The following Management's Discussion and Analysis of Financial Condition and
Results of Operations contains forward-looking statements that involve risks and
uncertainties. Our actual results could differ materially from those anticipated
in these forward-looking statements as a result of various factors, including
those set forth under "Cautionary Note Regarding Forward-Looking Statements"
herein and under "Risk Factors" in our 2020 Form 10-K. The following discussion
should be read in conjunction with our consolidated financial statements and
related notes thereto included elsewhere in this Quarterly Report and in our
2020 Form 10-K.
Overview
Caladrius Biosciences, Inc. ("we," "us," "our," "Caladrius" or the "Company") is
a clinical-stage biopharmaceutical company dedicated to the development and
commercialization of cellular therapies designed to reverse disease and/or
promote the regeneration of damaged tissue. We are developing first-in-class
therapeutics based on the characteristics of naturally occurring CD34+ cells and
their ability to stimulate the growth of new microvasculature. Our technology
leverages these cells to enable the body's natural repair mechanisms using
formulations unique to each medical indication.
Our leadership team has decades of collective biopharmaceutical development
experience. Our goal is to develop and commercialize products that address
important unmet medical needs based on a broad and versatile portfolio of
candidates. Our current product candidates include:
•CLBS16, the subject of both a recently completed positive Phase 2a study
(ESCaPE-CMD) and a newly initiated Phase 2b (FREEDOM Trial) study in the United
States for the treatment of coronary microvascular dysfunction ("CMD");
•HONEDRA® (CLBS12), recipient of SAKIGAKE designation and eligible for early
conditional approval in Japan for the treatment of critical limb ischemia
("CLI") and Buerger's disease based on the results of an ongoing clinical trial.
CLBS was the recipient of orphan drug designation in March 2021 from the U.S.
Food and Drug Administration ("FDA") for Buerger's disease;
•CLBS201, designed to assess the safety and efficacy of CD34+ cell therapy as a
treatment for patients with pre-dialysis diabetic kidney disease ("DKD"); and
•OLOGO™ (CLBS14), a Regenerative Medicine Advanced Therapy ("RMAT") designated
Phase 3 ready therapy for treatment of no-option refractory disabling angina
("NORDA").
Ischemic Repair (CD34 Cell Technology)
The CD34+ cell was discovered as a result of the deliberate search for a stem
cell capable of stimulating the development and/or repair of blood vessels. All
tissues in the body maintain their function by replacing cells over time. In
addition to the maintenance function, the body must also be capable of building
new blood vessels after injury. A CD34+ cell is a stem cell that has the ability
to stimulate new blood vessel formation at the level of the microvasculature. No
other native cell discovered to date has demonstrated this same capability.
Our proprietary cell technology using autologous (a patient's own naturally
occurring) CD34+ cells has led to the development of therapeutic product
candidates designed to address diseases and conditions caused by ischemia.
Ischemia occurs when the supply of oxygenated blood to healthy tissue is
restricted. Through the administration of CD34+ cells, we seek to promote the
development and formation of new microvasculature and thereby increase blood
flow to the impacted area. We believe that a number of conditions caused by
underlying ischemic injury can be improved through our CD34+ cell technology
including but not limited to Buerger's disease, CLI, CMD, DKD and NORDA.
HONEDRA® for Treatment of Critical Limb Ischemia
Our randomized and open-label, registration-eligible study of HONEDRA® in Japan
for the treatment of CLI has shown positive results to date. The initial
responses observed in the subjects who have reached an endpoint in this open
label study are consistent with a positive therapeutic effect and safety profile
as reported by previously published clinical trials in Japan. The study's
enrollment continues to be curtailed by the COVID-19 pandemic's impact in Japan;
however, we are encouraged by the patient pre-screening pipeline and, despite
the continually extending States of Emergency in Japan announced by the Japanese
government, continues to make progress, albeit slowly, towards study completion,
the exact date of which is impossible to predict given the continuing impact of
COVID-19 on clinical trials like ours in Japan. While the final outcome of the
trial will depend on all data from all subjects, data, to date, are encouraging.
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CLBS16 for Treatment of Coronary Microvascular Dysfunction
In 2017, with the assistance of a $1.9 million grant from the National
Institutes of Health (Award Number R44HL135889), we initiated our program for
CLBS16 for the treatment of CMD, a disease that afflicts millions of patients
with no current targeted treatment options. That study, the ESCaPE-CMD Trial,
was a Phase 2a proof-of-concept study that enrolled patients at the Mayo Clinic
in Rochester, MN and Cedars-Sinai Medical Center in Los Angeles, CA. That data
showed a positive therapeutic effect with a statistically significant
improvement in angina frequency, coronary flow reserve, Canadian Cardiovascular
Society Angina Class and Seattle Angina Questionnaire scores, as well as an
acceptable safety profile. The full data set from that study was presented at
the SCAI 2020 Scientific Sessions Virtual Conference on May 14, 2020 by Dr.
Timothy Henry, FACC, of the Christ Hospital in Cincinnati, Ohio. In December
2020, we commenced enrollment in our Phase 2b FREEDOM Trial of CLBS16 as a
therapy for CMD. The first patient in the study was subsequently treated in
January 2021 at The Christ Hospital Health Network in Cincinnati, Ohio. This
105-patient, double-blind randomized and placebo-controlled clinical trial is
designed to further evaluate the efficacy and safety of intracoronary delivery
of autologous CD34+ cells in subjects with CMD and without obstructive coronary
artery disease. To our knowledge, this is the first controlled regenerative
medicine trial in CMD.
Investigator and potential subject response to the FREEDOM Trial has been
favorable and early enrollment proceeded according to plan. However, the
continued impact of the COVID-19 pandemic, including the resurgence of cases
occurring in select areas throughout the United States, has contributed to a
general slowing of enrollment. Further work with investigators and subject
feedback also led us to propose to the FDA amendments to the FREEDOM Trial
protocol, as originally written, to enhance the breadth and speed of subject
enrollment, including by broadening the array of available techniques acceptable
for diagnosing CMD. These changes notwithstanding, based on the uncertainty that
remains surrounding the future impact of the COVID-19 pandemic on potential
patient recruitment, as well as on accessibility of investigator sites, we now
project enrollment completion for the FREEDOM Trial to occur in the third
quarter of 2022 with final data (based on the six month assessment of all
subjects) expected by the second quarter of 2023.
CLBS201 for Treatment of Diabetic Kidney Disease
We have prepared an initial development plan for the clinical study of CLBS201,
a CD34+ investigational product for administration via the renal arteries to
slow the deterioration, or, ideally, reverse the decline of, renal function in
patients with diabetic kidney disease ("DKD") who, although still pre-dialysis,
exhibit rapidly progressive stage 3b disease. Progressive kidney failure is
associated with attrition of the microcirculation of the kidney. Pre-clinical
studies in kidney disease and injury models have demonstrated that protection or
replenishment of the microcirculation results in improved kidney function. A
Phase 2 proof of concept, randomized, placebo-controlled study for the stage 3b
chronic kidney disease patient population is planned to initiate in the second
half of 2021. The protocol, pending final central institutional review board
approval, calls for a six subject open-label treatment run-in arm in which
patients will be treated sequentially, to be completed, evaluated and cleared
for continuation by the study's data safety monitoring board prior to initiating
the 40 patient randomized, placebo-controlled, double blinded portion of the
trial. We are projecting that safety data for the six subject run-in arm will be
complete by the second quarter of 2022.
OLOGO™ for Treatment of No Option Refractory Disabling Angina
We acquired the rights to data and regulatory filings for a CD34+ cell therapy
program for refractory angina that had been advanced to Phase 3 by a previous
sponsor.
Based on the clinical evidence from the completed studies that a single
administration of OLOGO™ reduces mortality, improves angina and increases
exercise capacity in patients with otherwise untreatable angina, this product
received Regenerative Medicine Advanced Therapy ("RMAT") designation from the
FDA. Discussions with the FDA have resulted in a rejection of our efforts to
reduce the FDA requirement of a 400-patient phase 3 study for registration
(including an arm of 50 standard of care patients and an arm of 150 placebo
patients), despite data showing that the NORDA population is orphan in size.
Because enrollment of a study of this magnitude and design is projected to take
many years, if executable at all, we have decided not to pursue a phase 3
program for OLOGO on our own but will continue to seek a partner to execute the
study.
Additional Out-licensing Opportunities
Our broad intellectual property portfolio of cell therapy assets includes
notable programs available for out-licensing in order to continue their clinical
development. Our current long-term strategy focuses on advancing our therapies
through development with the ultimate objective of obtaining market
authorizations and entering commercialization, either alone or with partners, to
provide treatment options to patients suffering from life-threatening medical
conditions. We believe that we are well-positioned to realize potentially
meaningful value increases within our own proprietary pipeline if we are
successful in advancing our product candidates to their next significant
development milestones.
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Coronavirus Considerations
In December 2019, a novel strain of coronavirus (SARS-CoV-2), which causes
COVID-19, was reported to have surfaced in China. In March 2020, the World
Health Organization declared the outbreak of COVID-19 to be a pandemic, and the
world's economies began to experience pronounced effects. Despite the FDA
approval of multiple COVID-19 vaccines in late 2020, there remains uncertainty
around the extent and duration of disruption and any future related financial
impact cannot reasonably be estimated at this time. In response to the COVID-19
pandemic, we have implemented universal work from home as well as stringent
social distancing and other hygiene policies for employees when they must be in
the office. Our clinical study of HONEDRA® in Japan has experienced significant
delays in enrollment due to the "State of Emergency" in effect in Japan for most
of 2020 and reimplemented in Japan on January 7, 2021 through March 21, 2021
covering Tokyo and other regions in response to an increased number of COVID-19
patients. Due to reported large increases in COVID-19 cases and a low rate of
vaccinations in Japan, a "State of Emergency" was renewed on April 25, 2021
through May 11, 2021 and then reimplemented in Tokyo from July 12, 2021 through
August 22, 2021. This newly reinstated "State of Emergency" continues negatively
to impact enrollment of the ongoing clinical trial.
Results of Operations

Three Months Ended June 30, 2021 Compared to Three Months Ended June 30, 2020


 Overall, net losses were $5.7 million for the three months ended June 30, 2021,
compared to net income of $6.6 million for the three months ended June 30, 2020.
Operating Expenses
For the three months ended June 30, 2021, operating expenses totaled
$7.1 million, compared to $4.3 million for the three months ended June 30, 2020,
representing an increase of 67%. Operating expenses comprised the following:
•Research and development expenses were approximately $4.3 million for the three
months ended June 30, 2021, compared to $1.8 million for the three months ended
June 30, 2020, representing an increase of $2.5 million or 138%. This increase
was primarily due to an increase in expenses associated with the enrollment of
our CLBS16 Phase 2b study (the FREEDOM Trial). Research and development in both
periods focused on the advancement of our ischemic repair platform and related
to:
•expenses associated with our CLBS16 Phase 2b study (the FREEDOM Trial) which
commenced in the fourth quarter of 2020 with the first patient in the study
treated in January 2021;
•ongoing registration-eligible study expenses for HONEDRA® in critical limb
ischemia in Japan, whereby we continue to focus spending on our patient
enrollment. We have experienced significant delays in enrollment in that study
due to the "State of Emergency" in effect in Japan for most of 2020 and
reimplemented in Japan on January 7, 2021 through March 21, 2021 covering Tokyo
and other regions in response to increased number of COVID-19 patients as well
as a severe shortage of beds in intensive care units (and other hospital beds)
affecting all of our clinical sites. Due to reported large increases in COVID-19
cases and a low rate of vaccinations in Japan, a "State of Emergency" was
renewed on April 25, 2021 through May 11, 2021 and then reimplemented in Tokyo
from July 12, 2021 through August 22, 2021. This newly reinstated "State of
Emergency" continues negatively to impact enrollment of the on-going clinical
trial due to the increased number of COVID-19 patients as well as a severe
shortage of beds in intensive care units (and other hospital beds) affecting all
of our clinical sites. We continue to make progress towards study completion;
and
•expenses associated with the preparation of our filing of an IND for the
clinical study of CLBS201 for treatment of diabetic kidney disease. A Phase 2
proof of concept, randomized, placebo-controlled study is planned for initiation
in the second half of 2021.
•General and administrative expenses were approximately $2.8 million for the
three months ended June 30, 2021, compared to $2.5 million for the three months
ended June 30, 2020, representing an increase of 14%. This increase was
primarily due to an increase in Directors and Officers insurance premiums and
strategic consulting expenses. Our general and administrative expenses focus on
general corporate-related activities.
Historically, to minimize our use of cash, we have used a variety of equity and
equity-linked instruments to compensate employees, consultants and other service
providers. The use of these instruments has resulted in charges to the results
of operations, which have been significant in the past.
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Other Income (Expense)
Total other income (expense) is comprised of investment income on cash, cash
equivalents and marketable securities and a loss on sale of $0.1 million related
to the sale of our New Jersey net operating losses ("NJ NOLs").
Income Tax Benefit
In April 2020, we received final approval from the New Jersey Economic
Development Authority ("NJEDA") under the Technology Business Tax Certificate
Transfer Program ("Program") to sell a percentage of our NJ NOLs. We
subsequently sold a portion of our NJ NOLs to a qualifying and approved buyer
pursuant to the Program for net proceeds of $10.9 million.
In April 2021, we received final approval from the NJEDA under the Program to
sell a portion of our NJ NOLs, which were subsequently sold to a qualifying and
approved buyer pursuant to the Program for net proceeds of $1.4 million. The
$1.5 million of our NJ NOL related tax benefits ("NJ NOL Tax Benefits") have
been recorded as a benefit from income taxes and the loss on sale of $0.1
million recorded in other income (expense).
Six Months Ended June 30, 2021 Compared to Six Months Ended June 30, 2020
 Overall, net losses were $13.7 million for the six months ended June 30, 2021,
compared to net income of $2.6 million for the six months ended June 30, 2020.
Operating Expenses
For the six months ended June 30, 2021, operating expenses totaled $15.2 million
compared to $8.3 million for the six months ended June 30, 2020, representing an
increase of 82%. Operating expenses comprised the following:
•Research and development expenses were approximately $9.4 million for the six
months ended June 30, 2021, compared to $3.3 million for the six months ended
June 30, 2020, representing an increase of $6.1 million or 184%. This increase
was primarily due to an increase in expenses associated with the enrollment of
our CLBS16 Phase 2b study (the FREEDOM Trial). Research and development in both
periods focused on the advancement of our ischemic repair platform and related
to:
•expenses associated with our CLBS16 Phase 2b study (the FREEDOM Trial) which
commenced in the fourth quarter of 2020 with the first patient in the study
treated in January 2021;
•ongoing registration-eligible study expenses for HONEDRA® in critical limb
ischemia in Japan, whereby we continue to focus spending on our patient
enrollment. We have experienced significant delays in enrollment in that study
due to the "State of Emergency" in effect in Japan for most of 2020 and
reimplemented in Japan on January 7, 2021 through March 21, 2021 covering Tokyo
and other regions in response to increased number of COVID-19 patients as well
as a severe shortage of beds in intensive care units (and other hospital beds)
affecting all of our clinical sites. Due to reported large increases in COVID-19
cases and a low rate of vaccinations in Japan, a "State of Emergency" was
renewed on April 25, 2021 through May 11, 2021 and then reimplemented in Tokyo
from July 12, 2021 through August 22, 2021. This newly reinstated "State of
Emergency" continues negatively to impact enrollment of the on-going clinical
trial due to the increased number of COVID-19 patients as well as a severe
shortage of beds in intensive care units (and other hospital beds) affecting all
of our clinical sites. We continue to make progress towards study completion;
•expenses associated with the preparation of our filing of an IND for the
clinical study of CLBS201 for treatment of diabetic kidney disease. A Phase 2
proof of concept, randomized, placebo-controlled study is planned for initiation
in the second half of 2021.
•General and administrative expenses were approximately $5.8 million for the six
months ended June 30, 2021, compared to $5.0 million for the six months ended
June 30, 2020, representing an increase of 16%. This increase was primarily due
to an increase in Directors and Officers insurance premiums and strategic
consulting expenses. Our general and administrative expenses focus on general
corporate-related activities.
Historically, to minimize our use of cash, we have used a variety of equity and
equity-linked instruments to compensate employees, consultants and other service
providers. The use of these instruments has resulted in charges to the results
of operations, which have been significant in the past.
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Index


Other Income (Expense)
Total other income (expense) is comprised of investment income on cash, cash
equivalents and marketable securities and a loss on sale of $0.1 million related
to the sale of our NJ NOLs.
Income Tax Benefit
In April 2020, we received final approval from the New Jersey Economic
Development Authority ("NJEDA") under the Technology Business Tax Certificate
Transfer Program ("Program") to sell a percentage of our NJ NOLs. We
subsequently sold a portion of our NJ NOLs to a qualifying and approved buyer
pursuant to the Program for net proceeds of $10.9 million.
In April 2021, we received final approval from the NJEDA under the Program to
sell a portion of our NJ NOLs, which were subsequently sold to a qualifying and
approved buyer pursuant to the Program for net proceeds of $1.4 million. The
$1.5 million of our NJ NOL Tax Benefits have been recorded as a benefit from
income taxes and the loss on sale of $0.1 million recorded in other income
(expense).

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Index


Analysis of Liquidity and Capital Resources
As of June 30, 2021, we had cash, cash equivalents and marketable securities of
approximately $106.1 million, working capital of approximately $104.2 million,
and stockholders' equity of approximately $104.9 million.
During the six months ended June 30, 2021, we met our immediate cash
requirements through existing cash balances. Additionally, we used equity and
equity-linked instruments to pay for services and compensation.
Net cash used in or provided by, operating, investing and financing activities
were as follows (in thousands):
                                                                        Six

Months Ended June 30,


                                                                        2021                    2020
Net cash (used in) provided by operating activities             $         (12,602)         $        262
Net cash (used in) provided by investing activities                       (76,294)                2,855
Net cash provided by financing activities                                  85,319                 9,535



Operating Activities
Our cash used in operating activities during the six months ended June 30, 2021
was $12.6 million, which is comprised of (i) our net loss of $13.7 million,
adjusted for non-cash expenses totaling $2.0 million (which includes adjustments
for equity-based compensation, depreciation and amortization, and
amortization/accretion of marketable securities), and (ii) changes in operating
assets and liabilities using approximately $0.9 million.
Our cash provided by operating activities during the six months ended June 30,
2020 was $0.3 million, which is comprised of (i) our net income of $2.6 million,
adjusted for non-cash expenses totaling $0.9 million (which includes adjustments
for equity-based compensation, depreciation and amortization, and
amortization/accretion of marketable securities), and (ii) changes in operating
assets and liabilities using approximately $3.3 million.
Investing Activities
Our cash used in investing activities during the six months ended June 30, 2021
totaled $76.3 million and was primarily due to net purchases of marketable
securities (net of sales of marketable securities).
Our cash provided by investing activities during the six months ended June 30,
2020 totaled $2.9 million and was primarily due to net proceeds from sales of
marketable securities (net of purchases of marketable securities).
Financing Activities
Our cash provided by financing activities during the six months ended June 30,
2021 primarily consisted of (i) net proceeds of $23.1 million through the
issuance of common shares and warrants in our January 2021 private placement,
(ii) net proceeds of $1.8 million in connection with warrant exercises, (iii)
net proceeds of $60.6 million through the issuance of common shares and warrants
in both of our February 2021 registered direct offerings, which was partially
offset by tax withholding-related payments on net share settlement equity awards
to employees.
Our cash provided by financing activities during the six months ended June 30,
2020 primarily consisted of (i) net proceeds of $4.5 million through the
issuance of common shares and warrants in our April 2020 registered direct
offering, (ii) net proceeds of $3.8 million through the issuance of common
shares and warrants in our May 2020 registered direct offering, and (iii) net
proceeds of $1.3 million through the issuance of common shares under our common
stock sales agreement with H.C. Wainwright, which was partially offset by tax
withholding-related payments on net share settlement equity awards to employees.
Liquidity and Capital Requirements Outlook
To meet our short and long-term liquidity needs, we expect to use existing cash
balances and a variety of other means. Other sources of liquidity could include
additional potential issuances of debt or equity securities in public or private
financings, partnerships and/or collaborations and/or sale of assets. Our
history of operating losses and liquidity challenges may make it difficult for
us to raise capital on acceptable terms or at all. The demand for the equity and
debt of biopharmaceutical companies like ours is dependent upon many factors,
including the general state of the financial markets. During times of extreme
market volatility, capital may not be available on favorable terms, if at all.
Our inability to obtain such additional capital could materially and adversely
affect our business operations. We will also continue to seek, as appropriate,
grants for scientific and clinical studies from various governmental agencies
and foundations, and other sources of non-dilutive funding.
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Index


We believe that our cash on hand will enable us to fund operating expenses for
at least the next 12 months following the issuance of our financial statements.
On June 4, 2021, the Company entered into an At The Market Offering Agreement
(the "ATM Agreement") with H.C. Wainwright & Co., LLC ("HCW"), as sales agent,
in connection with an "at the market offering" under which the Company from time
to time may offer and sell shares of its common stock, having an aggregate
offering price of up to $50.0 million. As of June 30, 2021, the Company had not
issued any shares under the ATM Agreement.
In February 2021, the Company received preliminary approval from the NJEDA to
participate in the Program. The Program permits qualified companies to sell a
percentage of their NJ NOLs to unrelated profitable corporations. On April 12,
2021, the Company received final approval from NJEDA to sell $1.5 million of its
NJ NOLs, which was subsequently sold to a qualifying and approved buyer pursuant
to the Program for net proceeds of $1.4 million.
In February 2021, we entered into a Securities Purchase Agreement (the
"Institutional Purchase Agreement") with certain institutional investors (the
"Institutional Purchasers"). Pursuant to the terms of the Institutional Purchase
Agreement, we sold to the Institutional Purchasers in a registered direct
offering an aggregate of 24,906,134 shares of our common stock and warrants to
purchase an aggregate of 12,453,067 shares of our common stock at a combined
purchase price equal to $2.45 per share and associated warrant. Each warrant
features an exercise price equal to $2.90 per share, is exercisable immediately
upon issuance and will expire five years from the issuance date. Additionally,
in a concurrent non-brokered registered direct offering, we entered into a
Securities Purchase Agreement (the "Additional Purchase Agreement") with certain
accredited investors (the "Additional Purchasers"). Pursuant to the terms of the
Additional Purchase Agreement, we sold to the Additional Purchasers an aggregate
of 1,632,652 shares of our common stock and warrants to purchase an aggregate of
816,326 shares of our common stock at a combined purchase price equal to $2.45
per share and associated warrant. Each warrant features an exercise price equal
to $2.90 per share, is exercisable immediately upon issuance and will expire
five years from the issuance date. The closing of the offerings occurred on
February 17, 2021. In connection with the registered direct offerings, we
received gross proceeds of approximately $65.0 million.
On February 12, 2021, we suspended the use of the at-the-market transactions
facility (the "ATM") and terminated the continuous offering pursuant to the
Common Stock Sales Agreement ("Sales Agreement") entered into in February 2018
with HCW. As of termination date of February 12, 2021, we had sold an aggregate
of 3,784,912 shares of our common stock pursuant to the Sales Agreement for
aggregate gross proceeds of $9.5 million.
In January 2021, we entered into a Securities Purchase Agreement (the "January
Purchase Agreement") with certain institutional and accredited investors (the
"January Purchasers"), pursuant to which the Company issued and sold to the
January Purchasers in a private placement an aggregate of (i) 12,500,000 shares
of common stock, and (ii) warrants exercisable for up to an aggregate of
6,250,000 shares of common stock at a combined offering price of $2.00 per share
of common stock and associated warrant. The warrants have an exercise price of
$2.90 per share. Each warrant will be immediately exercisable and will expire
five and one-half years from the issuance date. The closing of the offering
occurred on January 25, 2021. We received gross proceeds of $25.0 million in
connection with the private placement, before deducting placement agent fees and
related offering expenses.
In March 2019, we and Lincoln Park Capital Fund, LLC ("Lincoln Park") entered
into a purchase agreement (the "Purchase Agreement") and a registration rights
agreement (the "Registration Rights Agreement"), pursuant to which we have the
right to sell to Lincoln Park shares of our common stock having an aggregate
value of up to $26.0 million, subject to certain limitations and conditions set
forth in the Purchase Agreement (the "Offering"). As consideration for entering
into the Purchase Agreement, we issued to Lincoln Park an additional 181,510
shares of common stock as commitment shares. Pursuant to the Purchase Agreement,
Lincoln Park purchased 250,000 shares of common stock, at a price of $4.00 per
share, for a total gross purchase price of $1.0 million (the "Initial Purchase")
upon commencement. Thereafter, as often as every business day from and after one
business day following the date of the Initial Purchase and over the 36-month
term of the Purchase Agreement, we have the right, from time to time, at our
sole discretion and subject to certain conditions, to direct Lincoln Park to
purchase up to 100,000 shares of common stock, with such amount increasing as
the closing sale price of the common stock increases; provided Lincoln Park's
obligation under any single such purchase will not exceed $2,500,000, unless we
and Lincoln Park mutually agree to increase the maximum amount of such single
purchase (each, a "Regular Purchase"). If we direct Lincoln Park to purchase the
maximum number of shares of common stock it then may sell in a Regular Purchase,
then in addition to such Regular Purchase, and subject to certain conditions and
limitations in the Purchase Agreement, we may direct Lincoln Park in an
"accelerated purchase" to purchase an additional amount of common stock that may
not exceed the lesser of (i) 300% the number of shares purchased pursuant to the
corresponding Regular Purchase or (ii) 30% of the total number of shares of our
common stock traded during a specified period on the applicable purchase date as
set forth in the Purchase Agreement. Under certain circumstances and in
accordance with the Purchase Agreement, we may direct Lincoln Park to purchase
shares in multiple accelerated purchases on the same trading day. As of June 30,
2021, we had not made any sales of common stock to Lincoln Park under the
Purchase Agreement other than the Initial Purchase.
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Index


While we continue to seek capital through a number of means, there can be no
assurance that additional financing will be available on acceptable terms, if at
all, and our negotiating position in capital generating efforts may worsen as
existing resources are used. Additional equity financing may be dilutive to our
stockholders; debt financing, if available, may involve significant cash payment
obligations and covenants that restrict our ability to operate as a business;
our stock price may not reach levels necessary to induce option or warrant
exercises; and asset sales may not be possible on terms we consider acceptable.
If we are unable to access capital necessary to meet our long-term liquidity
needs, we may have to delay the expansion of our business or raise funds on
terms that we currently consider unfavorable.

Seasonality


We do not believe that our operations are seasonal in nature.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements.
Critical Accounting Policies and Estimates
There have been no material changes in our critical accounting policies and
estimates during the three and six months ended June 30, 2021, compared to those
reported in our 2020 Form 10-K.

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