) months for effectiveness, we expect to have primary endpoint data well in advance of the need to raise additional capital.

Results of Operations

Comparison of the three months ended JuneSeptember 30, 2022 and 2021

Overview

We reported net losses of $7.1$6.1 million and $2.4 million for the three months ended JuneSeptember 30, 2022 and 2021, respectively, representing an increase in net loss of $4.7$3.7 million or 197%154%, resulting fromdue to an increase in operating expenses of $3.4 million, and a net decrease in other expenses.

income and expense of $0.3 million.

Revenues

As a developmental stage Company, we are not currently generating revenue and our future revenue, if any, is expected to be diminutive and dependent on our ability to commercialize our product candidates. We are not currently generating revenue and do not expect significant revenue until we successfully commercialize our lead product candidate.

Selling, General and Administrative Expenses

For the three months ended JuneSeptember 30, 2022, selling, general and administrative expenses increased by $2.6$2.1 million or 202%140%, to $3.9$3.6 million from $1.3$1.5 million for the three months ended JuneSeptember 30, 2021. Of this increase, $2.1$1.9 million was due to share basedshare-based compensation from grants made during 2021, which increased share-based compensation cost to $2.3$2.2 million in 2022 from $0.2$0.3 million in 2021.

The remaining $0.5$0.2 million increase reflects $0.2 million from consulting for reimbursement codes forhigher legal expenses related to building the Company’s product once commercially approved, $0.1 million from higher Delaware franchise taxes in 2022 which increased due to changes in our capital structure, $0.1 million from higher information technology and other office expense to support increases in staff, and $0.1 million in compensation due to increased staff.patent portfolio.

Research and Development Expenses

For the three months ended JuneSeptember 30, 2022, research and development expenses increased by $2.0$1.3 million or 182%108%, to $3.1$2.5 million from $1.1$1.2 million for the three months ended JuneSeptember 30, 2021. This increase primarily resulted from $1.4$0.8 million in costs related the SAVVE study, $0.4$0.3 million in lab costs to support the SAVVE study and VenoValve continued development, $0.1and $0.2 million increase in personnel costs due to additional staff, and $0.1 million in travel costs mainly to support the SAVVE study.staff.

Gain on Extinguishment of Note Payable

Other (Income) Expense

For the three monthsquarter ended JuneSeptember 30, 2022 other (income) expense increased $0.12021 the Company recorded a one-time $0.3 million from nil forgain on extinguishment of note payable due to the three months ended June 30, 2021. This change is primarily related to unrealized loss from investments which reflects changes in market valueforgiveness of the US Treasuries purchasedloan it had obtained under the PPP program authorized by the Company. We expect the market value of these investments to fluctuate somewhat during their term, however all these Treasuries were purchased to provide a positive yield over their term.

CARES act.

Comparison of the sixnine months ended JuneSeptember 30, 2022 and 2021

Overview

We reported net losses of $12.4$18.5 million and $5.2$7.5 million for the sixnine months ended JuneSeptember 30, 2022 and 2021, respectively, representing an increase in net loss of $7.2$11.0 million, or 141%147%, due to an increase in operating expenses of $7.1$10.6 million, and an increasea decrease in other income and expense of $0.1$0.4 million.

Revenues

As a developmental stage Company, we are not currently generating revenue and our future revenue, if any, is expected to be diminutive and dependent on our ability to commercialize our product candidates.

Selling, General and Administrative Expenses

For the sixnine months ended JuneSeptember 30, 2022, selling, general and administrative expenses increased $5.2$7.3 million or 211%183%, to $7.7$11.3 million from $2.5$4.0 million for the sixnine months ended JuneSeptember 30, 2021. Of this increase, $4.2$6.1 million was due to share basedshare-based compensation from grants made during 2021, which increased share-based compensation cost to $4.5$6.7 million in 2022 from $0.3$0.6 million in 2021.

The remaining $1.0$1.2 million increase in expenses is attributable to $0.4 million from higher legal costs mainly related to building the Company’s patent portfolio, $0.3 million of consulting costs for reimbursement codes for the Company’s product to be used once the product is commercially approved, if ever, $0.2 million from higher legal costs mainly related to intellectual property, $0.2 million from higher Delaware franchise taxes in 2022 which increased due to changes in our capital structure, $0.2$0.3 million from higher information technology and other office expense to support increases in staff, $0.1 million from higher compensation cost, and $0.1 million from higher insurance costs related to increased coverages for cyber risks and higher a D&O insurance premium.premiums.

Research and Development Expenses

For the sixnine months ended JuneSeptember 30, 2022, research and development expenses increased by $1.9$3.1 million or 70%78%, to $4.6$7.1 million from $2.7$4.0 million for the sixnine months ended JuneSeptember 30, 2021.

This increase primarily resulted from $1.5$2.8 million in costs related the SAVVE study, $0.1$0.2 million in lab costs to support the SAVVE study and VenoValve continued development, $0.1 million increase in personnel costs due to additional staff,and $0.1 million in travel costs to support the SAVVE study, and $0.1 million in costs for the preparing regulatory submissions related to SAVVE.study.

Gain on Extinguishment of Note Payable

Other (Income) Expense

For the sixnine months ended JuneSeptember 30, 2022 other (income) expense increased $0.12021 the Company recorded a $0.3 million from nil forgain on extinguishment of note payable due to the six months ended June 30, 2021. This change is primarily related to unrealized loss from investments which reflects changes in market valueforgiveness of the US Treasuries purchasedloan it had obtained under the PPP program authorized by the Company. We expect the market value of these investments to fluctuate somewhat during their term, however all these Treasuries were purchased to provide a positive yield over their term.

CARES act.

Liquidity and Capital Resources

For the six-monthsnine-months ended JuneSeptember 30, 2022, the Company incurred losses from operations of $12.4$18.5 million and used $7.3$11.7 million cash in operating activities. The net cash used in operating activities during the 2022 period increased by $0.8$3.0 from $6.5$8.7 million for the six-monthsnine-months ended JuneSeptember 30, 2021.

The losses and the uses of cash are primarily due to the Company’s administrative and product research and development activities. Administrative functions relate to costs to support the Company’s public reporting and investor relations activities as well as internal administrative functions. Research and development activities are for continued product development and clinical trials for the VenoValve, currently primarily the SAVVE study. The Company will continue to incur these costs to complete its clinical trials, enhance products, develop new products, and operate as a public company. Although we have discretion in how we use the Company’s cash resources, we expect to continue these activities for the foreseeable future as we seek to obtain regulatory approval for our lead product candidate. We are not currently generating revenue and do not expect significant revenue until we successfully commercialize our lead product candidate.

Our cash flows from investing activity have historically consisted of purchases of property and equipment for our lab and offices. However, during the period ending JuneSeptember 30, 2022, we commenced a program to invest excess cash in US Treasury bills. In the sixnine months ended JuneSeptember 30, 2022, we purchased $38.3$42.2 million of these investments and expect to continue investing as the treasury bills mature and as allowed by the cash requirements of our operations. Also, during the sixnine months ending JuneSeptember 30, 2022, we purchased $0.1 million of property and equipment consisting primarily of lab and test equipment.

We do not currently have material commitments for capital expenditures or other expenditures with the exception of our facility lease commitment of $0.4 million per year. However, we expect a modest increase in purchases of property and equipment as we continue SAVVE and plan for commercialization of the VenoValve.

The Company has historically funded its operations through financing activities such as the capital raises completed in 2021. During 2021, the Company raised an aggregate of $57.4 million in net proceeds in private and public placements of its securities. Our cash balance as of JuneSeptember 30, 2022, is $9.1$2.9 million. In addition, we have $38.1$39.8 million in investments, for total cash and investments of $47.2$42.7 million.

Our future capital requirements will remain dependent upon a variety of factors, especially including the success of our clinical trials and related product development costs and our ability to successfully bring products to market. At our existing cash burn rate of approximately $4 million per quarter, we should have sufficient cash to fund operations through the end of 2024 and into 2025. With primary endpoints following full enrollment in the SAVVE pivotal trial of thirty (30) days for safety, and six (6) months for effectiveness, we expect to have primary endpoint data well in advance of the need to raise additional capital. Any inability to raise additional financing would have a material adverse effect on us.

Based upon our cash and working capital as of JuneSeptember 30, 2022, we have sufficient capital resources to meet our obligations as they become due for at least one year after the date of this Report and sustain operations.

As of August 1,October 25, 2022, our cash balance was $5.5$2.0 million and our investment balance was $40.7$39.9 million.

The COVID-19 pandemic continues to disrupt the global economy and has negatively impacted large populations including people and businesses that may be directly or indirectly involved with the operation of our Company and the manufacturing, development, and testing of our product candidates. COVID with its variants continues to have both direct and indirect consequences on our clinical trial. Several of our clinical sites put elective surgeries on hold and prohibited potential study subjects from coming to the hospital for screening. Further COVID resurgences put an enormous strain on all hospital resources including clinical staffs. The lack of available clinical personnel both slows enrollment and impacts the speed at which we can activate clinical sites.

COVID has also impacted our patient population. Patients with COVID or who have had COVID within ninety (90) days of their screening, are excluded from our study until after the ninety (90) day period has passed. In addition, concerns about getting COVID impact the patients’ willingness to undergo an elective surgical procedure with a one-night hospital stay. As hospital clinical operations return to more normal levels, our goal is to fully enroll the SAVVE pivotal trial by the end of 2022 or the beginning of 2023. We continue to monitor the ongoing overall impact of COVID on the SAVVE clinical trial and will issue updates when appropriate.

Off-Balance Sheet Arrangements

None.

Contractual Obligations

As a smaller reporting company, we are not required to provide the information requested by paragraph (a)(5) of this Item.

Critical Accounting Policies and Estimates

For a description of our critical accounting policies, see Note 34 – Significant Accounting Policies in Part 1, Item 1 of this Quarterly Report on Form 10-Q.