The following Management's Discussion and Analysis of Financial Condition and
Results of Operations, as well as other sections in this Quarterly Report on
Form 10-Q for the quarter ended March 31, 2020 (the "Quarterly Report"), should
be read in conjunction with our unaudited interim consolidated financial
statements and related notes thereto included elsewhere herein and the
consolidated financial statements and notes thereto for the year ended December
31, 2019 and the related Management's Discussion and Analysis of Financial
Condition and Results of Operation, both of which are contained in our Annual
Report on Form 10-K for the year ended December 31, 2019 (the "Annual Report")
filed with the Securities and Exchange Commission ("SEC") on March 30, 2020.  In
addition to historical financial information, some of the information contained
in the following discussion and analysis contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. All statements
other than statements of historical facts, including statements regarding our
future results of operations and financial position, business strategy, current
and prospective products, product approvals, research and development costs,
current and prospective collaborations, timing and likelihood of success, plans
and objectives of management for future operations and future results of current
and anticipated products, are forward-looking statements. These statements
involve known and unknown risks, uncertainties, assumptions and other important
factors that may cause our actual results, performance or achievements to be
materially different from any future results, performance or achievements
expressed or implied by the forward-looking statements.

Overview


We are a commercial stage medical technology company focused on designing,
developing and marketing a new category of tissue reinforcement materials to
address unmet needs in soft tissue reconstruction. We offer a portfolio of
advanced reinforced tissue matrices that improve clinical outcomes and reduce
overall costs of care in hernia repair, abdominal wall reconstruction and
plastic and reconstructive surgery. Our products are an innovative solution that
integrate multiple layers of minimally-processed biologic material with
interwoven polymers in a unique embroidered pattern, which we refer to as a
reinforced tissue matrix.

Our first portfolio of products ("OviTex") addresses unmet needs in hernia
repair and abdominal wall reconstruction by combining the benefits of biologic
matrices and polymer materials while minimizing their shortcomings, at a
cost-effective price. Our OviTex products have received 510(k) clearance from
the FDA, which clearance was obtained and is currently held by Aroa and have
demonstrated safety and clinical effectiveness in our BRAVO study. Ventral
hernia recurrence rates in the BRAVO study were 0% among the first 20 patients
who reached two year follow-up and 2% among the first 57 patients who reached
one year follow-up. Our second portfolio of products, OviTex PRS, addresses
unmet needs in plastic and reconstructive surgery.



We began commercialization of our OviTex products in the U.S. in July 2016 and
they are now sold to more than 265 hospital accounts. In the first half of 2017,
we began scaling our U.S. direct commercial presence and we initiated our BRAVO
study in April 2017. Our OviTex portfolio consists of multiple products for
hernia repair and abdominal wall reconstruction, inguinal hernia repair and
hiatal hernia repair. In addition, to address the significant increase in the
number of robotic-assisted hernia repairs over the last several years we have
designed an OviTex product for use in laparoscopic and robotic-assisted surgery
("OviTex LPR") which we began commercializing in November 2018. We introduced
additional sizes of our OviTex products in both 25 × 30 cm and 25 × 40 cm sizes
in January 2019. In April 2019, our OviTex PRS Reinforced Tissue Matrix ("OviTex
PRS") products received 510(k) clearance from the FDA for plastic and
reconstructive surgery, which clearance was obtained by Aroa and is currently
held by us. We commenced a limited launch in May 2019 and expect to continue
commercializing in a controlled manner to gradually expand our surgeon network
throughout 2020.

We market our products through a single direct sales force, predominantly in the
U.S. We have invested in our direct sales and marketing infrastructure in order
to expand our presence and to promote awareness and adoption of our products. As
of March 31, 2020, we had 39 sales territories in the U.S. As part of our
commercial strategy, we plan to continue to invest in our commercial
organization by hiring additional account managers, clinical development

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specialists, business managers and administrative support staff in order to cover the highest potential of accounts for soft tissue reconstruction procedures.



Prior to obtaining FDA clearance for our first OviTex product, we devoted
substantially all of our resources to the design and development of our
reinforced tissue matrices. Our development efforts to date have included an
extensive non-human primate preclinical research data set for OviTex. In
addition to our current portfolio, we are developing new product features and
designs for both our OviTex and OviTex PRS portfolios. We are currently devoting
research and

development resources on the exploration of new packaging technology to increase the shelf life of our OviTex and



OviTex PRS products along with the development of additional versions of our
OviTex PRS product lines. We are also investigating the introduction of
additional versions of our OviTex hernia product lines, including self-adhering
technology to further enhance product compatibility in robotic procedures. We
intend to continue to make investments in research and development efforts to
develop improvements and enhancements.



Substantially all of our revenue to date has been generated by the sale of our
OviTex products. Our revenue for the three months ended March 31, 2020 and 2019
was $3.7 million and $3.3 million, respectively, an increase of $0.4 million, or
13%. We incurred a net loss of $7.2 million for the three months ended March 31,
2020 as compared to $6.0 million for the three months ended March 31, 2019. We
have not been profitable since inception and as of March 31, 2020, we had an
accumulated deficit of $175.1 million. We expect to incur losses for the
foreseeable future.

Our products are manufactured by Aroa at their FDA registered and ISO 13485
facility in Auckland, New Zealand. We maintain our Aroa License for the
exclusive supply of ovine rumen and manufacture of our reinforced tissue
matrices under which we purchase product from Aroa at a fixed cost equal to 27%
of our net sales of licensed products. This revenue sharing arrangement allows
us to competitively price our products and pass along cost-savings to our
customers.

Components of Our Results of Operations

Revenue



Substantially all of our revenue consists of direct sales of our products to
hospital accounts in the United States. Depending on the terms of our agreements
with our customers, we recognize revenue related to product sales either when
control transfers, which generally occurs when the product is shipped to the
customer, or when the product is utilized in a surgical procedure in the case of
consignment agreements. Fees charged to customers for shipping are recognized as
revenue. Recent revenue growth has been driven by increasing revenue from
product sales due to our expanding customer base, although it is unclear at this
point what the long-term effect, if any, the COVID-19 pandemic will have on our
ability to continue to generate revenue and expand our customer base.

Cost of Revenue



Cost of revenue primarily consists of the costs of licensed products purchased
from Aroa, charges related to excess and obsolete inventory adjustments and
costs related to shipping. We purchase product from Aroa at a fixed cost equal
to 27% of our net sales of licensed products. The initial term of our Aroa
License terminates on the later of (i) August 3, 2022, or (ii) the expiration of
the last patent covering bovine and ovine products, with an option to extend for
an additional ten-year period. We expect our cost of revenue to increase in
absolute dollars as, and to the extent, our sales volume grows, although it is
unclear at this point what the long-term effect, if any, the COVID-19 pandemic
will have on product demand which could lead to additional charges to excess and
obsolete inventory.

Amortization of Intangible Assets



Amortization of intangible assets relates to the amortization of capitalized
milestone amounts paid or probable to be paid to Aroa related to license fees or
commercialization rights after future economic benefit has been established for
a product. These capitalized milestone amounts relate to regulatory clearances,
the receipt of certain supply quantities of product, and amounts based upon
aggregate net sales thresholds within a specified territory and are amortized
over the remaining useful life of the intellectual property.

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Gross Profit and Gross Margin



Our gross profit is calculated by subtracting our cost of revenue and
amortization of intangible assets from our revenue. We calculate our gross
margin percentage as our gross profit divided by our revenue. Our gross profit
has been, and we expect it will continue to be, affected by a variety of
factors, including sales volume and excess and inventory obsolescence costs. Our
gross profit may increase to the extent our revenue grows.

Sales and Marketing Expenses



Sales and marketing expenses consist of market research and commercial
activities related to the sale of OviTex and OviTex PRS and salaries and related
benefits, sales commissions and stock­based compensation for employees focused
on these efforts. Other significant sales and marketing expenses include costs
incurred with post­market clinical studies, conferences and trade shows,
promotional and marketing activities, as well as travel and training expenses.

Over time we expect our sales and marketing expenses to increase in absolute
dollars, however, due to the impact of the COVID-19 pandemic, we anticipate that
our sales and marketing expense will decrease in the near future due to a
decrease in sales. Longer term, we expect our sales and marketing expenses to
decrease as a percentage of revenue primarily as, and to the extent, our revenue
grows.

General and Administrative Expenses

General and administrative expenses consist primarily of salaries and related benefits, including stock­based compensation for personnel in executive, finance, information technology and administrative functions. General and administrative expenses also include professional service fees for legal, accounting, consulting, investor and public relations, insurance costs and direct and allocated facility­related costs.


We expect that our general and administrative expenses will decrease in the near
future due to decreases in salary and other expenses. However, the reduction in
general and administrative expenses may be offset in part by additional expenses
we incur related to operating as a public company, including director and
officer insurance coverage, legal costs, accounting costs, costs related to
exchange listing and costs related to the SEC, compliance and investor
relations. We expect our general and administrative expenses to decrease as a
percentage of revenue primarily as, and to the extent, our revenue grows.

Research and Development Expenses



Research and development expenses consist primarily of product research,
engineering, product development, regulatory compliance and clinical
development. These expenses include salaries and related benefits, stock­based
compensation, consulting services, costs associated with our preclinical
studies, costs incurred with our manufacturing partner under development
agreements related to technology transfer, laboratory materials and supplies and
an allocation of related facilities costs. We expense research and development
costs as they are incurred.

We expect that our research and development expenses will decrease in the near
future due to the decreases in salary and other expenses. Longer term, we expect
research and development expenses in absolute dollars to increase in the future
as we develop new products and enhance existing products. We expect research and
development expenses as a percentage of revenue to vary over time depending on
the level and timing of new product development initiatives.

Interest Expense



Interest expense consists of cash interest under our credit facilities, non­cash
interest attributable to the accrual of final payment fees and the amortization
of deferred financing costs related to our indebtedness.

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Change in Fair Value of Preferred Stock Warrant Liability



Prior to our initial public offering ("IPO"), our outstanding warrants to
purchase shares of our preferred stock were classified as liabilities, recorded
at fair value and were subject to remeasurement at each balance sheet date until
they were exercised, expired or were otherwise settled. The change in fair value
of our preferred stock warrant liability reflected a non­cash charge primarily
driven by changes in the fair value of our underlying Series B preferred stock.
All outstanding warrants to purchase shares of our preferred stock were
converted into warrants to purchase shares of our common stock after our IPO.

Other Income

Other income consists primarily of income earned on our cash, cash equivalents and short-term investments.

Business Update Regarding COVID-19



We continue to closely monitor developments related to the COVID-19 pandemic and
our decisions will continue to be driven by the health and well-being of our
employees, hospital and physician customers, and their patients while
maintaining operations to support our customers and their patients in the
near-term. These developments include:

· Surgery Deferrals: To date, among other impacts on our business related to the

pandemic, physicians and their patients are required, or are choosing, to defer

elective surgery procedures in which our products otherwise would be used. The

duration of elective surgery deferrals and the timing and extent of the

economic impact of the pandemic, and the pace at which the economy recovers

therefrom, cannot be determined at this time. We continue to work closely with

our hospital and physician customers and suppliers to navigate through this

unforeseen event while maintaining flexible operations.

· Operations: Our sales, marketing and research and development efforts have

continued since the outbreak of the pandemic, but steps we have taken in

response to the pandemic have adversely affected our business. To protect the

safety, health and well-being of our employees, hospital and physician

customers, and communities, we have implemented preventative measures including

travel restrictions and a requirement that all office-based employees work from

home, except as necessary, as permitted under governmental orders. Similarly,

most of our sales professionals currently are using a virtual selling program,

which includes virtual sales calls with physicians, peer-to-peer discussions

with key opinion leaders, physician webinars and sales professional training,

instead of in-person sales and marketing programs. We expect to continue to

adapt our sales and marketing plans as we better understand the effects of the

COVID-19 pandemic on our business. The change in the manner in which our

workforce is functioning could adversely affect sales and could delay the

product launches we have planned for 2020 and beyond, and could adversely

affect our future growth or cause our future revenue growth to not be

consistent with our previously anticipated timelines.

Our manufacturing, distribution and supply chain has largely been uninterrupted, but could be disrupted as a result of the pandemic because of staffing shortages, production slowdowns, stoppages, or disruptions in delivery systems.

· Cost Containment: We continue to carefully manage expenses and cash spend to

preserve liquidity and we initiated actions in April to generate savings in

areas such as travel, events, and consulting. The base salaries of each of our

senior executives have been reduced by 30% and the base salaries of each of our

vice presidents have been reduced by 25%. In addition, certain senior

executives volunteered to reduce their salaries by an additional 5%, for a

total reduction of 35% for those individuals. Reductions in salary for other

employees varied from 5% to 20%. These salary reductions will continue through

July 15, 2020. In addition, we have implemented a hiring freeze and have

suspended our matching contributions to all participants under our 401(k)

Retirement Plan. These comprehensive spending cuts were necessary to protect

our financial strength in the face of near-term challenges. Yet, despite those

challenges, the Company remains focused on managing the business for the

long-term, including preserving full time jobs to support the expected rebound


    in surgical procedure volumes.




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· Product Development: We continue to evaluate the timing and scope of planned

next generation product development and commercialization initiatives and we

plan to continue to prioritize and invest in our critical R&D and clinical


    programs.

· First Quarter 2020 Results. Due to the impacts from the COVID-19 pandemic, our

total revenue for the first quarter of 2020 increased moderately compared to

the same period in 2019. Based on the ongoing impact from

restrictions on surgical procedures and shelter-in-place policies, we expect revenue to decline in the

second quarter of 2020. We cannot predict with certainty the extent to which the COVID-19 pandemic will impact procedures in the second quarter and beyond.

· Outlook. There is considerable uncertainty and lack of visibility regarding our

near-term revenue growth prospects and product development plans due to the

rapidly evolving environment and continued uncertainties resulting from the

COVID-19 pandemic. At this time, the full extent of the impact of the COVID-19

pandemic on our business, financial condition and results of operations is

uncertain and cannot be predicted with reasonable accuracy and will depend on

future developments that are also uncertain and cannot be predicted with


    reasonable accuracy.


Results of Operations

Comparison of the Three Months Ended March 31, 2020 and 2019




                                                    Three months ended March 31,                    Change
                                                      2020                 2019              Dollar      Percentage
                                                                 (in thousands, except percentages)
Revenue                                          $         3,726      $         3,306       $     420            13 %
Cost of revenue (excluding amortization of
intangible assets)                                         1,450                1,432              18             1 %
Amortization of intangible assets                             76           

       76               -             - %
Gross profit                                               2,200                1,798             402            22 %
Gross margin                                                  59 %                 54 %
Operating expenses:
Sales and marketing                                        5,269                3,995           1,274            32 %
General and administrative                                 2,518                1,324           1,194            90 %
Research and development                                     912                1,659           (747)          (45) %
Total operating expenses                                   8,699                6,978           1,721            25 %
Loss from operations                                     (6,499)              (5,180)         (1,319)            25 %
Other (expense) income:
Interest expense                                           (879)                (912)              33           (4) %
Change in fair value of preferred stock
warrant liability                                              -                   36            (36)         (100) %
Other income                                                 158                   90              68            76 %
Total other (expense) income                               (721)                (786)              65           (8) %
Net loss                                         $       (7,220)      $       (5,966)       $ (1,254)            21 %




Revenue

Revenue increased by $0.4 million, or 13%, to $3.7 million for the three months
ended March 31, 2020 from  $3.3 million for the three months ended March 31,
2019. The increase in revenue was primarily driven by an increase in unit sales
of our products due to the expansion of our commercial organization and
increased penetration within existing customer accounts.  Though our revenue
increased over the prior year period, it was impacted by lower than expected
procedure volumes in the second half of March 2020 due to hospitals and patients
deferring elective procedures and other factors related to the COVID-19
pandemic. During the three months ended March 31, 2020, we sold 1,081 units of
OviTex compared to 820 units of OviTex during the three months ended March 31,
2019, a 32% increase in unit sales volume. We commenced a limited launch of
OviTex PRS in May 2019, selling 101 units during the three months ended March
31, 2020.



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Given that onset of COVID-19 impacts in the United States occurred toward the
end of the first quarter of 2020, we expect the negative financial impacts of
COVID-19 to be significantly greater in the second quarter of 2020 compared
to the first quarter of 2020.

Cost of Revenue



Cost of revenue (excluding amortization of intangible assets) increased
slightly to  $1.5 million for the three months ended March 31, 2020 from $1.4
million for the three months ended March 31, 2019. The increase in cost of
revenue for the three months ended March 31, 2020 was primarily the result of
higher revenue which was partially offset by a $0.3 million decrease in our
excess and obsolete inventory adjustment.

Amortization of Intangible Assets

Amortization of intangible assets was $76,000 for both the three months ended March 31, 2020 and 2019.



Gross Margin

Gross margin increased to 59% for the three months ended March 31, 2020 from 54%
for the three months ended March 31, 2019. The increase was primarily due to the
decrease in the charge recognized for excess and obsolete inventory adjustments
as a percentage of revenue for the three months ended March 31, 2020 as compared
to the prior year period.

Sales and Marketing



Sales and marketing expenses increased by $1.3 million, or 32%, to $5.3 million
for the three months ended March 31, 2020 from  $4.0 million for the three
months ended March 31, 2019. The increase was primarily due to higher salary,
benefits and commission costs as a result of our sales expansion activities,
including hiring of additional sales personnel.

General and Administrative


General and administrative expenses increased by $1.2 million, or 90%, to  $2.5
million for the three months ended March 31, 2020 from  $1.3 million for the
three months ended March 31, 2019. The increase was primarily due to a  $0.6
million increase in insurance costs, higher professional fees of $0.2 million,
higher salaries and benefits of $0.2 million and additional bad debt expense of
$0.2 million.

Research and Development

Research and development expenses decreased by $0.7 million, or 45%, to  $0.9
million for the three months ended March 31, 2020 from  $1.7 million for the
three months ended March 31, 2019 due to a decrease in licensing payments of
$0.5 million, reduced outside development expenses and a lower level of
laboratory spend.

Interest Expense


Interest expense decreased by $33,000, or 4%, to $0.9 million for both the three
months ended March 31, 2020 and 2019. The decrease was primarily due a lower
interest rate during the three months ended March 31, 2020 compared to the prior
period.

Change in Fair Value of Preferred Stock Warrant Liability

For the three months ended March 31, 2019, we recognized a gain of $36,000 due to the change in the fair value of the preferred stock warrant liability.



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Other Income

Other income increased by $68,000 to $0.2 million for the three months ended
March 31, 2020 from  $90,000 in the three months ended March 31, 2019 primarily
due to a larger cash balance which earned more interest compared to the
prior year period.

Liquidity and Capital Resources

Overview



As of March 31, 2020, we had cash, cash equivalents and short-term investments
of $46.7 million, working capital of $51.1 million and an accumulated deficit of
$175.1 million. As of December 31, 2019, we had cash, cash equivalents and
short-term investments of $54.6 million, working capital of $57.6 million and an
accumulated deficit of $167.9 million.

On November 13, 2019, we closed our IPO in which we issued and sold 4,398,700
shares of our common stock at a public offering price of $13.00 per share, which
included 398,700 shares of our common stock sold pursuant to the underwriters'
option to purchase additional shares. We received net proceeds of $50.6 million
after deducting underwriting discounts and commissions and other expenses.

We have incurred operating losses since our inception, and we anticipate that
our operating losses will continue in the near term as we seek to invest in our
sales and marketing initiatives to support our growth in existing and new
markets and in additional research and development activities. We will also
continue to incur additional costs operating as a public company. As of
March 31, 2020, we had $30.0 million of borrowings outstanding under our credit
facility or the OrbiMed Credit Facility, with OrbiMed Royalty Opportunities IP,
LP or OrbiMed. This credit facility matures in November 2023.  This facility
requires that we maintain a minimum cash balance of $2.0 million.

Based on our current business plan, we believe that our existing cash
resources and short-term investments will be sufficient to meet our capital
requirements and fund our operations for at least the next 12 months from the
issuance of this Quarterly Report. If these sources are insufficient to satisfy
our liquidity requirements, we may seek to sell additional common or preferred
equity or debt securities or enter into a new credit facility. If we raise
additional funds by issuing equity or equity­linked securities, our stockholders
would experience dilution and any new equity securities could have rights,
preferences and privileges superior to those of holders of our common stock.
Debt financing, if available, may involve covenants restricting our operations
or our ability to incur additional debt. We cannot be assured that additional
equity, equity­linked or debt financing will be available on terms favorable to
us or our stockholders, or at all, including as a result of market volatility
following the COVID-19 pandemic. If we are unable to obtain adequate financing,
we may be required to delay the development, commercialization and marketing of
our products.

Cash Flows

The following table summarizes our sources and uses of cash for each of the
periods presented:


                                                                Three months ended March 31,
(in thousands)                                                    2020                 2019
Cash used in operating activities                            $       (7,307)      $       (7,777)
Cash provided by (used in) investing activities                        3,932                (548)
Cash (used in) provided by financing activities                        (514)                  484
Effect of exchange rate on cash                                          (2)                  (5)
Net decrease in cash and cash equivalents                    $       (3,891)      $       (7,846)




Operating Activities

During the three months ended March  31, 2020, we used $7.3 million of cash in
operating activities, resulting from our net loss of $7.2 million and the change
in operating assets and liabilities of $1.2 million, offset by non­cash charges
of

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$1.1 million. Our non­cash charges were comprised of our excess and obsolete
inventory charge of $0.4 million, stock­based compensation expense of
$0.4 million, interest expense of $0.1 million and depreciation and amortization
expense of $0.1 million. The change in our operating assets and liabilities was
primarily related to a decrease in our accounts payable.

During the three months ended March 31, 2019, we used $7.8 million of cash in
operating activities, resulting from our net loss of $6.0 million and the change
in operating assets and liabilities of $2.8 million, offset by non­cash charges
of $1.0 million. Our non­cash charges were comprised of our excess and obsolete
inventory charge of $0.7 million,  interest expense of $0.1 million and
depreciation and amortization expense of $0.1 million. The change in our
operating assets was primarily related to a $0.6 million increase in our
accounts receivable, a $0.8 million increase in inventory and a $1.5 million
decrease in our accounts payable and accrued expenses and other liabilities.

Investing Activities

During the three months ended March 31, 2020, cash provided by investing activities was $3.9 million consisting primarily of the proceeds from the sale and maturity of short-term investments.

During the three months ended March 31, 2019, cash used in investing activities was $0.5 million, consisting of payments of $0.5 million for our intangible asset and purchases of property and equipment.

Financing Activities



During the three months ended March 31, 2020, cash used in financing activities
was $0.5 million, consisting primarily of payments made for offering costs from
our IPO.

During the three months ended March 31, 2019, cash provided by financing activities was $0.5 million, consisting of the net proceeds received from the issuance of our Series B preferred stock.

Indebtedness



In November 2018, we entered into the OrbiMed Credit Facility, which consists of
up to $35.0 million in term loans  (the "OrbiMed Term Loans"). The OrbiMed Term
Loans consist of two tranches, a $30.0 million Tranche 1 ("Tranche 1") and a
$5.0 million Tranche 2 ("Tranche 2"). Upon closing, we borrowed $30.0 million of
Tranche 1 and used a portion of the proceeds to repay borrowings under our
credit facility with MidCap and intend to use the remaining proceeds to fund
operations and capital expenditures. We elected not to borrow Tranche 2 prior to
its expiration on December 31, 2019.

Pursuant to the OrbiMed Credit Facility, we provided a first priority security
interest in all existing and future acquired assets, excluding intellectual
property and certain other assets, owned by us. The OrbiMed Credit Facility
contains a negative pledge on intellectual property owned by us. The OrbiMed
Credit Facility also contains customary indemnification obligations and
customary events of default, including, among other things, (i) non­payment,
(ii) breach of warranty, (iii) non­performance of covenants and obligations,
(iv) default on other indebtedness, (v) judgments, (iv) change of control,
(vii) bankruptcy and insolvency, (viii) impairment of security, (ix) key permit
events, (x) key person event, (xi) regulatory matters, and (xii) key contracts.
In addition, we must maintain a minimum cash balance of $2.0 million. In the
event of default under the OrbiMed Credit Facility, we would be required to pay
interest on principal and all other due and unpaid obligations at the current
rate in effect plus 3%.

The OrbiMed Term Loans mature on November 16, 2023 and bear interest at a rate
equal to 7.75% plus the greater of one­month LIBOR or 2.0%. We are required to
make 60 monthly interest payments beginning on November 30, 2018 with the entire
principal payment due at maturity. The OrbiMed Term Loans have a prepayment
penalty equal to 10.0% of the prepaid principal amount prior to the second
anniversary of the OrbiMed Term Loans, 5.0% of the prepaid principal amount
after the second anniversary but prior to the third anniversary and 2.5% of the
prepaid principal amount after the third anniversary. We are also required to
pay an exit fee at the time of maturity or prepayment event equal to

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10% of all principal borrowings and an administration fee equal to $10,000 on the last day of each quarter until all obligations have been paid in full.

Contractual Obligations and Commitments

As of March 31, 2020, there were no significant changes to our commitments and future minimum contractual obligations as set forth in our Annual Report.

Critical Accounting Policies and Significant Judgments and Estimates

The Critical Accounting Policies and Significant Judgements and Estimates included in our Annual Report have not materially changed.

Off­Balance Sheet Arrangements


We did not have during the periods presented, and we do not currently have, any
off­balance sheet arrangements, as defined in the rules and regulations of the
SEC.

Internal Controls over Financial Reporting



Our management is responsible for establishing and maintaining adequate internal
control over financial reporting. Internal control over financial reporting is a
process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of consolidated financial statements in
accordance with GAAP. As a result of becoming a public company, we will be
required, under Section 404 of the Sarbanes­Oxley Act of 2002, as amended  (the
"Sarbanes­Oxley Act"), to furnish a report by management on, among other things,
the effectiveness of our internal control over financial reporting beginning
with our Annual Report on Form 10­K for the year ending December 31, 2020. This
assessment will need to include disclosure of any material weaknesses identified
by our management in our internal control over financial reporting. The SEC
defines a material weakness as a deficiency, or combination of deficiencies, in
internal control over financial reporting such that there is a reasonable
possibility that a material misstatement of a company's annual or interim
consolidated financial statements will not be detected or prevented on a timely
basis.

In accordance with the provisions of the Sarbanes­Oxley Act, neither we nor our
independent registered public accounting firm has performed an evaluation of our
internal control over financial reporting during any period included in this
Quarterly Report.

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