X4 PHARMACEUTICALS, INC DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND MANAGEMENT RESULTS (Form 10-Q)

The following information should be read in conjunction with our unaudited
condensed consolidated financial statements and the notes thereto included in
this Quarterly Report on Form 10-Q and the audited financial information and the
notes thereto included in our Annual Report on Form 10-K, which was filed with
the Securities and Exchange Commission ("SEC"), on March 17, 2022, the ("Annual
Report"). This discussion and analysis contains forward-looking statements that
involve significant risks and uncertainties. Our actual results, performance or
experience could differ materially from what is indicated by any forward-looking
statement due to various important factors, risks and uncertainties, including,
but not limited to, those set forth under "Risk Factors" included elsewhere in
this Quarterly Report on Form 10-Q. Such factors may be amplified by the ongoing
COVID-19 pandemic and its potential impact on our business and the overall
global economy.

overview

We are a late-stage clinical biopharmaceutical company discovering and
developing novel therapies for the treatment of diseases of the immune system,
with a focus on rare diseases and those with limited treatment options. Our lead
clinical candidate, mavorixafor, is a first-in-class, small molecule antagonist
of chemokine receptor CXCR4 being developed as a once-daily oral therapy. We
believe that inhibition of the CXCR4 pathway creates the potential to provide
therapeutic benefit across a wide variety of immune-system related diseases,
including chronic neutropenic disorders and certain types of cancer.

We are currently evaluating the safety and efficacy of mavorixafor in a 52-week,
global Phase 3 clinical trial ("4WHIM trial") for the treatment of patients with
WHIM (Warts, Hypogammaglobulinemia, Infections, and Myelokathexis) syndrome, a
rare, inherited, primary immunodeficiency disease typically caused by genetic
mutations in the CXCR4 receptor gene. We are also studying mavorixafor in two
Phase 1b clinical trials - one in patients with chronic neutropenic disorders,
including congenital, idiopathic, and cyclic neutropenia, and one in combination
with the Bruton tyrosine kinase inhibitor ("BTKi") ibrutinib in patients with a
rare B-cell lymphoma called Waldenström's macroglobulinemia and confirmed
mutations to both the CXCR4 and MYD88 genes.

We completed enrollment of the 4WHIM trial in the third quarter of 2021, with 31
patients aged 12 and older enrolled, and continue to expect to report results
from the trial in the fourth quarter of 2022. We have begun building our
commercial team in anticipation of a possible New Drug Application ("NDA")
submission to the U.S. Food and Drug Administration ("FDA") early in the second
half of 2023, with the goal of obtaining approval for mavorixafor for the
treatment of people in the U.S. aged 12 and older with WHIM syndrome, should the
final Phase 3 data support the NDA filing.

We reported positive results from the Phase 1b chronic neutropenia trial in
September 2022 and we are currently amending the clinical trial protocol to
extend and expand the study. Additional clinical data are expected from this
expanded trial in the first half of 2023, which we expect will inform the likely
regulatory path forward for mavorixafor in the treatment of chronic neutropenia.
We reported positive interim results from the Waldenström's trial in August
2022; we expect this study to conclude in December 2022.

In July 2022, we announced a strategic re-prioritization of our resources
towards advancing mavorixafor solely in chronic neutropenic disorder
indications, including WHIM syndrome, while pausing our pre-clinical
immunodeficiency program and only progressing our oncology programs upon
completion of strategic partnership(s). As a result, any further development of
mavorixafor for any oncology indication, including Waldenström's
macroglobulinemia, will be subject to completion of a strategic partnership.
Similarly, we are currently completing pre-clinical toxicology studies on our
candidate X4P-002, a novel, small-molecule CXCR4 antagonist that has
demonstrated potential in a number of oncology indications; any regulatory
filings to begin clinical development of XP4-002 will now be subject to
completing a strategic partnership. In addition, we have paused pre-clinical
development of X4P-003, a novel, small-molecule CXCR4 antagonist on which patent
applications have been filed; further advancement of X4P-003 for any
immunodeficiency indication will be dependent on the potential first approval of
mavorixafor and our lifecycle management strategy for the company's product
portfolio.

Mavorixafor has received multiple special designations from global regulatory
authorities: in WHIM syndrome, mavorixafor has been granted Breakthrough Therapy
Designation, Fast Track Designation, and Rare Pediatric Designation in the U.S.,
and Orphan Drug Status in both the U.S. and European Union; mavorixafor has also
been granted Orphan Drug Designation in the U.S. in Waldenström's
macroglobulinemia, regardless of CXCR4 mutation status. In addition, X4 is
eligible to receive a Priority Review Voucher ("PRV") as a result of
mavorixafor's Rare Pediatric Designation in WHIM syndrome in the U.S.

To date, we have not generated revenue from product sales and do not expect to
generate significant revenue from the sale of our products in the foreseeable
future. If our development efforts for our product candidates are successful and
result in

                                       27
--------------------------------------------------------------------------------

regulatory approval, we may generate revenue in the future from product sales.
We cannot predict if, when, or to what extent we will generate revenue from the
commercialization and sale of our product candidates. We may never succeed in
obtaining regulatory approval for any of our product candidates.

Our pipeline

[[Image Removed: xfor-20220930_g1.jpg]]

COVID-19 Business Update
In light of the ongoing COVID-19 pandemic, we have implemented business
continuity measures designed to address and mitigate the impact of the COVID-19
pandemic on our employees, our business, including our clinical trials, supply
chains and third-party providers. We continue to closely monitor the COVID-19
pandemic as we evolve our business continuity plans and response strategy.
Following easing of governmental restrictions, in the fourth quarter of 2020, we
opened our new corporate headquarters in Boston, Massachusetts under a
return-to-work plan with a limited phased approach that is principles-based and
local in design, with a focus on employee safety and optimal work environment.
While we are currently operating under a "hybrid" model where full-time
in-person attendance in the office is optional, all employees who have been
fully vaccinated have returned to the office. While we are experiencing limited
financial impacts at this time, given the global economic slowdown, the overall
disruption of global healthcare systems and the other risks and uncertainties
associated with the COVID-19 pandemic and continued uncertainty, our business,
financial condition, results of operations and growth prospects could be
materially adversely affected.

Clinical Development
With respect to clinical development, we continue to implement risk-based
approaches in accordance with FDA and European Medicines Agency ("EMA") COVID-19
guidance, which includes virtual and remote patient visits and monitoring where
possible, while prioritizing patient safety, maintaining trial continuity and
preserving data integrity. We have experienced, and expect to continue to
experience, a disruption or delay in our ability to initiate trial sites and/or
enroll and assess patients in several of our clinical programs as a result of
the ongoing COVID-19 pandemic, notwithstanding substantial vaccination efforts.
While not currently impacted, there could be an impact on our ability to supply
study drug, report trial results, or interact with regulators, ethics committees
or other important agencies due to limitations in regulatory authority employee
resources or otherwise. In addition, we rely on contract research organizations
("CROs") or other third parties to assist us with clinical trials, and we cannot
guarantee that they will continue to perform their contractual duties in a
timely and satisfactory manner as a result of the ongoing COVID-19 pandemic. If
the COVID-19 pandemic continues and persists for an extended period of time, we
could experience further disruptions to our clinical development timelines,
which would adversely affect our business, financial condition, results of
operations and growth prospects.

                                       28
--------------------------------------------------------------------------------

Supply Chain
We continue to work closely with our third-party manufacturers, distributors and
other partners to manage our supply chain activities and mitigate potential
disruptions to our clinical supply as a result of the ongoing COVID-19 pandemic.
We have business continuity plans in place and have manufacturing plans that
will meet our global supply demands going forward. To best support our patients,
we continue to work with our vendors to provide the option for direct-to-patient
drug shipments from clinical sites. If the ongoing COVID-19 pandemic impacts
essential distribution systems we could experience disruptions to our supply
chain and operations, which could adversely impact our ability to carry out our
clinical trials.

Regulatory Activities
We expect that we could experience delays in the timing of review and/or our
interactions with the FDA or the European Commission ("EC") due to, for example,
inability to conduct planned physical inspections related to regulatory
approval, or the diversion of efforts of the FDA or EC and attention to approval
of other therapeutics or other activities related to COVID-19, which could delay
approval decisions with respect to the preparation and submission to the FDA of
a new drug application ("NDA"), or the preparation and submission to the EC of a
Marketing Authorization Application ("MAA"), and otherwise delay or limit our
ability to make planned regulatory submissions or obtain new product approvals.

Financial Impact
The ongoing COVID-19 pandemic continues to evolve and has already resulted in a
significant disruption of global financial markets. If the disruption persists
and deepens, we could experience an inability to access additional capital,
which could in the future negatively affect our operations.

operating results

Comparison of the ended three and nine months 09/30/2022 and 2021

The following table summarizes the results of our operations for the past three and nine months 09/30/2022 and 2021:

                                             Three Months Ended September 30,                                Nine Months Ended September 30,
                                         2022                   2021             Change                 2022                   2021             Change
(in thousands)

Operating expenses:
Research and development         $     14,110               $  13,188          $    922          $     42,044              $  38,485          $  3,559
Selling, general and
administrative                          6,044                   5,931               113                20,457                 17,567             2,890
Gain of sale of non-financial
asset                                       -                       -                 -                  (509)                     -              (509)
Total operating expenses               20,154                  19,119             1,035                61,992                 56,052             5,940
Loss from operations                  (20,154)                (19,119)           (1,035)              (61,992)               (56,052)           (5,940)
Total other expense, net               (1,445)                 (1,054)             (391)               (2,757)                (2,423)             (334)
Loss before provision for income
taxes                                 (21,599)                (20,173)           (1,426)              (64,749)               (58,475)           (6,274)
Provision for income taxes                (13)                      2               (15)                   14                     14                 -
Net loss                         $    (21,586)              $ (20,175)         $ (1,411)         $    (64,763)             $ (58,489)         $ (6,274)


Research and Development Expenses
Research and development expenses consist primarily of costs incurred in
connection with the discovery and development of our product candidates,
including employee salaries and related expenses, preclinical and clinical
development expenses for our product candidates; internal and third-party costs
of manufacturing our drug products for use in our preclinical studies and
clinical trials; facility, depreciation and other expenses; costs related to
compliance with regulatory requirements; and payments made under third-party
licensing agreements. We expense research and development costs as incurred.

                                       29
--------------------------------------------------------------------------------
                                            Three Months Ended September 30,                         Nine Months Ended September 30,
                                        2022               2021             Change              2022                2021             Change
(in thousands
Direct research and development expenses by product candidate:
Mavorixafor                         $    7,217          $  6,704          $   513          $     17,894          $ 19,966          $ (2,072)
X4P-002                                    341               284               57                 2,285               730             1,555
X4P-003                                      3               173             (170)                  199               923              (724)
  Unallocated expense                    6,549             6,027              522                21,666            16,866             4,800
Total research and development
expenses                            $   14,110          $ 13,188          $   922          $     42,044          $ 38,485          $  3,559



Research and development expenses were relatively consistent for the three
months ended September 30, 2022 as compared to the same period in the prior year
and increased $3.6 million in the nine months ended September 30, 2022 as
compared to the same period in the prior year. Expenses related to our Phase 3
clinical trials of mavorixafor were lower in both the three and nine month
periods as compared to the prior year as we incurred more start-up costs in the
prior year to ramp up these clinical trials. These decreases in the current year
were partial offset by higher unallocated research and development expenses,
which increased $4.8 million in the nine months ended September 30, 2022 as
compared to the same periods in the prior year primarily due to an increase
compensation costs as a result of higher head count within our research and
development departments, an increase in external regulatory compliance costs,
and higher information technology costs.

Selling, General and Administrative Expenses
Selling, general and administrative expenses consist primarily of salaries and
related costs, including stock-based compensation, for personnel in sale and
marketing, executive, finance and administrative functions. Selling, general and
administrative expenses also include direct and allocated facility-related costs
as well as professional fees for legal, patent, consulting, investor and public
relations, accounting, and audit services. Selling, general and administrative
expenses were higher as compared to the prior year primarily due to an increase
in compensation, including stock-based compensation costs, primarily resulting
from severance payments incurred during the third quarter of 2022 and increases
in salaries. We expect selling, general and administrative expenses will grow in
the future as we continue to build out our selling, general and administrative
functions.

Gain on Sale of Non-Financial Asset
During the nine months ended September 30, 2022, a third party, who had
previously acquired rights to certain intellectual property from us, terminated
the arrangement and transferred these rights back us and we transferred these
rights to another third party in return for $0.5 million. We have no continuing
involvement in any ongoing research and development activities associated with
the intellectual property. We concluded that these third parties are
"non-customers" as the underlying intellectual property transferred to and from
these third parties supports potential drug candidates that are not aligned with
our strategic focus and, therefore, are not an output of our ordinary
activities. Accordingly, we classified this transaction as a "gain on sale of
non-financial asset" for the nine month period ended September 30, 2022. There
was no such transaction in the same period of the prior year.

Other expenses, net

                                           Three Months Ended September 30,                         Nine Months Ended September 30,
                                        2022                2021            Change              2022                2021            Change
(in thousands)
Interest income                   $          14          $      2          $   12          $         21          $      7          $   14
Interest expense                         (1,018)             (920)            (98)               (2,849)           (2,717)           (132)
Change in fair value of
derivative liability                          -               (62)             62                   511               (36)            547
Other income (expense)                     (441)              (74)           (367)                 (440)              323            (763)
Total other expense, net          $      (1,445)         $ (1,054)         $ (391)         $     (2,757)         $ (2,423)         $ (334)

Other expenses, net, for the past three and nine months 09/30/2022 were relatively consistent for each period.

Provision for Income Taxes
We did not record a U.S. federal or state income tax benefit for our losses for
the three and nine months ended September 30, 2022 and 2021, respectively, due
to our conclusion that a full valuation allowance is required against our U.S.
federal and state

                                       30
--------------------------------------------------------------------------------

deferred tax assets. For the three and nine months ended 09/30/2022 and in 2021 we recognized an immaterial income tax expense related to our Austrian subsidiary.

liquidity and capital resources

To date, we have primarily funded our operations with proceeds from sales of
common stock, warrants and pre-funded warrants for the purchase of our preferred
stock and common stock, sales of preferred stock, proceeds from the issuance of
convertible debt and borrowings under loan and security agreements, such as our
existing loan and security agreement with Hercules Capital, Inc. (the "Hercules
Loan Agreement") as more fully described in the notes to our condensed
consolidated financial statements included herein.

In August 2020, we entered into a Controlled Equity OfferingSM Sales Agreement,
(the "ATM Sales Agreement"), with B. Riley Securities, Inc., Cantor Fitzgerald &
Co. and Stifel, Nicolaus & Company, Incorporated, (collectively, the "Sales
Agents"), pursuant to which we may offer and sell, at our sole discretion
through one or more of the Sales Agents, shares of our common stock having an
aggregate offering price of up to $50.0 million.

In March 2021, we entered into a securities purchase agreement with several
institutional and accredited investors pursuant to which we sold shares of
common stock and, in lieu of common stock, pre-funded warrants to purchase
shares of common stock for gross proceeds of $53.0 million, before deducting
offering expenses payable by us. In November 2021, we raised approximately $10.0
million through the sale of pre-funded warrants to an investor.

In January 2022, we entered into a common stock purchase agreement with Lincoln
Park Capital Fund LLC ("Lincoln Park") pursuant to which Lincoln Park has
committed to purchase, at our request from time to time over a 36-month period,
shares of our common stock having an aggregate offering price of up to $50.0
million, subject to certain limitations. In March 2022, we raised $3.0 million
for the sale of shares of our common stock and pre-funded warrants for the
purchase of shares of common stock in a private placement.

in the June 2022we entered into a securities purchase agreement with several institutional and accredited investors under which we sold common stock and prefunded warrants in lieu of common stock to purchase common stock for gross proceeds of $55.7 million, before deduction of the quotation costs to be paid by us. The transaction was completed on July 6, 2022.

As of September 30, 2022, we have borrowed $32.5 million through our Hercules
Loan Agreement. Under our Hercules facility, we may borrow up to an additional
$17.5 million in term loans through December 2022, at Hercules's sole
discretion. Principal payments under the Hercules Loan Agreement commence in
February 2023 and the Hercules Loan Agreement matures in July 2024.

Going Concern
Since our inception, we have incurred significant operating losses and negative
cash flows from our operations. We have not yet commercialized any products and
we do not expect to generate revenue from sales of any products for several
years, if at all. As of September 30, 2022, our cash and cash equivalents were
$79.9 million, and our restricted cash balance was $1.3 million. We expect that
our research and development and selling, general and administrative expenses
will continue to increase as we focus on completing the necessary development,
obtaining regulatory approval and preparing for potential commercialization of
our product candidates. Based on our current operating plan, we believe that our
existing cash and cash equivalents will be sufficient to fund our operating
expenses and capital expenditure requirements into the third quarter of 2023. As
further discussed in Note 7 to our condensed consolidated financial statements,
our Hercules Loan Agreement has a covenant that requires us to maintain a
minimum level of cash. Based on our current financial projections and assuming
we do not achieve certain financial and operational milestones that would reduce
this minimum cash requirement, we believe we would be in violation of this
covenant in the second quarter of 2023. If we are in violation of this covenant,
Hercules could require the repayment of all outstanding debt under the Hercules
Loan Agreement.

As a result, we believe that, in aggregate, these conditions raise substantial
doubt about our ability to continue as a going concern for the one-year period
following the issuance of these condensed consolidated financial statements for
the quarterly period ended September 30, 2022. Unless and until we reach
profitability in the future, we will require additional capital to fund our
operations. We intend to raise further capital through a combination of equity
offerings, debt financings, other third party funding, marketing and
distribution arrangements and collaborations and strategic alliances; however,
no assurances can be made as to when and if we will obtain such funding. If we
are unable to obtain funding, we could be forced to delay, reduce or eliminate
some or all of our research and development programs, product portfolio
expansion or pre-commercialization efforts, which would adversely affect our
business prospects, or we may be unable to continue or be required to scale down
operations.

                                       31
--------------------------------------------------------------------------------

cash flows

The following table summarizes our cash flow activities for each of the periods
presented:
                                                                Nine Months Ended September 30,
                                                                   2022                    2021
                                                                         (in thousands)
Net loss                                                    $       

(64,763) $ (58,489)
Adjustments to reconcile net loss with net cash used from operations

                                                   6,493                6,809
Changes in operating assets and liabilities                              261                 (172)
Net cash used in operating activities                                (58,009)             (51,852)
Net cash used in investing activities                                    (69)                (602)
Net cash provided by financing activities                             56,586               49,675

Effects of changes in exchange rates on cash, cash equivalents and restricted cash

                                                     (468)                (203)
Net decrease in cash, cash equivalents and restricted cash            (1,960)              (2,982)

Cash, cash equivalents and restricted cash, start of period

                                                      $         

83.108 $80,702
Cash, cash equivalents and restricted cash, period end $81,148 $77,720



Operating Activities During the nine months ended September 30, 2022, net cash
used in operating activities was $58.0 million, primarily resulting from our net
loss of $64.8 million, adjusted for noncash expenses of $6.5 million and changes
in our operating assets and liabilities of $0.3 million. Non-cash expenses
primarily includes stock-based compensation expense, non-cash lease expense and
non-cash interest expense. Net cash used in operating activities for the nine
months ended September 30, 2021 was $51.9 million, primarily resulting from our
net losses of $58.5 million, adjusted for noncash expenses of $6.8 million and
changes in our operating assets and liabilities of $0.2 million.

Investing Activities During the nine months ended September 30, 2022 and 2021,
cash used in investing activities of less than $0.1 million and $0.6 million,
respectively, related primarily to purchases of furniture and laboratory
equipment purchases related to our leased facility in Vienna, Austria.

Financing Activities During the nine months ended September 30, 2022, net cash
provided by financing activities was $56.6 million, consisting primarily of
$60.6 million of net proceeds from two private placement equity offerings that
closed during the nine month period and the sale of shares of our common stock
to Lincoln Park and through our employee stock purchase plan, partially offset
by $1.2 million of end-of-term payments made pursuant to our Hercules Loan
Agreement and fees related to amendments to the agreement during the period.
During the nine months ended September 30, 2021, net cash provided by financing
activities was $49.7 million, consisting primarily of $51.5 million in proceeds
from a private placement equity offing that closed during the period, partially
offset by $2.0 million of cash paid to repurchase redeemable common stock.

Funding Requirements
As noted above, the Hercules Loan Agreement contains a minimum cash covenant
that is effective on September 1, 2022. Based on our current financial
projections, assuming we do not achieve certain operational and financial
milestone contained within the Hercules Loan Agreement that would reduce this
minimum cash requirement, we would be in violation of this covenant in the
second quarter of 2023. If we are in violation of this covenant, Hercules could
require the repayment of all outstanding debt under the Hercules loan facility.
To fund our operations, we will be required to raise additional capital, which
may be through a combination of equity offerings, such as through our ATM Sales
Agreement or through our common stock purchase agreement with Lincoln Capital,
debt financings, including refinancing of our Hercules Loan Agreement or
entering into new debt arrangements with other third-parties, marketing and
distribution arrangements and collaborations and strategic alliances. However,
our ability to raise such funding, the timing of such funding and the amount of
funding cannot be assured. During 2022 and beyond, we expect our expenses to
continue to increase in connection with our ongoing activities, particularly as
we advance the current and anticipated clinical trials of our product candidates
in development. Because of the numerous risks and uncertainties associated with
research, development and commercialization of pharmaceutical product
candidates, we are unable to estimate the exact amount of our funding
requirements. Our short-term and long-term funding requirements will depend on
and could increase significantly as a result of many factors, including:

•the scope, number, initiation, progress, timing, costs, design, duration, any
potential delays, and results of clinical trials and nonclinical studies for our
current or future product candidates, particularly our ongoing Phase 3 pivotal
clinical trial of mavorixafor for the treatment of patients with WHIM syndrome,
our

                                       32
--------------------------------------------------------------------------------

ongoing phase 1b clinical trial of mavorixafor in chronic neutropenic disease and completion of our phase 1b clinical trial of mavorixafor in Waldenstrom;

•the ongoing global impact of the ongoing COVID-19 pandemic and its impact on our ongoing clinical trials, supply chain and financial markets generally;

•the outcome, timing and cost of regulatory reviews, approvals or other actions
to meet regulatory requirements established by the FDA and comparable foreign
regulatory authorities, including the potential for the FDA or comparable
foreign regulatory authorities to require that we perform more studies for our
product candidates than those that we currently expect;

•our ability to obtain marketing approval for our product candidates;

•the cost of filing, prosecuting, defending and enforcing our patent claims and
other intellectual property rights covering our product candidates, including
any such patent claims and intellectual property rights that we have licensed
from Genzyme pursuant to the terms of our license agreement with Genzyme;

•our ability to maintain, expand and defend the scope of our intellectual property portfolio, including the costs of defending intellectual property disputes, including patent infringement claims by third parties against us or our product candidates;

• the cost and timing of completing commercial-scale outsourced manufacturing activities related to our product candidates;

• our ability to establish and maintain licensing, collaboration or similar agreements on favorable terms, and whether and to what extent we retain development or commercialization responsibilities under any new licensing, collaboration or similar agreement;

•the cost of establishing sales, marketing and distribution capabilities for any
product candidates for which we may receive regulatory approval in regions where
we choose to commercialize our products on our own;

• the success of other businesses, products or technologies that we acquire or invest in;

•the costs of acquiring, licensing or investing in companies, product candidates and technologies;

•our need and ability to hire additional management, scientific and medical personnel;

•the costs to continue to operate as a public company, including the need to
implement additional financial and reporting systems and other internal systems
and infrastructure for our business;

•market acceptance of our product candidates to the extent they are approved for commercial sale; and

•the impact of competing technology and market developments.

If we are unable to raise additional funds through equity or debt financings or
other arrangements when needed, we may be required to delay, reduce or eliminate
our product development efforts or future commercialization efforts, or grant
rights to develop and market product candidates that we would otherwise prefer
to develop and market ourselves.

Hercules Credit Agreement For a full description of our Hercules Credit Agreement see Note 7 to our Condensed Consolidated Financial Statements.

Critical Accounting Policies and Significant Judgments and Estimates

Our condensed consolidated financial statements are prepared in accordance with
generally accepted accounting principles in the United States. The preparation
of our condensed consolidated financial statements and related disclosures
requires us to make estimates and judgments that affect the reported amounts of
assets, liabilities, costs and expenses, and the disclosure of contingent assets
and liabilities in our condensed consolidated financial statements. We base our
estimates on historical experience, known trends and events and various other
factors that we believe are reasonable under the circumstances, the results of
which form the basis for making judgments about the carrying values of assets
and liabilities that are not readily apparent from other sources. We evaluate
our estimates and assumptions on an ongoing basis. Our actual results may differ
from these estimates under different assumptions or conditions.

                                       33
--------------------------------------------------------------------------------

During the three and nine months ended September 30, 2022, there were no
material changes to our critical accounting policies as reported for the year
ended December 31, 2021 as part of our Annual Report. In addition, see Note 2 of
these condensed consolidated financial statements under the heading "Recently
Adopted Accounting Pronouncements" for new accounting pronouncements or changes
to the accounting pronouncements during the three and nine months ended
September 30, 2022.

Emerging growth company and smaller reporting company status

We are an emerging growth company ("EGC"), as defined in the Jumpstart Our
Business Startups Act of 2012 (the "JOBS Act"). The JOBS Act permits an EGC to
take advantage of an extended transition period to comply with new or revised
accounting standards applicable to public companies until those standards would
otherwise apply to private companies. We have irrevocably elected to "opt out"
of this provision and, as a result, we will comply with new or revised
accounting standards when they are required to be adopted by public companies
that are not EGCs. We will cease to be an EGC on December 31, 2022, which is the
last day of our fiscal year following the fifth anniversary of the completion of
our initial public offering.

In addition, we are also a smaller reporting company ("SRC"), as defined by Rule
12b-2 of the Securities Exchange Act of 1934, as amended (the "Exchange Act")
and in Item 10(f)(1) of Regulation S-K, allowing us to take advantage of certain
of the scaled disclosures available to smaller reporting companies. We will
continue to be an SRC even after we are no longer an EGC for so long as (i) our
voting and non-voting common stock held by non-affiliates is less than $250.0
million measured on the last business day of our second fiscal quarter or (ii)
our annual revenue is less than $100.0 million during the most recently
completed fiscal year and our voting and non-voting common stock held by
non-affiliates is less than $700.0 million measured on the last business day of
our second fiscal quarter.

© Edgar Online, source insights

Virginia C. Taylor