CMMB

Risk Factors You should consider carefully the following information about the risks described below, together with the other information contained in this Annual Report on Form 10-K and in our other public filings, in evaluating our business.
If any of the following risks actually occurs, our business, financial condition, results of operations and future growth prospects would likely be materially and adversely affected.
In these circumstances, the market price of our common stock would likely decline.
Risks Related to Chemomab’s Business, Research and Development and the Biopharmaceutical Industry Chemomab has a limited operating history and funding, which may make it difficult to evaluate its prospects and likelihood of success.
Chemomab is a clinical-stage biopharmaceutical company with a limited operating history.
Chemomab was incorporated in 2015, has no products approved for commercial sale and has not generated any revenue.
Its operations to date have been limited to organizing and staffing the company, business planning, raising capital, establishing its intellectual property portfolio and conducting research and development of its product candidates, technology related to CCL24 and novel therapies for the treatment of inflammation and fibrosis.
Chemomab’s approach to the discovery and development of product candidates is unproven, and Chemomab does not know whether it will be able to develop any products of commercial value.
In addition, Chemomab’s lead product candidate, CM-101, is in early clinical development for the treatment of PSC and SSc.
The clinical programs will require substantial additional development and clinical research, both in time and resources, before Chemomab is in a position to apply for or receive regulatory approvals and begin generating revenue in connection with the sale of such product candidates.
Chemomab has not yet demonstrated the ability to successfully complete a large-scale, pivotal clinical trial, obtain marketing approval, manufacture a commercial scale product, or arrange for a third party to do so on its behalf, or conduct sales and marketing activities necessary for successful product commercialization.
Consequently, predictions about Chemomab’s future success or viability may not be as accurate as they could be if Chemomab had a longer operating history or a history of successfully developing and commercializing pharmaceutical products.
In addition, as a business with a limited operating history, Chemomab may encounter unforeseen expenses, difficulties, complications, delays and other known or unknown factors and risks frequently experienced by early-stage biopharmaceutical companies in rapidly evolving fields.
Consequently, Chemomab has no meaningful history of operations upon which to evaluate its business, and predictions about its future success or viability may not be as accurate as they could be if Chemomab had a longer operating history or a history of successfully developing and commercializing drug products.
Chemomab will eventually need to transition from a company with a research and development focus to a company capable of supporting commercial activities.
Chemomab may not be successful in such a transition and, as a result, its business may be adversely affected.
As Chemomab continues to build its business, it expects its financial condition and operating results to fluctuate significantly from quarter to quarter and year to year due to a variety of factors, many of which are beyond Chemomab’s control.
Chemomab’s business is highly dependent on the success of its lead product candidate, CM-101, and any other product candidates that it advances into clinical studies.
All of Chemomab’s programs will require significant additional clinical development.
Chemomab currently has no products that are approved for commercial sale and may never be able to develop marketable products.
Chemomab is very early in its development efforts and has only one product candidate, CM-101, in early clinical development.
Because CM-101 is Chemomab’s lead product candidate, if CM-101 encounters safety or efficacy problems, development delays, regulatory issues or other problems, Chemomab’s development plans and business would be significantly harmed.
Chemomab has completed a Phase 1a SAD study with healthy volunteers, a Phase 1b MAD study of CM-101 in non-alcoholic fatty liver disease, or NAFLD, a Phase 2a safety, Pk and liver fibrosis biomarker study in NASH patients, an open-label exploratory study in severe lung injury in hospitalized COVID-19 patients and is recruiting patients in a Phase 2 PSC trial.
Chemomab plans to initiate a Phase 2 SSc study around midyear of 2023.
Chemomab expects that a substantial portion of its efforts and expenditures over the next few years will be devoted to CM-101, which will require additional clinical development, management of clinical and manufacturing activities, regulatory approval in multiple jurisdictions, obtaining manufacturing supply, building of a commercial organization, substantial investment and significant marketing efforts before it can generate any revenues from any commercial sales.
Chemomab cannot be certain that it will be able to successfully complete any of these activities.
In addition, if one or more of Chemomab’s product candidates are approved, Chemomab may need to ensure access to sufficient commercial manufacturing capacity and conduct significant marketing efforts in connection with any commercial launch.
These efforts will require substantial investment, and Chemomab may not have the financial resources to continue the development of its product candidates.
Chemomab will need to raise substantial additional funds through public or private equity or debt transactions and/or complete one or more strategic transactions or partnerships, to complete development of CM-101 or any other product candidates.
If Chemomab is unable to raise such financing or complete such a transaction, it may not be able to fund the clinical trials of its product candidates and potentially commercialize those product candidates.
As a result of the expected development timeline to potentially obtain FDA approval for CM-101, the substantial additional costs associated with the development of our product candidates, including the costs associated with clinical trials related thereto, and the substantial cost of commercializing CM-101, Chemomab will need to raise substantial additional funding through public or private equity or debt transactions or a strategic combination or partnership.
If Chemomab is delayed in obtaining funding or is unable to complete a strategic transaction, Chemomab may have to delay or discontinue development activities on CM-101 and our other product candidates.
Even if Chemomab is able to fund continued development of CM-101 or any of our other product candidates is approved, Chemomab expects that it will need to raise substantial additional funding through public or private equity or debt securities or complete a strategic transaction or partnership to successfully commercialize CM-101 or any other product candidate.
Chemomab believes its cash and cash equivalents and bank deposits as of December 31, 2022 will be sufficient to fund its operations at least through March 31, 2024.
Sales of Chemomab’s ADSs dilute the ownership interest of its shareholders and may cause the price per ADS to decrease.
Changing circumstances may cause us to consume capital significantly faster or slower than Chemomab currently anticipates.
Chemomab has based these estimates on assumptions that may prove to be wrong, and Chemomab could exhaust its available financial resources sooner than currently anticipated.
Chemomab’s liquidity, and ability to raise additional capital or complete any strategic transaction, depends on a number of factors, including, but not limited to, the following: • the costs and timing for potential additional clinical trials in order to gain possible regulatory approval for CM-101and our other product candidates; • the market price of Chemomab’s ADSs and the availability and cost of additional equity capital from existing and potential new investors; • Chemomab’s ability to retain the listing of its ADSs on the Nasdaq Capital Market; • general economic and industry conditions affecting the availability and cost of capital, including as a result of deteriorating market conditions due to investor concerns regarding inflation and continued hostilities between Russia and Ukraine; • Chemomab’s ability to control costs associated with its operations; • the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights; and • the terms and conditions of our existing collaborative and licensing agreements.
The sale of additional equity or convertible debt securities would likely result in substantial dilution to our stockholders.
If Chemomab raise additional funds through the incurrence of indebtedness, the obligations related to such indebtedness would be senior to rights of holders of our capital stock and could contain covenants that would restrict our operations.

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Gone since FY2021

We believe that period-to-period comparisons of our operating results are not necessarily meaningful and should not be relied upon as indications of future performance.
Year ended December 31, 2021 Compared to the Year Ended December 31, 2020 Research and development expenses Research and development expenses increased by approximately $1.6 million, or 35%, to approximately $6.3 million for the year ended December 31, 2021 compared to approximately $4.7 million for the year ended December 31, 2020.
The increase resulted primarily from an increase in headcount and payments to consultants and subcontractors for clinical and pre-clinical activities.
General and administrative expenses General and administrative expenses increased by approximately $4.7 million, or 368%, to approximately $6.0 million for the year ended December 31, 2021 compared to approximately $1.3 million for the year ended December 31, 2020.
The increase was primarily due to expenses related to becoming a public company, including increased professional fees and insurance expense, share based compensation expenses and additional headcount.
Financing (income) expense, net Financing expenses, net, increased by approximately $132 thousand, or 628%, to net expense of $111 thousand for the year ended December 31, 2021 compared to a net income of $21 thousand for the year ended December 31, 2020.
Financing expense, net for the year ended December 31, 2021 was primarily related to foreign currency exchange rate differences, offset by interest income on deposits.
Financing income, net for 2020 was primarily related to interest income on deposits, offset by foreign currency exchange rate differences.
Cash Flows The following table summarizes the Company's cash flows for the years ended December 31, 2021 and 2020: Year ended December 31, Increase/(decrease) 2021 2020 $ % (in thousands) Net cash used in operating activities $ (12,374 ) $ (5,242 ) $ (7,132 ) % Net cash used in investing activities (45,186 ) (62 ) (45,124 ) 72,781 % Net cash provided by financing activities 61,074 4,750 56,324 1,186 % Net increase (decrease) in cash, cash equivalents and restricted cash $ 3,514 $ (554 ) $ 4,068 % Operating activities Net cash used in operating activities for the year ended December 31, 2021 included net loss of $12.5 million, net cash used by changes in operating assets and liabilities of approximately $1.9 million and non-cash charges of $2 million, which mainly included share-based compensation expenses.
Net cash used in operating activities for the years ended December 31, 2020 included net loss of $5.9 million, partially offset by net cash provided by changes in operating assets and liabilities of $0.6 million and non-cash charges of $0.1 million, which mainly included share-based compensation expenses.
Investing activities Net cash used in investing activities for the year ended December 31, 2021 was approximately $45.2 million, which was primarily related to investment in short-term deposits offset by proceeds from the sale of an asset.
Net cash used in investing activities for the year ended December 31, 2020 was $62 thousands, which was primarily related to purchase of fixed assets and investment in bank.
Financing activities Net cash provided by financing activities for the year ended December 31, 2021, was approximately $61.1 million, consisting of $58.7 million of proceeds from the sale of the Company’s ADS, primarily from the Private Placement (as defined and described below) and issuances under the Sales Agreement with Cantor, and $2.4 million of cash acquired in the Merger.
Net cash provided by financing activities for the year ended December 31, 2020, was $4.7 million, consisting of proceeds from the sale of Chemomab Ltd.’s Series C preferred shares and exercise of warrants to purchase Chemomab Ltd.’s Series A preferred shares.
Funding Requirements The Company expects its expenses to increase substantially in connection with its ongoing activities, particularly as it advances its clinical activities and clinical trials of its product candidates.
In addition, it expects to incur additional costs associated with operating as a public company.
The Company believes that its existing cash and cash equivalents will enable it to fund its operating expenses and capital expenditure requirements through the end of 2023.
It has based these estimates on assumptions that may prove to be wrong, and it could utilize the Company’s available capital resources sooner than it expects.
If the Company receives regulatory approval for any of its product candidates, then it expects to incur significant commercialization expenses related to product manufacturing, sales, marketing and distribution.
Until such time, if ever, that the Company generates product revenue sufficient to achieve profitability, the Company expects to finance its cash needs through the sales of its securities and through other outside funding sources.
Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting the Company’s ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.
If it raises additional funds through government and other third-party funding, collaboration agreements, strategic alliances, licensing arrangements or marketing and distribution arrangements, then the Company may have to relinquish valuable rights to its technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to it.
If it is unable to raise additional funds through equity or debt financings when needed, then the Company may be required to delay, limit, reduce or terminate its product development or future commercialization efforts or grant rights to develop and market products or product candidates that it would otherwise prefer to develop and market by itself.
Liquidity and Capital Resources In connection with the Merger, on March 15, 2021, the Company entered into Securities Purchase Agreements with certain investors, pursuant to which the Company agreed to sell approximately $45.5 million of its ADSs in a private placement transaction, or the Private Placement.
The Private Placement closed on March 22, 2021, at which time the Company sold to the purchasers 2,619,270 ADSs together with warrants to purchase up to 261,929 ADSs at an exercise price of $17.35 per ADS.
The warrants expire five years from the date of issuance, and, if exercised in full, will provide proceeds of approximately $4.5 million.
On April 30, 2021, the Company entered into the Sales Agreement with Cantor.
Pursuant to the Sales Agreement, the Company may offer and sell, from time to time, its ADSs having an aggregate offering price of up to $75 million through Cantor.
Sales of our ADSs, if any, under the Sales Agreement may be made in sales deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act.
Pursuant to the Sales Agreement, Cantor has agreed to act as sales agent on a best efforts basis and use commercially reasonable efforts to sell on the Company’s behalf all of the ADSs requested to be sold by the Company in accordance with the Sales Agreement, consistent with Cantor’s normal trading and sales practices, on mutually agreed terms between Cantor and the Company.
From April 30, 2021, through December 31, 2021, the Company issued and sold 699,806 ADSs at an average price of $22.75 per ADS through the ATM facility, resulting in gross proceeds of approximately $15.9 million.
In May 2020, Chemomab Ltd. issued 34,130 series preferred C shares NIS 0.01 par value for a total consideration of USD 3,000 thousand.
These shares were exchanged for ADSs upon consummation of the Merger.
As shown in the accompanying consolidated financial statements, the Company has incurred losses and cash flow deficits from operations since inception, resulting in an accumulated deficit at December 31, 2021 of approximately $36 million.
The Company has financed operations to date primarily through public and private placements of equity securities.
We anticipate that we will continue to incur net losses for the foreseeable future.
We believe that our existing cash and cash equivalents will be sufficient to fund our projected cash needs only through the end of 2023.
To meet future capital needs we would need to raise additional capital through equity or debt financing or other strategic transactions.
However, any such financing may not be available to us on favorable terms or at all.
Our failure to obtain sufficient funds on commercially acceptable terms when needed would have a material adverse effect on our business, results of operations and financial condition.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2021 ↗, FY2022 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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