Celcuity Inc. (CELC) FY 2023 MD&A

ITEM
7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You
should read the following discussion and analysis of our financial condition and results of operations together in conjunction with our
financial statements and the related notes included elsewhere in this Annual Report. Some of the information contained in this discussion
and analysis or set forth elsewhere in this Annual Report, including information with respect to our plans and strategy for our business
and expected financial results, includes forward-looking statements that involve risks and uncertainties. You should review the “Risk
Factors” discussed in Item 1A of Part I of this Annual Report.

OVERVIEW

Celcuity
is a clinical-stage biotechnology company focused on the development of targeted therapies for oncology. The Company’s
lead therapeutic candidate is gedatolisib, a pan-PI3K/mTOR inhibitor. Its mechanism of action and pharmacokinetic properties are
highly differentiated from other currently approved and investigational therapies that target PI3K or mTOR alone or together. The
Company initiated VIKTORIA-1, a Phase 3 study evaluating gedatolisib in patients with HR+/HER2- advanced breast cancer in 2022 and
is currently enrolling patients. In addition to the Phase 3 study, the Company recently announced that it received U.S. Food and
Drug Administration (“FDA”)
clearance for its Investigational New Drug (IND) submission for the clinical development of gedatolisib in combination with
Nubeqa® (darolutamide), for the treatment of patients with metastatic castration resistant prostate cancer (mCRPC). The Company
initiated a Phase 1b/2 study, CELC-G-201, in the first quarter of 2024 and is currently enrolling patients. Its CELsignia companion
diagnostic platform is uniquely able to analyze live patient tumor cells to identify new groups of cancer patients likely to benefit
from already approved targeted therapies.

Gedatolisib,
is a potent, well-tolerated, small molecule reversible dual inhibitor, administered intravenously, that selectively targets all Class
I isoforms of PI3K and mammalian target of rapamycin (mTOR). In April 2021, we obtained exclusive global development and commercialization
rights to gedatolisib under a license agreement with Pfizer, Inc. We believe gedatolisib’s unique mechanism of action, differentiated
chemical structure, favorable pharmacokinetic properties, and intravenous formulation offer distinct advantages over currently approved
and investigational therapies that target PI3K or mTOR alone or together.

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As
of December 31, 2023, 492 patients with solid tumors have received gedatolisib in eight clinical trials sponsored by Pfizer. Of the 492
patients, 129 were treated with gedatolisib as a single agent in three clinical trials. The remaining 363 patients received gedatolisib
in combination with other anti-cancer agents in five clinical trials. Additional patients received gedatolisib in combination with other
anti-cancer agents in nine investigator sponsored clinical trials.

A
Phase 1b trial (B2151009) evaluating patients with ER+/HER2- metastatic breast cancer was initiated in 2016 and subsequently enrolled
138 patients. Five patients from this study continue to receive study treatment, as of December 31, 2023, each of which have received
study treatment for more than five years. The B2151009 clinical trial was an open label, multiple arm Phase 1b study that evaluated gedatolisib
in combination with palbociclib (CDK4/6 inhibitor) and fulvestrant or letrozole in patients with HR+/HER2- advanced breast cancer. Thirty-five
patients were enrolled in two dose escalation arms to evaluate the safety and tolerability and to determine the maximum tolerated dose
(MTD) of gedatolisib when used in combination with the standard doses of palbociclib and endocrine therapy (letrozole or fulvestrant).
The MTD was determined to be 180 mg administered intravenously once weekly. A total of 103 patients were subsequently enrolled in one
of four expansion arms (A, B, C, D).

High
objective overall response rates (ORR) were observed in all four expansion arms and were comparable in each arm for PIK3CA WT and
PIK3CA MT patients. As of the data cut-off date, March 16, 2023, for treatment- naïve patients in Escalation Arm A and
Expansion Arm A(n=41), median progression free survival (mPFS) was 48.6 months, median duration of response (mDOR) was 46.9 months,
and ORR was 79%.respectively. This data compares favorably to published data for current first-line standard-of-care treatments for
patients with HR+/HER2-advanced breast cancer. In patients who received prior hormonal therapy alone or in combination with a CDK4/6
inhibitor (Arms B, C, and D), ORR (including unconfirmed partial responses) ranged from 36% to 77%. Each arm achieved its primary
endpoint target, which was reporting higher ORR in the study arm than ORR from either the PALOMA-2 (ORR=55%) study that evaluated
palbociclib plus letrozole for Arm A or the PALOMA-3 study (ORR=25%) that evaluated palbociclib plus fulvestrant for Arms B, C, and
D. For all enrolled patients, a clinical benefit rate (CBR) of ≥79% was observed. Median progression-free survival (PFS) was 12.9
months for patients who received a prior CDK4/6 inhibitor and were treated in the study with the Phase 3 dosing schedule (Arm
D).

Gedatolisib
combined with palbociclib and endocrine therapy demonstrated a favorable safety profile with manageable toxicity. The majority of treatment
emergent adverse events were Grade 1 and 2. The most frequently observed adverse events included stomatitis/mucosal inflammation, the
majority of which were Grade 1 and 2. The most common Grade 4 AEs were neutropenia and neutrophil count decrease, which were assessed
as related to treatment with palbociclib. No grade 5 events were reported in this study.

We are currently enrolling patients in a Phase 3, open-label, randomized
clinical trial (VIKTORIA-1) to evaluate the efficacy and safety of two regimens in adults with HR+/HER2- advanced breast cancer whose
disease has progressed after prior CDK4/6 therapy in combination with an aromatase inhibitor: 1) gedatolisib in combination with palbociclib
and fulvestrant; and 2) gedatolisib in combination with fulvestrant. Approximately two hundred clinical sites in North America, Europe,
South America, Asia, and Australia have been selected to participate in the study. The first clinical site was activated in the third
quarter of 2022, and the first patient was dosed in December 2022.

The
VIKTORIA-1 Phase 3 clinical trial will enable separate evaluation of subjects according to their PIK3CA status. Subjects who meet
eligibility criteria and are PIK3CA WT will be randomly assigned (1:1:1) to receive a regimen of either gedatolisib, palbociclib,
and fulvestrant (Arm A), gedatolisib and fulvestrant (Arm B), or fulvestrant (Arm C). Subjects who meet eligibility criteria and are
PIK3CA MT will be randomly assigned (3:3:1) to receive a regimen of either gedatolisib, palbociclib, and fulvestrant (Arm D), or
alpelisib and fulvestrant (Arm E), or gedatolisib and fulvestrant (Arm F).

We
received approval from the US FDA in mid-2023 to proceed with the clinical development of gedatolisib in combination with
Nubeqa® (darolutamide), an approved androgen receptor inhibitor, for the treatment of patients with mCRPC. We have since
initiated a Phase 1b/2 study (CELC-G-201) that will enroll up to 54 participants with mCRPC who progressed after treatment with an
androgen receptor inhibitor. We dosed our first patient in this trial in February 2024.

In the Phase 1b portion of the study, Celcuity expects that 36 participants
will be randomly assigned to receive 600 mg darolutamide combined with either 120 mg gedatolisib in Arm 1 or 180 mg gedatolisib in Arm
2. An additional 12 participants will then be enrolled in the Phase 2 portion of the study at the recommended phase 2 dose (RP2D) level
to enable evaluation of 30 participants treated with the RP2D of gedatolisib.

The primary objectives of the Phase 1b portion of the trial include
assessment of the safety and tolerability of gedatolisib in combination with darolutamide and determination of the recommended Phase 2
dose of gedatolisib. The primary objective of the Phase 2 portion of the trial is to assess the radiographic progression-free survival
(rPFS) at six months of patients who received the RP2D.

Our
proprietary CELsignia diagnostic platform is the only commercially ready technology we are aware of that uses a patient’s living
tumor cells to identify the specific abnormal cellular process driving a patient’s cancer and the targeted therapy that best treats
it. This enables us to identify patients whose tumors may respond to a targeted therapy, even though they lack a previously associated
molecular mutation. By identifying cancer patients whose tumors lack an associated genetic mutation but have abnormal cellular activity
a matching targeted therapeutic is designed to inhibit, CELsignia CDx can expand the markets for a number of already approved targeted
therapies. Our current CDx identifies breast and ovarian cancer patients whose tumors have cancer drivers potentially responsive to treatment
with human epidermal growth factor receptor 2-negative (HER2), mesenchymal-epithelial transition factor (c-MET), or phosphatidylinositol
3-kinases (PI3K) targeted therapeutics. While U.S. Food and Drug Administration (“FDA”) approval or clearance is not currently
required for CELsignia tests offered as a stand-alone laboratory developed test, if we are partnered with a drug company to launch a
CELsignia test as a companion diagnostic for a new drug indication, we would be required to obtain premarket approval, or PMA, in conjunction
with the pharmaceutical company seeking a new drug approval for the matching therapy.

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We
are supporting the advancement of new potential indications for three different targeted therapies, controlled by other pharmaceutical
companies, that would rely on a CELsignia CDx to select patients. Three Phase 2 trials are underway to evaluate the efficacy and safety
of these therapies in CELsignia selected patients. These patients are not currently eligible to receive these drugs and are not identifiable
with a molecular test.

Supporting
the development of a potential first-in-class targeted therapy for breast cancer, like gedatolisib, with our CELsignia platform is a
natural extension of our strategy to use our CELsignia CDx to enable new indications for other companies’ targeted therapies. By
combining companion diagnostics designed to enable proprietary new drug indications with targeted therapies that treat signaling dysregulation
our CDx identifies, we believe we are uniquely positioned to improve the standard-of-care for many early and late-stage breast cancer
patients. Our goal is to play a key role in the multiple treatment approaches required to treat breast cancer patients at various stages
of their disease. With each program, we are:

Recent
Developments

On
February 22, 2024, the Company announced that the first patient has been dosed in its Phase 1b/2 study (CELC-G-201) evaluating gedatolisib
in combination with Nubeqa® (darolutamide), an approved androgen receptor inhibitor, for the treatment of patients with mCRPC.

In December 2023, Celcuity presented data from nonclinical studies
evaluating gedatolisib and other PI3K/AKT/mTOR (PAM) inhibitors in breast cancer cell lines during a poster session at the 2023 San Antonio
Breast Cancer Symposium (SABCS). In a panel of breast cancer cell lines, gedatolisib was found to be more cytotoxic and at least 300-fold
more potent, on average, compared to the single node PAM inhibitors.

On
December 1, 2023, pursuant to an Open Market Sale AgreementSM with Jefferies LLC, as agent, the Company sold 1,034,500 shares
of common stock in a single transaction at a price of $14.50 per share, generating gross proceeds of $15 million before deducting commissions
and other offering expenses of $0.6 million.

On
October 18, 2023, the Company entered into a securities purchase agreement to sell pre-funded warrants at a price of $8.70 per warrant,
to purchase up to 5,747,787 shares of the Company’s common stock in a private placement. The closing of the private placement occurred
on October 20, 2023 and resulted in gross proceeds of approximately $50 million, before deducting offering expenses of approximately
$0.1 million. Each Warrant to purchase one share has a purchase price of $8.699 per share, and an exercise price of $0.001 per share
for the Common Stock issuable upon exercise of the Warrant (for aggregate consideration equating to $8.70 per share). The Company expects
to use the net proceeds to advance clinical development of gedatolisib and for general corporate purposes. The Company has entered into
a Registration Rights Agreement in connection with the private placement, pursuant to which it has agreed to register for resale the
shares issuable upon exercise or exchange of the Warrants.

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We
have not generated any revenue from sales to date, and we continue to incur significant research and development and other expenses related
to our ongoing operations. As a result, we are not and have never been profitable and have incurred losses in each period since we began
operations in 2012. For the years ended December 31, 2023 and 2022, we reported a net loss of approximately $63.8 million and
$40.4 million, respectively. As of December 31, 2023, our cash and cash equivalents and short-term investments were approximately $180.6
million, and we had an accumulated deficit of approximately $160.1 million.

RESULTS
OF OPERATIONS

Components
of Operating Results

Revenue

To
date, we have not generated any revenue. With the execution of the Pfizer license agreement in April 2021, whereby we acquired
exclusive world-wide licensing rights to develop and commercialize gedatolisib, we initiated a Phase 3 clinical trial, VIKTORIA-1,
in 2022 to support potential regulatory approval to market gedatolisib. In August 2023, we announced plans to proceed with the
clinical development of gedatolisib in combination with Nubeqa® (darolutamide), an approved androgen receptor
inhibitor, for the treatment of patients with mCRPC. If we obtain regulatory approvals to market gedatolisib, we expect to generate
revenue from sales of the drug for the treatment of breast cancer patients. Additionally, we will seek to generate revenue from
partnership agreements with pharmaceutical companies to provide companion diagnostics for such pharmaceutical partners’
existing or investigational targeted therapies. If a new drug indication is received that requires use of our companion diagnostic
to identify eligible patients, we expect to generate revenues from sales of tests to treating physicians.

Research
and Development

Since
our inception, we have primarily focused on research and development of gedatolisib, a PI3K/mTOR targeted therapy, and our CELsignia platform
and corresponding tests. Research and development expenses primarily include:

Internal
and external research and development costs are expensed as they are incurred. As we continue to develop gedatolisib and manage
studies and clinical trials, including the VIKTORIA-1 Phase 3 trial, the CELC-G-201 Phase 1b/2 trial, and other clinical trials to
evaluate the efficacy of targeted therapies in cancer patients selected with one of our CELsignia tests, the proportion of research
and development expenses allocated to external spending will grow at a faster rate than expenses allocated to internal
expenses.

General
and Administrative

General
and administrative expenses consist primarily of salaries, benefits and stock-based compensation related to our executive, finance and
support functions. Other general and administrative expenses include professional fees for auditing, tax, and legal services associated
with being a public company, director and officer insurance, investor relations and travel expenses for our general and administrative
personnel.

Sales
and Marketing

Sales
and marketing expenses consist primarily of professional and consulting fees related to these functions. To date, we have incurred
immaterial sales and marketing expenses as we continue to focus primarily on developing our first drug, gedatolisib, managing the
VIKTORIA-1 Phase 3 and CELC-G-201 Phase 1b/2 trials, and developing our CELsignia platform and corresponding CELsignia tests. We
would expect to begin to incur increased sales and marketing expenses in anticipation of the commercialization of our first drug,
gedatolisib, and CELsignia tests. These increased expenses are expected to include employee-related and consulting costs.

Interest
Expense

Interest
expense is primarily due to a Loan Agreement and finance lease obligations.

Interest
Income

Interest
income consists of interest income earned on our cash, cash equivalents and investment balances.

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Results
of Operations

Comparison
of the Years Ended December 31, 2023 and 2022

Research
and Development

For
the year ended December 31, 2023, our research and development expenses were approximately $60.6 million, representing an increase
of approximately $25.3 million, or 72%, compared to the same period in 2022. Of the $25.3 million increase in research and
development expense, $2.4 million was related to increased employee and consulting expenses. The remaining $22.9 million increase of research and development costs are primarily related
to costs supporting activities for the VIKTORIA-1 pivotal trial.

Conducting
a significant amount of research and development is central to our business model. We plan to increase our research and development
expenses for the foreseeable future as we seek to develop gedatolisib, manage the VIKTORIA-1 Phase 3 and the CELC-G-201 Phase 1b/2 trials, discover new
cancer sub-types, and develop and validate additional CELsignia tests to diagnose such sub-types. We also expect to incur increased
expenses to support companion diagnostic business development activities with pharmaceutical companies as we develop additional
CELsignia tests and manage the clinical trials for gedatolisib.

General
and Administrative

For
the year ended December 31, 2023, our total general and administrative expenses were $5.6 million, representing an increase of
approximately $1.5 million, or 37%, compared to the same period in 2022. The increase primarily resulted from a $1.1 million
increase in employee and consulting expenses. In
addition, other general and administrative expenses increased $0.4 million primarily due to professional fees and other expenses
associated with being a public company.

We
anticipate that our general and administrative expenses will increase in future periods, reflecting both increased costs in connection
with the potential future commercialization of gedatolisib and CELsignia tests, an expanding infrastructure, and increased professional
fees associated with public company regulatory developments and other compliance matters.

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Interest
Expense

For
the year ended December 31, 2023, interest expense was $5.3 million and represents an increase of $3.2 million compared to the same
period in 2022. The increase is due to the Loan Agreement that was executed in April 2021, amended in August 2022, and includes $2.1
million of non-cash interest expense. The increase in interest expense is primarily due to the incremental $20 million funding of
Term Loan B in December 2022.

Interest
Income

For
the year ended December 31, 2023, interest income was $7.8 million and represents an increase of $6.7 million compared to the same period
in 2022. The increase was primarily the result of higher market interest rates and the closing of additional financing activities, leading
to higher cash, cash equivalents and short-term investment balances.

LIQUIDITY
AND CAPITAL RESOURCES

Since
our inception, we have incurred losses and cumulative negative cash flows from operations. Through December 31, 2023, we have funded
our operations primarily through private placements and registered offerings of our equity securities and unsecured convertible notes,
and borrowings under loan agreements. From inception through December 31, 2023, we raised an aggregate of approximately $288.0 million
of net proceeds through sales of our securities, and as of December 31, 2023 had $35.0 million of borrowings under loan agreements. In March 2024, an investor exercised 1,739,080 warrants at an exercise price of $8.05, which generated approximately $14 million in cash.
The warrants were issued pursuant to a private placement that closed and was funded on December 9, 2022. As
of December 31, 2023, our cash and cash equivalents and short-term investments were approximately $30.7 million and $149.9 million, respectively,
and we had an accumulated deficit of approximately $160.1 million.

Open
Market Sale OfferingSM. On February 4, 2022, we entered into an Open Market Sale AgreementSM with Jefferies
LLC, as agent, pursuant to which we may offer and sell, from time to time, through Jefferies, shares of our common stock having an aggregate
offering price of up to $50,000,000. Pursuant to the Open Market Sale AgreementSM with Jefferies LLC, as agent, on December
1, 2023, the Company sold 1,034,500 shares of common stock in a single transaction at a price of $14.50 per share, generating gross proceeds
of $15 million ($14.4 million net of commissions and offering expenses). At December 31, 2023, $29.8 million of common stock remains
available for sale under the Jefferies agreement.

Pre-funded
Warrants On October 18, 2023, the Company entered into a securities purchase agreement to sell pre-funded warrants at a price of
$8.70 per warrant, to purchase up to 5,747,787 shares of the Company’s common stock in a private placement. The closing of the
private placement occurred on October 20, 2023, and resulted in gross proceeds of approximately $50 million, before deducting offering
expenses of approximately $0.1 million.

Private
Placement. On December 9, 2022, we issued 6,182,574 shares of common stock, 1,120,873 shares of Series A Preferred Stock and warrants
exercisable for 6,956,450 shares of common stock to certain institutional and other accredited investors pursuant to a securities purchase
agreement entered into on May 15, 2022. Pursuant to the securities purchase agreement, the closing (funding) of the private placement
occurred following dosage of the first patient in the Company’s Phase 3 study, VIKTORIA-1. Investors purchased shares of common
stock and Series A Preferred Stock at a price of $5.75 per share (on an as converted to common stock basis), with forty percent (40%)
warrant coverage (on an as converted to common stock basis) and customary resale registration rights. The warrants have an exercise price
of $8.05 per share. The private placement generated gross proceeds of approximately $100 million before deducting placement agent fees
and other offering expenses of $4.3 million.

Open
Market Sale AgreementSM. On October 12, 2022, pursuant to our Open Market Sale AgreementSM with Jefferies
LLC as agent, the Company sold 500,000 shares of common stock in a single transaction at a price of $10.35 per share, generating
gross proceeds of $5.2 million ($4.8 million net of commissions and offering expenses).

Innovatus
Loan Agreement. On April 8, 2021, we entered into a Loan Agreement with Innovatus Life Sciences Lending Fund I, LP (“Innovatus”),
under which Innovatus agreed to loan up to $25 million in three tranches consisting of (i) a $15.0 million non-contingent Term A loan
that was funded on April 8, 2021, (ii) a $5 million Term B loan with a deadline of March 31, 2022, and (iii) a $5 million Term C loan
to be funded upon our request, subject to our ability to achieve certain milestones, no later than March 31, 2023. On August 9, 2022,
the Company amended the Loan Agreement with Innovatus to provide for up to $75 million in term loans. As of December 31, 2023, term loans
totaling $35 million are outstanding under the Loan Agreement, including the initial Term A loan of $15 million which was funded on April
8, 2021, and a $20 million Term B loan which was funded on December 22, 2022 following the closing of the $100 million private placement
described above. Additionally, the Company will be able to draw on two additional tranches of $10
million and one additional tranche of $20 million upon achievement of certain clinical trial milestones and satisfaction of certain financial
covenants determined on a pro forma as-funded basis. Funding of these additional tranches is also subject to other customary conditions
and limits on when the Company can request funding for such tranches.

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We
expect that our research and development and general and administrative expenses will increase as we continue to develop
gedatolisib, manage the VIKTORIA-1 Phase 3 and CELC-G-201 Phase 1b/2 trials, conduct research related to the discovery of new cancer
sub-types, conduct other studies and clinical trials, and pursue other business development activities. We would also expect to
incur sales and marketing expenses as we commercialize gedatolisib and our CELsignia tests. We expect to use cash on hand, which
includes funds received under the debt and equity financings described above, to fund our research and development expenses,
clinical trial costs, capital expenditures, working capital, sales and marketing expenses, and general corporate
expenses.

Based
on our current business plan, we believe that our current cash, cash equivalents and short-term investments together with available borrowings
under the Innovatus Loan Agreement will provide sufficient cash to finance our operations and pay obligations when due through at least
2025.

Our
expectations as to how long our current capital resources will be sufficient to fund our operations are based on assumptions that may
not be accurate, and we could use our current capital resources sooner than we currently expect. In addition, we may seek to raise additional
capital to finance capital expenditures and operating expenses over the next several years as we launch our integrated therapeutic and
companion diagnostic strategy and expand our infrastructure, commercial operations and research and development activities, and to take
advantage of financing or other opportunities that we believe to be in the best interests of the Company and our stockholders. Additional
capital may be raised through the sale of common or preferred equity or convertible debt securities, entry into debt facilities or other
third-party funding arrangements. The sale of equity and convertible debt securities may result in dilution to our stockholders and those
securities may have rights senior to those of our common shares. Agreements entered into in connection with such capital raising activities
could contain covenants that would restrict our operations or require us to relinquish certain rights. Additional capital may not be
available on reasonable terms, or not at all.

Cash
Flows

The
following table sets forth the primary sources and uses of cash for the years ended December 31:

Operating
Activities

Net
cash used in operating activities was approximately $53.8 million for the year ended December 31, 2023 and consisted primarily of a net
loss of approximately $63.8 million, offset by working capital changes of $3.9 million and non-cash expense items of approximately
$6.1 million. Non-cash expense items of approximately $6.1 million primarily consisted of $4.9 million of stock-based compensation expense,
non-cash interest expense of $2.1 million and depreciation expense of $0.1 million, offset by $1.0 accrued interest income. The approximately
$3.9 million of working capital changes was primarily due to increases in accounts payable and accrued expenses, offset by an increase
in other current assets.

Net
cash used in operating activities was approximately $36.0 million for the year ended December 31, 2022 and consisted primarily of a net
loss of approximately $40.4 million and working capital changes of $1.2 million, offset by non-cash expense items of approximately
$5.6 million. Non-cash expense items of approximately $5.6 million primarily consisted of $4.6 million of stock-based compensation expense,
non-cash interest expense of $0.9 million and depreciation expense of $0.2 million. The approximately $1.2 million of working capital
changes was primarily due to an increase in other current assets, somewhat offset by increases in accounts payable and accrued expenses.

Investing
Activities

Net
cash used in investing activities for the year ended December 31, 2023 was approximately $5.0 million and consisted of approximately
$4.9 million of net purchases of short-term investments in government securities (U.S. Treasury Bills and U.S. government agency securities)
and approximately $0.1 million in purchases of property and equipment.

Net
cash used in investing activities for the year ended December 31, 2022 was approximately $144.0 million and consisted of approximately
$143.9 million of short-term investments in government securities (U.S. Treasury Bills and U.S. government agency securities) and approximately
$0.1 million in purchases of property and equipment.

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Financing
Activities

Net
cash provided by financing activities for the year ended December 31, 2023 was approximately $64.9 million. The $64.9 million primarily
consisted of net proceeds from a pre-funded warrants offering and ATM offering, collectively totaling $64.4 million. The remaining $0.5
million was the result of proceeds from the exercise of employee stock options, the exercise of warrants, and proceeds from employee
stock purchases, slightly offset by payments for secondary registration and debt issuance costs.

Net
cash provided by financing activities for the year ended December 31, 2022 was approximately $120.3 million. The $120.3 million primarily
consisted of net proceeds from a private placement offering and ATM offering, collectively totaling $100.5 million, and $19.5 million
from net proceeds related to the closing of a Loan Agreement. The remaining $0.3 million was the result of proceeds from the exercise
of employee stock options and proceeds from employee stock purchases.

RECENT
ACCOUNTING PRONOUNCEMENTS

From
time-to-time new accounting pronouncements are issued by the Financial Accounting Standards Board, or FASB, or other standard setting
bodies and adopted by us as of the specified effective date. Unless otherwise discussed in Note 2 to our financial statements included
elsewhere in this Annual Report, we believe that the impact of recently issued standards that are not yet effective will not have a material
impact on our financial position or results of operations upon adoption.

CRITICAL
ACCOUNTING POLICIES AND USE OF ESTIMATES

Our
management’s discussion and analysis of financial condition and results of operations is based on our financial statements, which
have been prepared in accordance with accounting principles generally accepted in the United States, or Generally Accepted Accounted
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 expenses during the reporting periods. These items are monitored and analyzed by us for changes in
facts and circumstances, and material changes in these estimates could occur in the future. We base our estimates on 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 value of assets and liabilities that are not readily apparent from other sources. Changes in estimates are reflected
in reported results for the period in which they become known. Actual results may differ materially from these estimates.

Our
significant accounting policies are more fully described in Note 2 to our financial statements included elsewhere in this Annual Report.
Of our significant accounting policies, we believe that the following are the most critical:

Stock-Based
Compensation

Our
stock-based compensation consists of common stock options and restricted stock issued to certain employees and nonemployees and our Employee
Stock Purchase Plan (“ESPP”). We recognize compensation expense based on an estimated grant date fair value using the Black-Scholes
option-pricing method. We have elected to account for forfeitures as they occur.

The
inputs for the Black-Scholes valuation model require management’s significant assumptions. Prior to our IPO, the price per share
of common stock was determined by our board based on recent prices of common stock sold in private offerings. Subsequent to the IPO,
the price per share of common stock is determined by using the closing market price on the Nasdaq Capital Market on the grant date. The
risk-free interest rates are based on the rate for U.S. Treasury securities at the date of grant with maturity dates approximately equal
to the expected life at the grant date. The expected life was based on the simplified method in accordance with SEC Staff Accounting
Bulletin Nos. 107 and 110. The expected volatility was estimated based on historical volatility information of peer companies that are
publicly available in combination with our calculated volatility since being publicly traded.

All
assumptions used to calculate the grant date fair value of nonemployee options are generally consistent with the assumptions used for
options granted to employees. In the event we terminate any of our consulting agreements, the unvested options issued in connection with
such agreements would also be cancelled.

For
grants of restricted stock, we record compensation expense based on the quoted fair value of the shares on the grant date over the requisite
service period. Compensation expense for ESPP rights is recorded in line with each respective offering period.

Clinical
Trial Costs

The
Company records prepaid assets or accrued expenses for prepaid or estimated clinical trial costs conducted by third-party service
providers, which includes the conduct of preclinical studies and clinical trials. These costs can be a significant component of the
Company’s research and development expenses. The Company primarily relies on a compilation of progress reports from
third-party service providers, including the respective invoicing, to record actual expenses, along with determining changes to
prepaid assets and accrued liabilities. To date, the Company believes utilization of third-party reports most accurately reflects
expenses incurred. As the current VIKTORIA-1 Phase 3 and CELC-G-201 Phase 1b/2 trials ramp up site activation and patient
enrollment, the Company’s estimated expenses in future periods and the actual services performed may vary from these
estimates, and these estimates may become more significant. Changes in these estimates that result in material changes to the
Company’s prepaid assets or accrued expenses could materially affect the Company’s results of operations.