General and Administrative Expenses
General and administrative expenses increased by $0.8 million, or 15%, from $5.3 million for the three months ended March 31, 2020 to $6.1 million for the three months ended March 31, 2021. The increase was primarily due to an increase in personnel expenses related to bonus, salary and share based compensation.
Research and Development Expenses
Research and development expenses decreased $0.7 million, or 24%, from $3.0 million for the three months ended March 31, 2020 to $2.3 million for the three months ended March 31, 2021. The decrease was primarily due to reduced product development, personnel and travel expenses.
Interest Expense
Interest expense decreased $0.5 million, or 35% from $1.5 million for the three months ended March 31, 2020 to $1.0 million for the three months ended March 31, 2021. The decrease in interest expense was due to the loss on extinguishment of debt charge recognized in the first quarter of 2020 as part of Oxford debt facility. Refer to “Note 12. Debt” in the financial statements included in this Quarterly Report on Form 10-Q for information regarding the Oxford debt facility.
Other Income, Net
Other income, net decreased by $0.2 million, from $0.2 million for the three months ended March 31, 2020 to $0.0 million for the three months ended March 31, 2021, primarily as a result of decreased interest income earned on the Company’s money market accounts.
Liquidity and Capital Resources
Overview
On February 2, 2021, we closed on the Offering of our common stock in which we issued and sold 5,566,000 shares of our common stock, which included shares pursuant to an option granted to underwriters to purchase additional shares, at a public offering price of $15.50 per share. We received net proceeds of $80.6 million after deducting underwriting discounts, commissions and offering expenses.
As of March 31, 2021, we had cash and cash equivalents of $121.3 million and an accumulated deficit of $285.4 million, compared to cash and cash equivalents of $49.0 million and an accumulated deficit of $277.5 million as of December 31, 2020. We incurred negative cash flows from operating activities of $9.2 million and $13.7 million for the three months ended March 31, 2021 and 2020, respectively. 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 expand our sales and marketing initiatives to support our growth in existing and new markets, invest funds in additional research and development activities and utilize cash for other corporate purposes. Our primary sources of capital to date have been from our IPO, private placements of our convertible preferred securities, borrowings under our credit facilities, sales of our products and other public offerings of our common stock. As of March 31, 2021, the Company had $35.0 million of borrowings outstanding under its credit facility, which has a final maturity in February 2025. Management believes that the Company’s cash and cash equivalents as of March 31, 2021 and anticipated revenues from sales of its products are sufficient to fund the Company’s operations for at least 12 months from the issuance of these financial statements.
We cannot predict our revenues and expenses in the short term, in large part due to uncertainty relating the COVID-19 pandemic and related governmental responses. However, if our cash and cash equivalents and anticipated revenues from sales or our products 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 or another form of third-party funding or seek other debt financing. If we raise additional funds by issuing equity