The following discussion should be read in conjunction with our consolidated
financial statements and related notes appearing elsewhere in this Annual Report
on Form 10-K. The following discussion contains forward-looking statements that
involve risks and uncertainties that could cause actual results or events to
differ materially from those expressed or implied by such forward-looking
statements as a result of many important factors, including those set forth in
Part I of this Annual Report on Form 10-K under the caption "Risk Factors".
Please see also the "Special Note Regarding Forward-Looking Statements" in Part
I above. We do not undertake any obligation to update forward-looking statements
to reflect events or circumstances occurring after the date of this Annual
Report on Form 10-K.
All share amounts presented in this Item 7 give effect to the 1-for-30 reverse
stock split of the outstanding shares of our common stock that occurred on
February 11, 2020.
Introduction
This Management's Discussion and Analysis of our financial condition and results
of operations is based on our financial statements, which management has
prepared in accordance with U.S. generally accepted accounting principles. The
preparation of these financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
the disclosure of contingent assets and liabilities at the date of the financial
statements, as well as the reported revenues and expenses during the reporting
periods. On an ongoing basis, we evaluate such estimates and judgments,
including those described in greater detail below. We base our estimates on
historical experience and on various other factors that management believes are
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying value of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.
Business Overview
We are a research and clinical-stage biomaterials and biotechnology company with
a focus on treatment of spinal cord injuries, or SCIs. Our approach to treating
acute SCIs is based on our investigational Neuro-Spinal Scaffold™ implant, a
bioresorbable polymer scaffold that is designed for implantation at the site of
injury within a spinal cord and is intended to treat acute SCI. The Neuro-Spinal
Scaffold implant incorporates intellectual property licensed under an exclusive,
worldwide license from BCH and MIT. We also plan to evaluate other technologies
and therapeutics that may be complementary to our development of the
Neuro-Spinal Scaffold implant or offer the potential to bring us closer to our
goal of redefining the life of the SCI patient.
Overall, we expect our research and development expenses to be substantial and
to increase for the foreseeable future as we continue the development and
clinical investigation of our current and future products. However, expenditures
on research and development programs are subject to many uncertainties,
including whether we develop our products with a partner or independently, or
whether we acquire products from third parties. At this time, due to the
uncertainties and inherent risks involved in our business, we cannot estimate in
a meaningful way the duration of, or the costs to complete, our research and
development programs or whether, when or to what extent we will generate
revenues or cash inflows from the commercialization and sale of any of our
products. While we are currently focused on advancing our Neuro-Spinal Scaffold
implant, our future research and development expenses will depend on the
determinations we make as to the scientific and clinical prospects of each
product candidate, as well as our ongoing assessment of regulatory requirements
and each product's commercial potential. In addition, we may make acquisitions
of businesses, technologies or intellectual property rights that we believe
would be necessary, useful or complementary to our current business. Any
investment made in a potential acquisition could affect our results of
operations and reduce our limited capital resources, and any issuance of equity
securities in connection with a potential acquisition could be substantially
dilutive to our stockholders.
There can be no assurance that we will be able to successfully develop or
acquire any product, or that we will be able to recover our development or
acquisition costs, whether upon commercialization of a developed product or
otherwise. We cannot provide assurance that any of our programs under
development or any acquired technologies or products will result in products
that can be marketed or marketed profitably. If our development-stage programs
or any acquired products or technologies do not result in commercially viable
products, our results of operations could be materially adversely affected.
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We were incorporated on April 2, 2003, under the name of Design Source, Inc. On
October 26, 2010, we acquired the business of InVivo Therapeutics Corporation,
which was founded in 2005, and continued the existing business operations of
InVivo Therapeutics Corporation as our wholly-owned subsidiary.
Critical Accounting Policies and Estimates
Our consolidated financial statements, which appear in Item 8 of this Annual
Report on Form 10-K, have been prepared in accordance with accounting principles
generally accepted in the United States, which require that our management make
certain assumptions and estimates and, in connection therewith, adopt certain
accounting policies. Our significant accounting policies are set forth in
Note 2, "Significant Accounting Policies", in the Notes to Consolidated
Financial Statements in Item 8 of this Annual Report on Form 10-K. Of those
policies, we believe that the policies discussed below may involve the highest
degree of judgment and may be the most critical to an accurate reflection of our
financial condition and results of operations.
Stock-Based Compensation
Our stock options are granted with an exercise price set at the fair market
value of our common stock on the date of grant. Our stock options generally
expire 10 years from the date of grant and vest upon terms determined by our
Board of Directors.
We recognize compensation costs resulting from the issuance of stock-based
awards to employees, non-employees and directors as an expense in our statements
of operations over the service period based on a measure of fair value for each
stock-based award. The fair value of each option grant is estimated as of the
date of grant using the Black-Scholes option pricing model and the fair value of
each restricted stock award or restricted stock unit, which we refer to
collectively as restricted securities, is determined based on the fair market
value of our common stock on the date of grant. The fair value is amortized as a
compensation cost on a straight-line basis over the requisite service period of
the award, which is generally the vesting period. The expected term of any
options granted under our stock plans is based on the average of the contractual
term (generally, 10 years) and the vesting period (generally, 48 months). The
risk-free rate is based on the yield of a U.S. Treasury security with a term
consistent with the expected term of the option. The restricted securities
generally vest over a three-year period, contingent on the recipient's continued
employment. See Note 9, "Shared-Based Compensation, Stock Options and Restricted
Securities," in the Notes to Consolidated Financial Statements in Item 8 of this
Annual Report on Form 10 K for more information about the assumptions underlying
these estimates.
Research and Development Expense
Our research and development expenses consist primarily of costs incurred for
the development of our product candidates, which include:
? employee related expenses, including salaries, benefits, travel, and stock
based compensation expense;
? expenses incurred under agreements with contract research organization
("CROs"), and clinical sites that conduct our clinical studies;
facilities, depreciation, and other expenses, which include direct and
? allocated expenses for rent and maintenance of facilities, insurance, and other
supplies;
? costs associated with our research platform and preclinical activities;
? costs associated with our regulatory, quality assurance, and quality control
operations; and
? amortization of intangible assets.
Our research and development costs are expensed as incurred. We are required to
estimate our accrued research and development expenses. This process involves
reviewing open contracts and purchase orders, communicating with our personnel
to identify services that have been performed on our behalf and estimating the
level of service performed
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and the associated costs incurred for the services when we have not yet been
invoiced or otherwise notified of the actual costs. We make estimates of our
accrued expenses as of each balance sheet date in our consolidated financial
statements based on facts and circumstances known to us at that time. If the
actual timing of the performance of services or the level of effort varies from
our estimate, we adjust the accrued expense accordingly. Although we do not
expect our estimates to be materially different from amounts actually incurred,
our understanding of the status and timing of services performed relative to the
actual status and timing of services performed may vary and may result in us
reporting amounts that are too high or too low in any particular period. To
date, we have not made any material adjustments to our prior estimates of
accrued research and development expenses.
Recently Adopted Accounting Standards
In June 2016, the Financial Accounting Standards Board (the "FASB") issued
Accounting Standards Update ("ASU") No. 2016-13, "Financial Instruments-Credit
Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" and
subsequent amendments to the initial guidance: ASU 2018-19 "Codification
Improvements to Topic 326, Financial Instruments-Credit Losses", ASU 2019-04
"Codification Improvements to Topic 326, Financial Instruments-Credit Losses,
Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments", ASU
2019-05 "Financial Instruments-Credit Losses", ASU 2019-11 "Codification
Improvements to Topic 326, Financial Instruments - Credit Losses", ASU 2020-02
Financial Instruments-Credit Losses (Topic 326) and Leases (Topic 842) and ASU
2020-03 Codification Improvements to Financial Instruments, (collectively,
"Topic 326"). Topic 326 requires measurement and recognition of expected credit
losses for financial assets held. Topic 326 is effective for all public business
entities, excluding smaller reporting companies, for periods beginning after
December 15, 2019 and all other entities beginning after December 15, 2022. We
early adopted ASU No. 2016-13 and the related amending ASU's on January 1, 2020,
and the adoption did not have a material effect on our financial position,
results of operations or disclosures.
In August 2018, the FASB issued ASU No. 2018-13 - Fair Value Measurement (Topic
820): Disclosure Framework - Changes to the Disclosure Requirements for Fair
Value Measurement which improves the disclosure requirements on fair value
measurements in Topic 820, Fair Value Measurement. The amendments in this ASU
are effective for all entities for fiscal years, and interim periods within
those fiscal years, beginning after December 15, 2019. The amendments on changes
in unrealized gains and losses, the range and weighted average of significant
unobservable inputs used to develop Level 3 fair value measurements, and the
narrative description of measurement uncertainty should be applied prospectively
for only the most recent interim or annual period presented in the initial
fiscal year of adoption. All other amendments should be applied retrospectively
to all periods presented upon their effective date. Early adoption is permitted
upon issuance of this ASU. We adopted ASU No. 2018-13 on January 1, 2020, and
the adoption did not have a material effect on our financial position, results
of operations or disclosures.
In November 2019, the FASB issued ASU No. 2019-08 "Compensation - Stock
Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606):
Codification Improvements - Share-Based Consideration Payable to a Customer."
ASU No. 2019-08 amends and clarifies ASU No. 2018-07, which we adopted on
January 1, 2019, to require that an entity measure and classify share-based
payment awards granted to a customer by applying the guidance in Topic 718. For
entities that have already adopted the amendments in ASU No. 2018-07, the
amendments in this ASU are effective for fiscal years beginning after December
15, 2019, and for interim periods within those fiscal years, with early adoption
permitted. We adopted ASU No. 2019-08 on January 1, 2020, and the adoption did
not have any impact on our financial position, results of operations or
disclosures.
In December 2019, the FASB issued ASU No. 2019-12, Simplifications to Accounting
for Income Taxes (Topic 740). The amendments in this ASU removes certain
exceptions for recognizing deferred taxes for investments, performing
intra-period allocation, and calculating income taxes in interim periods. This
ASU also adds guidance to reduce complexity in certain areas, including deferred
taxes for goodwill and allocating taxes for members of a consolidated group.
This ASU is effective for all entities for fiscal years beginning after December
15, 2020, and early adoption is permitted. We adopted ASU No. 2019-12 on January
1, 2020, and the adoption did not have any impact on our financial position,
results of operations or disclosures.
New Accounting Pronouncements Not Yet Adopted
In January 2020, the FASB issued ASU No. 2020-01, Investments-Equity Securities
(Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and
Derivatives and Hedging (Topic 815). The
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amendments in this ASU clarify the interaction between the accounting for
investments in equity securities, investment in equity method and certain
derivatives instruments. The ASU is expected to reduce diversity in practice and
increase comparability of the accounting for these interactions. The
pronouncement is effective for fiscal years, and for interim periods within
those fiscal years, beginning after December 15, 2021. ASU No. 2020-01 is
effective for us beginning in fiscal 2022. We are currently in the process of
evaluating the effects of this pronouncement on our financial statements.
In August 2020, the FASB issued ASU No. 2020-06 "Debt-Debt with Conversion and
Other Options (Subtopic 470-20) and Derivatives and Hedging- Contracts in
Entity's Own Equity", related to the measurement and disclosure requirements for
convertible instruments and contracts in an entity's own equity. The
pronouncement simplifies and adds disclosure requirements for the accounting and
measurement of convertible instruments and the settlement assessment for
contracts in an entity's own equity. This pronouncement is effective for fiscal
years, and for interim periods within those fiscal years, beginning in fiscal
2022. We are currently in the process of evaluating the effects of this
pronouncement on our financial statements.
Results of Operations
Comparison of the Years Ended December 31, 2020 and 2019
Research and Development Expenses
Research and development expenses decreased by $1.7 million to $3.9 million for
the year ended December 31, 2020 from $5.6 million for the year ended
December 31, 2019. The decrease in research and development expenses for the
year ended December 31, 2020 is attributable to a decrease in clinical trial
costs of $1.0 million due to lower startup costs in our INSPIRE 2.0 Study in the
current year as compared to the prior year, a decrease in scaffold manufacturing
costs of $0.2 million primarily as a result of lower clinical demand, a decrease
in incentive compensation costs of $0.3 million, a decrease in legal costs of
$0.1 million primarily due to fewer regulatory tasks requiring legal assistance
and a decrease in other net immaterial balances of $0.1 million mainly due to
cost containment initiatives.
General and Administrative Expenses
General and administrative expenses decreased by $0.7 million to $5.2 million
for the year ended December 31, 2020 from $5.9 million for year ended
December 31, 2019. The decrease in general and administrative expenses for the
year ended December 31, 2020 is due to lower incentive compensation costs in the
current year of $0.3 million as well as lower consulting costs of $0.4 million.
In the prior year, the Company conducted a one-time market analysis which did
not recur in the current year resulting in lower consulting costs in the current
year.
Interest Income / (Expense), Net
Interest income decreased by $235 thousand to $19 thousand for the year ended
December 31, 2020 from $254 thousand for the year ended December 31, 2019. The
decrease in interest income was primarily due to lower yields in our cash and
cash equivalents in 2020.
Warrant Modification Expense
The Company did not incur any Warrant Modification Expenses during the year
ended December 31, 2020. During the year ended December 31, 2019, the Company
incurred $0.7 million in expense related to the Second Ladenburg Warrant
Amendment (defined below).
Other Income
Other income for the year ended December 31, 2020 was $4 thousand. Other income
for the year ended December 31, 2019 was $79 thousand mainly attributed to
income related to the sale of lab equipment.
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Liquidity and Capital Resources
Since inception, we have devoted substantially all of our efforts to business
planning, research and development, recruiting management and technical staff,
acquiring operating assets, and raising capital. At December 31, 2020, our
accumulated deficit was $228.2 million.
At December 31, 2020, we had total assets of $21.9 million, total liabilities of
$2.7 million, and total stockholders' equity of $19.2 million. We recorded a net
loss of $9.1 million for the year ended December 31, 2020. We have not achieved
profitability and may not be able to realize sufficient revenue to achieve or
sustain profitability in the future. We do not expect to be profitable in the
next several years, but rather expect to incur additional operating losses. We
believe that our cash and cash equivalents at December 31, 2020 combined with
the proceeds from the exercise of certain of the October 2020 Series A Warrants
subsequent to December 31, 2020, will provide necessary funding to fund
operations through the second quarter of 2023. This estimate is based on
assumptions that may prove to be wrong; expenses could prove to be significantly
higher, leading to a more rapid consumption of our existing resources. We have
limited liquidity and capital resources and must obtain significant additional
capital resources in order to fund our operations and sustain our product
development efforts, for acquisition of technologies and intellectual property
rights, for preclinical and clinical testing of our anticipated products,
pursuit of regulatory approvals, acquisition of capital equipment, laboratory
and office facilities, establishment of production capabilities, for selling,
general and administrative expenses and for other working capital requirements.
We also expect that we will need to raise additional capital through a
combination of equity offerings, debt financings, other third-party funding,
marketing and distribution arrangements and other collaborations, strategic
alliances and licensing arrangements. Additionally, the COVID-19 pandemic could
have a continued adverse impact on economic and market conditions and extend the
period of global economic slowdown, which would impair our ability to raise
needed funds.
We may pursue various other dilutive and nondilutive funding alternatives
depending upon our clinical path forward and the extent to which we require
additional capital to proceed with development of some or all of our product
candidates on expected timelines. The source, timing and availability of any
future financing will depend principally upon market conditions and the status
of our clinical development programs, both of which may be negatively impacted
by the COVID-19 pandemic. Funding may not be available when needed, at all, or
on terms acceptable to us. Lack of necessary funds may require us to, among
other things, delay, scale back or eliminate some or all of our research and
product development programs, planned clinical trials, and capital expenditures
or to license our potential products or technologies to third parties. We may
alternatively engage in cost-cutting measures in an attempt to extend our cash
resources as long as possible. If we are unable to raise additional capital, we
may be forced to cease operations entirely.
Financing Transactions
In October 2020, we completed a registered public offering (the "October 2020
Offering") in which we sold an aggregate of (i) 11,785,000 shares of our common
stock, (the "October 2020 Shares") and Series A Warrants exercisable for an
aggregate of 11,785,000 shares of our common stock (the "October 2020 Series A
Warrants") at a combined public offering price of $0.80 per share and associated
warrant and (ii) pre-funded Series B warrants exercisable for an aggregate of
6,965,000 shares of common stock (the "October 2020 Series B Pre-funded
Warrants") and Series A Warrants exercisable for an aggregate of 6,965,000
shares of our common stock (also the "October 2020 Series A Warrants") at a
combined public offering price of $0.80 per pre-funded warrant and associated
warrant. Each October 2020 Series A Warrant has an exercise price of $0.80 per
share, is exercisable immediately and expires in October 2025. Each October 2020
Series B Pre-funded Warrant has an exercise price of $0.00001 per share, is
exercisable immediately, and expires when exercised in full, subject to certain
conditions. In connection with the October 2020 Offering, we issued, to
designees of H.C. Wainwright & Co., LLC ("Wainwright"), the placement agent for
the October 2020 Offering, warrants (the "October 2020 Placement Agent
Warrants") to purchase an aggregate of 1,218,750 shares of our common stock,
which represents a number of shares of common stock equal to 6.5% of the
aggregate number of shares of common stock and October 2020 Series B Pre-funded
Warrants sold in the October 2020 Offering. The October 2020 Placement Agent
Warrants have an exercise price of $1.00 per share, are immediately exercisable
and expire in October 2025. The net proceeds to us, after deducting Wainwright's
placement agent fees and other offering expenses payable by us, were
approximately $13.5 million. During the year ended December 31, 2020, we issued
an aggregate of 6,965,000 shares of our common stock upon the exercise of all of
the October 2020 Series B Pre-funded Warrants for an immaterial amount, as they
were substantially pre-funded. During the year ended December 31, 2020, we did
not issue any shares as a result of October 2020 Series A Warrants or October
2020 Placement Agent Warrants exercise activity.
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In April 2020, we entered into a securities purchase agreement (the "April 2020
Purchase Agreement") with certain institutional investors (the "April 2020
Purchasers"), pursuant to which we agreed to sell and issue, in a registered
direct offering, an aggregate of 1,715,240 shares of our common stock, at a
purchase price per share of $1.75 (the "April 2020 Shares"). The April 2020
Shares were offered by us pursuant to a shelf registration statement on Form
S-3, which was declared effective by SEC on November 14, 2019 (File No.
333-234353) and a prospectus supplement thereunder. Pursuant to the April 2020
Purchase Agreement, in a concurrent private placement, we also issued to the
April 2020 Purchasers warrants (the "April 2020 Series C Warrants") to purchase
up to 1,715,240 shares of our common stock (the "Private Placement" and together
with the April 2020 Registered Offering, the "April 2020 Offerings"). The April
2020 Series C Warrants are exercisable immediately at an exercise price of $1.62
per share of common stock, subject to adjustment in certain circumstances, and
expire on October 17, 2025. In connection with the April 2020 Offerings, we also
issued to Wainwright warrants to purchase an aggregate of 111,491 shares of our
common stock (the "April 2020 Placement Agent Warrants") which represents a
number of shares of common stock equal to 6.5% of the aggregate number of April
2020 Shares sold in the April 2020 Registered Offering, at an exercise price of
$2.1875 per share with a term expiring on April 15, 2025. The net proceeds to
us, after deducting Wainwright's placement agent fees and other offering
expenses payable by us, were approximately $2.6 million. During the year ended
December 31, 2020, we issued an aggregate of 35,000 shares of our common stock
upon the exercise of certain of the April 2020 Series C Warrants for aggregate
proceeds of $57 thousand. During the year ended December 31, 2020, we did not
issue any shares as a result of April 2020 Placement Agent Warrants exercise
activity.
In March 2020, we completed a registered public offering (the "March 2020
Offering") in which we sold an aggregate of (i) 955,613 shares of our common
stock, (the "March 2020 Shares") and Series A Warrants exercisable for an
aggregate of 955,613 shares of our common stock (the "March 2020 Series A
Warrants") at a combined public offering price of $2.75 per share and associated
warrant and (ii) pre-funded Series B warrants exercisable for an aggregate of
1,589,842 shares of our common stock (the "March 2020 Series B Warrants") and
Series A Warrants exercisable for an aggregate of 1,589,842 shares of our common
stock (also the "March 2020 Series A Warrants") at a combined public offering
price of $2.75 per pre-funded warrant and associated warrant. Each March 2020
Series A Warrant has an exercise price of $2.75 per share, is exercisable
immediately and expires in March 2025. Each March 2020 Series B Warrant has an
exercise price of $0.00001 per share, is exercisable immediately, and expires
when exercised in full, subject to certain conditions. In connection with the
March 2020 Offering, we issued, to Wainwright, the placement agent for the March
2020 Offering, warrants (the "March 2020 Placement Agent Warrants") to purchase
an aggregate of 165,455 shares of our common stock, which represents a number of
shares of common stock equal to 6.5% of the aggregate number of shares of common
stock and March 2020 Series B Warrants sold in the March 2020 Offering. The
March 2020 Placement Agent Warrants have an exercise price of $3.4375 per share,
are immediately exercisable and expire in March 2025. The net proceeds to us,
after deducting Wainwright's placement agent fees and other offering expenses
payable by us, were approximately $6.0 million. During the year ended
December 31, 2020, we did not issue any shares as a result of the March 2020
Placement Agent Warrants or March 2020 Series A Warrants exercise activity.
During the year ended December 31, 2020, we issued an aggregate of 1,577,114
shares of our common stock upon the exercise of certain of the pre-funded March
2020 Series B warrants for an immaterial amount, as they were substantially
pre-funded.
In November 2019, we closed a public offering of an aggregate of 233,341 shares
of our common stock, at an offering price of $3.60 per share (the offering, the
"2019 Offering"). The net proceeds to us after deducting the placement agent
fees and other offering expenses, were $367 thousand. In connection with the
2019 Offering, we issued to Wainwright, warrants (the "2019 Placement Agent
Warrants") to purchase an aggregate of 15,168 shares of our common stock. The
2019 Placement Agent Warrants have an exercise price of $4.50 per share, are
immediately exercisable and expire in November 2024. During the year ended
December 31, 2020, we did not issue any shares of common stock as a result of
exercise activity related to the 2019 Placement Agent Warrants.
In November 2019, we entered into a Second Amendment to Warrant Agency Agreement
and Warrants, ("the Second Ladenburg Warrant Amendment"), by and between us and
Continental, as Warrant Agent, dated November 21, 2019, that amended the 2018
Series A warrants issued by us in the June 2018 underwritten public offering to
reflect a reduced exercise price per share of $6.98 from $60.00. See Note 10 to
our Consolidated Financial Statements for more information about the Second
Ladenburg Warrant Amendment. During the year ended December 31, 2020 we issued
an aggregate of 40,975 shares of common stock upon the exercise of certain of
the 2018 Series A warrants for aggregate proceeds of $286 thousand.
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Cashflows
Net cash used in operating activities is comprised of our net losses, adjusted
for non-cash expenses, and working capital requirements. Net cash used in
operating activities for the year ended December 31, 2020 was $9.5 million
compared to $10.3 million for the year ended December 31, 2019. The $0.8 million
decrease in net cash used in operating activities for the year ended
December 31, 2020 as compared to the same period in the prior year was primarily
due to a decrease in our net loss of $2.8 million, a decrease in warrant
modification expense of $0.7 million, a decrease in the change in accrued
expenses and other liabilities of $0.4 million, a decrease in the change in
accounts payable of $0.6 million and a decrease in the change in operating lease
right-of-use liability of $0.2 million.
Net cash used in investing activities for the years ended December 31, 2020 and
2019, was $41 thousand and $12 thousand, respectively attributable to purchases
of capital equipment.
Net cash provided by financing activities for the year ended December 31, 2020
was $22.4 million consisting of $22.1 million in proceeds from the issuance of
common stock associated with the offerings in 2020 and $0.3 million in proceeds
from the exercise of warrants. This compares to net cash of $0.3 million
provided by financing activities for the year ended December 31, 2019 consisting
primarily of $0.4 million in proceeds from the issuance of common stock
associated with the November 2019 underwritten public offering, offset by $0.1
million in loan repayments.
Off Balance Sheet Arrangements
We do not have any off balance sheet arrangements that have or are reasonably
likely to have a current or future material effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures, or capital resources.
Inflation and Changing Prices
We do not believe that inflation has had, or will have, a material impact on our
operating costs and earnings.
Commitments
See Note 13, "Commitments and Contingencies," in the Notes to Consolidated
Financial Statements in Item 8 of this Annual Report on Form 10-K for
information regarding our commitments.
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