PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
BELLEROPHON THERAPEUTICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands except share and per share data)
​
| ​ | ​ | ​ | ​ | ​ | ​ | ​ |
| ​ | ​ | As of | ​ | As of |
| ​ | March 31, 2023 | December 31, 2022 |
| ​ | ​ | (Unaudited) | ​ | ​ | ​ |
| Assets | ​ | ​ |
| Current assets: | ​ | ​ |
| Cash and cash equivalents | ​ | $ | 15,172 | ​ | $ | 6,924 |
| Restricted cash | ​ | 405 | ​ | 405 |
| Prepaid expenses and other current assets | ​ | 194 | ​ | 234 |
| Total current assets | ​ | 15,771 | ​ | 7,563 |
| Right of use assets, net | ​ | 8 | ​ | 184 |
| Property and equipment, net | ​ | 1 | ​ | 2 |
| Other non-current assets | ​ | ​ | 186 | ​ | ​ | 186 |
| Total assets | ​ | $ | 15,966 | ​ | $ | 7,935 |
| Liabilities and Stockholders' Equity | ​ | ​ |
| Current liabilities: | ​ | ​ |
| Accounts payable | ​ | $ | 1,070 | ​ | $ | 1,230 |
| Accrued research and development | ​ | 2,858 | ​ | 2,655 |
| Accrued expenses | ​ | 1,428 | ​ | 1,313 |
| Current portion of operating lease liabilities | ​ | 8 | ​ | 203 |
| Total liabilities | ​ | 5,364 | ​ | 5,401 |
| ​ | ​ | ​ | ​ | ​ | ​ | ​ |
| Commitments and contingencies | ​ | ​ |
| ​ | ​ | ​ | ​ | ​ | ​ | ​ |
| Stockholders' equity: | ​ | ​ |
| Common stock, $ 0.01 par value per share; 200,000,000 shares authorized and 10,448,185 and 9,645,711 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively | ​ | 104 | ​ | 96 |
| Preferred stock, $ 0.01 par value per share; 5,000,000 shares authorized, zero shares issued and outstanding at March 31, 2023 and December 31, 2022 | ​ | — | ​ | — |
| Additional paid-in capital | ​ | 259,754 | ​ | 254,516 |
| Accumulated deficit | ​ | ( 249,256 ) | ​ | ( 252,078 ) |
| Total stockholders' equity | ​ | 10,602 | ​ | 2,534 |
| Total liabilities and stockholders' equity | ​ | $ | 15,966 | ​ | $ | 7,935 |

​
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
​
6
| ​ | ​ | ​ | ​ | ​ | ​ | ​ |
| ​ | ​ | Three Months Ended |
| ​ | ​ | March 31, |
| ​ | 2023 | 2022 |
| Revenues: | ​ | ​ | ​ | ​ | ​ | ​ |
| Licensing revenue | ​ | $ | 5,640 | ​ | $ | — |
| ​ | ​ | ​ | ​ | ​ | ​ | ​ |
| Operating expenses: | ​ | ​ | ​ | ​ | ​ | ​ |
| Research and development | ​ | ​ | 2,552 | ​ | ​ | 4,409 |
| General and administrative | ​ | 1,609 | ​ | 1,233 |
| Total operating expenses | ​ | 4,161 | ​ | 5,642 |
| Income (loss) from operations | ​ | 1,479 | ​ | ( 5,642 ) |
| Interest income | ​ | 66 | ​ | 1 |
| Pre-tax income (loss) | ​ | 1,545 | ​ | ( 5,641 ) |
| Income tax benefit | ​ | 1,277 | ​ | — |
| Net income (loss) and comprehensive income (loss) | ​ | $ | 2,822 | ​ | $ | ( 5,641 ) |
| Weighted average shares outstanding: | ​ | ​ |
| Basic | ​ | 10,358,111 | ​ | 9,545,451 |
| Diluted | ​ | 10,605,946 | ​ | 9,545,451 |
| Net income (loss) per share: | ​ | ​ |
| Basic | ​ | $ | 0.27 | ​ | $ | ( 0.59 ) |
| Diluted | ​ | $ | 0.27 | ​ | $ | ( 0.59 ) |

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |
| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Total |
| ​ | ​ | Common Stock | ​ | Additional Paid in | ​ | Accumulated | ​ | Stockholders' |
| ​ | Shares | Amount | Capital | Deficit | Equity |
| Balance at December 31, 2022 | ​ | 9,645,711 | ​ | $ | 96 | ​ | $ | 254,516 | ​ | $ | ( 252,078 ) | ​ | $ | 2,534 |
| Net income | — | ​ | — | ​ | — | ​ | 2,822 | ​ | 2,822 |
| Direct offering of common stock | ​ | 718,474 | ​ | ​ | 7 | ​ | ​ | 1,430 | ​ | ​ | — | ​ | ​ | 1,437 |
| Direct offering of pre-funded warrants | ​ | — | ​ | ​ | — | ​ | ​ | 3,545 | ​ | ​ | — | ​ | ​ | 3,545 |
| Issuance of common stock, restricted stock vesting | ​ | 84,000 | ​ | ​ | 1 | ​ | ​ | ( 1 ) | ​ | ​ | — | ​ | ​ | — |
| Stock-based compensation | — | ​ | — | ​ | 264 | ​ | — | ​ | 264 |
| Balance at March 31, 2023 | 10,448,185 | ​ | $ | 104 | ​ | $ | 259,754 | ​ | $ | ( 249,256 ) | ​ | $ | 10,602 |
| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |
| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |
| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Total |
| ​ | ​ | Common Stock | ​ | Additional Paid in | ​ | Accumulated | ​ | Stockholders' |
| ​ | Shares | Amount | Capital | Deficit | Equity |
| Balance at December 31, 2021 | ​ | 9,545,451 | ​ | $ | 95 | ​ | $ | 253,771 | ​ | $ | ( 232,247 ) | ​ | $ | 21,619 |
| Net loss | — | ​ | — | ​ | — | ​ | ( 5,641 ) | ​ | ( 5,641 ) |
| Stock-based compensation | — | ​ | — | ​ | 192 | ​ | — | ​ | 192 |
| Balance at March 31, 2022 | 9,545,451 | ​ | $ | 95 | ​ | $ | 253,963 | ​ | $ | ( 237,888 ) | ​ | $ | 16,170 |

| ​ | ​ | ​ | ​ | ​ | ​ | ​ |
| ​ | ​ | Three Months Ended March 31, |
| ​ | 2023 | 2022 |
| Cash flows from operating activities: | ​ | ​ | ​ | ​ | ​ | ​ |
| Net income (loss) | ​ | $ | 2,822 | ​ | $ | ( 5,641 ) |
| Adjustments to reconcile net loss to net cash used in operating activities: | ​ | ​ |
| Depreciation | ​ | 1 | ​ | 21 |
| Stock-based compensation | ​ | 264 | ​ | 192 |
| Changes in operating assets and liabilities: | ​ | ​ | ​ | ​ |
| Prepaid expenses and other current assets | ​ | 40 | ​ | 207 |
| Accounts payable, accrued research and development, lease liabilities and other accrued expenses | ​ | 139 | ​ | 485 |
| Net cash provided by (used in) operating activities | ​ | 3,266 | ​ | ( 4,736 ) |
| Cash flows from financing activities: | ​ | ​ | ​ | ​ |
| Proceeds from issuance of common stock in Direct Offering | ​ | ​ | 1,437 | ​ | ​ | — |
| Proceeds from issuance of pre-funded warrants in Direct Offering | ​ | 3,545 | ​ | — |
| Net cash provided by financing activities | ​ | 4,982 | ​ | — |
| ​ | ​ | ​ | ​ | ​ | ​ | ​ |
| Net change in cash, cash equivalents and restricted cash | ​ | 8,248 | ​ | ( 4,736 ) |
| Cash, cash equivalents and restricted cash at beginning of period | ​ | 7,329 | ​ | 25,139 |
| Cash, cash equivalents and restricted cash at end of period | ​ | $ | 15,577 | ​ | $ | 20,403 |

| ● | The risk that the Company will not achieve success in its research and development efforts, including clinical trials conducted by it or its potential collaborative partners. |
| ● | The expectation that the Company will experience operating losses for the next several years. |
| ● | Decisions by regulatory authorities regarding whether and when to approve the Company’s regulatory applications as well as their decisions regarding labeling and other matters which could affect the commercial potential of the Company’s products or product candidates. |
| ● | The risk that the Company will fail to obtain adequate financing to meet its future operational and capital needs post-top-line results, expected mid-year 2023, for which the Company may be required to significantly reduce or cease operations. |
| ● | The risk that the Company will be unable to obtain adequate funds to alleviate the substantial doubt about its ability to continue as a going concern. |
| ● | The risk that key personnel will leave the Company and/or that the Company will be unable to recruit and retain senior level officers to manage its business. |
| ● | There are many uncertainties regarding the novel coronavirus (“COVID-19”) pandemic, and the Company is closely monitoring the impact of the pandemic on all aspects of its business, including how the pandemic will impact its clinical trials, employees and suppliers. While the pandemic did not materially affect the Company’s financial results and business operations in the three months ended March 31, 2023, the extent to which the coronavirus impacts the Company’s results will depend on future developments, which are highly uncertain and cannot be predicted. Further, should COVID-19 continue to spread, the Company’s business operations could be delayed or interrupted. |

The Company is responsible for the unaudited condensed consolidated financial statements. The condensed consolidated financial statements include all normal and recurring adjustments that are considered necessary for the fair presentation of the Company’s financial position, results of operations, comprehensive loss and its cash flows for the periods presented. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2022, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. The results of operations for the three months ended March 31, 2023 for the Company are not necessarily indicative of the results expected for the full year.The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of costs and expenses during the reporting period, including accrued research and development expenses, stock-based compensation, common stock warrant liabilities and income taxes. Actual results could differ from those estimates. (b) Cash and Cash EquivalentsThe Company considers all highly liquid investments with an original maturity date of three months or less to be cash equivalents. All investments with maturities of greater than three months from the date of purchase are classified as available-for-sale marketable securities. (c) Stock-Based CompensationThe Company accounts for its stock-based compensation in accordance with applicable accounting guidance which establishes accounting for share-based awards, including stock options and restricted stock, exchanged for services and requires companies to expense the estimated fair value of these awards over the requisite service period. The Company recognizes stock-based compensation expense in operations based on the fair value of the award on the date of the grant. The resulting compensation expense is recognized on a straight-line basis over the requisite service period or sooner if the awards immediately vest. The Company determines the fair value of stock options issued using a Black-Scholes-Merton option pricing model. Certain assumptions used in the model include expected volatility, dividend yield, risk-free interest rate and expected term. For restricted stock, the fair value is the closing market price per share on the grant date. See Note 7 - Stock-Based Compensation for a description of these assumptions. (d) Common Stock Warrants The Company accounts for common stock warrants issued as freestanding instruments in accordance with applicable accounting guidance as either liabilities or as equity instruments depending on the specific terms of the warrant agreement. The Company classifies warrant liabilities on the consolidated balance sheet based on the warrants’ terms as long-term liabilities, which are revalued at each balance sheet date subsequent to the initial issuance. Changes in the fair value of the warrants are reflected in the consolidated statement of operations as “Change in fair value of common stock warrant liability.” The Company uses the Black-Scholes-Merton pricing model to value the related warrant liability. Certain assumptions used in the model include expected volatility, dividend yield and risk-free interest rate. See Note 6 - Fair Value Measurements for a description of these assumptions. (e) Income TaxesThe Company uses the asset and liability approach to account for income taxes as required by applicable accounting guidance, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Valuation allowances are provided when necessary to reduce deferred tax assets to the amount expected to be realized, on a more likely than not basis. The Company recognizes the benefit of an uncertain tax position that it has taken or expects to take on income tax returns it files if such tax position is more likely than not to be sustained on examination by the taxing authorities, based on the technical merits of the position. These tax benefits are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. 11
(f) Research and Development ExpenseResearch and development costs are expensed as incurred. These expenses include the costs of the Company’s proprietary research and development efforts, as well as costs incurred in connection with certain licensing arrangements. Upfront and milestone payments made to third parties in connection with research and development collaborations are expensed as incurred up to the point of regulatory approval. Payments made to third parties upon or subsequent to regulatory approval are capitalized and amortized over the remaining useful life of the related product. The Company also expenses the cost of purchased technology and equipment in the period of purchase if it believes that the technology or equipment has not demonstrated technological feasibility and it does not have an alternative future use. Nonrefundable advance payments for goods or services that will be used or rendered for future research and development activities are deferred and are recognized as research and development expense as the related goods are delivered or the related services are performed. (g) LeasesA lease is a contract, or part of a contract, that conveys the right to control the use of explicitly or implicitly identified property, plant or equipment in exchange for consideration. Control of an asset is conveyed to the Company if the Company obtains the right to obtain substantially all of the economic benefits of the asset or the right to direct the use of the asset. The Company recognizes right of use (“ROU”) assets and lease liabilities at the lease commencement date based on the present value of future, fixed lease payments over the term of the arrangement. Lease expense is recognized on a straight-line basis over the term of the lease. Lease liabilities are reduced at the time when the lease payment is payable to the vendor. Variable lease payments are recognized at the time when the event giving rise to the payment occurs and are recognized in the statement of operations in the same line item as expenses arising from fixed lease payments.Leases are measured at present value using the rate implicit in the lease or, if the implicit rate is not determinable, the lessee’s implicit borrowing rate. As the implicit rate is not typically available, the Company uses its implicit borrowing rate based on the information available at the lease commencement date to determine the present value of future lease payments. The implicit borrowing rate approximates the rate the Company would pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments.The Company does not recognize ROU assets or related lease liabilities for leases with a lease term of twelve months or less on its consolidated balance sheet. Short-term lease costs are recorded in the Company’s consolidated statements of operations in the period in which the obligation for those payments was incurred. Short-term lease costs for the three months ended March 31, 2023 and 2022 were de minimis. 12
(h) Revenue from Contracts with CustomersTo date the Company’s only revenue has consisted of license revenue. The Company has not generated any revenue from product sales and does not expect to generate any revenue from product sales for the foreseeable future. The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). ASC 606 applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. Under ASC 606, the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. If a contract is determined to be within the scope of ASC 606 at inception, the Company assesses the goods or services promised within such contract, determines which of those goods and services are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Specifically, license revenue relates to license fees from the Company’s license agreement granting a customer with the right to use the Company’s intellectual property for development and commercialization activities within an authorized territory. The Company must first assess whether the license is distinct, which depends upon whether the customer can benefit from the license and whether the license is separate from other performance obligations in the agreement. If the license is distinct, the Company must further assess whether the customer has a right to access or a right to use the license depending on whether the functionality of the license is expected to substantively change over time. If the license is not expected to substantively change, the revenue is recognized at a point in time when the license is provided. If the license is expected to substantively change, the revenue is recognized over the license period. The Company’s license agreement entered into during the three months ended March 31, 2023 was determined to be a right to use license and accordingly, the revenue was recognized at a point in time. ​ (i) New Accounting PronouncementsNot Yet AdoptedIn June 2022, the FASB issued ASU No. 2022-03: ASC Subtopic 820 - Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”). ASU 2022-03 amends ASC 820 to clarify that a contractual sales restriction is not considered in measuring an equity security at fair value and to introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value. ASU 2022-03 applies to both holders and issuers of equity and equity-linked securities measured at fair value. The amendments in ASU 2022-03 are effective for the Company for fiscal years beginning after December 15, 2023, and the interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. The Company is evaluating the impact of this pronouncement on its consolidated financial statements and related disclosures. 13
​ (3) LiquidityIn the course of its development activities, the Company has sustained operating losses and expects such losses to continue over the next several years. The Company expects to continue to incur significant expenses and operating losses for the foreseeable future as it continues the development and clinical trials of, and seeks regulatory approval for, its product candidates. The Company’s primary uses of capital are, and it expects will continue to be, compensation and related expenses, third-party clinical research and development services, contract manufacturing services, laboratory and related supplies, clinical costs, legal and other regulatory expenses and general overhead costs.If the Company obtains regulatory approval for any of its product candidates, the Company expects to incur significant commercialization expenses. The Company does not have a sales, marketing, manufacturing or distribution infrastructure for a pharmaceutical product. To develop a commercial infrastructure, the Company will have to invest financial and management resources, some of which would have to be deployed prior to having any certainty of marketing approval. The Company had unrestricted cash and cash equivalents of $ 15.2 million as of March 31, 2023. The Company’s existing cash and cash equivalents as of March 31, 2023, will be used primarily to fund the Phase 3 trial of INOpulse for fILD. ​The Company evaluated whether there are any conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year beyond the filing of this Quarterly Report on Form 10-Q. Based on such evaluation and the Company’s current plans, management believes that the Company’s existing cash and cash equivalents as of March 31, 2022 are not sufficient to satisfy its operating cash needs for at least one year after the filing of this Quarterly Report on Form 10-Q.Accordingly, substantial doubt about the Company’s ability to continue as a going concern exists.Until such time, if ever, as the Company can generate substantial product revenues, it expects to finance its cash needs through a combination of equity and debt financings, sales of state net operating losses (“NOLs”) and research and development (“R&D”) tax credits subject to program availability and approval, existing working capital and funding from potential future collaboration or licensing arrangements. To the extent that the Company raises additional capital through the future sale of equity or convertible debt, the ownership interest of its existing stockholders may be diluted, and the terms of such securities may include liquidation or other preferences or rights such as anti-dilution rights that adversely affect the rights of its existing stockholders. If the Company raises additional funds through strategic partnerships in the future, it may have to relinquish valuable rights to its technologies, future revenue streams or product candidates or grant licenses on terms that may not be favorable to it. If the Company is unable to raise additional funds through equity or debt financings when needed, or unable to sell its state NOLs and R&D credits, it may be required to delay, limit, reduce or terminate its product development or future commercialization efforts or grant rights to develop and market product candidates that it would otherwise prefer to develop and market itself. ​ (4) Right of Use Assets and LeasesThe Company historically maintained two operating leases in Warren, NJ, one for the use of an office and research facility and a second for the use of a laboratory. The office and research facility lease was for a term of four years with an expiration date of March 31, 2023, with the Company’s right to extend the original term for one period of five years . During the three months ended March 31, 2023, the Company decided not to renew the lease associated with its corporate headquarters and decided to vacate the premises upon the expiration of the existing lease. The laboratory lease is for a term of three years and nine months with an expiration date of April 30, 2023, with the Company’s right to extend the original term for one period of 90 days . During the three months ended March 31, 2023, the Company agreed to a short-term lease extension of the existing laboratory space through August 2023. The existing laboratory space is deemed to have adequate office space to meet the Company’s needs and will serve as the Company’s corporate headquarters. Operating lease expense is recognized on a straight-line basis over the respective lease term. 14
| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |
| ​ | Three Months Ended |
| ​ | March 31, |
| ​ | 2023 | ​ | 2022 |
| Cash paid for operating lease liability | $ | 197 | ​ | ​ | $ | 193 | ​ |
| Operating lease expenses | $ | 177 | ​ | ​ | $ | 177 | ​ |
| Weighted average remaining lease term | 0.1 | years | ​ | 1.0 | years |
| Weighted average discount rate | 4.57 | % | ​ | 4.93 | % |
| ​ | ​ | ​ | ​ |
| 2023 | ​ | $ | 8 |
| Less imputed interest | ​ | — |
| Total operating lease liability | ​ | $ | 8 |

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |
| ​ | ​ | Equity Classified | ​ | Liability Classified |
| ​ | Warrants | Warrants | Estimated Fair Value |
| Warrants outstanding as of December 31, 2022 | ​ | 1,881,789 | ​ | — | ​ | $ | — |
| Expired | ( 1,296,650 ) | — | ​ | — |
| Issued | ​ | 1,781,526 | — | ​ | — |
| Warrants outstanding as of March 31, 2023 | ​ | 2,366,665 | ​ | — | ​ | $ | — |
| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |
| ​ | ​ | Equity Classified | ​ | Liability Classified |
| ​ | Warrants | Warrants | Estimated Fair Value |
| Warrants outstanding as of December 31, 2021 | ​ | 1,881,789 | ​ | 70,666 | ​ | $ | 1 |
| Change in fair value of common stock warrant liability recognized in consolidated statement of operations | — | — | ​ | — |
| Warrants outstanding as of March 31, 2022 | ​ | 1,881,789 | ​ | 70,666 | ​ | $ | 1 |

| ● | Level 1 — Values are based on unadjusted quoted prices for identical assets or liabilities in an active market which the Company has the ability to access at the measurement date. |
| ● | Level 2 — Values are based on quoted market prices in markets where trading occurs infrequently or whose values are based on quoted prices of instruments with similar attributes in active markets. |
| ● | Level 3 — Values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset. |

| ​ | ​ | ​ | ​ |
| ​ | ​ | Three Months Ended |
| ​ | March 31, 2023 |
| Valuation assumptions: |
| Risk-free rate | 3.86 | % |
| Expected volatility | 136.83 | % |
| Expected term (years) | 6.0 |
| Dividend yield | — | ​ |
| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |
| ​ | ​ | Bellerophon 2015 and 2014 Equity Incentive Plans |
| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Weighted Average |
| ​ | ​ | ​ | ​ | ​ | Weighted | Remaining |
| ​ | ​ | ​ | ​ | Range of | ​ | Average | ​ | Contractual |
| ​ | Options | Exercise Price | Price | Life (in years) |
| Options outstanding as of December 31, 2022 | 322,038 | ​ | $ | 3.10 | - | 199.20 | ​ | $ | 12.58 | 6.7 |
| Granted | 516,000 | ​ | 1.52 | ​ | 1.52 | ​ |
| Forfeited | ​ | ( 5,177 ) | ​ | ​ | 4.06 | - | 180.00 | ​ | ​ | 23.40 | ​ | ​ |
| Options outstanding as of March 31, 2023 | 832,861 | ​ | $ | 1.52 | - | 199.20 | ​ | $ | 5.66 | 8.6 |
| Options vested and exercisable as of March 31, 2023 | 311,210 | ​ | $ | 1.52 | - | 199.20 | ​ | $ | 12.49 | 6.5 |
| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |
| ​ | ​ | Bellerophon 2015 Equity Incentive Plan |
| ​ | ​ | ​ | ​ | ​ | ​ | Weighted Average |
| ​ | ​ | ​ | ​ | ​ | ​ | ​ | Aggregate Grant | ​ | Remaining |
| ​ | ​ | ​ | ​ | Weighted Average | ​ | Date Fair Value | ​ | Contractual |
| ​ | ​ | Shares | ​ | Fair Value | ​ | (in millions) | ​ | Life (in years) |
| Restricted stock outstanding as of December 31, 2022 | 165,500 | ​ | $ | 2.23 | ​ | $ | 0.7 | 0.9 |
| Granted | 84,000 | ​ | 1.52 | ​ | 0.1 | ​ |
| Vested | ​ | ( 86,500 ) | (1) | ​ | 1.53 | ​ | ​ | ( 0.1 ) | ​ | ​ |
| Forfeited | ( 15,000 ) | ​ | 1.11 | ​ | — | ​ |
| Restricted stock outstanding as of March 31, 2023 | 148,000 | ​ | $ | 2.35 | ​ | $ | 0.7 | 0.7 |
| (1) | 2,500 restricted stock units vested during the three months ended March 31, 2023, however, the common stock was subsequently issued in April 2023. |

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |
| ​ | ​ | Ikaria Equity Incentive Plans |
| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Weighted Average |
| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Weighted | ​ | Remaining |
| ​ | ​ | ​ | ​ | Range of | ​ | Average | ​ | Contractual |
| ​ | Options | Exercise Price | Price | Life (in years) |
| Options outstanding as of December 31, 2022 | 864 | ​ | $ | 124.05 | - | 131.55 | ​ | $ | 124.50 | 0.2 |
| Expired | ( 812 ) | ​ | 124.05 | ​ | 124.05 | ​ |
| Options outstanding as of March 31, 2023 | ​ | 52 | ​ | $ | 131.55 | ​ | $ | 131.55 | ​ | 0.1 |
| Options vested and exercisable as of March 31, 2023 | 52 | ​ | $ | 131.55 | ​ | $ | 131.55 | 0.1 |
| ​ | ​ | ​ | ​ | ​ | ​ | ​ |
| ​ | ​ | ​ | ​ | ​ | ​ | ​ |
| ​ | ​ | Three Months Ended March 31, |
| ​ | 2023 | 2022 |
| Research and development | ​ | $ | 101 | ​ | $ | 113 |
| General and administrative | ​ | 163 | ​ | 79 |
| Total expense | ​ | $ | 264 | ​ | $ | 192 |

(9) Income TaxesExcluding the impact of the sale of the state net operating losses (“NOL”) and research and development tax credits during the three months ended March 31, 2023, the effective tax rate for each of the three months ended March 31, 2023 and 2022 was 38.8 % and zero , respectively. The effective tax rate for the three months ended March 31, 2023 exceeded the federal statutory rate due to the impact of the $ 0.6 million paid to the Chinese tax authorities for required withholding taxes applicable under Chinese tax regulations. The $ 0.6 million payment of withholdings taxes are eligible for a credit under U.S. income tax regulations and as such are recorded as an income tax expense for the period. The effective tax rate for the three months ended March 31, 2022 was lower than the federal statutory rate primarily due to the losses incurred and the full valuation allowance on deferred tax assets.The Company’s estimated tax rate for 2023 excluding any benefits from any sales of net operating losses or research and development (“R&D”), tax credits is expected to be greater than zero because of the impact of the withholding taxes paid to the Chinese tax authorities described above, however, the Company expects to generate additional losses and currently has maintained a full valuation allowance. The valuation allowance is required until the Company has sufficient positive evidence of taxable income necessary to support realization of its deferred tax assets. In addition, the Company may be subject to certain limitations in its annual utilization of NOL carry forwards to offset future taxable income (and of tax credit carry forwards to offset future tax expense) pursuant to Section 382 of the Internal Revenue Code, which could result in tax attributes expiring unused.Subject to state approval, the Company plans to sell NOLs and Research and Development credits under the State of New Jersey’s Technology Business Tax Certificate Transfer Program in the future. The proceeds from such sales are recorded as income tax benefit when sales occur and proceeds are received.During January 2023, the Company completed the sale of $ 19.7 million of state NOLs and $ 0.1 million of R&D tax credit under the State of New Jersey’s Business Tax Certificate Transfer Program for net proceeds of $ 1.7 million. As of March 31, 2023, there were no material uncertain tax positions. There are no tax positions for which a material change in any unrecognized tax benefit liability is reasonably possible in the next 12 months. ​ (10) Net Income (Loss) Per ShareBasic net income (loss) per share is calculated by dividing net income (loss) by the weighted average number of shares outstanding during the period, as applicable. Included in the calculation of the weighted average number of shares outstanding for the basic net income per share calculation for the three months ended March 31, 2023 is the 1,781,526 pre-funded warrants, as described in Note 5 – Common Stock Warrants and Warrant Liability, as they are issuable in exchange for a nominal cash consideration and are therefore treated as issued for basic net income per share purposes. Diluted net income (loss) per share is calculated by dividing net income (loss), adjusted to reflect the impact of dilutive warrants, by the weighted average number of shares outstanding, adjusted to reflect potentially dilutive securities using the treasury stock method, except when the effect would be anti-dilutive.​ 20
| ​ | ​ | ​ | ​ | ​ | ​ |
| ​ | Three months ended March 31, |
| ​ | 2023 | 2022 |
| Net income (loss) | $ | 2,822 | ​ | $ | ( 5,641 ) |
| Weighted-average shares: | ​ |
| Basic | 10,358,111 | ​ | 9,545,451 |
| Effect of dilutive securities: | ​ |
| Options | ​ | 168,844 | ​ | ​ | — |
| Restricted Stock | ​ | 78,991 | ​ | ​ | — |
| Diluted | 10,605,946 | ​ | 9,545,451 |
| Net income (loss) per share: | ​ |
| Basic | $ | 0.27 | ​ | $ | ( 0.59 ) |
| Diluted | $ | 0.27 | ​ | $ | ( 0.59 ) |

Item 2. 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 with our condensed consolidated financial statements and the related notes appearing elsewhere in this Quarterly Report on Form 10-Q. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. You should read the “Risk Factors” section in Part II—Item 1A. of this Quarterly Report on Form 10-Q and in Part I—Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022 for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Overview
Business
We are a clinical-stage therapeutics company focused on developing innovative products that address significant unmet medical needs in the treatment of cardiopulmonary diseases. Our focus is the continued development of our nitric oxide therapy for patients with or at risk of pulmonary hypertension, or PH, using our proprietary pulsatile nitric oxide delivery platform, INOpulse.
In 2016, we began developing INOpulse for the treatment of pulmonary hypertension associated with fibrotic interstitial lung disease (“fILD”), which includes PH associated with idiopathic pulmonary fibrosis (“PH-IPF”) as well as other pulmonary fibrosing diseases. During May 2017, we announced the completion of our Phase 2 clinical trial using INOpulse therapy to treat PH-IPF. The clinical data showed that INOpulse was associated with clinically meaningful improvements in hemodynamics and exercise capacity in difficult-to-treat PH-IPF patients. The PH-IPF trial was a proof of concept study (n=4) designed to evaluate the ability of pulsed inhaled nitric oxide, or iNO, to provide selective vasodilation as well as to assess the potential for improvement in hemodynamics and exercise capacity in PH-IPF patients. The clinical trial met its primary endpoint showing an average of 15.3% increase in blood vessel volume (p<0.001) during acute inhalation of iNO as well as showing a significant association between ventilation and vasodilation, demonstrating the ability of INOpulse to provide selective vasodilation to the better ventilated areas of the lung. The trial showed consistent benefit in hemodynamics with a clinically meaningful average reduction of 14% in systolic pulmonary arterial pressure with acute exposure to iNO. The study assessed both the iNO 75 and iNO 30 dose.
During August 2017, we announced acceptance by the U.S. Food and Drug Administration (the “FDA”) of our Investigational New Drug (“IND”) application for our Phase 2b (“iNO-PF”) clinical trial using INOpulse therapy in a broad population of patients with pulmonary fibrosis, or PF, at both low and intermediate/high risk of PH. In January 2019, we announced top-line results from cohort 1 of our iNO-PF trial. The results suggested directional improvements in multiple clinically meaningful exploratory endpoints as measured by a wearable medical-grade activity monitor. In addition, these results suggested that iNO may have a favorable safety profile, supporting the continuation into cohort 2. In April 2019, we announced that we reached an agreement with the FDA on modifying the ongoing Phase 2b trial into a seamless Phase 2/3 trial, with cohort 3 serving as the pivotal study, as well as an agreement on the primary endpoint in cohort 3 of change in moderate to vigorous activity (“MVPA”) from baseline to month 4, measured by Actigraphy. Actigraphy (medical wearable continuous activity monitoring) has the potential to provide highly sensitive objective real-world physical activity data that we expect to correlate with clinically meaningful patient functional abilities and health outcomes. Actigraphy is currently being utilized as the primary endpoint in multiple late-stage clinical programs in various cardiopulmonary diseases such as heart failure and chronic obstructive pulmonary disease (“COPD”). In December 2019, we announced top-line results from cohort 2 of the iNO-PF trial. Cohort 2 of iNO-PF suggested directionally favorable and potentially clinically meaningful placebo corrected improvement in MVPA, in subjects treated with iNO45 (45 mcg/kg IBW/hr) versus placebo. The improvement in MVPA was underscored by benefits in overall activity, as well as multiple patient reported outcomes. In March 2020, we announced that in consultation with the FDA, we had finalized some of the key elements of our planned pivotal Phase 3 study for fILD, including the use of MVPA as the primary endpoint for approval, the patient population of pulmonary fibrosis subjects at risk of PH, as well as the dose of iNO45. In December 2020, we announced the first patient enrollment in this Phase 3 study called
22
| ● | Analysis conducted on cohort 2 (Phase 2) data utilizing the statistical analysis methodology to be used in REBUILD, including bi-weekly analysis of MVPA data and mixed models for repeated measures (“MMRM”) assessment of the last half of the blinded treatment period, which showed the trial would be >90% powered for p<0.05 at 80 total patients and >90% powered for a p<0.01 at 114 patients based on the effect size determined from cohort 2; |
| ● | Similar baseline MVPA distribution between cohort 2 and the first 80 randomized patients in REBUILD based on a blinded assessment; and |
| ● | Independent Data Monitoring Committee unblinded safety review of the first 85 randomized patients in REBUILD indicating no safety concern with regards to reduction of REBUILD to 140 patients. |

entitled “Pulmonary vascular effects of pulsed inhaled nitric oxide in COPD patients with pulmonary hypertension.” During September 2017, we shared the results of our Phase 2a PH-COPD trial that was designed to evaluate the acute effects of pulsed inhaled nitric oxide, or iNO, on vasodilation as well as the chronic effect on hemodynamics and exercise tolerance. The trial showed a statistically significant increase (average 4.2%) in blood vessel volume on iNO compared to baseline (p=0.03), and a statistically significant correlation in Ventilation-Vasodilation (p=0.01). The chronic results demonstrated a statistically significant and clinically meaningful increase in six minute walk distance, or 6MWD, of 50.7m (p=0.04) as well as a decrease of 19.9% in systolic pulmonary arterial pressure (p=0.02), as compared to baseline. The data suggested that the dose may have a favorable safety profile. In May 2018, we announced that the FDA concurred with the design of our planned Phase 2b study of INOpulse for treatment of PH-COPD. The study will assess the effect of INOpulse on various parameters including exercise capacity, right ventricular function and oxygen saturation, as well as other composite endpoints. We continue to evaluate alternatives for the funding and timing of this program.In addition, other potential indications for our INOpulse platform include: chronic thromboembolic PH, or CTEPH and PH associated with pulmonary edema from high altitude sickness. However, we have not yet commenced any studies of the INOpulse platform with respect to such other indications. We have devoted all of our resources to our therapeutic discovery and development efforts, including performance of IND-enabling studies, conducting clinical trials for our product candidates, protecting our intellectual property and the general and administrative support of these operations. We have devoted significant time and resources to developing and optimizing our drug delivery system, INOpulse, which operates through the administration of nitric oxide as brief, controlled pulses that are timed to occur at the beginning of a breath.To date, we have generated no revenue from product sales. We expect that it may be several years before we commercialize a product candidate, if ever.Financial Operations OverviewPrior to February 2014, we were a wholly-owned subsidiary of Ikaria, Inc. (a subsidiary of Mallinckrodt plc), or Ikaria. As part of an internal reorganization of Ikaria in October 2013, Ikaria transferred to us exclusive worldwide rights, with no royalty obligations, to develop and commercialize pulsed nitric oxide in PAH, PH-COPD and PH-IPF. Following the internal reorganization, in February 2014, Ikaria distributed all of our then outstanding units to its stockholders through the payment of a special dividend on a pro rata basis based on each stockholder’s ownership of Ikaria capital stock, which we refer to as the Spin-Out, and as a result we became a stand-alone company. In November 2015, we entered into an amendment to our exclusive cross-license, technology transfer and regulatory matters agreement with Ikaria that included a royalty equal to 3% of net sales of any commercial products for PAH. In April 2018, we expanded the scope of our license from PH-IPF to PH in patients with Pulmonary Fibrosis (PH-PF), which includes idiopathic interstitial pneumonias, chronic hypersensitivity pneumonitis, occupational and environmental lung disease, with a royalty equal to 1% of net sales of any commercial products for PH-PF.License Agreement with Baylor BioSciences, Inc.In January 2023, we entered into a License Agreement with Baylor, pursuant to which Baylor received exclusive rights to develop and commercialize INOpulse within Greater China for diseases associated with pulmonary hypertension, including the lead indication of fibrotic interstitial lung disease (“fILD”), as well as PAH, PH-Sarcodosis, and PH-COPD, CTEPH and PH associated with pulmonary edema from high altitude sickness. Under the terms of the License Agreement, we received a license payment of $5 million, which was net of VAT and withholding taxes of approximately $1.0 million, from Baylor. Additionally, we are entitled to royalties of 5% on net sales by Baylor resulting from all of the licensed INOpulse indications within Greater China.​24
Registered Direct OfferingOn March 3, 2023, we entered into a subscription agreement with an institutional investor, pursuant to which we agreed to issue and sell in a registered direct offering (the “Offering”) (i) an aggregate of 718,474 shares (the “Shares”) of our common stock and (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to 1,781,526 shares of common stock. We closed the Offering on March 7, 2023 with the Shares sold to the purchaser at a price per share of $2.00 per share. The Pre-Funded Warrants were sold at an offering price of $1.99 per Pre-Funded Warrant, which represents the per share offering price for the common stock less a $0.01 per share exercise price for each such Pre-Funded Warrant. No underwriter or placement agent participated in the Offering and the proceeds from the Offering were approximately $5 million.The Pre-Funded Warrants are exercisable at any time after the date of issuance. A holder of Pre-Funded Warrants may not exercise the warrant if the holder, together with its affiliates, would beneficially own more than 9.99% of the number of shares of common stock outstanding immediately after giving effect to such exercise. A holder of Pre-Funded Warrants may increase or decrease this percentage, but not in excess of 19.99%, by providing at least 61 days prior notice to us.The Offering was made pursuant to the Company’s shelf registration statement previously filed with the Securities and Exchange Commission (the “SEC”), originally filed on June 26, 2020 (File No. 333-239473), which the SEC declared effective on July 2, 2020, and a related prospectus supplement.Completion of Sale under the State of New Jersey’s Technology Business Tax Certificate Transfer ProgramDuring January 2023, we completed a sale of our NOLs and R&D credits under the State of New Jersey’s Technology Business Tax Certificate Transfer Program. We sold $19.7 million of state NOLs and $0.1 million of R&D credits for net proceeds of approximately $1.7 million.RevenueTo date, we have not generated any revenue from product sales and may not generate any revenue from product sales for the next several years, if ever. In the future, we may generate revenue from a combination of product sales, license fees and milestone payments in connection with strategic partnerships, and royalties from the sale of products developed under licenses of our intellectual property. Our ability to generate revenue and become profitable depends primarily on our ability to successfully develop and commercialize or partner our product candidates as well as any product candidates we may advance in the future. We expect that any revenue we may generate will fluctuate from quarter to quarter as a result of the timing and amount of any payments we may receive under future partnerships, if any, and from sales of any products we successfully develop and commercialize, if any. If we fail to complete the development of any of our product candidates currently in clinical development or any future product candidates in a timely manner, or to obtain regulatory approval for such product candidates, our ability to generate future revenue, and our business, results of operations, financial condition and cash flows and future prospects would be materially adversely affected.​25
| ● | employee-related expenses, including salary, benefits and stock-based compensation expense; |
| ● | expenses incurred under agreements with contract research organizations, investigative sites that conduct our clinical trials and consultants that conduct a portion of our pre-clinical studies; |
| ● | expenses relating to vendors in connection with research and development activities; |
| ● | the cost of acquiring and manufacturing clinical trial materials; |
| ● | facilities, depreciation and allocated expenses; |

| ● | lab supplies, reagents, active pharmaceutical ingredients and other direct and indirect costs in support of our pre-clinical and clinical activities; |
| ● | device development and drug manufacturing engineering; |
| ● | license fees related to in-licensed products and technology; and |
| ● | costs associated with non-clinical activities and regulatory approvals. |

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |
| ​ | ​ | Three Months Ended | ​ | ​ | ​ | ​ | ​ |
| ​ | ​ | March 31, | ​ | ​ | ​ | ​ | ​ | ​ |
| (Dollar amounts in thousands) | 2023 | 2022 | $ Change | % Change |
| Revenues: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |
| Licensing revenue | ​ | $ | 5,640 | ​ | $ | — | ​ | $ | 5,640 | >100 | % |
| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |
| Research and development expenses: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |
| fILD, PH-Sarc and PH-COPD | ​ | ​ | 979 | ​ | ​ | 1,327 | ​ | ​ | (348) | (26) | % |
| Other clinical trials | ​ | — | ​ | 1 | ​ | (1) | (100) | % |
| Drug and delivery system costs | ​ | ​ | 14 | ​ | ​ | 799 | ​ | ​ | (785) | (99) | % |
| Clinical programs | ​ | 993 | ​ | 2,127 | ​ | (1,134) | (53) | % |
| Research and development infrastructure | ​ | 1,238 | ​ | 1,846 | ​ | (608) | (33) | % |
| INOpulse engineering | ​ | 321 | ​ | 436 | ​ | (115) | (26) | % |
| Total research and development expenses | ​ | 2,552 | ​ | 4,409 | ​ | (1,857) | (42) | % |
| General and administrative expenses | ​ | 1,609 | ​ | 1,233 | ​ | 376 | 30 | % |
| Total operating expenses | ​ | ​ | 4,161 | ​ | ​ | 5,642 | ​ | ​ | (1,481) | ​ | (26) | % |
| Income (loss) from operations | ​ | 1,479 | ​ | (5,642) | ​ | 7,121 | >100 | % |
| Interest income | ​ | 66 | ​ | 1 | ​ | 65 | >100 | % |
| Pre-tax income (loss) | ​ | 1,545 | ​ | (5,641) | ​ | 7,186 | (127) | % |
| Income tax benefit | ​ | 1,277 | ​ | — | ​ | 1,277 | >100 | % |
| Net income (loss) | ​ | $ | 2,822 | ​ | $ | (5,641) | ​ | $ | 8,463 | >100 | % |
| ● | fILD, PH-Sarc and PH-COPD expenses for the three months ended March 31, 2023 were $1.0 million compared to $1.3 million for the three months ended March 31, 2022, a decrease of $0.3 million, or 26%. The decrease was primarily due to the completion of enrollment in January 2023 resulting in fewer patients in the active trial activities compared to the prior period during which there was an increase in expenditures to support patient enrollment activities related to the Phase 3 fILD trial. |
| ● | Drug and delivery system costs for the three months ended March 31, 2023 were de minimis, compared to $0.8 million for the three months ended March 31, 2022, a decrease of $0.8 million, or 99%. Drug and delivery system costs are recorded at the time of procurement from our suppliers. The decrease is directly attributable to the requisite lead times to source sufficient clinical materials and supplies to support the Phase 3 fILD trial. |

| ● | Research and development infrastructure for the three months ended March 31, 2023 was $1.2 million compared to $1.8 million for the three months ended March 31, 2022, a decrease of $0.6 million, or 33%. The decrease was primarily due to a decrease in contractor costs associated with the Phase 3 clinical trial for fILD combined with a reduction in general labor and bonus costs. |
| ● | The Technology Business Tax Certificate Transfer Program enables qualified, unprofitable New Jersey based technology or biotechnology companies to sell a percentage of NOL and R&D tax credits to unrelated profitable corporations, subject to meeting certain eligibility criteria. We have sold $19.7 million of state NOLs and $0.1 million of R&D credits under the State of New Jersey’s Technology Business Tax Certificate Transfer Program in January 2023 for net proceeds of $1.7 million. We have also sold an additional $25.1 million of state NOLs and $0.2 million of R&D credits under the State of New Jersey’s Technology Business Tax Certificate Transfer Program for net proceeds of $2.2 million in April 2022. We plan to sell additional NOLs and R&D credits under the same program in the future subject to program availability and state approval. The proceeds from such sales are recorded as income tax benefit when sales occur or proceeds are received. |
| ● | In January 2023, we entered into a license agreement (the “License Agreement”) with Baylor BioSciences, Inc. (“Baylor”), pursuant to which Baylor received exclusive rights to develop and commercialize INOpulse within mainland China, Taiwan, Hong Kong and Macau (collectively, “Greater China”) for diseases associated with pulmonary hypertension, including the lead indication of fibrotic interstitial lung |

| disease (fILD), as well as PAH, PH-Sarcoidosis, and PH-COPD, CTEPH and PH associated with pulmonary edema from high altitude sickness. Under the terms of the License Agreement, a license payment of $5 million, which was net of VAT and withholding taxes of approximately $1.0 million, was received in full from Baylor by March 31, 2023. Additionally, we are entitled to royalties of 5% on net sales by Baylor resulting from all of the licensed INOpulse indications within Greater China. |
| ● | On March 3, 2023, the Company entered into a subscription agreement with an institutional investor, pursuant to which the Company agreed to issue and sell in a registered direct offering (the “Offering”) (i) an aggregate of 718,474 shares (the “Shares”) of the Company’s common stock, $0.01 par value per share (“Common Stock”) and (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to 1,781,526 shares of Common Stock. The Company closed the Offering on March 7, 2023 with the Shares sold to the purchaser at a price per share of $2.00 per share. The Pre-Funded Warrants were sold at an offering price of $1.99 per Pre-Funded Warrant, which represents the per share offering price for the Common Stock less a $0.01 per share exercise price for each such Pre-Funded Warrant. No underwriter or placement agent participated in the Offering and the proceeds from the Offering were approximately $5 million. |
| ​ | ​ | ​ | ​ | ​ | ​ | ​ |
| ​ | ​ | Three Months Ended |
| ​ | ​ | March 31, |
| (Dollar amounts in thousands) | 2023 | 2022 |
| Operating activities | ​ | $ | 3,266 | ​ | $ | (4,736) |
| Financing activities | ​ | ​ | 4,982 | ​ | ​ | — |
| Net change in cash, cash equivalents and restricted cash | ​ | $ | 8,248 | ​ | $ | (4,736) |

Net Cash Provided by (Used in) Operating ActivitiesCash provided by operating activities for the three months ended March 31, 2023 was $3.3 million, as compared to $4.7 million used in operating activities for the three months ended March 31, 2022. The change in cash used in operating activities was primarily due to the net income from the licensing revenue earned and reduction in operating expenses during the current period combined with the changes in our operating assets and liabilities.Net Cash Provided by Financing ActivitiesCash provided by financing activities for the three months ended March 31, 2023 was $5.0 million which was directly attributable to cash raised under the direct offering of common stock and pre-funded warrants during March 2023. There were no financing activities conducted during the three months ended March 31, 2022. Contractual Obligations and CommitmentsThere were no material changes in our outstanding contractual obligations from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022.In the course of our normal business operations, we also enter into agreements with contract service providers and others to assist in the performance of our research and development and manufacturing activities. We can elect to discontinue the work under these contracts and purchase orders at any time with notice, and such contracts and purchase orders do not contain minimum purchase obligations.Off-Balance Sheet ArrangementsWe did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined under applicable SEC rules.Critical Accounting Policies and Significant Judgments and EstimatesOur management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and the disclosure of contingent assets and liabilities in our financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to research and development expense, stock-based compensation and common stock warrants. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.During the three months ended March 31, 2023, we modified our critical accounting policies to include disclosures related to revenues with customers recognized under ASC 606, which is described under the Management’s Discussion and Analysis of Financial Condition and Results of Operations herein this Form 10-Q. There were no other material changes to our critical accounting policies. Our critical accounting policies are described under Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.​31
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Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are exposed to market risk related to changes in interest rates. As of March 31, 2023, we had unrestricted cash and cash equivalents of $15.2 million, consisting primarily of demand deposits with U.S. banking institutions. Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates, particularly because our investments are in cash and cash equivalents. Due to the nature of our deposits and the low risk profile of our investments, an immediate 10% change in interest rates would not have a material effect on the fair market value of our deposits. At times, our deposits held at financial institutions exceeds the $250,000 limit insured by the Federal Deposit Insurance Corporation (“FDIC”).
​
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2023. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of March 31, 2023, our principal executive officer and principal financial officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.
Changes in Internal Control Over Financial Reporting
No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the three months ended March 31, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
​
​
32
PART II. OTHER INFORMATION
Item 1.
We are currently not a party to any material legal proceedings.
​
Item 1A.
Risk Factors.
Except as set forth below, there have been no material changes to our risk factors contained in our Annual Report on Form 10-K for the year ended December 31, 2022. For a further discussion of our Risk Factors, refer to the “Risk Factors” discussion contained in our Annual Report on Form 10-K for the year ended December 31, 2022.
Until we hire a permanent Principal Financial & Accounting Officer, our Chief Executive Officer will also be serving as our principal financial and accounting officer, which could have an adverse impact on our business.
Following the previously-announced resignation of our Principal Financial & Accounting Officer, Nicholas Laccona on April 19, 2023 (with transitional support through May 15, 2023), Peter Fernandes, our Chief Executive Officer, has assumed the role of our principal financial and accounting officer. As a result of this change, Mr. Fernandes has taken on substantially more responsibility for the management of our business and of our financial reporting, which has resulted in greater workload demands and could divert his attention away from certain key areas of our business. Mr. Fernandes’s serving in a temporary dual capacity of Chief Executive Officer and principal financial and accounting officer may have a disruptive impact on our ability to implement our strategy and could adversely affect our business, internal controls, financial condition and results of operations. Our lack of a Principal Financial & Accounting Officer is likely to affect our internal control over financial reporting. Until we find and integrate a Principal Financial & Accounting Officer, we may be unable to successfully manage our business, and our results of operations, internal controls and financial condition could be adversely affected as a result. Leadership transitions can be inherently difficult to manage and may cause uncertainty and decreased productivity among our employees and increase the likelihood of turnover, which could result in significant disruptions to our operations. We could be adversely affected if we fail to adequately plan for the succession of members of our management team should we have additional departures.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
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Item 3. Defaults Upon Senior Securities.
None.
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Item 4. Mine Safety Disclosures.
Not applicable.
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Item 5. Other Information.
None.
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Item 6. Exhibits.
The exhibits listed in the Exhibit Index to this Quarterly Report on Form 10-Q are incorporated herein by reference.
​
33
| ExhibitNumber | Description |
| 4.1 | ​ | Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8 K filed with the SEC on March 6, 2023). |
| 10.1* | ​ | License Agreement, dated as of January 4, 2023, by and between Bellerophon Therapeutics, Inc. and Baylor BioSciences, Inc. |
| 10.2 | ​ | Subscription Agreement, dated as of March 3, 2023, by and among Bellerophon Therapeutics, Inc. and the purchaser identified on the signature pages thereto (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8 K filed with the SEC on March 6, 2023). |
| 31.1 | ​ | Certification of Principal Executive Officer and Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended |
| 32 | ​ | Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
| 101.INS | ​ | Inline XBRL Instance Document |
| 101.SCH | ​ | Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL | ​ | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF | ​ | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB | ​ | Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE | ​ | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 104 | ​ | Cover Page Interactive Date File (Formatted as Inline XBRL and contained in Exhibit 101) |

| BELLEROPHON THERAPEUTICS, INC. |
| ​ |
| Date: May 15, 2023 | By: | /s/ Peter Fernandes |
| ​ | ​ | Peter FernandesChief Executive Officer(Principal Executive Officer and Principal Financial and Accounting Officer) |
| ​ | ​ | ​ |


Question: What is the difference of the company's stockholders' equity between the end of 2022 and the first quarter of 2023, resulted from operations rather than financial activities like stock offerings, in thousands of dollars?

Python solution:
def solution():
    #Define variables name and value

    initial_equity_2023 = 2534        # Stockholders' Equity at December 31, 2022
    final_equity_2023 = 10602         # Stockholders' Equity at March 31, 2023
    offering_common_stock = 1437      # Direct offering of common stock
    offering_prefunded_warrants = 3545 # Direct offering of pre-funded warrants

    #Do math calculation to get the answer
    operations_related_equity_increase = final_equity_2023 - initial_equity_2023 - offering_common_stock - offering_prefunded_warrants
    answer = operations_related_equity_increase
    return answer


Answer: 3086