0001144204-16-100593.txt : 20160511 0001144204-16-100593.hdr.sgml : 20160511 20160510194606 ACCESSION NUMBER: 0001144204-16-100593 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 52 CONFORMED PERIOD OF REPORT: 20160331 FILED AS OF DATE: 20160511 DATE AS OF CHANGE: 20160510 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NORTHWEST BIOTHERAPEUTICS INC CENTRAL INDEX KEY: 0001072379 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 943306718 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-35737 FILM NUMBER: 161637419 BUSINESS ADDRESS: STREET 1: 4800 MONTGOMERY LANE STREET 2: SUITE 800 CITY: BETHESDA STATE: MD ZIP: 20814 BUSINESS PHONE: (240) 497-9024 MAIL ADDRESS: STREET 1: 4800 MONTGOMERY LANE STREET 2: SUITE 800 CITY: BETHESDA STATE: MD ZIP: 20814 10-Q 1 v439072_10q.htm 10-Q

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2016

 

OR

 

¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ______to _______

 

Commission File Number: 001-35737

 

NORTHWEST BIOTHERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

 

Delaware

(State or Other Jurisdiction of Incorporation or

Organization)

 

94-3306718 

(I.R.S. Employer Identification No.)

 

4800 Montgomery Lane, Suite 800, Bethesda, MD 20814

(Address of principal executive offices) (Zip Code)

 

(240) 497-9024

(Registrant's telephone number)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x  No ¨

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x  No ¨

 

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ¨ Accelerated filer x Non-accelerated filer ¨ Smaller reporting company ¨
(do not check if a smaller reporting company)

 

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes  ¨  No  x

 

As of May 6, 2016, the total number of shares of common stock, par value $0.001 per share, outstanding was 101,740,440.

 

 

 

 

NORTHWEST BIOTHERAPEUTICS, INC.

 

FORM 10-Q

 

TABLE OF CONTENTS

 

PART I - FINANCIAL INFORMATION 3
     
Item 1. Condensed Consolidated Interim Financial Statements (Unaudited)  
     
  Condensed Consolidated Balance Sheets as of March 31, 2016 and December 31, 2015 3
     
  Condensed Consolidated Statements of Operations for the three months ended March 31, 2016 and 2015 4
     
  Condensed Consolidated Statements of Comprehensive Loss for the three months ended March 31, 2016 and 2015 5
     
  Condensed Consolidated Statement of Stockholders’ Equity (Deficit) for the three months ended March 31, 2016 6
     
  Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2016 and 2015 7
     
  Notes to Condensed Consolidated Financial Statements 9
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 21
     
Item 3. Quantitative and Qualitative Disclosures About Market Risk 25
     
Item 4. Controls and Procedures 25
     
PART II - OTHER INFORMATION 26
     
Item 1. Legal Proceedings 26
     
Item 1A.  Risk Factors 27
     
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 28
     
Item 3. Defaults Upon Senior Securities 29
     
Item 4. Mine Safety Disclosures 29
     
Item 5. Other Information 29
     
Item 6. Exhibits 29
   
SIGNATURES 30

 

2 

 

 

PART I - FINANCIAL INFORMATION 

NORTHWEST BIOTHERAPEUTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands, except share and per share amounts)

 

   March 31,   December 31, 
   2016   2015 
ASSETS          
Current assets:          
Cash and cash equivalents  $11,688   $21,813 
Restricted cash - interest payments held in escrow   746    886 
Prepaid expenses and other current assets   1,065    1,402 
Total current assets   13,499    24,101 
           
Non-current assets:          
Property, plant and equipment, net   48,360    46,157 
Restricted cash - interest payments held in escrow, net of current portion   214    349 
Other assets   153    190 
Total non-current assets   48,727    46,696 
           
Total assets  $62,226   $70,797 
           
COMMITMENTS AND CONTINGENCIES          
           
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)          
Current liabilities:          
Accounts payable  $8,726   $11,721 
Accounts payable to related party   6,366    5,455 
Accrued expenses (includes related party of $12 and $11 as of March 31, 2016 and December 31, 2015, respectively)   1,189    1,309 
Convertible notes, net (includes related party note of $50 as of March 31, 2016 and December 31, 2015)   185    185 
Note payable - in dispute   934    934 
Mortgage loan (net of deferred financing cost of $321 and $468 as of March 31, 2016 and December 31, 2015, respectively)   10,950    11,144 
Environmental remediation liability   6,200    6,200 
Shares payable to related party   8,799    - 
Derivative liability   14,457    27,982 
Total current liabilities   57,806    64,930 
           
Non-current liabilities:          
Convertible note (net of deferred financing cost of $387 and $457 as of March 31, 2016 and December 31, 2015, respectively)   10,613    10,543 
Total non-current liabilities   10,613    10,543 
           
Total liabilities   68,419    75,473 
           
Commitments and Contingencies          
           
Stockholders' equity (deficit):          
Preferred stock ($0.001 par value); 40,000,000 shares authorized; 0 shares issued and outstanding as of March 31, 2016 and December 31, 2015, respectively   -    - 
Common stock ($0.001 par value); 450,000,000 shares authorized; 101,740,440 and 95,858,087 shares issued and outstanding as of March 31, 2016 and December 31, 2014, respectively   102    96 
Additional paid-in capital   634,696    630,613 
Accumulated deficit   (641,368)   (635,262)
Accumulated other comprehensive gain (loss)   377    (123)
Total stockholders' equity (deficit)   (6,193)   (4,676)
Total liabilities and stockholders' equity (deficit)  $62,226   $70,797 

  

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

3 

 

 

NORTHWEST BIOTHERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(in thousands, except per share amounts)

 

   For the three months ended 
   March 31, 
   2016   2015 
Revenues:          
Research grant and other  $236   $194 
Total revenues   236    194 
Operating costs and expenses:          
Research and development   13,440    19,625 
General and administrative   4,275    3,400 
Total operating costs and expenses   17,715    23,025 
Loss from operations   (17,479)   (22,831)
Other income (expense):          
Change in fair value of derivative liability   13,525    (23,158)
Interest expense   (718)   (793)
Foreign currency transaction (loss) gain   (1,434)   349 
Net loss  $(6,106)  $(46,433)
           
Net loss per share applicable to common stockholders - basic and diluted  $(0.06)  $(0.67)
           
Weighted average shares used in computing basic and diluted loss per share   97,688    69,406 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

   

4 

 

 

NORTHWEST BIOTHERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

(in thousands)

 

   For the three months ended 
   March 31, 
   2016   2015 
Net loss  $(6,106)  $(46,433)
Other comprehensive income (loss)          
Foreign currency translation adjustment   500    (68)
Total comprehensive loss  $(5,606)  $(46,501)

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

5 

 

 

NORTHWEST BIOTHERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)

(Unaudited)

(in thousands)

 

    Common Stock     Additional
Paid-in
    Accumulated     Cumulative
Translation
      Total Stockholders  
  Shares     Par value     Capital     Deficit     Adjustment       Equity (Deficit)  
Balance January 1, 2016     95,858     $ 96     $ 630,613     $ (635,262 )   $ (123 )   $ (4,676 )
Issuance of common stock and warrants for cash in a registered direct offering     5,882       6       9,994       -       -       10,000  
Offering cost related to registered direct offering     -       -       (756 )     -       -       (756 )
Shares payment due to Cognate BioServices     -       -       (5,155 )     -       -       (5,155 )
Net loss     -       -       -       (6,106 )     -       (6,106 )
Cumulative translation adjustment     -       -       -       -       500       500  
Balance at March 31, 2016     101,740     $ 102     $ 634,696     $ (641,368 )   $ 377     $ (6,193 )

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

6 

 

 

NORTHWEST BIOTHERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)

 

   For the three months ended 
   March 31, 
   2016   2015 
Cash Flows from Operating Activities:          
Net Loss  $(6,106)  $(46,433)
Reconciliation of net loss to net cash used in operating activities:          
Depreciation and amortization   13    3 
Amortization of deferred financing cost   209    234 
Change in fair value of derivatives   (13,525)   23,158 
Accrued interest converted to common stock   -    (349)
Stock issued to Cognate BioServices under Cognate Agreements   3,644    6,359 
Changes in operating assets and liabilities:          
Prepaid expenses and other current assets   337    (279)
Accounts payable and accrued expenses   (3,116)   (378)
Related party accounts payable and accrued expenses   912    103 
Other non-current assets   37    - 
Net cash used in operating activities   (17,595)   (17,582)
Cash Flows from Investing Activities:          
Purchase of property, plant and equipment   (2,683)   (1,133)
Funding of escrow - convertible notes   275    - 
Net cash used in investing activities   (2,408)   (1,133)
Cash Flows from Financing Activities:          
Proceeds from mortgage loan   -    4,997 
Deferred offering cost related to mortgage loan   -    (138)
Proceeds from issuance of common stock and warrants in a registered direct offering   10,000    - 
Offering cost related to registered direct offering   (756)   - 
Proceeds from exercise of warrants   -    3,651 
Net cash provided by financing activities   9,244    8,510 
Effect of exchange rate changes on cash and cash equivalents   634    (15)
Net decrease in cash and cash equivalents   (10,125)   (10,220)
           
Cash and cash equivalents at beginning of year   21,813    13,390 
Cash and cash equivalents at end of year  $11,688   $3,170 
           
Supplemental disclosure of cash flow information          
Interest payments on mortgage loan  $(334)  $(307)
Interest payments on senior convertible notes  $(275)  $(428)

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

7 

 

 

NORTHWEST BIOTHERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

(Unaudited)

(in thousands)

 

   For the three months ended 
   March 31, 
   2016   2015 
Supplemental schedule of non-cash investing and financing activities:        
Accrued Exit Fee incurred from mortgage loan  $-   $50 
Cashless warrant exercise on warrant liability  $-   $520 
Increase in accounts payable related to UK property  $-   $257 
Interest payment on convertible note from escrow  $-   $428 
Redeemable security settlement  $-   $299 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

8 

 

 

NORTHWEST BIOTHERAPEUTICS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

1. Organization and Description of Business and Recent Developments

 

Northwest Biotherapeutics, Inc. and its subsidiaries NW Bio Europe S.A.R.L, NW Bio Gmbh and Aracaris Capital, Ltd. (collectively, the “Company”, “we”, “us” and “our”) were organized to discover and develop innovative immunotherapies for cancer.

 

The Company’s platform technology, DCVax®, is currently being tested for the treatment of certain types of cancers through clinical trials in the United States and Europe that are in various phases.

  

2. Liquidity and Financial Condition

 

For the three months ended March 31, 2016 and 2015, we recognized a net loss of $6.1 million and a net loss of $46.4 million, respectively.

 

During the three months ended March 31, 2016, the Company used approximately $17.6 million of cash in its operating activities. These cash outflows included substantial amounts of accrued costs relating to periods of higher activity and expenditures in the Company’s Phase III clinical trial which have subsequently been reduced, and included substantial amounts of legal costs which the Company anticipates may be subject to reimbursement under the Company’s insurance, with further legal expenses going forward being covered by insurance directly. The Company had cash and cash equivalents of $11.7 million and a working capital deficiency (cash and non-cash liabilities combined) of approximately $44.3 million at March 31, 2016 (with $14.5 million of the $44.3 million deficit comprised of non-cash derivative liabilities and $6.2 million comprised of projected potential future liability for future environmental costs). The Company owes an aggregate of $6.4 million of trade liabilities and convertible notes to related parties. 

 

Because of recurring operating losses, net operating cash flow deficits, and an accumulated deficit there is substantial doubt about the Company’s ability to continue as a going concern. The financial statements have been prepared assuming the Company will continue as a going concern and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that might become necessary should the Company be able to continue as a going concern.

 

3. Summary of Significant Accounting Policies

 

Basis of Presentation

 

The accompanying unaudited condensed consolidated interim financial statements include the accounts of the Company and its subsidiaries. All material intercompany balances and transactions have been eliminated.

 

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (“SEC”) and on the same basis as the Company prepares its annual audited consolidated financial statements. The condensed consolidated balance sheet as of March 31, 2016, condensed consolidated statements of operations for the three months ended March 31, 2016 and 2015, condensed consolidated statements of comprehensive loss for the three months ended March 31, 2016 and 2015, condensed consolidated statement of stockholders’ equity (deficit) for the three months ended March 31, 2016, and the condensed consolidated statements of cash flows for the three months ended March 31, 2016 and 2015 are unaudited, but include all adjustments, consisting only of normal recurring adjustments, which the Company considers necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The results for the three months ended March 31, 2016 are not necessarily indicative of results to be expected for the year ending December 31, 2016 or for any future interim period. The condensed consolidated balance sheet at March 31, 2016 has been derived from audited financial statements; however, it does not include all of the information and notes required by U.S. GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2015, and notes thereto included in the Company’s annual report on Form 10-K, which was filed with the SEC on March 16, 2016.

 

9 

 

 

NORTHWEST BIOTHERAPEUTICS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Use of Estimates

 

In preparing financial statements in conformity with U.S. GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of expenses during the reporting period. Due to inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in these estimates. On an ongoing basis, the Company evaluates its estimates and assumptions. These estimates and assumptions include valuing equity securities in share-based payment arrangements, valuing environmental liabilities, estimating the fair value of equity instruments recorded as derivative liabilities, and estimating the useful lives of depreciable assets and whether impairment charges may apply.

 

Warrant Liability

 

The Company accounts for certain common stock warrants outstanding as a liability at its fair value and adjusts the instrument to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company's statements of operations. The fair value of the warrants issued by the Company in connection the Conversion Transaction has been estimated using a Monte Carlo simulation.

 

Environmental Remediation Liabilities

 

The Company records environmental remediation liabilities for properties acquired. The environmental remediation liabilities are initially recorded at fair value. The liability is reduced for actual costs incurred in connection with the clean-up activities for each property. Upon completion of the clean-up, the environmental remediation liability is adjusted to equal the fair value of the remaining operation, maintenance and monitoring activities to be performed for the property. The amount of the liability resulting from the completion of the clean-up, if any, would be included in other income (expense). As of March 31, 2016, the Company estimated that the total environmental remediation costs associated with the purchase of the UK Facility will be approximately $6.2 million. This is a projected potential future cost. No such environmental costs have been incurred to date and none are currently pending. Contamination clean-up costs that improve the property from its original acquisition state will be capitalized as part of the property’s overall development costs. The Company engaged a third party specialist to conduct certain surveys of the condition of the property which included, among other things, a preliminary analysis of potential environmental remediation exposures. The Company determined, based on information contained in the specialist’s report, that it would be required to estimate the fair value of an unconditional obligation to remediate specific ground contamination at an estimated fair value of approximately $6.2 million. The Company computed the fair value of this obligation using a probability weighted approach that measures the likelihood of the following two potential outcomes: (i) a higher probability requirement of erecting a protective barrier around the affected area at an estimated cost of approximately $4.5 million, and (ii) a lower probability requirement of having to excavate the affected area at an estimated cost of approximately $32.0 million. The Company’s estimate is preliminary and therefore subject to change as further studies are conducted, and as additional facts come to the Company’s attention. Environmental remediation efforts are complex, technical and subject to various uncertainties. Accordingly, it is at least reasonably possible that any changes in the Company’s estimate could materially differ from the management’s preliminary assessment discussed herein.      

 

10 

 

 

NORTHWEST BIOTHERAPEUTICS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Foreign Currency Translation and Transactions

 

The Company has operations in Germany, the United Kingdom and Canada, in addition to the U.S. Assets and liabilities are translated into U.S. dollars using end of period exchange rates and revenues and expenses are translated into U.S. dollars using weighted average rates. Foreign currency translation adjustments are reported as a separate component of accumulated other comprehensive income (loss) within stockholders’ equity (deficit).

 

During the three months ended March 31, 2016, the Company recorded $0.5 million of foreign currency translation gain primarily due to the strengthening of the U.S. dollar relative to the euro and British pound sterling.

 

Foreign currency transaction losses are recognized in the Consolidated Statements of Operations as incurred.

 

Comprehensive Loss

 

The Company reports comprehensive loss and its components in its consolidated financial statements. Comprehensive loss consists of net loss and foreign currency translation adjustments, affecting stockholders’ equity (deficit) that, under U.S, GAAP, is excluded from net loss.

 

Research and Development Costs

 

Research and development costs are charged to operations as incurred and consist primarily of clinical trial costs, related party manufacturing costs, consulting costs, contract research and development costs, clinical site costs and compensation costs. 

 

For the three months ended March 31, 2016 and 2015, the Company recognized research and development costs of $13.4 million and $19.6 million, respectively.

 

Significant Accounting Policies

 

There have been no material changes in the Company’s significant accounting policies to those previously disclosed in the 2015 Annual Report.

 

11 

 

 

NORTHWEST BIOTHERAPEUTICS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Recent Accounting Pronouncements

 

In January 2016, FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 requires equity investments to be measured at fair value with changes in fair value recognized in net income; simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; requires separate presentation of financial assets and financial liabilities by measurement category and form of financial assets on the balance sheet or the accompanying notes to the financial statements; and clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. ASU 2016-01 will be effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company is currently evaluating the impact that ASU 2016-01 will have on its condensed consolidated financial statements and related disclosures.

 

In February 2016, FASB issued ASU No. 2016-02, Leases (Topic 842) which supersedes FASB ASC Topic 840, Leases (Topic 840) and provides principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than twelve months regardless of classification. Leases with a term of twelve months or less will be accounted for similar to existing guidance for operating leases. The standard will be effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted upon issuance. The Company is currently evaluating the impact that ASU 2016-02 will have on its condensed consolidated financial statements and related disclosures.

 

In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”). The amendment is to simplify several aspects of the accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. For public entities, the amendments in ASU 2016-09 are effective for interim and annual reporting periods beginning after December 15, 2016. The Company is currently assessing the impact of ASU 2016-09 on its condensed consolidated financial statements and related disclosures.

  

12 

 

 

NORTHWEST BIOTHERAPEUTICS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

4. Fair Value Measurements

 

The following table classifies the Company’s liabilities measured at fair value on a recurring basis into the fair value hierarchy as of March 31, 2016 and December 31, 2015 (in thousands):

 

   Fair value measured at March 31, 2016 
       Quoted prices in active   Significant other  Significant 
    Fair value at    markets   observable inputs   unobservable inputs 
    March 31, 2016    (Level 1)   (Level 2)   (Level 3) 
Derivative liability  $14,457   $-   $ -  $14,457 

 

   Fair value measured at December 31, 2015 
         Quoted prices in active    Significant other   Significant  
    Fair value at    markets   observable inputs   unobservable inputs 
    December 31, 2015    (Level 1)   (Level 2)   (Level 3) 
Derivative liability  $27,982   $-   $ -  $27,982 

 

 

There were no transfers between Level 1, 2 or 3 during the three-month period ended March 31, 2016.

 

The following table presents changes in Level 3 liabilities measured at fair value for the three-month period ended March 31, 2016. Both observable and unobservable inputs were used to determine the fair value of positions that the Company has classified within the Level 3 category. Unrealized gains and losses associated with liabilities within the Level 3 category include changes in fair value that were attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long- dated volatilities) inputs (in thousands).

 

   Warrant 
   Liability 
Balance - January 1, 2016  $27,982 
Change in fair value   (13,525)
Balance – March 31, 2016  $14,457 

 

The Company’s warrant liabilities are measured at fair value using the Monte Carlo simulation valuation methodology. A summary of the weighted average (in aggregate) significant unobservable inputs (Level 3 inputs) used in measuring the Company’s warrant liabilities that are categorized within Level 3 of the fair value hierarchy for the three months ended March 31, 2016 is as follows:

  

Date of valuation  January 1, 2016   March 31, 2016 
Strike price  $3.49   $2.38 
Volatility (annual)   86.9%   85.9%
Risk-free rate   1.3%   0.9%
Contractual term (years)   3.1    3.0 
Dividend yield (per share)   0%   0%

  

The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s management.

 

 

13 

 

 

NORTHWEST BIOTHERAPEUTICS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

5. Property, Plant and Equipment

 

Property and equipment consist of the following at March 31, 2016 and December 31, 2015 (in thousands):

 

   March 31,   December 31, 
   2016   2015 
Leasehold improvements  $69   $69 
Office furniture and equipment   25    25 
Computer equipment and software   602    597 
UK property acquisition, construction and estimated environmental liability   47,893    45,681 
           
    48,589    46,373 
Less: accumulated depreciation   (229)   (216)
   $48,360   $46,157 

 

Depreciation expense was approximately $13,000 and $3,000 for the three months ended March 31, 2016 and 2015.

 

6. Notes Payable

 

2014 Convertible Senior Notes

 

The Company has Convertible Senior Notes of $10.6 million, net of $0.4 million deferred offering cost as of March 31, 2016 with an interest rate of 5% and conversion price of $6.60. The Company has remaining $1.0 million in escrowed interest payments, which is sufficient to fund, when due, the total aggregate amount of the six scheduled semi-annual interest payments during the remaining term of the notes, excluding additional interest, if any.

 

The following table shows the details of interest expenses related to 2014 Convertible Senior Notes for the three months ended March 31, 2016 and 2015, respectively (in thousands):

 

14 

 

NORTHWEST BIOTHERAPEUTICS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

   For the three months ended 
   March 31, 
   2016   2015 
Contractual interest  $137   $216 
Amortization of debt issuance costs   70    105 
Total interest expense on the convertible senior notes  $207   $321 

 

Mortgage Loan

  

The Company has two 12% mortgage loans that are secured by the UK facility with principal of $11.3 million, net of deferred financing costs of $0.3 million. $4.7 million of the mortgage loans are due in August 2016 and the remainder in November 2016.

 

Interest expense was approximately $0.4 million and $0.3 million for the three months ended March 31, 2016 and 2015, respectively, which includes $0.1 million amortization of deferred offering financing costs in both periods. 

 

Other Notes Payable

 

Notes payable consist of the following at March 31, 2016 and December 31, 2015 (in thousands):

 

   March 31,   December 31, 
   2016   2015 
Notes payable – current          
12% unsecured originally due July 2011 - in dispute (1)  $934   $934 
    934    934 
Convertible notes payable, net - current          
6% unsecured (2)   135    135 
    135    135 
Note payable          
6% due on demand (3)   50    50 
    50    50 
           
Total notes payable, net  $1,119   $1,119 

  

(1) This $0.934 million note, which was originally due in July 2011 is currently under dispute with the creditor as to the validity of the note payable balance, which the Company believes has already been paid in full and is not outstanding.

 

(2) This $0.135 million note as of March 31, 2016 consists of two separate 6% notes in the amounts of $0.110 million and $0.025 million. In regard to the $0.110 million note, the Company has made ongoing attempts to locate the creditor to repay or convert this note, but has been unable to locate the creditor to date. In regard to the $0.025 million note, the holder has elected to convert these notes into equity, the Company has delivered the applicable conversion documents to the holder, and the Company is waiting for the holder to execute and return the documents.

 

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NORTHWEST BIOTHERAPEUTICS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

(3) This $0.050 million demand note as of March 31, 2016 is held by an officer of the Company. The holder has made no demand for payment, but reserves the right to make a demand at any time.

 

7. Net Loss per Share Applicable to Common Stockholders

 

Options, warrants, and convertible debt outstanding were all considered anti-dilutive for the three months ended March 31, 2016, and 2015, due to net losses.

 

The following securities were not included in the diluted net loss per share calculation because their effect was anti-dilutive as of the periods presented (in thousands): 

 

   For the three months ended 
   March 31, 
   2016   2015 
Common stock options   1,551    1,551 
Common stock warrants - equity treatment   26,876    15,830 
Common stock warrants - liability treatment   15,839    12,500 
Convertible notes and accrued interest   1,743    2,797 
Potentially dilutive securities   46,009    32,678 

 

8. Related Party Transactions

 

Cognate BioServices, Inc.

 

Cognate Expenses and Accounts Payable

 

At March 31, 2016 and December 31, 2015, the Company owed Cognate $6.4 million and $5.5 million, respectively, for unpaid invoices for manufacturing and related services.

 

Overall, for the three months ended March 31, 2016 and 2015, the Company incurred research and development costs (cash and non-cash) related to Cognate BioServices of $11.2 million and $14.7 million, respectively, relating to the DCVax-L and DCVax-Direct programs, product and process development work and preparations for upcoming Phase II trials. 

 

Share Based Payments

 

The Company recorded $5.2 million of income and $6.4 million of expense for the three-month period ended March 31, 2016 or 2015, respectively, for stock based payment expense to Cognate for the applicable pro rata portion of the ongoing 3-year vesting of the one-time initiation payments under Manufacturing and Services Agreement that were entered into in January 2014. The fair value calculation of these shares was determined using the market price for tradable shares. 

 

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NORTHWEST BIOTHERAPEUTICS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Shares payable to related party – most favored nation provision

 

The shares and warrants previously issued to Cognate in partial payment of invoices for manufacturing services continue to be under a 3-year lock-up, which has been in place since January 2014, preventing Cognate from selling them. If the Company enters into a transaction with other investors or creditors during this lock-up period on more favorable terms than Cognate received, the Company has an ongoing obligation to conform the terms of Cognate’s shares and warrants to the same terms as the other investors or creditors, under a most favored nation provision.

 

On March 3, 2016, the Company entered into a financing under which it sold 5.9 million common shares and 12.1 million Series A, B and C warrants to unrelated investors on terms more favorable than the existing terms of Cognate’s shares. The sale of common shares had an effective price of $1.7, which triggered a most favored nation obligation which would result in an obligation to issue 6.0 million shares to Cognate. However, these shares have not been issued, and the Company is in active negotiations with Cognate seeking to modify these arrangements.

 

While these negotiations are ongoing, the Company has accrued $8.8 million to represent shares payable to related parties on the condensed consolidated balance sheet based upon the closing stock price as of March 31, 2016 to recognize the contractual provision of the most favored nation clause.

  

9. Stockholders’ Equity (Deficit)

 

Common Stock Issuances

 

First Quarter 2016

 

On February 29, 2016, the Company entered into a Securities Purchase Agreement (the “Agreement”) with certain institutional investors (the “Purchasers”), for a registered direct offering (the “Offering”) of 5,882,353 shares (the “Shares”) of the Company’s Common Stock at the purchase price of $1.70 per share, and Series A Warrants (the “Series A Warrants”) to purchase an additional 2,941,177 shares of Common Stock at an exercise price of $2.25 per share. The Series A Warrants will become exercisable on the six month anniversary of issuance and expire five years thereafter.

 

In addition, the Company granted the Purchasers a sixty (60) day overallotment option in the form of Series B Warrants to purchase an additional 5,882,353 shares of Common Stock at an exercise price of $3.00 per share (the “Series B Warrants”). The Series B Warrants was exercisable immediately and was to expire within sixty (60) days. However, on May 2, 2016, the Company and the investors agreed to extend this warrant exercise period by twenty-one (21) days, from May 2 to May 23, 2016. The Company and the Purchasers consummated the purchase and sale of the Securities on March 3, 2016 (the “Closing”) and the Company raised gross proceeds of $10 million and net proceeds of approximately $9.2 million, after deducting placement agent fees, attorneys’ fees and other expenses. Subsequent to the reporting period, the Series B Warrants were extended an additional twenty-one (21) days to May 23, 2016.

 

In a concurrent private placement, each Purchaser will also receive Series C Warrants (the “Series C Warrants”) to purchase up to 2,941,177 shares of Common Stock. The Series C Warrants vest and become exercisable only if, and to the extent that, the Series B Warrants held by such Purchaser are exercised. The Series C warrants will be issuable and exercisable for one-half share of Common Stock per each Series B Warrant exercised. The Series C Warrants have an exercise price of $4.00 per share, shall be exercisable on the six-month anniversary of issuance and will expire five years thereafter.

 

 

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NORTHWEST BIOTHERAPEUTICS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

In connection with the Offering and the concurrent private placement, the Company engaged H.C. Wainwright & Co., LLC (the “Placement Agent”) to act as its exclusive placement agent. The Company agreed to pay the Placement Agent a cash placement fee equal to 7% of the aggregate purchase price for the common stock sold in the registered offering. The Placement Agent will also receive Common Stock purchase warrants (the “Compensation Warrants”) to purchase up to 294,118 shares of Common Stock, or 5% of the aggregate number of shares of common Stock sold in the registered offering, at an exercise price of $2.125, or 125% of the public offering price per share in the registered offering, which are exercisable six months following issuance and terminate on February 29, 2021.

  

Stock Purchase Warrants

 

The following is a summary of warrant activity for the three months ended March 31, 2016 (in thousands, except per share data):

 

   Number of   Weighted Average 
   Warrants   Exercise Price 
Outstanding as of December 31, 2015   27,267,441   $4.40 
Warrants granted in a registered direct offering   12,058,825    3.04 
Additional warrants owed to Cognate as part of reset   3,405,671    1.70 
Warrants expired and cancelled   (16,791)   11.86 
Outstanding as of March 31, 2016   42,715,146   $3.53 

 

 

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NORTHWEST BIOTHERAPEUTICS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

10. Contingencies

   

Derivative and Class Action Litigation

 

In 2014, as previously reported, the Company received demand letters from three purported individual shareholders seeking to inspect our corporate books and records pursuant to Section 220 of the Delaware General Corporation Law. The demand letters were all substantially similar, and claimed that their purpose is to investigate possible mismanagement and breaches of fiduciary duty by the Company’s directors and officers.  They requested a range of documents.  On November 13, 2014, one of the purported shareholders filed a complaint in the Delaware Court of Chancery seeking to enforce her books and records demand. The Company reached negotiated agreements and provided limited records, under confidentiality agreements. On July 16, 2015, the parties filed, and the court entered, a stipulation dismissing the case.

 

On June 19, 2015, two of the purported shareholders filed a complaint purportedly suing on behalf of a class of similarly situated shareholders and derivatively on behalf of the Company in the Delaware Court of Chancery.  The lawsuit names Cognate BioServices, Inc., Toucan Partners, Toucan Capital Fund III, our CEO Linda Powers and the Company’s Board of Directors as defendants, and names the Company as a “nominal defendant” with respect to the derivative claims.  The complaint generally objects to certain transactions between the Company and Cognate and the Toucan entities, in which Cognate and the Toucan entities provided services and financing to the Company, or agreed to conversion of debts owed to them by the Company into equity.  The complaint seeks unspecified monetary relief for the Company and the plaintiffs, and various forms of equitable relief, including disgorgement of allegedly improper benefits, rescission of the challenged transactions, and an order forbidding similar transactions in the future.  On September 1, 2015, the Company and other named defendants filed motions to dismiss.  In response, the plaintiffs filed an amended complaint on November 6, 2015. The Company and the other named defendants filed motions to dismiss plaintiffs’ amended complaint on January 19, 2016. The plaintiffs filed an answering brief in opposition to the motion to dismiss on April 4, 2016. The Company intends to continue to vigorously defend the case.

 

On November 19, 2015, a third purported shareholder who had sought corporate books and records filed a complaint in the U.S. District Court for the District of Maryland, claiming to sue derivatively on behalf of the Company. The complaint names the Company’s Board of Directors, Toucan Capital Fund III, L.P., Toucan General II, LLC, Toucan Partners, LLC, and Cognate as defendants, and names the Company as a nominal defendant. The complaint claims that the plaintiff made a demand on the Company’s Board of Directors to commence an action against the Company’s directors and its CEO and that the plaintiff commenced the derivative action after not receiving a response to the demand letter within an allegedly “sufficient time.” The complaint further claims that the Company purportedly overcompensated Cognate and Toucan for certain services and loans in payments of stock, and that the Company’s CEO, Ms. Powers, benefited from these transactions with Cognate and Toucan, which she allegedly owns or controls. The complaint asserts that the alleged overpayments unjustly enriched Ms. Powers, Toucan, and Cognate. The Complaint also claims that the Company’s directors breached their fiduciary duties of loyalty and good faith to the Company by authorizing the payments to Cognate. Finally, the complaint claims that Ms. Powers, Cognate, and Toucan aided and abetted the directors’ breaches of fiduciary duties by causing the board to enter into the agreements with Cognate. The plaintiff seeks an award of unspecified damages to the Company and seeks equitable remedies, including disgorgement by Ms. Powers, Toucan, and Cognate of the allegedly improper benefits received as a result of the disputed transactions. The plaintiff also seeks costs and disbursements associated with bringing suit, including attorneys’ fees and expert fees. On February 2, 2016, plaintiff and defendants filed a joint motion to stay the proceedings pending an investigation by a special committee of the Company’s Board of Directors into the allegations asserted in the demand letter and underlying the lawsuit. 

 

Class Action Securities Litigation

 

On August 26, 2015, a purported shareholder of the Company filed a putative class action complaint in the U.S. District Court for the District of Maryland.  The lawsuit names the Company and Ms. Powers as defendants.  On December 14, 2015, the court appointed two lead plaintiffs. The Lead Plaintiffs filed an amended complaint on February 12, 2016, purportedly on behalf of all of those who purchased common stock in NW Bio between January 13, 2014 and August 21, 2015. The amended complaint generally claims that the defendants violated Section 10(b) and Section 20(a) of the Securities Exchange Act of 1934 by making misleading statements and/or omissions on a variety of subjects, including the status and results of the Company’s DCVax trials.  The amended complaint seeks unspecified damages, attorneys’ fees, and costs. The Company and Ms. Powers filed a motion to dismiss plaintiffs’ amended complaint on April 12, 2016.  The Company intends to vigorously defend the case.

 

 

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NORTHWEST BIOTHERAPEUTICS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Shareholder Books and Record Demand

 

On December 7, 2015, the Company received a letter on behalf of shareholders demanding to inspect certain corporate books and records pursuant to Section 220 of the Delaware General Corporation Law. The demand letter claimed that its purpose was to investigate: (1) allegedly improper transactions, misconduct, and mismanagement by directors and an officer of the Company; (2) the possible breach of fiduciary duty by certain directors and officers of the Company; and (3) the independence and disinterestedness of the Company’s board, to determine whether a pre-suit demand would be necessary before commencing any derivative action on behalf of the Company. The Company has appointed a special committee of its Board of Directors consisting of independent and disinterested directors to investigate the allegations set forth in the demand letter, as well as the allegations asserted in the litigation summarized above. The Company also is in ongoing discussions with the shareholders demanding corporate books and records.

 

11. Subsequent Events

  

As the Company previously reported on Form 8-K, on April 26, 2016, the Company received a letter (the “Letter”) from the staff of The NASDAQ Stock Market LLC (“Nasdaq”) indicating that the Nasdaq Staff had reviewed certain stock issuances by the Company to Cognate BioServices, Inc. (“Cognate”), and had determined that those issuances did not comply with Nasdaq Rules 5635(c) and (d). The Letter has no immediate effect on the listing of the Company’s common stock. The Letter allows the Company until June 10, 2016 to submit a remediation plan to regain compliance with Nasdaq’s rules 5635(c) and (d). If the plan is accepted, Nasdaq can allow up to 6 months from the date of the Letter for the Company to evidence compliance with these rules.

 

The Company intends to take the appropriate steps to address the issues raised by the Nasdaq Staff as quickly as possible and is already in discussions with the Nasdaq Staff about two approaches to remediation. The Company intends to submit a remediation plan to Nasdaq promptly for its approval.

 

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the notes to those statements included with this report. In addition to historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. The words “believe,” “expect,” “intend,” “anticipate,” and similar expressions are used to identify forward-looking statements, but some forward-looking statements are expressed differently. Many factors could affect our actual results, including those factors described under “Risk Factors” in our Form 10-K for the year ended December 31, 2015 and in Part II Item 1A of this report. These factors, among others, could cause results to differ materially from those presently anticipated by us. You should not place undue reliance on these forward-looking statements.

 

Overview

 

We are a biotechnology company focused on developing immunotherapy products to treat cancers more effectively than current treatments, without toxicities of the kind associated with chemotherapies, and, through a proprietary batch manufacturing process, on a cost-effective basis, initially in the United States, Canada and Europe.

 

We have developed a platform technology, DCVax®, which uses activated dendritic cells to mobilize a patient's own immune system to attack their cancer. The DCVax technology is expected to be applicable to all solid tumor cancers, and is embodied in several distinct product lines. One of the product lines (DCVax®-L) is designed to cover all solid tumor cancers in which the tumors can be surgically removed. Another product line (DCVax®-Direct) is designed for all solid tumor cancers which are considered inoperable and cannot be surgically removed. We believe the broad applicability of DCVax to many cancers provides multiple opportunities for commercialization and partnering.

 

Our DCVax platform technology involves dendritic cells, the master cells of the immune system, and is designed to reinvigorate and educate the immune system to attack cancers. The dendritic cells are able to mobilize the overall immune system, including T cells, B cells and antibodies, natural killer cells and many others. Such mobilization of the overall immune system provides a broader attack on the cancer than mobilizing just a particular component, such as T cells alone, or a particular antibody alone. Likewise, our DCVax technology is designed to attack the full set of biomarkers, or antigens, on a patient’s cancer, rather than just a particular selected target or several targets. Clinical experience indicates that when just one or a few biomarkers on a cancer are targeted by a drug or other treatment, sooner or later the cancer usually develops a way around that drug, and the drug stops working. We believe that mobilizing the overall immune system, and targeting the full set of biomarkers on the patient’s cancer, contributes to the effectiveness of DCVax.

 

Critical Accounting Policies and Estimates

 

Our discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect our reported amounts of assets, liabilities, revenues and expenses.

 

On an ongoing basis, we evaluate our estimates and judgments, including those related to accrued expenses and stock-based compensation. We based our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the reported amounts of revenues and expenses that are not readily apparent from other sources. Actual results may differ from these estimates.

 

21 

 

 

Our critical accounting policies and significant estimates are detailed in our Annual Report on Form 10-K for the year ended December 31, 2015. Our critical accounting policies and significant estimates have not changed substantially from those previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2015.

  

Results of Operations

 

Operating costs:

 

Operating costs and expenses consist primarily of research and development expenses, including clinical trial expenses which increase when we are actively participating in clinical trials and are especially high when we are in a large ongoing international Phase III trial (as we now are), as well as preparing for multiple Phase II trials. Such costs have increased and will continue to increase as we expand and accelerate these programs, and bring on additional clinical trial programs and additional intellectual property development, and general and administrative expenses. Such expenses will also increase as we undertake preparations for eventual commercialization, which involves extensive work for process optimization, validation and scale-up. The associated administrative expenses also increase as such operating activities grow.

 

Research and development expense was $13.4 million for the three months ended March 31, 2016 versus $19.6 million for the three months ended March 31, 2015.

 

Our operating costs include ongoing development work relating to our DCVax products and their manufacturing, such as the development, testing and optimization of different product preparations and methods, the design, engineering, sourcing, production, testing, modification and validation of manufacturing automation systems, disposable sets to be used with the manufacturing automation systems, and manufacturing processes, product ingredients, product release assays, and other matters, as well as development of standard operating procedures (SOPs), batch production records, and other necessary materials.

 

Our operating costs also include the costs of expansion of our clinical trial programs including the Phase III trial in the US, UK, Germany and Canada (with DCVax-L for brain cancer), early access programs in Europe, and preparations for multiple Phase II trials. The preparation costs include product and process development, upfront payments to the clinical trial sites and the CROs managing the trials and other service providers, and legal, regulatory and expert expenses related to regulatory approvals, institutional approvals and clinical trial agreements with each site, database development, training of medical and other site personnel, trial supplies and other. Additional substantial costs relate to the expansion of manufacturing facilities and capacity, in both the US and Europe.

  

Research and development:

 

Discovery and preclinical research and development expenses include costs for external technical and regulatory advisers, scientific or medical personnel and others, costs of laboratory supplies and equipment used in research and development projects, travel, regulatory compliance, and expenditures for preclinical and clinical trial operation and management when we are actively engaged in clinical trials.

 

Because we are a pre-revenue company, we do not allocate research and development costs on a project basis. We adopted this policy, in part, due to the unreasonable cost burden associated with accounting at such a level of detail and our limited number of financial and personnel resources.

 

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General and administrative:

 

General and administrative expenses include both cash and non-cash measures. The non-cash expenses include stock-based compensation and depreciation. The cash expenses include administrative personnel related salary and benefit expenses, cost of facilities, insurance and travel, property and equipment. The cash expenses also include large amounts of legal fees and related expenses, and substantial intellectual property costs.

 

Three Months Ended March 31, 2016 and 2015

 

For the three months ended March 31, 2016 and 2015, we recognized a net loss of $6.1 million and a net loss of $46.4 million, respectively. For the period ended March 31, 2016, the Company recorded additional income of $13.5 million related to the change in fair value of derivative liability. For the period ended March 31, 2015, the Company recorded a $23.2 million expense related to the change in fair value of derivative liability.

 

Research and Development Expense

 

Research and development expense was $13.4 million for the three months ended March 31, 2016 versus $19.6 million for the three months ended March 31, 2015. The decrease was primarily due to decreased non-cash manufacturing and services costs as described below.

 

For the three months ended March 31, 2016 and 2015, we made cash payments for the two periods, respectively, of approximately $5.2 million, and $8.2 million to Cognate. At March 31, 2016 and 2015, we owed Cognate $6.4 million and $5.5 million, respectively, for unpaid invoices for DCVax-L and DCVax-Direct programs, product and process development work and preparations for upcoming Phase II trials.

  

For the three months ended March 31, 2016 and 2015, we incurred non-cash equity based benefit and expense (restricted common stock and warrants) for the applicable pro rata portion of the ongoing vesting (in equal monthly installments over 3 years) of the one-time initiation payments of shares and warrants under the four agreements the Company entered into with Cognate in January 2014. The Company recorded $5.2 million of income and $6.4 million expense for the three months ended March 31, 2016 and 2015. The income in March 2016 was due to the drop in share price from December 31, 2015. The fair value calculation of these shares was determined using the market price for tradable shares; however the shares issued to Cognate were unregistered non-tradable shares subject to multiple restrictions including multi-year vesting and multi-year lock-up. The ongoing installments also included lock-up warrants (for a 3-year lock-up of Cognate shares) and most favored nation warrants.

 

General and Administrative Expense

 

General and administrative expense was $4.3 million (cash and non-cash expenses combined) for the three months ended March 31, 2016 versus $3.4 million for the three months ended March 31, 2015. The increase in general and administrative expenses can be attributed mainly to the increase in legal expenses.

 

Change in fair value of derivatives

 

During the three months ended March 31, 2016 and 2015 we recognized a non-cash gain of $13.5 million and a non-cash loss of $23.2 million, respectively. The change in the fair value of the derivative liability during the 1st quarter of 2016 was due to a decrease in our stock price compared to the prior quarter, issued to Cognate in connection with the extinguishment of accounts payable

 

23 

 

 

Interest Expense

 

Interest expense (including non-cash elements such as amortization of debt discount and debt issuance cost) $0.7 million and $0.8 million for the three months ended March 31, 2016 and 2015, respectively. The decrease is due to the reduction in outstanding debt in 2015.

 

Liquidity and Capital Resources

 

We have experienced recurring losses from operations. During the three months ended March 31, 2016 and 2015, net cash outflows from operations were $17.6 million for both periods.

 

At March 31, 2016, current assets totaled $13.5 million, compared to $24.1 million at December 31, 2015. Current assets less current liabilities produces working capital deficit (cash and non-cash liabilities combined) in the amount of $44.3 million at March 31, 2016 (with $14.5 million of the $44.3 million deficit comprised of non-cash derivative liabilities and $6.2 million comprised of an estimated liability for future environmental costs), compared to a deficit of $40.8 million at December 31, 2015, as described above.

 

Operating Activities

 

During the three months ended March 31, 2016 and 2015, net cash outflows from operations were $17.6 million for both periods.

 

Investing Activities

 

During the three months ended March 31, 2016 and 2015, we used $2.4 million and $1.1 million to capitalize costs related to the UK facility and UK facility purchase, respectively.

  

Financing Activities

 

During the three months ended March 31, 2016 and 2015, our financing activities provided net proceeds after expenses of $9.2 million and $8.5 million, respectively.

 

Our financial statements indicate there is substantial doubt about our ability to continue as a going concern as we are dependent on our ability to obtain ongoing financing and ultimately to generate sufficient cash flow to meet our obligations on a timely basis.  We can give no assurance that our plans and efforts to achieve the above steps will be successful.

 

Other factors affecting our ongoing funding requirements include the number of staff we employ, the number of sites and number of patients still undergoing treatment in our Phase III brain cancer trial, the costs of further product and process development work relating to our DCVax products, the costs of preparations for multiple Phase II trials, the costs of expansion of manufacturing, the cost of pursuing our Hospital Exemption program and potential reimbursements in Germany, and unanticipated developments. The extent of resources available to us will determine which programs can move forward and at what pace.

  

Off-Balance Sheet Arrangements

 

Since our inception, we have not engaged in any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.

 

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

Market risk represents the risk of loss that may result from the change in value of financial instruments due to fluctuations in its market price. Market risk is inherent in all financial instruments. Market risk may be exacerbated in times of trading illiquidity when market participants refrain from transacting in normal quantities and/or at normal bid-offer spreads. Our exposure to market risk is directly related to derivatives, debt and equity linked instruments related to our financing activities.

 

Our assets and liabilities are overwhelmingly denominated in U.S. dollars. We do not use foreign currency contracts or other derivative instruments to manage changes in currency rates. We do not now, nor do we plan to, use derivative financial instruments for speculative or trading purposes. However, these circumstances might change.

  

The primary quantifiable market risk associated with our financial instruments is sensitivity to changes in interest rates. Interest rate risk represents the potential loss from adverse changes in market interest rates. We use an interest rate sensitivity simulation to assess our interest rate risk exposure. For purposes of presenting the possible earnings effect of a hypothetical, adverse change in interest rates over the 12-month period from our reporting date, we assume that all interest rate sensitive financial instruments will be impacted by a hypothetical, immediate 100 basis point increase in interest rates as of the beginning of the period. The sensitivity is based upon the hypothetical assumption that all relevant types of interest rates that affect our results would increase instantaneously, simultaneously and to the same degree. We do not believe that our cash and equivalents have significant risk of default or illiquidity.

 

The sensitivity analyses of the interest rate sensitive financial instruments are hypothetical and should be used with caution. Changes in fair value based on a 1% or 2% variation in an estimate generally cannot be extrapolated because the relationship of the change in the estimate to the change in fair value may not be linear. Also, the effect of a variation in a particular estimate on the fair value of financial instruments is calculated independent of changes in any other estimate; in practice, changes in one factor may result in changes in another factor, which might magnify or counteract the sensitivities. In addition, the sensitivity analyses do not consider any action that we may take to mitigate the impact of any adverse changes in the key estimates.

 

Based on our analysis, as of March 31, 2016, the effect of a 100+/- basis point change in interest rates on the value of our financial instruments and the resultant effect on our net loss are considered immaterial.

 

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

Since 2012, our Company’s finance and accounting functions have been performed by an external firm on a contract services basis.  This firm specializes in providing financing and accounting functions for biotech companies, and the founders and senior managers are highly experienced former partners of national accounting firms. Together with this external firm, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended. 

  

Based on the evaluation of our disclosure controls and procedures, our principal executive, financial and accounting officer concluded that during the period covered by this report, our Company’s processes for internally reporting material information in a systematic manner to allow for timely filing of material information were improving compared with prior periods, but were not effective, due to inherent limitations from being a small company and insufficient personnel for segregation of duties, and there remain material weaknesses in our oversight over the financial reporting that contribute to the weaknesses in our disclosure controls and procedures.  We have been working together with the external firm who performs the Company’s finance and accounting functions to address the weaknesses and enable increased segregation of duties and oversight, as described below.

 

25 

 

 

Changes in Internal Control over Financial Reporting

 

We have been taking steps to remedy the weaknesses identified above, which continue to exist as of the end of the period covered by this report.  Specifically, we are working with both counsel and consultants to address the weaknesses, and we have expanded the personnel resources allocated to our Company’s work, and the activities performed for our Company, by the external firm.  We have recruited additional personnel, and we are in the process of recruiting further personnel, to enable increased segregation of duties and increased oversight. We plan to continue taking steps to improve our internal control system and to address remaining deficiencies, but the timing of such steps is uncertain and our ability to retain or attract qualified individuals to undertake these functions is also uncertain.  Aside from these changes, there has been no change in our internal controls over financial reporting that occurred during the fiscal quarter ended March 31, 2016, that has materially affected, or is reasonably expected to materially affect, our internal controls over financial reporting.

  

Part II - Other Information

 

Item 1. Legal Proceedings

 

Derivative and Class Action Litigation

 

In 2014, as previously reported, the Company received demand letters from three purported individual shareholders seeking to inspect our corporate books and records pursuant to Section 220 of the Delaware General Corporation Law. The demand letters were all substantially similar, and claimed that their purpose is to investigate possible mismanagement and breaches of fiduciary duty by the Company’s directors and officers.  They requested a range of documents.  On November 13, 2014, one of the purported shareholders filed a complaint in the Delaware Court of Chancery seeking to enforce her books and records demand. The Company reached negotiated agreements and provided limited records, under confidentiality agreements. On July 16, 2015, the parties filed, and the court entered, a stipulation dismissing the case.

 

On June 19, 2015, two of the purported shareholders filed a complaint purportedly suing on behalf of a class of similarly situated shareholders and derivatively on behalf of the Company in the Delaware Court of Chancery. The lawsuit names Cognate BioServices, Inc., Toucan Partners, Toucan Capital Fund III, our CEO Linda Powers and the Company's Board of Directors as defendants, and names the Company as a "nominal defendant" with respect to the derivative claims. The complaint generally objects to certain transactions between the Company and Cognate and the Toucan entities, in which Cognate and the Toucan entities provided services and financing to the Company, or agreed to conversion of debts owed to them by the Company into equity. The complaint seeks unspecified monetary relief for the Company and the plaintiffs, and various forms of equitable relief, including disgorgement of allegedly improper benefits, rescission of the challenged transactions, and an order forbidding similar transactions in the future. On September 1, 2015, the Company and other named defendants filed motions to dismiss. In response, the plaintiffs filed an amended complaint on November 6, 2015. The Company and the other named defendants filed motions to dismiss plaintiffs' amended complaint on January 19, 2016. The plaintiffs filed an answering brief in opposition to the motion to dismiss on April 4, 2016. The Company intends to continue to vigorously defend the case

 

On November 19, 2015, a third purported shareholder who had sought corporate books and records filed a complaint in the U.S. District Court for the District of Maryland, claiming to sue derivatively on behalf of the Company. The complaint names the Company’s Board of Directors, Toucan Capital Fund III, L.P., Toucan General II, LLC, Toucan Partners, LLC, and Cognate as defendants, and names the Company as a nominal defendant. The complaint claims that the plaintiff made a demand on the Company’s Board of Directors to commence an action against the Company’s directors and its CEO and that the plaintiff commenced the derivative action after not receiving a response to the demand letter within an allegedly “sufficient time.” The complaint further claims that the Company purportedly overcompensated Cognate and Toucan for certain services and loans in payments of stock, and that the Company’s CEO, Ms. Powers, benefited from these transactions with Cognate and Toucan, which she allegedly owns or controls. The complaint asserts that the alleged overpayments unjustly enriched Ms. Powers, Toucan, and Cognate. The Complaint also claims that the Company’s directors breached their fiduciary duties of loyalty and good faith to the Company by authorizing the payments to Cognate. Finally, the complaint claims that Ms. Powers, Cognate, and Toucan aided and abetted the directors’ breaches of fiduciary duties by causing the board to enter into the agreements with Cognate. The plaintiff seeks an award of unspecified damages to the Company and seeks equitable remedies, including disgorgement by Ms. Powers, Toucan, and Cognate of the allegedly improper benefits received as a result of the disputed transactions. The plaintiff also seeks costs and disbursements associated with bringing suit, including attorneys’ fees and expert fees. On February 2, 2016, plaintiff and defendants filed a joint motion to stay the proceedings pending an investigation by a special committee of the Company’s Board of Directors into the allegations asserted in the demand letter and underlying the lawsuit. 

 

26 

 

 

Class Action Securities Litigation

 

On August 26, 2015, a purported shareholder of the Company filed a putative class action complaint in the U.S. District Court for the District of Maryland.  The lawsuit names the Company and Ms. Powers as defendants.  On December 14, 2015, the court appointed two lead plaintiffs. The Lead Plaintiffs filed an amended complaint on February 12, 2016, purportedly on behalf of all of those who purchased common stock in NW Bio between January 13, 2014 and August 21, 2015. The amended complaint generally claims that the defendants violated Section 10(b) and Section 20(a) of the Securities Exchange Act of 1934 by making misleading statements and/or omissions on a variety of subjects, including the status and results of the Company’s DCVax trials.  The amended complaint seeks unspecified damages, attorneys’ fees, and costs. The Company and Ms. Powers filed a motion to dismiss plaintiffs’ amended complaint on April 12, 2016.  The Company intends to vigorously defend the case.

 

Shareholder Books and Record Demand

 

On December 7, 2015, the Company received a letter on behalf of shareholders demanding to inspect certain corporate books and records pursuant to Section 220 of the Delaware General Corporation Law. The demand letter claimed that its purpose was to investigate: (1) allegedly improper transactions, misconduct, and mismanagement by directors and an officer of the Company; (2) the possible breach of fiduciary duty by certain directors and officers of the Company; and (3) the independence and disinterestedness of the Company’s board, to determine whether a pre-suit demand would be necessary before commencing any derivative action on behalf of the Company. The Company has appointed a special committee of its Board of Directors consisting of independent and disinterested directors to investigate the allegations set forth in the demand letter, as well as the allegations asserted in the litigation summarized above. The Company also is in ongoing discussions with the shareholders demanding corporate books and records.

 

Item 1A. Risk Factors

 

Other than the following additional risk factor, the risk factors described in our most recent Annual Report on Form 10-K and other filings continue to apply as described therein:

 

If we fail to comply with NASDAQ listing rules, or remedy non-compliance, we could be subject to adverse action by NASDAQ

 

As the Company previously reported on Form 8-K, on April 26, 2016, the Company received a letter (the “Letter”) from the staff of The NASDAQ Stock Market LLC (“Nasdaq”) indicating that the Nasdaq Staff had reviewed certain stock issuances by the Company to Cognate BioServices, Inc. (“Cognate”), and had determined that those issuances did not comply with Nasdaq Rules 5635(c) and (d).  When a listed company fails to be in compliance with the listing rules of Nasdaq, there is a range of potential actions which may follow.  The Nasdaq Staff and the company may negotiate and agree upon a remediation plan, or the Nasdaq Staff could issue a letter of reprimand, or the Nasdaq Staff could initiate a process to delist the company’s common shares.  The Company is currently in discussions with Nasdaq about potential approaches to remedy the non-compliance with these rules and the Company intends to submit a remediation plan to Nasdaq promptly for its approval.  However, there can be no assurance as to whether our plan will be accepted by Nasdaq or whether we will be able to reach agreement with Nasdaq on a remediation plan.  If  Nasdaq were to issue a letter of reprimand or initiate delisting proceedings against us, it could have a material adverse effect on the trading price and liquidity of our common stock. 

 

27 

 

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

On February 29, 2016, the Company entered into a Securities Purchase Agreement (the “Agreement”) with certain institutional investors (the “Purchasers”), for a registered direct offering (the “Offering”) of 5,882,353 shares (the “Shares”) of the Company’s common stock, par value $0.001 per share (the “Common Stock”) at the purchase price of $1.70 per share, and Series A Warrants (the “Series A Warrants”) to purchase an additional 2,941,177 shares of Common Stock at an exercise price of $2.25 per share. The Series A Warrants will become exercisable on the six month anniversary of issuance and expire five years thereafter.  In addition, the Company granted the Purchasers a sixty (60) day overallotment option in the form of Series B Warrants to purchase an additional 5,882,353 shares of Common Stock at an exercise price of $3.00 per share (the “Series B Warrants” and collectively with the Shares and the Series A Warrants, the “Securities”). The Series B Warrants shall be exercisable immediately and expire within sixty (60) days. The Company and the Purchasers consummated the purchase and sale of the Securities (the “Closing”) and the Company raised gross proceeds of $10 million and net proceeds of approximately $9,210,000, after deducting placement agent fees, attorneys’ fees and other expenses.

 

28 

 

 

The offer and sale of the Securities in the offering was registered under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to the Company’s shelf registration statement on Form S-3, as amended (File No. 333-207976), which became effective on December 22, 2015, and Form S-3 MEF (File No. 333- 209895), filed on March 3, 2016.

 

Thus far, the Company has used the net proceeds of the offering for working capital purposes. 

 

Item 3. Defaults Upon Senior Securities

 

Not Applicable.

 

Item 4. Mine Safety Disclosures

 

Not applicable.

  

Item 5. Other Information

 

Not applicable.

 

Item 6. Exhibits

 

31.1   Certification of President (Principal Executive Officer and Principal Financial and Accounting Officer), Pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
     
32.1  

Certification of President, Chief Executive Officer and Principal Financial and Accounting Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**

 

101.INS   XBRL Instance Document.
     
101.SCH   XBRL Schema Document.
     
101.CAL   XBRL Calculation Linkbase Document.
     
101.DEF   XBRL Definition Linkbase Document.
     
101.LAB   XBRL Label Linkbase Document.
     
101.PRE   XBRL Presentation Linkbase Document.
     

 

*Filed herewith
**Furnished herewith

 

29 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

  NORTHWEST BIOTHERAPEUTICS, INC
     
Dated: May 10, 2016 By:   /s/ Linda F. Powers
    Name:   Linda F. Powers
       
    Title: President and Chief Executive Officer
      Principal Executive Officer
      Principal Financial and Accounting Officer

 

30 

EX-31.1 2 v439072_ex31-1.htm EXHIBIT 31.1

 

Exhibit 31.1

 

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Linda F. Powers, certify that:

 

(1)         I have reviewed this quarterly report on Form 10-Q of Northwest Biotherapeutics, Inc.;

 

(2)         Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

(3)         Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

(4)         I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15 (f)), for the registrant and have:

 

(a)         Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its condensed consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

 

(b)         Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c)         Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d)         Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

(5)         I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):

 

(a)         All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b)         Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: May 10, 2016  
       
By:   /s/ Linda F. Powers  
  Name:    Linda F. Powers  
       
  Title: President and Chief Executive Officer  
    Principal Executive Officer  
    Principal Financial and Accounting Officer  

  

 

EX-32.1 3 v439072_ex32-1.htm EXHIBIT 32.1

 

Exhibit 32.1

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the quarterly report of Northwest Biotherapeutics, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2016, as filed with the Securities and Exchange Commission (the “Report”), I, Linda F. Powers, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1)  The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: May 10, 2016  
       
By:   /s/ Linda F. Powers  
  Name:    Linda F. Powers  
       
  Title: President and Chief Executive Officer  
    Principal Executive Officer  
    Principal Financial and Accounting Officer  

 

 

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The condensed consolidated balance sheet as of March 31, 2016, condensed consolidated statements of operations for the three months ended March 31, 2016 and 2015, condensed consolidated statements of comprehensive loss for the three months ended March 31, 2016 and 2015, condensed consolidated statement of stockholders&#8217; equity (deficit) for the three months ended March 31, 2016, and the condensed consolidated statements of cash flows for the three months ended March 31, 2016 and 2015 are unaudited, but include all adjustments, consisting only of normal recurring adjustments, which the Company considers necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The results for the three months ended March 31, 2016 are not necessarily indicative of results to be expected for the year ending December 31, 2016 or for any future interim period. The condensed consolidated balance sheet at March 31, 2016 has been derived from audited financial statements; however, it does not include all of the information and notes required by U.S. GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2015, and notes thereto included in the Company&#8217;s annual report on Form 10-K, which was filed with the SEC on March 16, 2016.</div> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 29.7pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif; COLOR: #212121" align="justify"></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"><b>Use of Estimates</b></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 37.4pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"><i>&#160;</i></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">In preparing financial statements in conformity with U.S. GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of expenses during the reporting period. 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This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company's statements of operations. The fair value of the warrants issued by the Company in connection the Conversion Transaction has been estimated using a Monte Carlo simulation.</div> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 29.7pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"><b>Environmental Remediation Liabilities</b></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 31.9pt; MARGIN: 0pt 0px 0pt 16.5pt; FONT: 10pt Times New Roman, Times, Serif" align="justify">&#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">The Company records environmental remediation liabilities for properties acquired. 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Contamination clean-up costs that improve the property from its original acquisition state will be capitalized as part of the property&#8217;s overall development costs. The Company engaged a third party specialist to conduct certain surveys of the condition of the property which included, among other things, a preliminary analysis of potential environmental remediation exposures. The Company determined, based on information contained in the specialist&#8217;s report, that it would be required to estimate the fair value of an unconditional obligation to remediate specific ground contamination at an estimated fair value of&#160; approximately $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">6.2</font> million. The Company computed the fair value of this obligation using a probability weighted approach that measures the likelihood of the following two potential outcomes: (i) a higher probability requirement of erecting a protective barrier around the affected area at an estimated cost of approximately $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">4.5</font> million, and (ii) a lower probability requirement of having to excavate the affected area at an estimated cost of approximately $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">32.0</font> million. The Company&#8217;s estimate is preliminary and therefore subject to change as further studies are conducted, and as additional facts come to the Company&#8217;s attention. Environmental remediation efforts are complex, technical and subject to various uncertainties. Accordingly, it is at least reasonably possible that any changes in the Company&#8217;s estimate could materially differ from the management&#8217;s preliminary assessment discussed herein.</div> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"><b>Foreign Currency Translation and Transactions</b></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 29.7pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"><b><i>&#160;</i></b></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">The Company has operations in Germany, the United Kingdom and Canada, in addition to the U.S. Assets and liabilities are translated into U.S. dollars using end of period exchange rates and revenues and expenses are translated into U.S. dollars using weighted average rates. Foreign currency translation adjustments are reported as a separate component of accumulated other comprehensive income (loss) within stockholders&#8217; equity (deficit).</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 27.5pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">&#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">During the three months ended March 31, 2016, the Company recorded $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">0.5</font> million of foreign currency translation gain primarily due to the strengthening of the U.S. dollar relative to the euro and British pound sterling.</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">&#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">Foreign currency transaction losses are recognized in the Consolidated Statements of Operations as incurred.</div> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 29.7pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"><b>Comprehensive Loss</b></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 27.5pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">&#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">The Company reports comprehensive loss and its components in its consolidated financial statements. Comprehensive loss consists of net loss and foreign currency translation adjustments, affecting stockholders&#8217; equity (deficit) that, under U.S, GAAP, is excluded from net loss.</div> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 27.5pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"><b>Research and Development Costs</b></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 37.4pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"><i>&#160;</i></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">Research and development costs are charged to operations as incurred and consist primarily of clinical trial costs, related party manufacturing costs, consulting costs, contract research and development costs, clinical site costs and compensation costs.&#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">&#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">For the three months ended March 31, 2016 and 2015, the Company recognized research and development costs of $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">13.4</font> million and $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">19.6</font> million, respectively.</div> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"></div> <strong>Significant Accounting Policies</strong> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 31.9pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"><b>&#160;</b></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">There have been no material changes in the Company&#8217;s significant accounting policies to those&#160;previously disclosed in the 2015 Annual Report.</div> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 31.9pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif; font-size:10pt;"> </div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"><b>Recent Accounting Pronouncements</b></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 29.7pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> &#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">In January 2016, FASB issued ASU 2016-01, <i> Recognition and Measurement of Financial Assets and Financial Liabilities</i>. ASU 2016-01 requires equity investments to be measured at fair value with changes in fair value recognized in net income; simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; requires separate presentation of financial assets and financial liabilities by measurement category and form of financial assets on the balance sheet or the accompanying notes to the financial statements; and clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity&#8217;s other deferred tax assets. ASU 2016-01 will be effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company is currently evaluating the impact that ASU 2016-01 will have on its condensed consolidated financial statements and related disclosures.</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">&#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">In February 2016, FASB issued ASU No. 2016-02, <i> Leases (Topic 842)</i> which supersedes FASB ASC Topic 840, <i> Leases (Topic 840)</i> and provides principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than twelve months regardless of classification. Leases with a term of twelve months or less will be accounted for similar to existing guidance for operating leases. The standard will be effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted upon issuance. The Company is currently evaluating the impact that ASU 2016-02 will have on its condensed consolidated financial statements and related disclosures.</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">&#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">In March 2016, the FASB issued ASU No. 2016-09, <i>Compensation &#150; Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting</i> (&#8220;ASU 2016-09&#8221;). The amendment is to simplify several aspects of the accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. 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FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">$</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="14%"> <div style="CLEAR:both;CLEAR: both">-</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">$</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="14%"> <div style="CLEAR:both;CLEAR: both">-</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">$</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="14%"> <div style="CLEAR:both;CLEAR: both">14,457</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> </tr> </table> </div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;CLEAR: both"> &#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN:Left; TEXT-INDENT: 0in; WIDTH: 100%"> <table style="MARGIN: 0in; WIDTH: 100%; BORDER-COLLAPSE: collapse; OVERFLOW: visible" cellspacing="0" cellpadding="0" align="left"> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="35%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 700" width="63%" colspan="11"> <div style="CLEAR:both;CLEAR: both"> Fair&#160;value&#160;measured&#160;at&#160;December&#160;31,&#160;2015</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="35%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="14%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="15%" colspan="2"> <div style="CLEAR:both;CLEAR: both"> Quoted&#160;prices&#160;in&#160;active</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="15%" colspan="2"> <div style="CLEAR:both;CLEAR: both">Significant&#160;other</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="15%" colspan="2"> <div style="CLEAR:both;CLEAR: both">Significant</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="35%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="15%" colspan="2"> <div style="CLEAR:both;CLEAR: both">Fair&#160;value&#160;at</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="15%" colspan="2"> <div style="CLEAR:both;CLEAR: both">markets</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="15%" colspan="2"> <div style="CLEAR:both;CLEAR: both">observable&#160;inputs</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="15%" colspan="2"> <div style="CLEAR:both;CLEAR: both">unobservable&#160;inputs</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="35%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="15%" colspan="2"> <div style="CLEAR:both;CLEAR: both"> December&#160;31,&#160;2015</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="15%" colspan="2"> <div style="CLEAR:both;CLEAR: both">(Level&#160;1)</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="15%" colspan="2"> <div style="CLEAR:both;CLEAR: both">(Level&#160;2)</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; 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VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">$</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="14%"> <div style="CLEAR:both;CLEAR: both">27,982</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">$</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="14%"> <div style="CLEAR:both;CLEAR: both">-</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">$</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="14%"> <div style="CLEAR:both;CLEAR: both">-</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">$</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="14%"> <div style="CLEAR:both;CLEAR: both">27,982</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> </tr> </table> </div> <font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"></font> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> &#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">There were no transfers between Level 1, 2 or 3 during the three-month period ended March 31, 2016.</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 29.7pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">&#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"><font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"> </font>The following table presents changes in Level 3 liabilities measured at fair value for the three-month period ended March 31, 2016. Both observable&#160;and unobservable inputs were used to determine the fair value of positions that the Company has classified&#160;within the&#160;Level 3 category. Unrealized gains and losses associated with liabilities&#160;within the&#160;Level 3&#160;category&#160;include changes in fair value that were attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long- dated volatilities) inputs (in thousands).</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">&#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN:center; TEXT-INDENT: 0in; WIDTH: 100%" align="center"> <table style="MARGIN: 0px:auto; WIDTH: 80%; BORDER-COLLAPSE: collapse; OVERFLOW: visible" cellspacing="0" cellpadding="0" align="center"> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="67%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="11%" colspan="2"> <div style="CLEAR:both;CLEAR: both">Warrant</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="67%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="11%" colspan="2"> <div style="CLEAR:both;CLEAR: both">Liability</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="67%"> <div style="CLEAR:both;CLEAR: both">Balance - January 1, 2016</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">$</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div style="CLEAR:both;CLEAR: both">27,982</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; 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FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="67%"> <div style="CLEAR:both;CLEAR: both">Balance &#150; March 31, 2016</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">$</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div style="CLEAR:both;CLEAR: both">14,457</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> </tr> </table> </div> <font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"></font> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 27.5pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="center">&#160;</div> <font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"></font> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">The Company&#8217;s warrant liabilities are measured at fair value using the Monte Carlo simulation valuation methodology. A summary of the weighted average (in aggregate) significant unobservable inputs (Level 3 inputs) used in measuring the Company&#8217;s warrant liabilities that are categorized within Level 3 of the fair value hierarchy for the three months ended March 31, 2016 is as follows:</div> &#160;&#160; <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN:center; TEXT-INDENT: 0in; WIDTH: 100%" align="center"> <table style="BORDER-BOTTOM: #9eb6ce 0px solid; BORDER-LEFT: #9eb6ce 0px solid; MARGIN: 0px:auto; WIDTH: 80%; BORDER-COLLAPSE: collapse; OVERFLOW: visible; BORDER-TOP: #9eb6ce 0px solid; BORDER-RIGHT: #9eb6ce 0px solid" cellspacing="0" cellpadding="0" align="center"> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 700" width="54%"> <div style="CLEAR:both;CLEAR: both"> Date&#160;of&#160;valuation</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 700" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 700" width="11%" colspan="2"> <div style="CLEAR:both;CLEAR: both">January&#160;1,&#160;2016</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 700" width="2%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 700" width="11%" colspan="2"> <div style="CLEAR:both;CLEAR: both">March&#160;31,&#160;2016</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="54%"> <div style="CLEAR:both;CLEAR: both">Strike price</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">$</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; 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VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div style="CLEAR:both;CLEAR: both">0.9</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">%</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="54%"> <div style="CLEAR:both;CLEAR: both">Contractual term (years)</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div style="CLEAR:both;CLEAR: both">3.1</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="2%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; 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FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div style="CLEAR:both;CLEAR: both">0</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="2%"> <div style="CLEAR:both;CLEAR: both">%</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div style="CLEAR:both;CLEAR: both">0</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">%</div> </td> </tr> </table> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;CLEAR: both"> </div> <font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"></font></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <font style="COLOR: #1f497d"><i>&#160;</i></font> &#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company&#8217;s management.</div> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 31.9pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">The following table classifies the Company&#8217;s liabilities measured at fair value on a recurring basis into the fair value hierarchy as of March 31, 2016 and December 31, 2015 (in thousands):</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">&#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN:Left; TEXT-INDENT: 0in; WIDTH: 100%"> <table style="MARGIN: 0in; WIDTH: 100%; BORDER-COLLAPSE: collapse; OVERFLOW: visible" cellspacing="0" cellpadding="0" align="left"> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="35%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 700" width="63%" colspan="11"> <div style="CLEAR:both;CLEAR: both"> Fair&#160;value&#160;measured&#160;at&#160;March&#160;31,&#160;2016</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="35%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="14%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="15%" colspan="2"> <div style="CLEAR:both;CLEAR: both"> Quoted&#160;prices&#160;in&#160;active</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="15%" colspan="2"> <div style="CLEAR:both;CLEAR: both">Significant&#160;other</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="15%" colspan="2"> <div style="CLEAR:both;CLEAR: both">Significant</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="35%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="15%" colspan="2"> <div style="CLEAR:both;CLEAR: both">Fair&#160;value&#160;at</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; 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FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">$</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="14%"> <div style="CLEAR:both;CLEAR: both">-</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">$</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; 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FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="15%" colspan="2"> <div style="CLEAR:both;CLEAR: both">Significant</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="35%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; 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FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="15%" colspan="2"> <div style="CLEAR:both;CLEAR: both">observable&#160;inputs</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="15%" colspan="2"> <div style="CLEAR:both;CLEAR: both">unobservable&#160;inputs</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="35%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="15%" colspan="2"> <div style="CLEAR:both;CLEAR: both"> December&#160;31,&#160;2015</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="15%" colspan="2"> <div style="CLEAR:both;CLEAR: both">(Level&#160;1)</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="15%" colspan="2"> <div style="CLEAR:both;CLEAR: both">(Level&#160;2)</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="15%" colspan="2"> <div style="CLEAR:both;CLEAR: both">(Level&#160;3)</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="35%"> <div style="CLEAR:both;CLEAR: both">Derivative liability</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">$</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="14%"> <div style="CLEAR:both;CLEAR: both">27,982</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">$</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="14%"> <div style="CLEAR:both;CLEAR: both">-</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">$</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="14%"> <div style="CLEAR:both;CLEAR: both">-</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">$</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="14%"> <div style="CLEAR:both;CLEAR: both">27,982</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> </tr> </table> </div> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 29.7pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">The following table presents changes in Level 3 liabilities measured at fair value for the three-month period ended March 31, 2016. Both observable&#160;and unobservable inputs were used to determine the fair value of positions that the Company has classified&#160;within the&#160;Level 3 category. Unrealized gains and losses associated with liabilities&#160;within the&#160;Level 3&#160;category&#160;include changes in fair value that were attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long- dated volatilities) inputs (in thousands).</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">&#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN:center; TEXT-INDENT: 0in; WIDTH: 100%" align="center"> <table style="MARGIN: 0px:auto; WIDTH: 80%; BORDER-COLLAPSE: collapse; OVERFLOW: visible" cellspacing="0" cellpadding="0" align="center"> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="67%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="11%" colspan="2"> <div style="CLEAR:both;CLEAR: both">Warrant</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="67%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="11%" colspan="2"> <div style="CLEAR:both;CLEAR: both">Liability</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="67%"> <div style="CLEAR:both;CLEAR: both">Balance - January 1, 2016</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">$</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div style="CLEAR:both;CLEAR: both">27,982</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; PADDING-LEFT: 13px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="67%"> <div style="CLEAR:both;CLEAR: both">Change in fair value</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div style="CLEAR:both;CLEAR: both">(13,525)</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="67%"> <div style="CLEAR:both;CLEAR: both">Balance &#150; March 31, 2016</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">$</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div style="CLEAR:both;CLEAR: both">14,457</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> </tr> </table> </div> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 27.5pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="center"></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">The Company&#8217;s warrant liabilities are measured at fair value using the Monte Carlo simulation valuation methodology. A summary of the weighted average (in aggregate) significant unobservable inputs (Level 3 inputs) used in measuring the Company&#8217;s warrant liabilities that are categorized within Level 3 of the fair value hierarchy for the three months ended March 31, 2016 is as follows:</div> &#160;&#160; <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN:center; TEXT-INDENT: 0in; WIDTH: 100%" align="center"> <table style="BORDER-BOTTOM: #9eb6ce 0px solid; BORDER-LEFT: #9eb6ce 0px solid; MARGIN: 0px:auto; WIDTH: 80%; BORDER-COLLAPSE: collapse; OVERFLOW: visible; BORDER-TOP: #9eb6ce 0px solid; BORDER-RIGHT: #9eb6ce 0px solid" cellspacing="0" cellpadding="0" align="center"> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 700" width="54%"> <div style="CLEAR:both;CLEAR: both"> Date&#160;of&#160;valuation</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 700" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 700" width="11%" colspan="2"> <div style="CLEAR:both;CLEAR: both">January&#160;1,&#160;2016</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 700" width="2%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 700" width="11%" colspan="2"> <div style="CLEAR:both;CLEAR: both">March&#160;31,&#160;2016</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="54%"> <div style="CLEAR:both;CLEAR: both">Strike price</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">$</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div style="CLEAR:both;CLEAR: both">3.49</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="2%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">$</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div style="CLEAR:both;CLEAR: both">2.38</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="54%"> <div style="CLEAR:both;CLEAR: both">Volatility (annual)</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div style="CLEAR:both;CLEAR: both">86.9</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="2%"> <div style="CLEAR:both;CLEAR: both">%</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div style="CLEAR:both;CLEAR: both">85.9</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">%</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="54%"> <div style="CLEAR:both;CLEAR: both">Risk-free rate</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div style="CLEAR:both;CLEAR: both">1.3</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="2%"> <div style="CLEAR:both;CLEAR: both">%</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div style="CLEAR:both;CLEAR: both">0.9</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">%</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="54%"> <div style="CLEAR:both;CLEAR: both">Contractual term (years)</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div style="CLEAR:both;CLEAR: both">3.1</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="2%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div style="CLEAR:both;CLEAR: both">3.0</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="54%"> <div style="CLEAR:both;CLEAR: both">Dividend yield (per share)</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div style="CLEAR:both;CLEAR: both">0</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="2%"> <div style="CLEAR:both;CLEAR: both">%</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div style="CLEAR:both;CLEAR: both">0</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">%</div> </td> </tr> </table> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;CLEAR: both"> </div> </div> </div> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <strong>5.&#160;Property, Plant and Equipment</strong></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 29.7pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> &#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"> </font>Property and equipment consist of the following at March 31, 2016 and December 31, 2015 (in thousands):</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN:Left; TEXT-INDENT: 0in; WIDTH: 100%"> <table style="MARGIN: 0in; WIDTH: 100%; BORDER-COLLAPSE: collapse; OVERFLOW: visible" cellspacing="0" cellpadding="0" align="left"> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="75%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="11%" colspan="2"> <div>March&#160;31,</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="11%" colspan="2"> <div>December&#160;31,</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="75%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="11%" colspan="2"> <div>2016</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="11%" colspan="2"> <div>2015</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="75%"> <div>Leasehold improvements</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>$</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>69</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>$</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>69</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="75%"> <div>Office furniture and equipment</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>25</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>25</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="75%"> <div>Computer equipment and software</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>602</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>597</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="75%"> <div>UK property acquisition, construction and estimated environmental liability</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="10%"> <div>47,893</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="10%"> <div>45,681</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="75%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="75%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>48,589</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>46,373</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="75%"> <div>Less: accumulated depreciation</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>(229)</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>(216)</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="75%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>$</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>48,360</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>$</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>46,157</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> </table> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt"></div> </div> <font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"></font> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> &#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">Depreciation expense was approximately $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">13,000</font> and $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">3,000</font> for the three months ended March 31, 2016 and 2015.</div> </div> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 29.7pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> Property and equipment consist of the following at March 31, 2016 and December 31, 2015 (in thousands):</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN:Left; TEXT-INDENT: 0in; WIDTH: 100%"> <table style="MARGIN: 0in; WIDTH: 100%; BORDER-COLLAPSE: collapse; OVERFLOW: visible" cellspacing="0" cellpadding="0" align="left"> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="75%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="11%" colspan="2"> <div>March&#160;31,</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="11%" colspan="2"> <div>December&#160;31,</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="75%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="11%" colspan="2"> <div>2016</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="11%" colspan="2"> <div>2015</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="75%"> <div>Leasehold improvements</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>$</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>69</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>$</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>69</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="75%"> <div>Office furniture and equipment</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>25</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>25</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="75%"> <div>Computer equipment and software</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>602</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>597</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="75%"> <div>UK property acquisition, construction and estimated environmental liability</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="10%"> <div>47,893</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="10%"> <div>45,681</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="75%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="75%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>48,589</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>46,373</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="75%"> <div>Less: accumulated depreciation</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>(229)</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>(216)</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="75%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>$</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>48,360</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>$</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>46,157</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> </table> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt"></div> </div> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <strong>6.&#160;Notes Payable</strong></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 29.7pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <strong>&#160;</strong></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <strong>2014 Convertible Senior Notes</strong></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 29.7pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <strong>&#160;</strong></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">The Company has Convertible Senior Notes of $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">10.6</font> million, net of $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">0.4</font> million deferred offering cost as of March 31, 2016 with an interest rate of <font style="FONT-FAMILY: 'Times New Roman','serif'; 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The Company has remaining $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">1.0</font> million in escrowed interest payments, which is sufficient to fund, when due, the total aggregate amount of the six scheduled semi-annual interest payments during the remaining term of the notes, excluding additional interest, if any.</div> </div> &#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"><font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"> </font>The following table shows the details of interest expenses related to 2014 Convertible Senior Notes for the three months ended March 31, 2016 and 2015, respectively (in thousands):</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">&#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 27.5pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN:Left; TEXT-INDENT: 0in; WIDTH: 100%"> <table style="MARGIN: 0in; WIDTH: 100%; BORDER-COLLAPSE: collapse; OVERFLOW: visible" cellspacing="0" cellpadding="0" align="left"> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="71%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="27%" colspan="5"> <div>For&#160;the&#160;three&#160;months&#160;ended</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="71%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="27%" colspan="5"> <div>March&#160;31,</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="71%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="13%" colspan="2"> <div>2016</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="13%" colspan="2"> <div>2015</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="71%"> <div>Contractual interest</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>$</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="12%"> <div>137</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>$</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="12%"> <div>216</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="71%"> <div>Amortization of debt issuance costs</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="12%"> <div>70</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="12%"> <div>105</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="71%"> <div>Total interest expense on the convertible senior notes</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>$</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="12%"> <div>207</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; 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FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="65%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 700" width="11%" colspan="2"> <div>March&#160;31,</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 700" width="11%" colspan="2"> <div>December&#160;31,</div> </td> <td style="TEXT-ALIGN: center; 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TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 700" width="11%" colspan="2"> <div>2015</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 700" width="65%"> <div>Notes payable &#150; current</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="65%"> <div>12% unsecured originally due July 2011 - in dispute (1)</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>$</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; 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BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="65%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>934</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; 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VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; 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FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>135</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>135</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="65%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>135</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>135</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 700" width="65%"> <div>Note payable</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="65%"> <div>6% due on demand (3)</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>50</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>50</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="65%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>50</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>50</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="65%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="65%"> <div>Total notes payable, net</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>$</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>1,119</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>$</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>1,119</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> </table> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt"></div> </div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 27.5pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="center">&#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">(1) This $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">0.934</font> million note, which was originally due in July 2011 is currently under dispute with the creditor as to the validity of the note payable balance, which the Company believes has already been paid in full and is not outstanding.</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;CLEAR: both"> &#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">(2) This $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">0.135</font> million note as of March 31, 2016 consists of two separate <font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"> 6</font>% notes in the amounts of $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">0.110</font> million and $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">0.025</font> million. In regard to the $0.110 million note, the Company has made ongoing attempts to locate the creditor to repay or convert this note, but has been unable to locate the creditor to date. In regard to the $0.025 million note, the holder has elected to convert these notes into equity, the Company has delivered the applicable conversion documents to the holder, and the Company is waiting for the holder to execute and return the documents.</div> &#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">(3) This $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">0.050</font> million demand note as of March 31, 2016 is held by an officer of the Company. The holder has made no demand for payment, but reserves the right to make a demand at any time.<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"></font></div> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">The following table shows the details of interest expenses related to 2014 Convertible Senior Notes for the three months ended March 31, 2016 and 2015, respectively (in thousands):</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">&#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 27.5pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN:Left; TEXT-INDENT: 0in; WIDTH: 100%"> <table style="MARGIN: 0in; WIDTH: 100%; BORDER-COLLAPSE: collapse; OVERFLOW: visible" cellspacing="0" cellpadding="0" align="left"> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="71%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="27%" colspan="5"> <div>For&#160;the&#160;three&#160;months&#160;ended</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="71%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="27%" colspan="5"> <div>March&#160;31,</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="71%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="13%" colspan="2"> <div>2016</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="13%" colspan="2"> <div>2015</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="71%"> <div>Contractual interest</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>$</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="12%"> <div>137</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>$</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="12%"> <div>216</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="71%"> <div>Amortization of debt issuance costs</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="12%"> <div>70</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="12%"> <div>105</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="71%"> <div>Total interest expense on the convertible senior notes</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>$</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="12%"> <div>207</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>$</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="12%"> <div>321</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> </table> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;CLEAR: both"> </div> </div> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 29.7pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> Notes payable consist of the following at March 31, 2016 and December 31, 2015 (in thousands):</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> &#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN:center; TEXT-INDENT: 0in; WIDTH: 100%" align="center"> <table style="BORDER-BOTTOM: #9eb6ce 0px solid; BORDER-LEFT: #9eb6ce 0px solid; MARGIN: 0px:auto; WIDTH: 90%; BORDER-COLLAPSE: collapse; OVERFLOW: visible; BORDER-TOP: #9eb6ce 0px solid; BORDER-RIGHT: #9eb6ce 0px solid" cellspacing="0" cellpadding="0" align="center"> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="65%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 700" width="11%" colspan="2"> <div>March&#160;31,</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 700" width="11%" colspan="2"> <div>December&#160;31,</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="65%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 700" width="11%" colspan="2"> <div>2016</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 700" width="11%" colspan="2"> <div>2015</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 700" width="65%"> <div>Notes payable &#150; current</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="65%"> <div>12% unsecured originally due July 2011 - in dispute (1)</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>$</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>934</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>$</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>934</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="65%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>934</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>934</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 700" width="65%"> <div>Convertible notes payable, net - current</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="65%"> <div>6% unsecured (2)</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>135</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>135</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="65%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>135</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>135</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 700" width="65%"> <div>Note payable</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="65%"> <div>6% due on demand (3)</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>50</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>50</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="65%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>50</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>50</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="65%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="10%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="65%"> <div>Total notes payable, net</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>$</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>1,119</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>$</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="10%"> <div>1,119</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> </table> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt"></div> </div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 27.5pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="center">&#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">(1) This $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">0.934</font> million note, which was originally due in July 2011 is currently under dispute with the creditor as to the validity of the note payable balance, which the Company believes has already been paid in full and is not outstanding.</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;CLEAR: both"> &#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">(2) This $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">0.135</font> million note as of March 31, 2016 consists of two separate <font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"> 6</font>% notes in the amounts of $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">0.110</font> million and $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">0.025</font> million. In regard to the $0.110 million note, the Company has made ongoing attempts to locate the creditor to repay or convert this note, but has been unable to locate the creditor to date. In regard to the $0.025 million note, the holder has elected to convert these notes into equity, the Company has delivered the applicable conversion documents to the holder, and the Company is waiting for the holder to execute and return the documents.</div> &#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">(3) This $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">0.050</font> million demand note as of March 31, 2016 is held by an officer of the Company. The holder has made no demand for payment, but reserves the right to make a demand at any time.</div> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"><strong>7. Net Loss per Share Applicable to Common Stockholders</strong></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"><strong>&#160;</strong></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">Options, warrants, and convertible debt outstanding were all considered anti-dilutive for the three months ended March 31, 2016, and 2015, due to net losses.</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">&#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"><font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"> </font>The following securities were not included in the diluted net loss per share calculation because their effect was anti-dilutive as of the periods presented (in thousands):&#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="center">&#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN:Left; TEXT-INDENT: 0in; WIDTH: 100%"> <table style="MARGIN: 0in; WIDTH: 100%; BORDER-COLLAPSE: collapse; OVERFLOW: visible" cellspacing="0" cellpadding="0" align="left"> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="71%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="27%" colspan="5"> <div>For&#160;the&#160;three&#160;months&#160;ended</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="71%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="27%" colspan="5"> <div>March&#160;31,</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="71%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="13%" colspan="2"> <div>2016</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="13%" colspan="2"> <div>2015</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="71%"> <div>Common stock options</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="12%"> <div>1,551</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="12%"> <div>1,551</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="71%"> <div>Common stock warrants - equity treatment</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="12%"> <div>26,876</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="12%"> <div>15,830</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="71%"> <div>Common stock warrants - liability treatment</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="12%"> <div>15,839</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="12%"> <div>12,500</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="71%"> <div>Convertible notes and accrued interest</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; 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table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">The following securities were not included in the diluted net loss per share calculation because their effect was anti-dilutive as of the periods presented (in thousands):&#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="center">&#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN:Left; TEXT-INDENT: 0in; WIDTH: 100%"> <table style="MARGIN: 0in; WIDTH: 100%; BORDER-COLLAPSE: collapse; OVERFLOW: visible" cellspacing="0" cellpadding="0" align="left"> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="71%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="27%" colspan="5"> <div>For&#160;the&#160;three&#160;months&#160;ended</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="71%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="27%" colspan="5"> <div>March&#160;31,</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="71%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="13%" colspan="2"> <div>2016</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="13%" colspan="2"> <div>2015</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="71%"> <div>Common stock options</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="12%"> <div>1,551</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="12%"> <div>1,551</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="71%"> <div>Common stock warrants - equity treatment</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="12%"> <div>26,876</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="12%"> <div>15,830</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="71%"> <div>Common stock warrants - liability treatment</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="12%"> <div>15,839</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="12%"> <div>12,500</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="71%"> <div>Convertible notes and accrued interest</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="12%"> <div>1,743</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="12%"> <div>2,797</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="71%"> <div>Potentially dilutive securities</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="12%"> <div>46,009</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 400" width="12%"> <div>32,678</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div>&#160;</div> </td> </tr> </table> </div> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> 10000000 0 756000 0 <div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <b>10. Contingencies</b></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <b>&#160;</b> &#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"><i>Derivative and Class Action Litigation</i></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"><i>&#160;</i></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">In 2014, as previously reported, the Company received demand letters from three purported individual shareholders seeking to inspect our corporate books and records pursuant to Section 220 of the Delaware General Corporation Law. The demand letters were all substantially similar, and claimed that their purpose is to investigate possible mismanagement and breaches of fiduciary duty by the Company&#8217;s directors and officers.&#160; They requested a range of documents.&#160; On November 13, 2014, one of the purported shareholders filed a complaint in the Delaware Court of Chancery seeking to enforce her books and records demand. The Company reached negotiated agreements and provided limited records, under confidentiality agreements. On July 16, 2015, the parties filed, and the court entered, a stipulation dismissing the case.</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt"> &#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt" align="justify">On June 19, 2015, two of the purported shareholders filed a complaint purportedly suing on behalf of a class of similarly situated shareholders and derivatively on behalf of the Company in the Delaware Court of Chancery.&#160; The lawsuit names Cognate BioServices, Inc., Toucan Partners, Toucan Capital Fund III, our CEO Linda Powers and the Company&#8217;s Board of Directors as defendants, and names the Company as a &#8220;nominal defendant&#8221; with respect to the derivative claims.&#160; The complaint generally objects to certain transactions between the Company and Cognate and the Toucan entities, in which Cognate and the Toucan entities provided services and financing to the Company, or agreed to conversion of debts owed to them by the Company into equity.&#160; The complaint seeks unspecified monetary relief for the Company and the plaintiffs, and various forms of equitable relief, including disgorgement of allegedly improper benefits, rescission of the challenged transactions, and an order forbidding similar transactions in the future. &#160;On September 1, 2015, the Company and other named defendants filed motions to dismiss.&#160; In response, the plaintiffs filed an amended complaint on November 6, 2015. The Company and the other named defendants filed motions to dismiss plaintiffs&#8217; amended complaint on January 19, 2016. The plaintiffs filed an answering brief in opposition to the motion to dismiss on April 4, 2016. The Company intends to continue to vigorously defend the case.</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt"> &#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">On November 19, 2015, a third purported shareholder who had sought corporate books and records filed a complaint in the U.S. District Court for the District of Maryland, claiming to sue derivatively on behalf of the Company. The complaint names the Company&#8217;s Board of Directors, Toucan Capital Fund III, L.P., Toucan General II, LLC, Toucan Partners, LLC, and Cognate as defendants, and names the Company as a nominal defendant. The complaint claims that the plaintiff made a demand on the Company&#8217;s Board of Directors to commence an action against the Company&#8217;s directors and its CEO and that the plaintiff commenced the derivative action after not receiving a response to the demand letter within an allegedly &#8220;sufficient time.&#8221; The complaint further claims that the Company purportedly overcompensated Cognate and Toucan for certain services and loans in payments of stock, and that the Company&#8217;s CEO, Ms. Powers, benefited from these transactions with Cognate and Toucan, which she allegedly owns or controls. The complaint asserts that the alleged overpayments unjustly enriched Ms. Powers, Toucan, and Cognate. The Complaint also claims that the Company&#8217;s directors breached their fiduciary duties of loyalty and good faith to the Company by authorizing the payments to Cognate. Finally, the complaint claims that Ms. Powers, Cognate, and Toucan aided and abetted the directors&#8217; breaches of fiduciary duties by causing the board to enter into the agreements with Cognate. The plaintiff seeks an award of unspecified damages to the Company and seeks equitable remedies, including disgorgement by Ms. Powers, Toucan, and Cognate of the allegedly improper benefits received as a result of the disputed transactions. The plaintiff also seeks costs and disbursements associated with bringing suit, including attorneys&#8217; fees and expert fees. On February 2, 2016, plaintiff and defendants filed a joint motion to stay the proceedings pending an investigation by a special committee of the Company&#8217;s Board of Directors into the allegations asserted in the demand letter and underlying the lawsuit.&#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;CLEAR: both"> &#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"><i>Class Action Securities Litigation</i></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 29.5pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">&#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">On August 26, 2015, a purported shareholder of the Company filed a putative class action complaint in the U.S. District Court for the District of Maryland.&#160; The lawsuit names the Company and Ms. Powers as defendants.&#160; On December 14, 2015, the court appointed two lead plaintiffs. The Lead Plaintiffs filed an amended complaint on February 12, 2016, purportedly on behalf of all of those who purchased common stock in NW Bio between January 13, 2014 and August 21, 2015. The amended complaint generally claims that the defendants violated Section 10(b) and Section 20(a) of the Securities Exchange Act of 1934 by making misleading statements and/or omissions on a variety of subjects, including the status and results of the Company&#8217;s DCVax trials.&#160; The amended complaint seeks unspecified damages, attorneys&#8217; fees, and costs. 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The demand letter claimed that its purpose was to investigate: (1) allegedly improper transactions, misconduct, and mismanagement by directors and an officer of the Company; (2) the possible breach of fiduciary duty by certain directors and officers of the Company; and (3) the independence and disinterestedness of the Company&#8217;s board, to determine whether a pre-suit demand would be necessary before commencing any derivative action on behalf of the Company. The Company has appointed a special committee of its Board of Directors consisting of independent and disinterested directors to investigate the allegations set forth in the demand letter, as well as the allegations asserted in the litigation summarized above. The Company also is in ongoing discussions with the shareholders demanding corporate books and records.</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;CLEAR: both"> <font style="FONT-FAMILY:Times New Roman, Times, Serif"> </font></div> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> 11700000 44300000 14500000 6400000 27982000 14457000 48589000 46373000 135000 135000 50000 50000 756000 756000 0 0 0 5155000 0 5155000 0 0 8799000 0 5882353 1.70 2941177 2.25 44300000 6200000 0.05 6.60 1000000 8800000 12058825000 3.04 10000000 9200000 5882353 3.00 2941177 4.00 0.07 0.05 2.125 1.25 294118 P5Y 10600000 400000 50000 0.12 11300000 300000 4700000 <div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <b>11.&#160;Subsequent Events<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"></font></b></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;CLEAR: both"> </div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;CLEAR: both"> &#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif; font-stretch: normal; font-size-adjust: none"> As the Company previously reported on Form 8-K, on April 26, 2016, the Company received a letter (the &#8220;Letter&#8221;) from the staff of The NASDAQ Stock Market LLC (&#8220;Nasdaq&#8221;) indicating that the Nasdaq Staff had reviewed certain stock issuances by the Company to Cognate BioServices, Inc. (&#8220;Cognate&#8221;), and had determined that those issuances did not comply with Nasdaq Rules 5635(c) and (d). The Letter has no immediate effect on the listing of the Company&#8217;s common stock. The Letter allows the Company until June 10, 2016 to submit a remediation plan to regain compliance with Nasdaq&#8217;s rules 5635(c) and (d). If the plan is accepted, Nasdaq can allow up to 6 months from the date of the Letter for the Company to evidence compliance with these rules.</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif; font-stretch: normal; font-size-adjust: none"> &#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif; font-stretch: normal; font-size-adjust: none"> The Company intends to take the appropriate steps to address the issues raised by the Nasdaq Staff as quickly as possible and is already in discussions with the Nasdaq Staff about two approaches to remediation. 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These cash outflows included substantial amounts of accrued costs relating to periods of higher activity and expenditures in the Company&#8217;s Phase III clinical&#160; trial which have subsequently been reduced, and included substantial amounts of legal costs which the Company anticipates may be subject to reimbursement under the Company&#8217;s insurance, with further legal expenses going forward being covered by insurance directly. The Company had cash and cash equivalents of $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">11.7</font> million and a working capital deficiency (cash and non-cash liabilities combined) of approximately $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">44.3</font> million at March 31, 2016 (with $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">14.5</font> million of the $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">44.3</font> million deficit comprised of non-cash derivative liabilities and $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">6.2</font> million comprised of projected potential future liability for future environmental costs). The Company owes an aggregate of $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">6.4</font> million of trade liabilities and convertible notes to related parties.&#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">&#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">Because of recurring operating losses, net operating cash flow deficits, and an accumulated deficit there is substantial doubt about the Company&#8217;s ability to continue as a going concern. The financial statements have been prepared assuming the Company will continue as a going concern and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that might become necessary should the Company be able to continue as a going concern.</div> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> 47893000 45681000 6400000 5500000 On March 3, 2016, the Company entered into a financing under which it sold 5.9 million common shares and 12.1 million Series A, B and C warrants to unrelated investors on terms more favorable than the existing terms of Cognates shares. The sale of common shares had an effective price of $1.7, which triggered a most favored nation obligation which would result in an obligation to issue 6.0 million shares to Cognate. However, these shares have not been issued, and the Company is in active negotiations with Cognate seeking to modify these arrangements. <div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"><b>8. 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If the Company enters into a transaction with other investors or creditors during this lock-up period on more favorable terms than Cognate received, the Company has an ongoing obligation to conform the terms of Cognate&#8217;s shares and warrants to the same terms as the other investors or creditors, under a most favored nation provision.</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">&#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"><font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"> </font><font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">On March 3, 2016, the Company entered into a financing under which it sold 5.9 million common shares and 12.1 million Series A, B and C warrants to unrelated investors on terms more favorable than the existing terms of Cognate&#8217;s shares. 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Stockholders&#8217; Equity (Deficit)</strong></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 29.7pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"><strong>&#160;</strong></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <strong><i>Common Stock Issuances</i></strong></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 29.7pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <strong><i>&#160;</i></strong></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <i><u>First Quarter 2016</u></i></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <i>&#160;</i></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;BACKGROUND-COLOR: transparent; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">On February 29, 2016, the Company entered into a Securities Purchase Agreement (the &#8220;Agreement&#8221;) with certain institutional investors (the &#8220;Purchasers&#8221;), for a registered direct offering (the &#8220;Offering&#8221;) of <font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"> 5,882,353</font> shares (the &#8220;Shares&#8221;) of the Company&#8217;s Common Stock at the purchase price of $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">1.70</font> per share, and Series A Warrants (the &#8220;Series A Warrants&#8221;) to purchase an additional <font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"> 2,941,177</font> shares of Common Stock at an exercise price of $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">2.25</font> per share. 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However, on May 2, 2016, the Company and the investors agreed to extend this warrant exercise period by twenty-one (21) days, from May 2 to May 23, 2016. The Company and the Purchasers consummated the purchase and sale of the Securities on March 3, 2016 (the &#8220;Closing&#8221;) and the Company raised gross proceeds of $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">10</font> million and net proceeds of approximately $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">9.2</font> million, after deducting placement agent fees, attorneys&#8217; fees and other expenses. 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Wainwright&#160;&amp; Co., LLC (the &#8220;Placement Agent&#8221;) to act as its exclusive placement agent. The Company agreed to pay the Placement Agent a cash placement fee equal to <font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">7</font>% of the aggregate purchase price for the common stock sold in the registered offering. 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FONT: 10pt Times New Roman, Times, Serif" align="justify"><strong><i>Stock Purchase Warrants</i></strong></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 29.7pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">&#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"><font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"> </font><font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"></font>The following is a summary of warrant activity for the three months ended March 31, 2016 (in thousands, except per share data):</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 29.7pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">&#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN:Left; TEXT-INDENT: 0in; WIDTH: 100%"> <table style="MARGIN: 0in; WIDTH: 100%; BORDER-COLLAPSE: collapse; OVERFLOW: visible" cellspacing="0" cellpadding="0" align="left"> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="71%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 700" width="13%" colspan="2"> <div style="CLEAR:both;CLEAR: both">Number&#160;of</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 700" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 700" width="13%" colspan="2"> <div style="CLEAR:both;CLEAR: both">Weighted&#160;Average</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="71%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 700" width="13%" colspan="2"> <div style="CLEAR:both;CLEAR: both">Warrants</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 700" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 700" width="13%" colspan="2"> <div style="CLEAR:both;CLEAR: both">Exercise&#160;Price</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 700" width="71%"> <div style="CLEAR:both;CLEAR: both">Outstanding as of December 31, 2015</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 700" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 700" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 700" width="12%"> <div style="CLEAR:both;CLEAR: both">27,267,441</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 700" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 700" width="1%"> <div style="CLEAR:both;CLEAR: both">$</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 700" width="12%"> <div style="CLEAR:both;CLEAR: both">4.40</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 700" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="71%"> <div style="CLEAR:both;CLEAR: both">Warrants granted in a registered direct offering</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="12%"> <div style="CLEAR:both;CLEAR: both">12,058,825</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="12%"> <div style="CLEAR:both;CLEAR: both">3.04</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="71%"> <div style="CLEAR:both;CLEAR: both">Additional warrants owed to Cognate as part of reset</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="12%"> <div style="CLEAR:both;CLEAR: both">3,405,671</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; PADDING-LEFT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; PADDING-LEFT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="12%"> <div style="CLEAR:both;CLEAR: both">1.70</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="71%"> <div style="CLEAR:both;CLEAR: both">Warrants expired and cancelled</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="12%"> <div style="CLEAR:both;CLEAR: both">(16,791)</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="12%"> <div style="CLEAR:both;CLEAR: both">11.86</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> </tr> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 700" width="71%"> <div style="CLEAR:both;CLEAR: both">Outstanding as of March 31, 2016</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 700" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 700" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 700" width="12%"> <div style="CLEAR:both;CLEAR: both">42,715,146</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 700" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 700" width="1%"> <div style="CLEAR:both;CLEAR: both">$</div> </td> <td style="BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; FONT-STYLE: normal; PADDING-RIGHT: 5px; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px solid; FONT-WEIGHT: 700" width="12%"> <div style="CLEAR:both;CLEAR: both">3.53</div> </td> <td style="TEXT-ALIGN: left; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #cceeff; FONT-SIZE: 10pt; VERTICAL-ALIGN: middle; FONT-WEIGHT: 700" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> </tr> </table> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;CLEAR: both"> </div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;CLEAR: both"> </div> </div> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 29.7pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"><font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"> </font><font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">The following is a summary of warrant activity for the three months ended March 31, 2016 (in thousands, except per share data):</font></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 29.7pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">&#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN:Left; TEXT-INDENT: 0in; WIDTH: 100%"> <table style="MARGIN: 0in; WIDTH: 100%; BORDER-COLLAPSE: collapse; OVERFLOW: visible" cellspacing="0" cellpadding="0" align="left"> <tr style="HEIGHT: 12px"> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="71%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 400" width="1%"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: times new roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; FONT-WEIGHT: 700" width="13%" colspan="2"> <div style="CLEAR:both;CLEAR: both">Number&#160;of</div> </td> <td style="TEXT-ALIGN: center; 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FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;CLEAR: both"> </div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;CLEAR: both"> </div> </div> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> This $0.934 million note, which was originally due in July 2011 is currently under dispute with the creditor as to the validity of the note payable balance, which the Company believes has already been paid in full and is not outstanding. This $0.135 million note as of March 31, 2016 consists of two separate 6% notes in the amounts of $0.110 million and $0.025 million. In regard to the $0.110 million note, the Company has made ongoing attempts to locate the creditor to repay or convert this note, but has been unable to locate the creditor to date. In regard to the $0.025 million note, the holder has elected to convert these notes into equity, the Company has delivered the applicable conversion documents to the holder, and the Company is waiting for the holder to execute and return the documents. This $0.050 million demand note as of March 31, 2016 is held by an officer of the Company. The holder has made no demand for payment, but reserves the right to make a demand at any time. 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Document And Entity Information - shares
3 Months Ended
Mar. 31, 2016
May. 06, 2016
Document Information [Line Items]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Mar. 31, 2016  
Document Fiscal Year Focus 2016  
Document Fiscal Period Focus Q1  
Entity Registrant Name NORTHWEST BIOTHERAPEUTICS INC  
Entity Central Index Key 0001072379  
Current Fiscal Year End Date --12-31  
Entity Filer Category Accelerated Filer  
Trading Symbol NWBO  
Entity Common Stock, Shares Outstanding   101,740,440
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CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Mar. 31, 2016
Dec. 31, 2015
Current assets:    
Cash and cash equivalents $ 11,688 $ 21,813
Restricted cash - interest payments held in escrow 746 886
Prepaid expenses and other current assets 1,065 1,402
Total current assets 13,499 24,101
Non-current assets:    
Property, plant and equipment, net 48,360 46,157
Restricted cash - interest payments held in escrow, net of current portion 214 349
Other assets 153 190
Total non-current assets 48,727 46,696
Total assets 62,226 70,797
Current liabilities:    
Accounts payable 8,726 11,721
Accounts payable to related party 6,366 5,455
Accrued expenses (includes related party of $12 and $11 as of March 31, 2016 and December 31, 2015, respectively) 1,189 1,309
Convertible notes, net (includes related party note of $50 as of March 31, 2016 and December 31, 2015) 185 185
Note payable - in dispute 934 934
Mortgage loan (net of deferred financing cost of $321 and $468 as of March 31, 2016 and December 31, 2015, respectively) 10,950 11,144
Environmental remediation liability 6,200 6,200
Shares payable to related party 8,799 0
Derivative liability 14,457 27,982
Total current liabilities 57,806 64,930
Non-current liabilities:    
Convertible note (net of deferred financing cost of $387 and $457 as of March 31, 2016 and December 31, 2015, respectively) 10,613 10,543
Total non-current liabilities 10,613 10,543
Total liabilities $ 68,419 $ 75,473
Commitments and Contingencies
Stockholders' equity (deficit):    
Preferred stock ($0.001 par value); 40,000,000 shares authorized; 0 shares issued and outstanding as of March 31, 2016 and December 31, 2015, respectively $ 0 $ 0
Common stock ($0.001 par value); 450,000,000 shares authorized; 101,740,440 and 95,858,087 shares issued and outstanding as of March 31, 2016 and December 31, 2014, respectively 102 96
Additional paid-in capital 634,696 630,613
Accumulated deficit (641,368) (635,262)
Accumulated other comprehensive gain (loss) 377 (123)
Total stockholders' equity (deficit) (6,193) (4,676)
Total liabilities and stockholders' equity (deficit) $ 62,226 $ 70,797
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CONDENSED CONSOLIDATED BALANCE SHEETS [Parenthetical] - USD ($)
$ in Thousands
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Preferred stock, par value (in dollars per share) $ 0.001 $ 0.001
Preferred stock, shares authorized 40,000,000 40,000,000
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
Common stock, par value (in dollars per share) $ 0.001 $ 0.001
Common stock, shares authorized 450,000,000 450,000,000
Common stock, shares issued 101,740,440 95,858,087
Common stock, shares outstanding 101,740,440 95,858,087
Convertible Debt [Member]    
Deferred Finance Costs, Noncurrent, Net (in dollars) $ 387 $ 457
Mortgage Loan [Member]    
Deferred Finance Costs, Noncurrent, Net (in dollars) $ 321 $ 468
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
shares in Thousands, $ in Thousands
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Revenues:    
Research grant and other $ 236 $ 194
Total revenues 236 194
Operating costs and expenses:    
Research and development 13,440 19,625
General and administrative 4,275 3,400
Total operating costs and expenses 17,715 23,025
Loss from operations (17,479) (22,831)
Other income (expense):    
Change in fair value of derivative liability 13,525 (23,158)
Interest expense (718) (793)
Foreign currency transaction (loss) gain (1,434) 349
Net loss $ (6,106) $ (46,433)
Net loss per share applicable to common stockholders - basic and diluted (in dollars per share) $ (0.06) $ (0.67)
Weighted average shares used in computing basic and diluted loss per share (in shares) 97,688 69,406
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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Net loss $ (6,106) $ (46,433)
Other comprehensive income (loss)    
Foreign currency translation adjustment 500 (68)
Total comprehensive loss $ (5,606) $ (46,501)
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CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) - 3 months ended Mar. 31, 2016 - USD ($)
$ in Thousands
Total
Common Stock [Member]
Additional Paid-in Capital [Member]
Accumulated Deficit [Member]
Cumulative Translation Adjustment [Member]
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Balance (in shares) at Dec. 31, 2015   95,858      
Issuance of common stock and warrants for cash in a registered direct offering 10,000 $ 6 9,994 0 0
Issuance of common stock and warrants for cash in a registered direct offering (in shares)   5,882      
Offering cost related to registered direct offering (756) $ 0 (756) 0 0
Shares payment due to Cognate BioServices (5,155) 0 (5,155) 0 0
Net loss (6,106) 0 0 (6,106) 0
Cumulative translation adjustment 500 0 0 0 500
Balance at Mar. 31, 2016 $ (6,193) $ 102 $ 634,696 $ (641,368) $ 377
Balance (in shares) at Mar. 31, 2016   101,740      
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Cash Flows from Operating Activities:    
Net Loss $ (6,106) $ (46,433)
Reconciliation of net loss to net cash used in operating activities:    
Depreciation and amortization 13 3
Amortization of deferred financing cost 209 234
Change in fair value of derivatives (13,525) 23,158
Accrued interest converted to common stock 0 (349)
Stock issued to Cognate BioServices under Cognate Agreements 3,644 6,359
Changes in operating assets and liabilities:    
Prepaid expenses and other current assets 337 (279)
Accounts payable and accrued expenses (3,116) (378)
Related party accounts payable and accrued expenses 912 103
Other non-current assets 37 0
Net cash used in operating activities (17,595) (17,582)
Cash Flows from Investing Activities:    
Purchase of property, plant and equipment (2,683) (1,133)
Funding of escrow - convertible notes 275 0
Net cash used in investing activities (2,408) (1,133)
Cash Flows from Financing Activities:    
Proceeds from mortgage loan 0 4,997
Deferred offering cost related to mortgage loan 0 (138)
Proceeds from issuance of common stock and warrants in a registered direct offering 10,000 0
Offering cost related to registered direct offering (756) 0
Proceeds from exercise of warrants 0 3,651
Net cash provided by financing activities 9,244 8,510
Effect of exchange rate changes on cash and cash equivalents 634 (15)
Net decrease in cash and cash equivalents (10,125) (10,220)
Cash and cash equivalents at beginning of year 21,813 13,390
Cash and cash equivalents at end of year 11,688 3,170
Supplemental schedule of non-cash investing and financing activities:    
Accrued Exit Fee incurred from mortgage loan 0 50
Cashless warrant exercise on warrant liability 0 520
Increase in accounts payable related to UK property 0 257
Interest payment on convertible note from escrow 0 428
Redeemable security settlement 0 299
Mortgage Loan [Member]    
Supplemental disclosure of cash flow information    
Interest Payments (334) (307)
Convertible Notes Payable [Member]    
Supplemental disclosure of cash flow information    
Interest Payments $ (275) $ (428)
XML 17 R8.htm IDEA: XBRL DOCUMENT v3.4.0.3
Organization and Description of Business and Recent Developments
3 Months Ended
Mar. 31, 2016
Organization, Consolidation and Presentation Of Financial Statements [Abstract]  
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]
1. Organization and Description of Business and Recent Developments
 
Northwest Biotherapeutics, Inc. and its subsidiaries NW Bio Europe S.A.R.L, NW Bio Gmbh and Aracaris Capital, Ltd. (collectively, the “Company”, “we”, “us” and “our”) were organized to discover and develop innovative immunotherapies for cancer.
 
The Company’s platform technology, DCVax®, is currently being tested for the treatment of certain types of cancers through clinical trials in the United States and Europe that are in various phases.
XML 18 R9.htm IDEA: XBRL DOCUMENT v3.4.0.3
Liquidity and Financial Condition
3 Months Ended
Mar. 31, 2016
Liquidity [Abstract]  
Liquidity and Financial Condition [Text Block]
2. Liquidity and Financial Condition
 
For the three months ended March 31, 2016 and 2015, we recognized a net loss of $6.1 million and a net loss of $46.4 million, respectively.
 
During the three months ended March 31, 2016, the Company used approximately $17.6 million of cash in its operating activities. These cash outflows included substantial amounts of accrued costs relating to periods of higher activity and expenditures in the Company’s Phase III clinical  trial which have subsequently been reduced, and included substantial amounts of legal costs which the Company anticipates may be subject to reimbursement under the Company’s insurance, with further legal expenses going forward being covered by insurance directly. The Company had cash and cash equivalents of $11.7 million and a working capital deficiency (cash and non-cash liabilities combined) of approximately $44.3 million at March 31, 2016 (with $14.5 million of the $44.3 million deficit comprised of non-cash derivative liabilities and $6.2 million comprised of projected potential future liability for future environmental costs). The Company owes an aggregate of $6.4 million of trade liabilities and convertible notes to related parties. 
 
Because of recurring operating losses, net operating cash flow deficits, and an accumulated deficit there is substantial doubt about the Company’s ability to continue as a going concern. The financial statements have been prepared assuming the Company will continue as a going concern and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that might become necessary should the Company be able to continue as a going concern.
XML 19 R10.htm IDEA: XBRL DOCUMENT v3.4.0.3
Summary of Significant Accounting Policies
3 Months Ended
Mar. 31, 2016
Accounting Policies [Abstract]  
Significant Accounting Policies [Text Block]
3. Summary of Significant Accounting Policies
 
Basis of Presentation
 
The accompanying unaudited condensed consolidated interim financial statements include the accounts of the Company and its subsidiaries. All material intercompany balances and transactions have been eliminated.
 
The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (“SEC”) and on the same basis as the Company prepares its annual audited consolidated financial statements. The condensed consolidated balance sheet as of March 31, 2016, condensed consolidated statements of operations for the three months ended March 31, 2016 and 2015, condensed consolidated statements of comprehensive loss for the three months ended March 31, 2016 and 2015, condensed consolidated statement of stockholders’ equity (deficit) for the three months ended March 31, 2016, and the condensed consolidated statements of cash flows for the three months ended March 31, 2016 and 2015 are unaudited, but include all adjustments, consisting only of normal recurring adjustments, which the Company considers necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The results for the three months ended March 31, 2016 are not necessarily indicative of results to be expected for the year ending December 31, 2016 or for any future interim period. The condensed consolidated balance sheet at March 31, 2016 has been derived from audited financial statements; however, it does not include all of the information and notes required by U.S. GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2015, and notes thereto included in the Company’s annual report on Form 10-K, which was filed with the SEC on March 16, 2016.
 
Use of Estimates
 
In preparing financial statements in conformity with U.S. GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of expenses during the reporting period. Due to inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in these estimates. On an ongoing basis, the Company evaluates its estimates and assumptions. These estimates and assumptions include valuing equity securities in share-based payment arrangements, valuing environmental liabilities, estimating the fair value of equity instruments recorded as derivative liabilities, and estimating the useful lives of depreciable assets and whether impairment charges may apply.
 
Warrant Liability
 
The Company accounts for certain common stock warrants outstanding as a liability at its fair value and adjusts the instrument to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company's statements of operations. The fair value of the warrants issued by the Company in connection the Conversion Transaction has been estimated using a Monte Carlo simulation.
 
Environmental Remediation Liabilities
 
The Company records environmental remediation liabilities for properties acquired. The environmental remediation liabilities are initially recorded at fair value. The liability is reduced for actual costs incurred in connection with the clean-up activities for each property. Upon completion of the clean-up, the environmental remediation liability is adjusted to equal the fair value of the remaining operation, maintenance and monitoring activities to be performed for the property. The amount of the liability resulting from the completion of the clean-up, if any, would be included in other income (expense). As of March 31, 2016, the Company estimated that the total environmental remediation costs associated with the purchase of the UK Facility will be approximately $6.2 million. This is a projected potential future cost. No such environmental costs have been incurred to date and none are currently pending. Contamination clean-up costs that improve the property from its original acquisition state will be capitalized as part of the property’s overall development costs. The Company engaged a third party specialist to conduct certain surveys of the condition of the property which included, among other things, a preliminary analysis of potential environmental remediation exposures. The Company determined, based on information contained in the specialist’s report, that it would be required to estimate the fair value of an unconditional obligation to remediate specific ground contamination at an estimated fair value of  approximately $6.2 million. The Company computed the fair value of this obligation using a probability weighted approach that measures the likelihood of the following two potential outcomes: (i) a higher probability requirement of erecting a protective barrier around the affected area at an estimated cost of approximately $4.5 million, and (ii) a lower probability requirement of having to excavate the affected area at an estimated cost of approximately $32.0 million. The Company’s estimate is preliminary and therefore subject to change as further studies are conducted, and as additional facts come to the Company’s attention. Environmental remediation efforts are complex, technical and subject to various uncertainties. Accordingly, it is at least reasonably possible that any changes in the Company’s estimate could materially differ from the management’s preliminary assessment discussed herein.
 
Foreign Currency Translation and Transactions
 
The Company has operations in Germany, the United Kingdom and Canada, in addition to the U.S. Assets and liabilities are translated into U.S. dollars using end of period exchange rates and revenues and expenses are translated into U.S. dollars using weighted average rates. Foreign currency translation adjustments are reported as a separate component of accumulated other comprehensive income (loss) within stockholders’ equity (deficit).
 
During the three months ended March 31, 2016, the Company recorded $0.5 million of foreign currency translation gain primarily due to the strengthening of the U.S. dollar relative to the euro and British pound sterling.
 
Foreign currency transaction losses are recognized in the Consolidated Statements of Operations as incurred.
 
Comprehensive Loss
 
The Company reports comprehensive loss and its components in its consolidated financial statements. Comprehensive loss consists of net loss and foreign currency translation adjustments, affecting stockholders’ equity (deficit) that, under U.S, GAAP, is excluded from net loss.
 
Research and Development Costs
 
Research and development costs are charged to operations as incurred and consist primarily of clinical trial costs, related party manufacturing costs, consulting costs, contract research and development costs, clinical site costs and compensation costs. 
 
For the three months ended March 31, 2016 and 2015, the Company recognized research and development costs of $13.4 million and $19.6 million, respectively.
  
Significant Accounting Policies
 
There have been no material changes in the Company’s significant accounting policies to those previously disclosed in the 2015 Annual Report.
 
Recent Accounting Pronouncements
 
In January 2016, FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 requires equity investments to be measured at fair value with changes in fair value recognized in net income; simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; requires separate presentation of financial assets and financial liabilities by measurement category and form of financial assets on the balance sheet or the accompanying notes to the financial statements; and clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. ASU 2016-01 will be effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company is currently evaluating the impact that ASU 2016-01 will have on its condensed consolidated financial statements and related disclosures.
 
In February 2016, FASB issued ASU No. 2016-02, Leases (Topic 842) which supersedes FASB ASC Topic 840, Leases (Topic 840) and provides principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than twelve months regardless of classification. Leases with a term of twelve months or less will be accounted for similar to existing guidance for operating leases. The standard will be effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted upon issuance. The Company is currently evaluating the impact that ASU 2016-02 will have on its condensed consolidated financial statements and related disclosures.
 
In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”). The amendment is to simplify several aspects of the accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. For public entities, the amendments in ASU 2016-09 are effective for interim and annual reporting periods beginning after December 15, 2016. The Company is currently assessing the impact of ASU 2016-09 on its condensed consolidated financial statements and related disclosures.
XML 20 R11.htm IDEA: XBRL DOCUMENT v3.4.0.3
Fair Value Measurements
3 Months Ended
Mar. 31, 2016
Fair Value Disclosures [Abstract]  
Fair Value Disclosures [Text Block]
4. Fair Value Measurements
 
The following table classifies the Company’s liabilities measured at fair value on a recurring basis into the fair value hierarchy as of March 31, 2016 and December 31, 2015 (in thousands):
 
 
 
Fair value measured at March 31, 2016
 
 
 
 
 
 
Quoted prices in active
 
Significant other
 
Significant
 
 
 
Fair value at
 
markets
 
observable inputs
 
unobservable inputs
 
 
 
March 31, 2016
 
(Level 1)
 
(Level 2)
 
(Level 3)
 
Derivative liability
 
$
14,457
 
$
-
 
$
-
 
$
14,457
 
 
 
 
Fair value measured at December 31, 2015
 
 
 
 
 
 
Quoted prices in active
 
Significant other
 
Significant
 
 
 
Fair value at
 
markets
 
observable inputs
 
unobservable inputs
 
 
 
December 31, 2015
 
(Level 1)
 
(Level 2)
 
(Level 3)
 
Derivative liability
 
$
27,982
 
$
-
 
$
-
 
$
27,982
 
 
There were no transfers between Level 1, 2 or 3 during the three-month period ended March 31, 2016.
 
The following table presents changes in Level 3 liabilities measured at fair value for the three-month period ended March 31, 2016. Both observable and unobservable inputs were used to determine the fair value of positions that the Company has classified within the Level 3 category. Unrealized gains and losses associated with liabilities within the Level 3 category include changes in fair value that were attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long- dated volatilities) inputs (in thousands).
 
 
 
Warrant
 
 
 
Liability
 
Balance - January 1, 2016
 
$
27,982
 
Change in fair value
 
 
(13,525)
 
Balance – March 31, 2016
 
$
14,457
 
 
The Company’s warrant liabilities are measured at fair value using the Monte Carlo simulation valuation methodology. A summary of the weighted average (in aggregate) significant unobservable inputs (Level 3 inputs) used in measuring the Company’s warrant liabilities that are categorized within Level 3 of the fair value hierarchy for the three months ended March 31, 2016 is as follows:
  
Date of valuation
 
January 1, 2016
 
March 31, 2016
 
Strike price
 
$
3.49
 
$
2.38
 
Volatility (annual)
 
 
86.9
%
 
85.9
%
Risk-free rate
 
 
1.3
%
 
0.9
%
Contractual term (years)
 
 
3.1
 
 
3.0
 
Dividend yield (per share)
 
 
0
%
 
0
%
   
The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s management.
XML 21 R12.htm IDEA: XBRL DOCUMENT v3.4.0.3
Property, Plant and Equipment
3 Months Ended
Mar. 31, 2016
Property, Plant and Equipment [Abstract]  
Property, Plant and Equipment Disclosure [Text Block]
5. Property, Plant and Equipment
 
Property and equipment consist of the following at March 31, 2016 and December 31, 2015 (in thousands):
 
 
March 31,
 
December 31,
 
 
 
2016
 
2015
 
Leasehold improvements
 
$
69
 
$
69
 
Office furniture and equipment
 
 
25
 
 
25
 
Computer equipment and software
 
 
602
 
 
597
 
UK property acquisition, construction and estimated environmental liability
 
 
47,893
 
 
45,681
 
 
 
 
 
 
 
 
 
 
 
 
48,589
 
 
46,373
 
Less: accumulated depreciation
 
 
(229)
 
 
(216)
 
 
 
$
48,360
 
$
46,157
 
 
Depreciation expense was approximately $13,000 and $3,000 for the three months ended March 31, 2016 and 2015.
XML 22 R13.htm IDEA: XBRL DOCUMENT v3.4.0.3
Notes Payable
3 Months Ended
Mar. 31, 2016
Debt Disclosure [Abstract]  
Debt Disclosure [Text Block]
6. Notes Payable
 
2014 Convertible Senior Notes
 
The Company has Convertible Senior Notes of $10.6 million, net of $0.4 million deferred offering cost as of March 31, 2016 with an interest rate of 5% and conversion price of $6.60. The Company has remaining $1.0 million in escrowed interest payments, which is sufficient to fund, when due, the total aggregate amount of the six scheduled semi-annual interest payments during the remaining term of the notes, excluding additional interest, if any.
 
The following table shows the details of interest expenses related to 2014 Convertible Senior Notes for the three months ended March 31, 2016 and 2015, respectively (in thousands):
 
 
 
For the three months ended
 
 
 
March 31,
 
 
 
2016
 
2015
 
Contractual interest
 
$
137
 
$
216
 
Amortization of debt issuance costs
 
 
70
 
 
105
 
Total interest expense on the convertible senior notes
 
$
207
 
$
321
 
 
Mortgage Loan
   
The Company has two 12% mortgage loans that are secured by the UK facility with principal of $11.3 million, net of deferred financing costs of $0.3 million. $4.7 million of the mortgage loans are due in August 2016 and the remainder in November 2016.
 
Interest expense was approximately $0.4 million and $0.3 million for the three months ended March 31, 2016 and 2015, respectively, which includes $0.1 million amortization of deferred offering financing costs in both periods.
 
Other Notes Payable
 
Notes payable consist of the following at March 31, 2016 and December 31, 2015 (in thousands):
 
 
 
March 31,
 
December 31,
 
 
 
2016
 
2015
 
Notes payable – current
 
 
 
 
 
 
 
12% unsecured originally due July 2011 - in dispute (1)
 
$
934
 
$
934
 
 
 
 
934
 
 
934
 
Convertible notes payable, net - current
 
 
 
 
 
 
 
6% unsecured (2)
 
 
135
 
 
135
 
 
 
 
135
 
 
135
 
Note payable
 
 
 
 
 
 
 
6% due on demand (3)
 
 
50
 
 
50
 
 
 
 
50
 
 
50
 
 
 
 
 
 
 
 
 
Total notes payable, net
 
$
1,119
 
$
1,119
 
 
(1) This $0.934 million note, which was originally due in July 2011 is currently under dispute with the creditor as to the validity of the note payable balance, which the Company believes has already been paid in full and is not outstanding.
 
(2) This $0.135 million note as of March 31, 2016 consists of two separate 6% notes in the amounts of $0.110 million and $0.025 million. In regard to the $0.110 million note, the Company has made ongoing attempts to locate the creditor to repay or convert this note, but has been unable to locate the creditor to date. In regard to the $0.025 million note, the holder has elected to convert these notes into equity, the Company has delivered the applicable conversion documents to the holder, and the Company is waiting for the holder to execute and return the documents.
 
(3) This $0.050 million demand note as of March 31, 2016 is held by an officer of the Company. The holder has made no demand for payment, but reserves the right to make a demand at any time.
XML 23 R14.htm IDEA: XBRL DOCUMENT v3.4.0.3
Net Loss per Share Applicable to Common Stockholders
3 Months Ended
Mar. 31, 2016
Earnings Per Share [Abstract]  
Earnings Per Share [Text Block]
7. Net Loss per Share Applicable to Common Stockholders
 
Options, warrants, and convertible debt outstanding were all considered anti-dilutive for the three months ended March 31, 2016, and 2015, due to net losses.
 
The following securities were not included in the diluted net loss per share calculation because their effect was anti-dilutive as of the periods presented (in thousands): 
 
 
 
For the three months ended
 
 
 
March 31,
 
 
 
2016
 
2015
 
Common stock options
 
 
1,551
 
 
1,551
 
Common stock warrants - equity treatment
 
 
26,876
 
 
15,830
 
Common stock warrants - liability treatment
 
 
15,839
 
 
12,500
 
Convertible notes and accrued interest
 
 
1,743
 
 
2,797
 
Potentially dilutive securities
 
 
46,009
 
 
32,678
 
XML 24 R15.htm IDEA: XBRL DOCUMENT v3.4.0.3
Related Party Transactions
3 Months Ended
Mar. 31, 2016
Related Party Transactions [Abstract]  
Related Party Transactions Disclosure [Text Block]
8. Related Party Transactions
 
Cognate BioServices, Inc.
 
Cognate Expenses and Accounts Payable
 
At March 31, 2016 and December 31, 2015, the Company owed Cognate $6.4 million and $5.5 million, respectively, for unpaid invoices for manufacturing and related services.
 
Overall, for the three months ended March 31, 2016 and 2015, the Company incurred research and development costs (cash and non-cash) related to Cognate BioServices of $11.2 million and $14.7 million, respectively, relating to the  DCVax-L and DCVax-Direct programs, product and process development work and preparations for upcoming Phase II trials.
 
Share Based Payments
 
The Company recorded $5.2 million of income and $6.4 million of expense for the three-month period ended March 31, 2016 or 2015, respectively, for stock based payment expense to Cognate for the applicable pro rata portion of the ongoing 3-year vesting of the one-time initiation payments under Manufacturing and Services Agreement that were entered into in January 2014. The fair value calculation of these shares was determined using the market price for tradable shares.
 
Shares payable to related party – most favored nation provision
 
The shares and warrants previously issued to Cognate in partial payment of invoices for manufacturing services continue to be under a 3-year lock-up, which has been in place since January 2014, preventing Cognate from selling them. If the Company enters into a transaction with other investors or creditors during this lock-up period on more favorable terms than Cognate received, the Company has an ongoing obligation to conform the terms of Cognate’s shares and warrants to the same terms as the other investors or creditors, under a most favored nation provision.
 
On March 3, 2016, the Company entered into a financing under which it sold 5.9 million common shares and 12.1 million Series A, B and C warrants to unrelated investors on terms more favorable than the existing terms of Cognate’s shares. The sale of common shares had an effective price of $1.7, which triggered a most favored nation obligation which would result in an obligation to issue 6.0 million shares to Cognate. However, these shares have not been issued, and the Company is in active negotiations with Cognate seeking to modify these arrangements.
 
While these negotiations are ongoing, the Company has accrued $8.8 million to represent shares payable to related parties on the condensed consolidated balance sheet based upon the closing stock price as of March 31, 2016 to recognize the contractual provision of the most favored nation clause.
XML 25 R16.htm IDEA: XBRL DOCUMENT v3.4.0.3
Stockholders' Equity (Deficit)
3 Months Ended
Mar. 31, 2016
Stockholders' Equity Note [Abstract]  
Stockholders' Equity Note Disclosure [Text Block]
9. Stockholders’ Equity (Deficit)
 
Common Stock Issuances
 
First Quarter 2016
 
On February 29, 2016, the Company entered into a Securities Purchase Agreement (the “Agreement”) with certain institutional investors (the “Purchasers”), for a registered direct offering (the “Offering”) of 5,882,353 shares (the “Shares”) of the Company’s Common Stock at the purchase price of $1.70 per share, and Series A Warrants (the “Series A Warrants”) to purchase an additional 2,941,177 shares of Common Stock at an exercise price of $2.25 per share. The Series A Warrants will become exercisable on the six month anniversary of issuance and expire five years thereafter.
 
In addition, the Company granted the Purchasers a sixty (60) day overallotment option in the form of Series B Warrants to purchase an additional 5,882,353 shares of Common Stock at an exercise price of $3.00 per share (the “Series B Warrants”). The Series B Warrants was exercisable immediately and was to expire within sixty (60) days. However, on May 2, 2016, the Company and the investors agreed to extend this warrant exercise period by twenty-one (21) days, from May 2 to May 23, 2016. The Company and the Purchasers consummated the purchase and sale of the Securities on March 3, 2016 (the “Closing”) and the Company raised gross proceeds of $10 million and net proceeds of approximately $9.2 million, after deducting placement agent fees, attorneys’ fees and other expenses. Subsequent to the reporting period, the Series B Warrants were extended an additional twenty-one (21) days to May 23, 2016.
 
In a concurrent private placement, each Purchaser will also receive Series C Warrants (the “Series C Warrants”) to purchase up to 2,941,177 shares of Common Stock. The Series C Warrants vest and become exercisable only if, and to the extent that, the Series B Warrants held by such Purchaser are exercised. The Series C warrants will be issuable and exercisable for one-half share of Common Stock per each Series B Warrant exercised. The Series C Warrants have an exercise price of $4.00 per share, shall be exercisable on the six-month anniversary of issuance and will expire five years thereafter. 
 
In connection with the Offering and the concurrent private placement, the Company engaged H.C. Wainwright & Co., LLC (the “Placement Agent”) to act as its exclusive placement agent. The Company agreed to pay the Placement Agent a cash placement fee equal to 7% of the aggregate purchase price for the common stock sold in the registered offering. The Placement Agent will also receive Common Stock purchase warrants (the “Compensation Warrants”) to purchase up to 294,118 shares of Common Stock, or 5% of the aggregate number of shares of common Stock sold in the registered offering, at an exercise price of $2.125, or 125% of the public offering price per share in the registered offering, which are exercisable six months following issuance and terminate on February 29, 2021.
  
Stock Purchase Warrants
 
The following is a summary of warrant activity for the three months ended March 31, 2016 (in thousands, except per share data):
 
 
 
Number of
 
Weighted Average
 
 
 
Warrants
 
Exercise Price
 
Outstanding as of December 31, 2015
 
 
27,267,441
 
$
4.40
 
Warrants granted in a registered direct offering
 
 
12,058,825
 
 
3.04
 
Additional warrants owed to Cognate as part of reset
 
 
3,405,671
 
 
1.70
 
Warrants expired and cancelled
 
 
(16,791)
 
 
11.86
 
Outstanding as of March 31, 2016
 
 
42,715,146
 
$
3.53
 
XML 26 R17.htm IDEA: XBRL DOCUMENT v3.4.0.3
Contingencies
3 Months Ended
Mar. 31, 2016
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Disclosure [Text Block]
10. Contingencies
   
Derivative and Class Action Litigation
 
In 2014, as previously reported, the Company received demand letters from three purported individual shareholders seeking to inspect our corporate books and records pursuant to Section 220 of the Delaware General Corporation Law. The demand letters were all substantially similar, and claimed that their purpose is to investigate possible mismanagement and breaches of fiduciary duty by the Company’s directors and officers.  They requested a range of documents.  On November 13, 2014, one of the purported shareholders filed a complaint in the Delaware Court of Chancery seeking to enforce her books and records demand. The Company reached negotiated agreements and provided limited records, under confidentiality agreements. On July 16, 2015, the parties filed, and the court entered, a stipulation dismissing the case.
 
On June 19, 2015, two of the purported shareholders filed a complaint purportedly suing on behalf of a class of similarly situated shareholders and derivatively on behalf of the Company in the Delaware Court of Chancery.  The lawsuit names Cognate BioServices, Inc., Toucan Partners, Toucan Capital Fund III, our CEO Linda Powers and the Company’s Board of Directors as defendants, and names the Company as a “nominal defendant” with respect to the derivative claims.  The complaint generally objects to certain transactions between the Company and Cognate and the Toucan entities, in which Cognate and the Toucan entities provided services and financing to the Company, or agreed to conversion of debts owed to them by the Company into equity.  The complaint seeks unspecified monetary relief for the Company and the plaintiffs, and various forms of equitable relief, including disgorgement of allegedly improper benefits, rescission of the challenged transactions, and an order forbidding similar transactions in the future.  On September 1, 2015, the Company and other named defendants filed motions to dismiss.  In response, the plaintiffs filed an amended complaint on November 6, 2015. The Company and the other named defendants filed motions to dismiss plaintiffs’ amended complaint on January 19, 2016. The plaintiffs filed an answering brief in opposition to the motion to dismiss on April 4, 2016. The Company intends to continue to vigorously defend the case.
 
On November 19, 2015, a third purported shareholder who had sought corporate books and records filed a complaint in the U.S. District Court for the District of Maryland, claiming to sue derivatively on behalf of the Company. The complaint names the Company’s Board of Directors, Toucan Capital Fund III, L.P., Toucan General II, LLC, Toucan Partners, LLC, and Cognate as defendants, and names the Company as a nominal defendant. The complaint claims that the plaintiff made a demand on the Company’s Board of Directors to commence an action against the Company’s directors and its CEO and that the plaintiff commenced the derivative action after not receiving a response to the demand letter within an allegedly “sufficient time.” The complaint further claims that the Company purportedly overcompensated Cognate and Toucan for certain services and loans in payments of stock, and that the Company’s CEO, Ms. Powers, benefited from these transactions with Cognate and Toucan, which she allegedly owns or controls. The complaint asserts that the alleged overpayments unjustly enriched Ms. Powers, Toucan, and Cognate. The Complaint also claims that the Company’s directors breached their fiduciary duties of loyalty and good faith to the Company by authorizing the payments to Cognate. Finally, the complaint claims that Ms. Powers, Cognate, and Toucan aided and abetted the directors’ breaches of fiduciary duties by causing the board to enter into the agreements with Cognate. The plaintiff seeks an award of unspecified damages to the Company and seeks equitable remedies, including disgorgement by Ms. Powers, Toucan, and Cognate of the allegedly improper benefits received as a result of the disputed transactions. The plaintiff also seeks costs and disbursements associated with bringing suit, including attorneys’ fees and expert fees. On February 2, 2016, plaintiff and defendants filed a joint motion to stay the proceedings pending an investigation by a special committee of the Company’s Board of Directors into the allegations asserted in the demand letter and underlying the lawsuit. 
 
Class Action Securities Litigation
 
On August 26, 2015, a purported shareholder of the Company filed a putative class action complaint in the U.S. District Court for the District of Maryland.  The lawsuit names the Company and Ms. Powers as defendants.  On December 14, 2015, the court appointed two lead plaintiffs. The Lead Plaintiffs filed an amended complaint on February 12, 2016, purportedly on behalf of all of those who purchased common stock in NW Bio between January 13, 2014 and August 21, 2015. The amended complaint generally claims that the defendants violated Section 10(b) and Section 20(a) of the Securities Exchange Act of 1934 by making misleading statements and/or omissions on a variety of subjects, including the status and results of the Company’s DCVax trials.  The amended complaint seeks unspecified damages, attorneys’ fees, and costs. The Company and Ms. Powers filed a motion to dismiss plaintiffs’ amended complaint on April 12, 2016.  The Company intends to vigorously defend the case.
 
Shareholder Books and Record Demand
 
On December 7, 2015, the Company received a letter on behalf of shareholders demanding to inspect certain corporate books and records pursuant to Section 220 of the Delaware General Corporation Law. The demand letter claimed that its purpose was to investigate: (1) allegedly improper transactions, misconduct, and mismanagement by directors and an officer of the Company; (2) the possible breach of fiduciary duty by certain directors and officers of the Company; and (3) the independence and disinterestedness of the Company’s board, to determine whether a pre-suit demand would be necessary before commencing any derivative action on behalf of the Company. The Company has appointed a special committee of its Board of Directors consisting of independent and disinterested directors to investigate the allegations set forth in the demand letter, as well as the allegations asserted in the litigation summarized above. The Company also is in ongoing discussions with the shareholders demanding corporate books and records.
XML 27 R18.htm IDEA: XBRL DOCUMENT v3.4.0.3
Subsequent Events
3 Months Ended
Mar. 31, 2016
Subsequent Events [Abstract]  
Subsequent Events [Text Block]
11. Subsequent Events
 
As the Company previously reported on Form 8-K, on April 26, 2016, the Company received a letter (the “Letter”) from the staff of The NASDAQ Stock Market LLC (“Nasdaq”) indicating that the Nasdaq Staff had reviewed certain stock issuances by the Company to Cognate BioServices, Inc. (“Cognate”), and had determined that those issuances did not comply with Nasdaq Rules 5635(c) and (d). The Letter has no immediate effect on the listing of the Company’s common stock. The Letter allows the Company until June 10, 2016 to submit a remediation plan to regain compliance with Nasdaq’s rules 5635(c) and (d). If the plan is accepted, Nasdaq can allow up to 6 months from the date of the Letter for the Company to evidence compliance with these rules.
 
The Company intends to take the appropriate steps to address the issues raised by the Nasdaq Staff as quickly as possible and is already in discussions with the Nasdaq Staff about two approaches to remediation. The Company intends to submit a remediation plan to Nasdaq promptly for its approval.
XML 28 R19.htm IDEA: XBRL DOCUMENT v3.4.0.3
Summary of Significant Accounting Policies (Policies)
3 Months Ended
Mar. 31, 2016
Accounting Policies [Abstract]  
Basis of Accounting, Policy [Policy Text Block]
Basis of Presentation
 
The accompanying unaudited condensed consolidated interim financial statements include the accounts of the Company and its subsidiaries. All material intercompany balances and transactions have been eliminated.
 
The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (“SEC”) and on the same basis as the Company prepares its annual audited consolidated financial statements. The condensed consolidated balance sheet as of March 31, 2016, condensed consolidated statements of operations for the three months ended March 31, 2016 and 2015, condensed consolidated statements of comprehensive loss for the three months ended March 31, 2016 and 2015, condensed consolidated statement of stockholders’ equity (deficit) for the three months ended March 31, 2016, and the condensed consolidated statements of cash flows for the three months ended March 31, 2016 and 2015 are unaudited, but include all adjustments, consisting only of normal recurring adjustments, which the Company considers necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The results for the three months ended March 31, 2016 are not necessarily indicative of results to be expected for the year ending December 31, 2016 or for any future interim period. The condensed consolidated balance sheet at March 31, 2016 has been derived from audited financial statements; however, it does not include all of the information and notes required by U.S. GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2015, and notes thereto included in the Company’s annual report on Form 10-K, which was filed with the SEC on March 16, 2016.
Use of Estimates, Policy [Policy Text Block]
Use of Estimates
 
In preparing financial statements in conformity with U.S. GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of expenses during the reporting period. Due to inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in these estimates. On an ongoing basis, the Company evaluates its estimates and assumptions. These estimates and assumptions include valuing equity securities in share-based payment arrangements, valuing environmental liabilities, estimating the fair value of equity instruments recorded as derivative liabilities, and estimating the useful lives of depreciable assets and whether impairment charges may apply.
Warrant Liability Policy [Policy Text Block]
Warrant Liability
 
The Company accounts for certain common stock warrants outstanding as a liability at its fair value and adjusts the instrument to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company's statements of operations. The fair value of the warrants issued by the Company in connection the Conversion Transaction has been estimated using a Monte Carlo simulation.
Environmental Cost, Expense Policy [Policy Text Block]
Environmental Remediation Liabilities
 
The Company records environmental remediation liabilities for properties acquired. The environmental remediation liabilities are initially recorded at fair value. The liability is reduced for actual costs incurred in connection with the clean-up activities for each property. Upon completion of the clean-up, the environmental remediation liability is adjusted to equal the fair value of the remaining operation, maintenance and monitoring activities to be performed for the property. The amount of the liability resulting from the completion of the clean-up, if any, would be included in other income (expense). As of March 31, 2016, the Company estimated that the total environmental remediation costs associated with the purchase of the UK Facility will be approximately $6.2 million. This is a projected potential future cost. No such environmental costs have been incurred to date and none are currently pending. Contamination clean-up costs that improve the property from its original acquisition state will be capitalized as part of the property’s overall development costs. The Company engaged a third party specialist to conduct certain surveys of the condition of the property which included, among other things, a preliminary analysis of potential environmental remediation exposures. The Company determined, based on information contained in the specialist’s report, that it would be required to estimate the fair value of an unconditional obligation to remediate specific ground contamination at an estimated fair value of  approximately $6.2 million. The Company computed the fair value of this obligation using a probability weighted approach that measures the likelihood of the following two potential outcomes: (i) a higher probability requirement of erecting a protective barrier around the affected area at an estimated cost of approximately $4.5 million, and (ii) a lower probability requirement of having to excavate the affected area at an estimated cost of approximately $32.0 million. The Company’s estimate is preliminary and therefore subject to change as further studies are conducted, and as additional facts come to the Company’s attention. Environmental remediation efforts are complex, technical and subject to various uncertainties. Accordingly, it is at least reasonably possible that any changes in the Company’s estimate could materially differ from the management’s preliminary assessment discussed herein.
Foreign Currency Transactions and Translations Policy [Policy Text Block]
Foreign Currency Translation and Transactions
 
The Company has operations in Germany, the United Kingdom and Canada, in addition to the U.S. Assets and liabilities are translated into U.S. dollars using end of period exchange rates and revenues and expenses are translated into U.S. dollars using weighted average rates. Foreign currency translation adjustments are reported as a separate component of accumulated other comprehensive income (loss) within stockholders’ equity (deficit).
 
During the three months ended March 31, 2016, the Company recorded $0.5 million of foreign currency translation gain primarily due to the strengthening of the U.S. dollar relative to the euro and British pound sterling.
 
Foreign currency transaction losses are recognized in the Consolidated Statements of Operations as incurred.
Comprehensive Loss Policy [Policy Text Block]
Comprehensive Loss
 
The Company reports comprehensive loss and its components in its consolidated financial statements. Comprehensive loss consists of net loss and foreign currency translation adjustments, affecting stockholders’ equity (deficit) that, under U.S, GAAP, is excluded from net loss.
Research and Development Expense, Policy [Policy Text Block]
Research and Development Costs
 
Research and development costs are charged to operations as incurred and consist primarily of clinical trial costs, related party manufacturing costs, consulting costs, contract research and development costs, clinical site costs and compensation costs. 
 
For the three months ended March 31, 2016 and 2015, the Company recognized research and development costs of $13.4 million and $19.6 million, respectively.
Significant Accounting Policies [Policy Text Block]
Significant Accounting Policies
 
There have been no material changes in the Company’s significant accounting policies to those previously disclosed in the 2015 Annual Report.
New Accounting Pronouncements, Policy [Policy Text Block]
Recent Accounting Pronouncements
 
In January 2016, FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 requires equity investments to be measured at fair value with changes in fair value recognized in net income; simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; requires separate presentation of financial assets and financial liabilities by measurement category and form of financial assets on the balance sheet or the accompanying notes to the financial statements; and clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. ASU 2016-01 will be effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company is currently evaluating the impact that ASU 2016-01 will have on its condensed consolidated financial statements and related disclosures.
 
In February 2016, FASB issued ASU No. 2016-02, Leases (Topic 842) which supersedes FASB ASC Topic 840, Leases (Topic 840) and provides principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than twelve months regardless of classification. Leases with a term of twelve months or less will be accounted for similar to existing guidance for operating leases. The standard will be effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted upon issuance. The Company is currently evaluating the impact that ASU 2016-02 will have on its condensed consolidated financial statements and related disclosures.
 
In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”). The amendment is to simplify several aspects of the accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. For public entities, the amendments in ASU 2016-09 are effective for interim and annual reporting periods beginning after December 15, 2016. The Company is currently assessing the impact of ASU 2016-09 on its condensed consolidated financial statements and related disclosures.
XML 29 R20.htm IDEA: XBRL DOCUMENT v3.4.0.3
Fair Value Measurements (Tables)
3 Months Ended
Mar. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]  
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]
The following table classifies the Company’s liabilities measured at fair value on a recurring basis into the fair value hierarchy as of March 31, 2016 and December 31, 2015 (in thousands):
 
 
 
Fair value measured at March 31, 2016
 
 
 
 
 
 
Quoted prices in active
 
Significant other
 
Significant
 
 
 
Fair value at
 
markets
 
observable inputs
 
unobservable inputs
 
 
 
March 31, 2016
 
(Level 1)
 
(Level 2)
 
(Level 3)
 
Derivative liability
 
$
14,457
 
$
-
 
$
-
 
$
14,457
 
 
 
 
Fair value measured at December 31, 2015
 
 
 
 
 
 
Quoted prices in active
 
Significant other
 
Significant
 
 
 
Fair value at
 
markets
 
observable inputs
 
unobservable inputs
 
 
 
December 31, 2015
 
(Level 1)
 
(Level 2)
 
(Level 3)
 
Derivative liability
 
$
27,982
 
$
-
 
$
-
 
$
27,982
 
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]
The following table presents changes in Level 3 liabilities measured at fair value for the three-month period ended March 31, 2016. Both observable and unobservable inputs were used to determine the fair value of positions that the Company has classified within the Level 3 category. Unrealized gains and losses associated with liabilities within the Level 3 category include changes in fair value that were attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long- dated volatilities) inputs (in thousands).
 
 
 
Warrant
 
 
 
Liability
 
Balance - January 1, 2016
 
$
27,982
 
Change in fair value
 
 
(13,525)
 
Balance – March 31, 2016
 
$
14,457
 
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Table Text Block]
The Company’s warrant liabilities are measured at fair value using the Monte Carlo simulation valuation methodology. A summary of the weighted average (in aggregate) significant unobservable inputs (Level 3 inputs) used in measuring the Company’s warrant liabilities that are categorized within Level 3 of the fair value hierarchy for the three months ended March 31, 2016 is as follows:
  
Date of valuation
 
January 1, 2016
 
March 31, 2016
 
Strike price
 
$
3.49
 
$
2.38
 
Volatility (annual)
 
 
86.9
%
 
85.9
%
Risk-free rate
 
 
1.3
%
 
0.9
%
Contractual term (years)
 
 
3.1
 
 
3.0
 
Dividend yield (per share)
 
 
0
%
 
0
%
XML 30 R21.htm IDEA: XBRL DOCUMENT v3.4.0.3
Property, Plant and Equipment (Tables)
3 Months Ended
Mar. 31, 2016
Property, Plant and Equipment [Abstract]  
Property, Plant and Equipment [Table Text Block]
Property and equipment consist of the following at March 31, 2016 and December 31, 2015 (in thousands):
 
 
March 31,
 
December 31,
 
 
 
2016
 
2015
 
Leasehold improvements
 
$
69
 
$
69
 
Office furniture and equipment
 
 
25
 
 
25
 
Computer equipment and software
 
 
602
 
 
597
 
UK property acquisition, construction and estimated environmental liability
 
 
47,893
 
 
45,681
 
 
 
 
 
 
 
 
 
 
 
 
48,589
 
 
46,373
 
Less: accumulated depreciation
 
 
(229)
 
 
(216)
 
 
 
$
48,360
 
$
46,157
 
XML 31 R22.htm IDEA: XBRL DOCUMENT v3.4.0.3
Notes Payable (Tables)
3 Months Ended
Mar. 31, 2016
Debt Disclosure [Abstract]  
Interest Income and Interest Expense Disclosure [Table Text Block]
The following table shows the details of interest expenses related to 2014 Convertible Senior Notes for the three months ended March 31, 2016 and 2015, respectively (in thousands):
 
 
 
For the three months ended
 
 
 
March 31,
 
 
 
2016
 
2015
 
Contractual interest
 
$
137
 
$
216
 
Amortization of debt issuance costs
 
 
70
 
 
105
 
Total interest expense on the convertible senior notes
 
$
207
 
$
321
 
Schedule of Debt [Table Text Block]
Notes payable consist of the following at March 31, 2016 and December 31, 2015 (in thousands):
 
 
 
March 31,
 
December 31,
 
 
 
2016
 
2015
 
Notes payable – current
 
 
 
 
 
 
 
12% unsecured originally due July 2011 - in dispute (1)
 
$
934
 
$
934
 
 
 
 
934
 
 
934
 
Convertible notes payable, net - current
 
 
 
 
 
 
 
6% unsecured (2)
 
 
135
 
 
135
 
 
 
 
135
 
 
135
 
Note payable
 
 
 
 
 
 
 
6% due on demand (3)
 
 
50
 
 
50
 
 
 
 
50
 
 
50
 
 
 
 
 
 
 
 
 
Total notes payable, net
 
$
1,119
 
$
1,119
 
 
(1) This $0.934 million note, which was originally due in July 2011 is currently under dispute with the creditor as to the validity of the note payable balance, which the Company believes has already been paid in full and is not outstanding.
 
(2) This $0.135 million note as of March 31, 2016 consists of two separate 6% notes in the amounts of $0.110 million and $0.025 million. In regard to the $0.110 million note, the Company has made ongoing attempts to locate the creditor to repay or convert this note, but has been unable to locate the creditor to date. In regard to the $0.025 million note, the holder has elected to convert these notes into equity, the Company has delivered the applicable conversion documents to the holder, and the Company is waiting for the holder to execute and return the documents.
 
(3) This $0.050 million demand note as of March 31, 2016 is held by an officer of the Company. The holder has made no demand for payment, but reserves the right to make a demand at any time.
XML 32 R23.htm IDEA: XBRL DOCUMENT v3.4.0.3
Net Loss per Share Applicable to Common Stockholders (Tables)
3 Months Ended
Mar. 31, 2016
Earnings Per Share [Abstract]  
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]
The following securities were not included in the diluted net loss per share calculation because their effect was anti-dilutive as of the periods presented (in thousands): 
 
 
 
For the three months ended
 
 
 
March 31,
 
 
 
2016
 
2015
 
Common stock options
 
 
1,551
 
 
1,551
 
Common stock warrants - equity treatment
 
 
26,876
 
 
15,830
 
Common stock warrants - liability treatment
 
 
15,839
 
 
12,500
 
Convertible notes and accrued interest
 
 
1,743
 
 
2,797
 
Potentially dilutive securities
 
 
46,009
 
 
32,678
 
XML 33 R24.htm IDEA: XBRL DOCUMENT v3.4.0.3
Stockholders' Equity (Deficit) (Tables)
3 Months Ended
Mar. 31, 2016
Stockholders' Equity Note [Abstract]  
Schedule Of Warrant Activity [Table Text Block]
The following is a summary of warrant activity for the three months ended March 31, 2016 (in thousands, except per share data):
 
 
 
Number of
 
Weighted Average
 
 
 
Warrants
 
Exercise Price
 
Outstanding as of December 31, 2015
 
 
27,267,441
 
$
4.40
 
Warrants granted in a registered direct offering
 
 
12,058,825
 
 
3.04
 
Additional warrants owed to Cognate as part of reset
 
 
3,405,671
 
 
1.70
 
Warrants expired and cancelled
 
 
(16,791)
 
 
11.86
 
Outstanding as of March 31, 2016
 
 
42,715,146
 
$
3.53
 
XML 34 R25.htm IDEA: XBRL DOCUMENT v3.4.0.3
Liquidity and Financial Condition (Details Textual) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Net Cash Provided By (Used In) Operating Activities $ (17,595) $ (17,582)
Cash Equivalents, at Carrying Value 11,700  
Current Assets Less Payables 44,300  
Convertible Notes Payable Related Parties 6,400  
Noncash Derivative Liability 44,300  
Derivative Liability 14,500  
Net Income (Loss) Attributable To Parent (6,106) $ (46,433)
Projected Potential Future Liability $ 6,200  
XML 35 R26.htm IDEA: XBRL DOCUMENT v3.4.0.3
Summary of Significant Accounting Policies (Details Textual) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Summary of Significant Accounting Policies [Line Items]    
Research and Development Expense $ 13,440 $ 19,625
Accrued Environmental Loss Contingencies, Noncurrent 6,200  
Site Contingency, Loss Exposure in Excess of Accrual, High Estimate 4,500  
Site Contingency, Loss Exposure in Excess of Accrual, Low Estimate 32,000  
Site Contingency, Loss Exposure in Excess of Accrual, Best Estimate 6,200  
Foreign Currency Transaction Gain (Loss), Realized (1,434) $ 349
Foreign Currency Gain (Loss) [Member]    
Summary of Significant Accounting Policies [Line Items]    
Foreign Currency Transaction Gain (Loss), Realized $ 500  
XML 36 R27.htm IDEA: XBRL DOCUMENT v3.4.0.3
Fair Value Measurements (Details) - USD ($)
$ in Thousands
Mar. 31, 2016
Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative liability $ 14,457 $ 27,982
Fair Value, Inputs, Level 1 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative liability 0 0
Fair Value, Inputs, Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative liability 0 0
Fair Value, Inputs, Level 3 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative liability $ 14,457 $ 27,982
XML 37 R28.htm IDEA: XBRL DOCUMENT v3.4.0.3
Fair Value Measurements (Details 1) - Warrant Liability [Member]
$ in Thousands
3 Months Ended
Mar. 31, 2016
USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]  
Balance $ 27,982
Change in fair value (13,525)
Balance $ 14,457
XML 38 R29.htm IDEA: XBRL DOCUMENT v3.4.0.3
Fair Value Measurements (Details 2)
3 Months Ended
Mar. 31, 2016
$ / shares
Quantitative Information One [Member]  
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]  
Strike price $ 3.49
Volatility (annual) 86.90%
Risk-free rate 1.30%
Contractual term (years) 3 years 1 month 6 days
Dividend yield (per share) 0.00%
Quantitative Information Two [Member]  
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]  
Strike price $ 2.38
Volatility (annual) 85.90%
Risk-free rate 0.90%
Contractual term (years) 3 years
Dividend yield (per share) 0.00%
XML 39 R30.htm IDEA: XBRL DOCUMENT v3.4.0.3
Property, Plant and Equipment (Details) - USD ($)
$ in Thousands
Mar. 31, 2016
Dec. 31, 2015
Property, Plant and Equipment, Gross $ 48,589 $ 46,373
Less: accumulated depreciation (229) (216)
Property, Plant and Equipment, Net 48,360 46,157
Leasehold improvements [Member]    
Property, Plant and Equipment, Gross 69 69
Office furniture and equipment [Member]    
Property, Plant and Equipment, Gross 25 25
Computer equipment and software [Member]    
Property, Plant and Equipment, Gross 602 597
Property Acquisition and Construction [Member]    
Property, Plant and Equipment, Gross $ 47,893 $ 45,681
XML 40 R31.htm IDEA: XBRL DOCUMENT v3.4.0.3
Property, Plant and Equipment (Details Textual) - USD ($)
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Depreciation $ 13,000 $ 3,000
XML 41 R32.htm IDEA: XBRL DOCUMENT v3.4.0.3
Notes Payable (Details) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Contractual interest $ 137 $ 216
Amortization of debt issuance costs 70 105
Total interest expense on the convertible senior notes $ 207 $ 321
XML 42 R33.htm IDEA: XBRL DOCUMENT v3.4.0.3
Notes Payable (Details 1) - USD ($)
$ in Thousands
Mar. 31, 2016
Dec. 31, 2015
Debt Instrument [Line Items]    
Notes payable - current $ 934 $ 934
Convertible notes payable, net - current 135 135
Notes payable 50 50
Total notes payable, net 1,119 1,119
Notes Payable Current, Unsecured, Issued One [Member]    
Debt Instrument [Line Items]    
Notes payable - current [1] 934 934
Convertible Notes Payable Current, Unsecured, Issued One [Member]    
Debt Instrument [Line Items]    
Convertible notes payable, net - current [2] 135 135
Note Payable [Member]    
Debt Instrument [Line Items]    
Notes payable [3] $ 50 $ 50
[1] This $0.934 million note, which was originally due in July 2011 is currently under dispute with the creditor as to the validity of the note payable balance, which the Company believes has already been paid in full and is not outstanding.
[2] This $0.135 million note as of March 31, 2016 consists of two separate 6% notes in the amounts of $0.110 million and $0.025 million. In regard to the $0.110 million note, the Company has made ongoing attempts to locate the creditor to repay or convert this note, but has been unable to locate the creditor to date. In regard to the $0.025 million note, the holder has elected to convert these notes into equity, the Company has delivered the applicable conversion documents to the holder, and the Company is waiting for the holder to execute and return the documents.
[3] This $0.050 million demand note as of March 31, 2016 is held by an officer of the Company. The holder has made no demand for payment, but reserves the right to make a demand at any time.
XML 43 R34.htm IDEA: XBRL DOCUMENT v3.4.0.3
Notes Payable (Details Textual) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Dec. 31, 2015
Debt Instrument [Line Items]      
Notes Payable, Current, Total $ 934   $ 934
Convertible Debt, Current 135   135
Notes Payable, Noncurrent 50   50
Note One [Member]      
Debt Instrument [Line Items]      
Debt Conversion, Converted Instrument, Amount 110    
Note Two [Member]      
Debt Instrument [Line Items]      
Debt Conversion, Converted Instrument, Amount 25    
Mortgages [Member]      
Debt Instrument [Line Items]      
Interest Expense, Debt 400 $ 300  
Write off of Deferred Debt Issuance Cost $ 100    
Second Mortgage [Member]      
Debt Instrument [Line Items]      
Debt Instrument, Interest Rate, Stated Percentage 12.00%    
Short-term Debt $ 11,300    
Second Mortgage [Member] | Mortgage Loans Due August 2016 [Member]      
Debt Instrument [Line Items]      
Deferred Finance Costs, Current, Net 300    
Second Mortgage [Member] | Mortgage Loans Due November 2016 [Member]      
Debt Instrument [Line Items]      
Deferred Finance Costs, Current, Net 4,700    
Senior Convertible Notes [Member]      
Debt Instrument [Line Items]      
Debt Conversion, Converted Instrument, Amount $ 10,600    
Debt Instrument, Convertible, Conversion Price $ 6.60    
Debt Instrument, Interest Rate, Stated Percentage 5.00%    
Escrow Deposit $ 1,000    
Deferred Offering Costs 400    
Notes Payable Current, Unsecured, Issued One [Member]      
Debt Instrument [Line Items]      
Notes Payable, Current, Total [1] 934   934
Convertible Notes Payable Current, Unsecured, Issued One [Member]      
Debt Instrument [Line Items]      
Convertible Debt, Current [2] $ 135   $ 135
Convertible Notes Payable Current Unsecured Issued Two [Member]      
Debt Instrument [Line Items]      
Debt Instrument, Interest Rate, Stated Percentage 6.00%    
Notes Payable [Member]      
Debt Instrument [Line Items]      
Notes Payable, Noncurrent $ 50    
[1] This $0.934 million note, which was originally due in July 2011 is currently under dispute with the creditor as to the validity of the note payable balance, which the Company believes has already been paid in full and is not outstanding.
[2] This $0.135 million note as of March 31, 2016 consists of two separate 6% notes in the amounts of $0.110 million and $0.025 million. In regard to the $0.110 million note, the Company has made ongoing attempts to locate the creditor to repay or convert this note, but has been unable to locate the creditor to date. In regard to the $0.025 million note, the holder has elected to convert these notes into equity, the Company has delivered the applicable conversion documents to the holder, and the Company is waiting for the holder to execute and return the documents.
XML 44 R35.htm IDEA: XBRL DOCUMENT v3.4.0.3
Net Loss per Share Applicable to Common Stockholders (Details) - shares
shares in Thousands
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Potentially dilutive securities 46,009 32,678
Common stock options [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Potentially dilutive securities 1,551 1,551
Common stock warrants equity treatment [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Potentially dilutive securities 26,876 15,830
Common stock warrants liability treatment [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Potentially dilutive securities 15,839 12,500
Convertible notes and accrued interest [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Potentially dilutive securities 1,743 2,797
XML 45 R36.htm IDEA: XBRL DOCUMENT v3.4.0.3
Related Party Transactions (Details Textual) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Dec. 31, 2015
Related Party Transaction [Line Items]      
Share-based Compensation $ 5.2 $ 6.4  
Deferred Compensation Liability, Current and Noncurrent $ 8.8    
Common Stock Shares And Warrants Issued Favored Nation Provision Terms On March 3, 2016, the Company entered into a financing under which it sold 5.9 million common shares and 12.1 million Series A, B and C warrants to unrelated investors on terms more favorable than the existing terms of Cognates shares. The sale of common shares had an effective price of $1.7, which triggered a most favored nation obligation which would result in an obligation to issue 6.0 million shares to Cognate. However, these shares have not been issued, and the Company is in active negotiations with Cognate seeking to modify these arrangements.    
Cognate Bioservices [Member]      
Related Party Transaction [Line Items]      
Accounts Payable, Related Parties $ 6.4   $ 5.5
Payments to Acquire in Process Research and Development $ 11.2 $ 14.7  
XML 46 R37.htm IDEA: XBRL DOCUMENT v3.4.0.3
Stockholders' Equity (Deficit) (Details)
shares in Thousands
3 Months Ended
Mar. 31, 2016
$ / shares
shares
Shareholders Deficit [Line Items]  
Number of Warrants, Outstanding as of December 31, 2015 | shares 27,267,441
Number of Warrants, Warrants granted in a registered direct offering | shares 12,058,825
Number Of Warrants - Additional warrants owed to Cognate as part of reset | shares 3,405,671
Number of Warrants, Warrants expired and cancellation | shares (16,791)
Number of Warrants, Outstanding as of March 31, 2016 | shares 42,715,146
Weighted Average Exercise Price - Outstanding | $ / shares $ 4.4
Weighted Average Exercise Price - Warrants granted in a registered direct offering | $ / shares 3.04
Weighted Average Exercise Price - Additional warrants owed to Cognate as part of reset | $ / shares $ 1.70
Weighted Average Exercise Price - Warrants expired and cancellation | $ / shares 11.86
Weighted Average Exercise Price - Outstanding as of March 31, 2016 | $ / shares $ 3.53
XML 47 R38.htm IDEA: XBRL DOCUMENT v3.4.0.3
Stockholders' Equity (Deficit) (Details Textual) - USD ($)
$ / shares in Units, $ in Millions
1 Months Ended 3 Months Ended
Feb. 29, 2016
Mar. 31, 2016
Shareholders Deficit [Line Items]    
Proceeds From Sale Of Available Securities Gross $ 10.0  
Proceeds from Sale of Available-for-sale Securities, Total $ 9.2  
Series A Warrants [Member]    
Shareholders Deficit [Line Items]    
Sale of Stock, Number of Shares Issued in Transaction 5,882,353  
Sale of Stock, Price Per Share $ 1.70  
Warrant Issued to Purchase Common Stock 2,941,177  
Class of Warrant or Right, Exercise Price of Warrants or Rights $ 2.25  
Series B Warrants [Member]    
Shareholders Deficit [Line Items]    
Warrant Issued to Purchase Common Stock 5,882,353  
Class of Warrant or Right, Exercise Price of Warrants or Rights $ 3.00  
Series C Warrants [Member]    
Shareholders Deficit [Line Items]    
Warrant Issued to Purchase Common Stock 2,941,177  
Class of Warrant or Right, Exercise Price of Warrants or Rights $ 4.00  
Warrants Expiration Period 5 years  
Private Placement [Member]    
Shareholders Deficit [Line Items]    
Class of Warrant or Right, Exercise Price of Warrants or Rights   $ 2.125
Percentage Of Placement Fees On Aggregate Purchase Price Of Common Stock Sold   7.00%
Percentage Of Common Stock Warrants Issuable On Aggregate Number Of Shares Of Common Stock Sold   5.00%
Class Of Warrant Or Right Exercise Price Percentage On Public Offering Price   125.00%
Class of Warrant or Right, Number of Securities Called by Warrants or Rights   294,118
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