2017 Q4 Form 10-Q Financial Statement

#000162828017011022 Filed on November 07, 2017

View on sec.gov

Income Statement

Concept 2017 Q4 2017 Q3 2016 Q4
Revenue $23.35M $14.26M $23.35M
YoY Change 0.0% 30.48% 51.43%
Cost Of Revenue $8.390M $7.186M $7.590M
YoY Change 10.54% 4.81% 4.98%
Gross Profit $14.96M $7.074M $14.96M
YoY Change 0.0% 73.68% 82.65%
Gross Profit Margin 64.07% 49.61% 64.07%
Selling, General & Admin $10.18M $8.186M $7.930M
YoY Change 28.37% 16.78% 38.15%
% of Gross Profit 68.04% 115.72% 53.0%
Research & Development $3.590M $2.919M $4.260M
YoY Change -15.73% -15.22% -42.43%
% of Gross Profit 24.0% 41.26% 28.47%
Depreciation & Amortization $420.0K $410.0K $500.0K
YoY Change -16.0% -12.77% 21.95%
% of Gross Profit 2.81% 5.8% 3.34%
Operating Expenses $13.77M $11.11M $12.18M
YoY Change 13.05% 6.24% -7.38%
Operating Profit $1.191M -$4.031M $1.191M
YoY Change 0.0% -36.82% -124.03%
Interest Expense $50.00K $317.0K -$310.0K
YoY Change -116.13% 268.6%
% of Operating Profit 4.2% -26.03%
Other Income/Expense, Net -$100.0K -$1.376M $0.00
YoY Change 366.44% -100.0%
Pretax Income $290.0K -$5.410M -$6.200M
YoY Change -104.68% -19.01% 26.27%
Income Tax $0.00
% Of Pretax Income 0.0%
Net Earnings $287.0K -$5.407M $287.0K
YoY Change 0.0% -19.0% -105.85%
Net Earnings / Revenue 1.23% -37.92% 1.23%
Basic Earnings Per Share
Diluted Earnings Per Share $8.269K -$160.7K -$254.7K
COMMON SHARES
Basic Shares Outstanding 34.91M shares 32.82M shares 24.11M shares
Diluted Shares Outstanding

Balance Sheet

Concept 2017 Q4 2017 Q3 2016 Q4
SHORT-TERM ASSETS
Cash & Short-Term Investments $26.90M $15.50M $23.00M
YoY Change 16.96% 74.16% 57.53%
Cash & Equivalents $26.86M $15.50M $22.98M
Short-Term Investments
Other Short-Term Assets $1.581M $1.366M $1.164M
YoY Change 35.82% 84.35% 150.86%
Inventory $3.793M $4.049M $3.488M
Prepaid Expenses
Receivables $18.27M $15.43M $17.09M
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $50.51M $36.31M $44.72M
YoY Change 12.93% 72.1% 63.56%
LONG-TERM ASSETS
Property, Plant & Equipment $4.071M $3.967M $3.875M
YoY Change 5.06% -5.88% -4.3%
Goodwill
YoY Change
Intangibles $0.00
YoY Change -100.0%
Long-Term Investments
YoY Change
Other Assets
YoY Change
Total Long-Term Assets $4.071M $3.967M $3.875M
YoY Change 5.06% -42.7% -44.37%
TOTAL ASSETS
Total Short-Term Assets $50.51M $36.31M $44.72M
Total Long-Term Assets $4.071M $3.967M $3.875M
Total Assets $54.58M $40.28M $48.60M
YoY Change 12.3% 43.74% 41.65%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $5.552M $5.972M $6.535M
YoY Change -15.04% 9.24% -13.88%
Accrued Expenses $5.573M $379.0K $4.523M
YoY Change 23.21% 1479.17% 25.53%
Deferred Revenue $420.0K
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $400.0K $2.600M $800.0K
YoY Change -50.0%
Total Short-Term Liabilities $13.09M $14.53M $12.85M
YoY Change 1.84% -5.42% 6.15%
LONG-TERM LIABILITIES
Long-Term Debt $16.89M $7.400M $9.318M
YoY Change 81.24% 17519.05% 13023.94%
Other Long-Term Liabilities $2.100M $0.00 $32.00K
YoY Change 6462.5% -100.0%
Total Long-Term Liabilities $2.059M $7.400M $1.687M
YoY Change 22.05% 17519.05%
TOTAL LIABILITIES
Total Short-Term Liabilities $13.09M $14.53M $12.85M
Total Long-Term Liabilities $2.059M $7.400M $1.687M
Total Liabilities $32.04M $23.54M $23.89M
YoY Change 34.1% 41.57% 96.16%
SHAREHOLDERS EQUITY
Retained Earnings -$360.9M -$361.2M -$343.6M
YoY Change 5.03% 7.05% 6.04%
Common Stock $383.0M $377.7M $329.7M
YoY Change 16.17% 21.76% 7.13%
Preferred Stock
YoY Change
Treasury Stock (at cost) $0.00
YoY Change -100.0%
Treasury Stock Shares 0.000 shares
Shareholders Equity $22.54M $16.74M $24.71M
YoY Change
Total Liabilities & Shareholders Equity $54.58M $40.28M $48.60M
YoY Change 12.3% 43.74% 41.65%

Cashflow Statement

Concept 2017 Q4 2017 Q3 2016 Q4
OPERATING ACTIVITIES
Net Income $287.0K -$5.407M $287.0K
YoY Change 0.0% -19.0% -105.85%
Depreciation, Depletion And Amortization $420.0K $410.0K $500.0K
YoY Change -16.0% -12.77% 21.95%
Cash From Operating Activities $840.0K -$5.240M -$9.310M
YoY Change -109.02% 25.36% 130.45%
INVESTING ACTIVITIES
Capital Expenditures -$720.0K -$520.0K -$110.0K
YoY Change 554.55% 116.67% 10.0%
Acquisitions
YoY Change
Other Investing Activities $0.00 $0.00
YoY Change
Cash From Investing Activities -$720.0K -$520.0K -$110.0K
YoY Change 554.55% 57.58% 22.22%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net $18.00M
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities 11.28M 7.190M 23.50M
YoY Change -52.0% 101.97%
NET CHANGE
Cash From Operating Activities 840.0K -5.240M -9.310M
Cash From Investing Activities -720.0K -520.0K -110.0K
Cash From Financing Activities 11.28M 7.190M 23.50M
Net Change In Cash 11.40M 1.430M 14.08M
YoY Change -19.03% -250.53% -440.92%
FREE CASH FLOW
Cash From Operating Activities $840.0K -$5.240M -$9.310M
Capital Expenditures -$720.0K -$520.0K -$110.0K
Free Cash Flow $1.560M -$4.720M -$9.200M
YoY Change -116.96% 19.8% 133.5%

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1317000 USD
CY2016Q3 us-gaap Operating Leases Rent Expense Net
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1200000 USD
us-gaap Operating Leases Rent Expense Net
OperatingLeasesRentExpenseNet
3600000 USD
CY2017Q3 us-gaap Operating Leases Rent Expense Net
OperatingLeasesRentExpenseNet
1500000 USD
us-gaap Operating Leases Rent Expense Net
OperatingLeasesRentExpenseNet
4100000 USD
CY2016Q4 us-gaap Other Assets Current
OtherAssetsCurrent
1164000 USD
CY2017Q3 us-gaap Other Assets Current
OtherAssetsCurrent
1366000 USD
CY2016Q4 us-gaap Other Liabilities Current
OtherLiabilitiesCurrent
259000 USD
CY2017Q3 us-gaap Other Liabilities Current
OtherLiabilitiesCurrent
216000 USD
CY2016Q4 us-gaap Other Liabilities Noncurrent
OtherLiabilitiesNoncurrent
32000 USD
CY2017Q3 us-gaap Other Liabilities Noncurrent
OtherLiabilitiesNoncurrent
0 USD
CY2016Q3 us-gaap Other Nonoperating Income Expense
OtherNonoperatingIncomeExpense
0 USD
us-gaap Other Nonoperating Income Expense
OtherNonoperatingIncomeExpense
-10000 USD
CY2017Q3 us-gaap Other Nonoperating Income Expense
OtherNonoperatingIncomeExpense
5000 USD
us-gaap Other Nonoperating Income Expense
OtherNonoperatingIncomeExpense
6000 USD
us-gaap Payments Of Debt Issuance Costs
PaymentsOfDebtIssuanceCosts
244000 USD
us-gaap Payments Of Debt Issuance Costs
PaymentsOfDebtIssuanceCosts
0 USD
us-gaap Payments Of Stock Issuance Costs
PaymentsOfStockIssuanceCosts
300000 USD
us-gaap Payments To Acquire Businesses Net Of Cash Acquired
PaymentsToAcquireBusinessesNetOfCashAcquired
1314000 USD
us-gaap Payments To Acquire Businesses Net Of Cash Acquired
PaymentsToAcquireBusinessesNetOfCashAcquired
792000 USD
us-gaap Preferred Stock Accretion Of Redemption Discount
PreferredStockAccretionOfRedemptionDiscount
36000 USD
us-gaap Preferred Stock Accretion Of Redemption Discount
PreferredStockAccretionOfRedemptionDiscount
486000 USD
CY2016Q3 us-gaap Preferred Stock Dividends Income Statement Impact
PreferredStockDividendsIncomeStatementImpact
1931000 USD
us-gaap Preferred Stock Dividends Income Statement Impact
PreferredStockDividendsIncomeStatementImpact
5591000 USD
CY2017Q3 us-gaap Preferred Stock Dividends Income Statement Impact
PreferredStockDividendsIncomeStatementImpact
0 USD
us-gaap Preferred Stock Dividends Income Statement Impact
PreferredStockDividendsIncomeStatementImpact
0 USD
us-gaap Proceeds From Issuance Of Preferred Stock And Preference Stock
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469000 USD
us-gaap Proceeds From Issuance Of Preferred Stock And Preference Stock
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7549000 USD
us-gaap Proceeds From Secured Lines Of Credit
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8400000 USD
us-gaap Proceeds From Secured Lines Of Credit
ProceedsFromSecuredLinesOfCredit
0 USD
CY2016Q4 us-gaap Property Plant And Equipment Gross
PropertyPlantAndEquipmentGross
10968000 USD
CY2017Q3 us-gaap Property Plant And Equipment Gross
PropertyPlantAndEquipmentGross
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CY2016Q4 us-gaap Property Plant And Equipment Net
PropertyPlantAndEquipmentNet
3875000 USD
CY2017Q3 us-gaap Property Plant And Equipment Net
PropertyPlantAndEquipmentNet
3967000 USD
CY2017Q3 us-gaap Purchase Obligation
PurchaseObligation
2940000 USD
CY2017Q3 us-gaap Purchase Obligation Due After Fifth Year
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546000 USD
CY2017Q3 us-gaap Purchase Obligation Due In Fifth Year
PurchaseObligationDueInFifthYear
546000 USD
CY2017Q3 us-gaap Purchase Obligation Due In Fourth Year
PurchaseObligationDueInFourthYear
546000 USD
CY2017Q3 us-gaap Purchase Obligation Due In Next Twelve Months
PurchaseObligationDueInNextTwelveMonths
45000 USD
CY2017Q3 us-gaap Purchase Obligation Due In Second Year
PurchaseObligationDueInSecondYear
681000 USD
CY2017Q3 us-gaap Purchase Obligation Due In Third Year
PurchaseObligationDueInThirdYear
576000 USD
us-gaap Repayments Of Long Term Debt
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28000 USD
us-gaap Repayments Of Long Term Debt
RepaymentsOfLongTermDebt
252000 USD
us-gaap Repayments Of Short Term Debt
RepaymentsOfShortTermDebt
2400000 USD
us-gaap Repayments Of Short Term Debt
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0 USD
CY2016Q3 us-gaap Research And Development Expense
ResearchAndDevelopmentExpense
3443000 USD
us-gaap Research And Development Expense
ResearchAndDevelopmentExpense
11037000 USD
CY2017Q3 us-gaap Research And Development Expense
ResearchAndDevelopmentExpense
2919000 USD
us-gaap Research And Development Expense
ResearchAndDevelopmentExpense
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CY2016Q4 us-gaap Retained Earnings Accumulated Deficit
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CY2017Q3 us-gaap Retained Earnings Accumulated Deficit
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CY2016Q3 us-gaap Sales Revenue Goods Net
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us-gaap Sales Revenue Goods Net
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37860000 USD
CY2017Q3 us-gaap Sales Revenue Goods Net
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14260000 USD
us-gaap Sales Revenue Goods Net
SalesRevenueGoodsNet
40574000 USD
CY2016Q3 us-gaap Selling General And Administrative Expense
SellingGeneralAndAdministrativeExpense
7010000 USD
us-gaap Selling General And Administrative Expense
SellingGeneralAndAdministrativeExpense
19463000 USD
CY2017Q3 us-gaap Selling General And Administrative Expense
SellingGeneralAndAdministrativeExpense
8186000 USD
us-gaap Selling General And Administrative Expense
SellingGeneralAndAdministrativeExpense
25427000 USD
us-gaap Share Based Compensation
ShareBasedCompensation
1973000 USD
us-gaap Share Based Compensation
ShareBasedCompensation
2053000 USD
us-gaap Stock Issued1
StockIssued1
0 USD
us-gaap Stock Issued1
StockIssued1
38389000 USD
CY2016Q4 us-gaap Stockholders Equity
StockholdersEquity
24708000 USD
CY2017Q3 us-gaap Stockholders Equity
StockholdersEquity
16737000 USD
CY2016Q4 us-gaap Warrants And Rights Outstanding
WarrantsAndRightsOutstanding
190000 USD
CY2017Q3 us-gaap Warrants And Rights Outstanding
WarrantsAndRightsOutstanding
190000 USD
CY2016Q3 us-gaap Weighted Average Number Of Share Outstanding Basic And Diluted
WeightedAverageNumberOfShareOutstandingBasicAndDiluted
22744000 shares
us-gaap Weighted Average Number Of Share Outstanding Basic And Diluted
WeightedAverageNumberOfShareOutstandingBasicAndDiluted
22678000 shares
CY2017Q3 us-gaap Weighted Average Number Of Share Outstanding Basic And Diluted
WeightedAverageNumberOfShareOutstandingBasicAndDiluted
33667000 shares
us-gaap Weighted Average Number Of Share Outstanding Basic And Diluted
WeightedAverageNumberOfShareOutstandingBasicAndDiluted
32783000 shares
us-gaap Basis Of Accounting
BasisOfAccounting
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Basis of Presentation</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;text-align:justify;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The condensed consolidated financial statements included herein have been prepared in accordance with the rules&#160;and regulations of the U.S. Securities and Exchange Commission (SEC).&#160; The preparation of condensed consolidated financial statements in conformity with generally accepted accounting principles in the United States of America (U.S. GAAP) requires management to make estimates, judgments, and assumptions that may affect the reported amounts of assets, liabilities, equity, revenues and expenses. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to such rules&#160;and regulations. The financial statements reflect, in the opinion of management, all adjustments (consisting only of normal, recurring adjustments) necessary to state fairly the financial position and results of operations as of and for the periods indicated.&#160; The results of operations for the </font><font style="font-family:inherit;font-size:10pt;">three and nine</font><font style="font-family:inherit;font-size:10pt;"> months ended </font><font style="font-family:inherit;font-size:10pt;">September&#160;30, 2017</font><font style="font-family:inherit;font-size:10pt;">, are not necessarily indicative of the results to be expected for the full year or for any other period. The </font><font style="font-family:inherit;font-size:10pt;">September&#160;30, 2017</font><font style="font-family:inherit;font-size:10pt;"> condensed consolidated balance sheet data was derived from the Company&#8217;s audited consolidated financial statements, but does not include all disclosures required by U.S. GAAP.</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;text-align:justify;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form&#160;10-K for the year ended </font><font style="font-family:inherit;font-size:10pt;">December&#160;31, 2016</font><font style="font-family:inherit;font-size:10pt;">, as filed with the SEC on March&#160;13, 2017 (Annual Report).</font></div></div>
us-gaap Nature Of Operations
NatureOfOperations
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Organization</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;text-align:justify;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Vericel Corporation, a Michigan corporation (the Company, Vericel, we, us or our), was incorporated in March&#160;1989 and began employee-based operations in 1991. On May&#160;30, 2014, Vericel completed the acquisition of certain assets and assumed certain liabilities of Sanofi, a French soci&#233;t&#233; anonyme (Sanofi), including all of the outstanding equity interests of Genzyme Biosurgery ApS (Genzyme Denmark or the Danish subsidiary) (now known as Vericel Denmark ApS), a wholly-owned subsidiary of Sanofi, and over </font><font style="font-family:inherit;font-size:10pt;">250</font><font style="font-family:inherit;font-size:10pt;"> patent applications of Sanofi and certain of its subsidiaries for purposes of acquiring the portion of the cell therapy and regenerative medicine business (the CTRM Business), which researches, develops, manufactures, markets and sells the Carticel</font><font style="font-family:inherit;font-size:10pt;"><sup style="vertical-align:top;line-height:120%;font-size:7pt">&#174;</sup></font><font style="font-family:inherit;font-size:10pt;">, MACI</font><font style="font-family:inherit;font-size:10pt;"><sup style="vertical-align:top;line-height:120%;font-size:7pt">&#174;</sup></font><font style="font-family:inherit;font-size:10pt;">,&#160;and Epicel</font><font style="font-family:inherit;font-size:10pt;"><sup style="vertical-align:top;line-height:120%;font-size:7pt">&#174;</sup></font><font style="font-family:inherit;font-size:10pt;">&#160;products. The Company is a fully integrated, commercial-stage biopharmaceutical company dedicated to the identification, development and commercialization of innovative therapies that enable the body to repair and regenerate damaged tissues and organs to restore normal structure and function. Vericel has marketed products and developmental stage product candidates, and the Company&#8217;s goal is to become the leader in cell therapy and regenerative medicine by developing, manufacturing and marketing best-in-class therapies for patients with significant unmet medical needs. </font></div><div style="line-height:120%;text-align:justify;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company operates its business primarily in the U.S. in </font><font style="font-family:inherit;font-size:10pt;">one</font><font style="font-family:inherit;font-size:10pt;"> reportable segment &#8212; the research, product development, manufacture and distribution of patient-specific, expanded cellular therapies for use in the treatment of specific diseases.</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;text-align:justify;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;color:#222222;">The accompanying consolidated financial statements have been prepared on a basis which assumes that the Company will continue as a going concern and contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business.&#160; As of </font><font style="font-family:inherit;font-size:10pt;color:#222222;">September&#160;30, 2017</font><font style="font-family:inherit;font-size:10pt;color:#222222;">, the Company has an accumulated deficit of </font><font style="font-family:inherit;font-size:10pt;color:#222222;">$361.2 million</font><font style="font-family:inherit;font-size:10pt;color:#222222;"> and had a net loss of </font><font style="font-family:inherit;font-size:10pt;color:#222222;">$5.4 million</font><font style="font-family:inherit;font-size:10pt;color:#222222;"> during the quarter ended </font><font style="font-family:inherit;font-size:10pt;color:#222222;">September&#160;30, 2017</font><font style="font-family:inherit;font-size:10pt;color:#222222;">.&#160; The Company had cash of </font><font style="font-family:inherit;font-size:10pt;color:#222222;">$15.5 million</font><font style="font-family:inherit;font-size:10pt;color:#222222;"> as of </font><font style="font-family:inherit;font-size:10pt;color:#222222;">September&#160;30, 2017</font><font style="font-family:inherit;font-size:10pt;color:#222222;">.&#160; The Company expects that existing cash together with its </font><font style="font-family:inherit;font-size:10pt;">term loan and revolving line of credit agreement with Silicon Valley Bank (SVB) and MidCap Financial Services (MidCap) (the</font><font style="font-family:inherit;font-size:10pt;color:#222222;"> SVB-MidCap facility), will be sufficient to support the Company's </font><font style="font-family:inherit;font-size:10pt;">current operations through at least twelve months following the filing of this Form 10-Q</font><font style="font-family:inherit;font-size:10pt;color:#222222;">.&#160; In connection with the SVB-MidCap facility, </font><font style="font-family:inherit;font-size:10pt;">the Company must remain in compliance with minimum monthly net revenue covenants (determined in accordance with U.S. GAAP), measured on a trailing twelve month basis. </font><font style="font-family:inherit;font-size:10pt;color:#222222;">SVB and MidCap also have the ability to call debt based on material adverse change clauses which are subjectively determinable and result in a </font><font style="font-family:inherit;font-size:10pt;">subjective acceleration clause. </font><font style="font-family:inherit;font-size:10pt;color:#222222;">If the Company's cash requirements exceed its current expectations, or if it is not in compliance with the&#160;monthly net revenue covenants&#160;or the subjective acceleration clauses are triggered under the&#160;SVB-MidCap facility, then SVB&#160;may call the debt&#160;resulting in&#160;the Company immediately needing additional funds.&#160; As of </font><font style="font-family:inherit;font-size:10pt;color:#222222;">September&#160;30, 2017</font><font style="font-family:inherit;font-size:10pt;color:#222222;">, the Company was in compliance with the minimum revenue covenant set forth in the Second Loan Modification Agreement between the Company, SVB and MidCap. The Company may seek additional funding through debt or equity financings including the at-the-market sales agreement in place with </font><font style="font-family:inherit;font-size:10pt;">Cowen and Company, LLC</font><font style="font-family:inherit;font-size:10pt;color:#222222;">.&#160; However, the Company may not be able to obtain financing on acceptable terms or at all. The terms of any financing may adversely affect the holdings or the rights of the Company's shareholders.&#160; If the Company needs additional funds and is unable to obtain funding on a timely basis, the Company may need to significantly curtail its operations including its research and development programs in an effort to provide sufficient funds to continue its operations, which could adversely affect its business prospects.</font></div></div>

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