I.	Preferred Stock and Warrants

Authorized, Issued, and Outstanding Preferred Stock

April 2015,

the Company amended and restated its Certificate of Incorporation to decrease

the number of its authorized shares of preferred stock to

10,000,000

shares with a par value of

$0.0001

per share. As described in Note A, in

April 2015,

the Company completed an IPO of its common stock. Upon completion of the IPO, all outstanding shares of the Company’s redeemable convertible preferred stock were automatically converted or reclassified into an aggregate of

5,980,564

shares of the Company’s common stock. As of

December 31, 2017,

the Company had

10,000,000

shares of authorized and undesignated preferred stock and did

not

have any preferred stock outstanding.

Preferred Stock Activity

The following table summarizes redeemable convertible preferred stock activity for the years ended

December 31, 2017,

2016

and

2015:

	Shares of
	Series A Preferred			Series B Preferred			Series C Preferred			Series D Preferred			Series D-1 Preferred			Total
Balance as of January 1, 2015		9,704,215			6,220,000			18,557,408			7,255,425			—			41,737,048
Issuance of Series D-1 preferred stock		—			—			—			—			3,200,000			3,200,000
Exercise of Series D preferred warrants		—			—			—			3,205			—			3,205
Effect of reverse stock split		(8,410,377	)		(5,390,766	)		(16,083,286	)		(6,290,844	)		(2,784,416	)		(38,959,689	)
Less: Conversion of preferred stock into common stock upon IPO		(1,293,838	)		(829,234	)		(2,474,122	)		(967,786	)		(415,584	)		(5,980,564	)
Balance as of December 31, 2015		—			—			—			—			—			—
Balance as of December 31, 2016		—			—			—			—			—			—
Balance as of December 31, 2017		—			—			—			—			—			—

Series D-

Redeemable Convertible Preferred Stock

February 2015,

the Company entered into a stock purchase

agreement with Cowen KP Investment LLC in which Cowen KP Investment LLC agreed to purchase and the Company agreed to sell

3,200,000

shares of the Company’s Series D-

redeemable convertible preferred stock for

$1.25

per share, or an aggregate of

$4.0

million. Upon completion of the IPO, these shares automatically converted into

415,584

shares of the Company’s common stock.

Warrants

As described in Note A, in

April 2015,

the Company completed an IPO of its common stock.

Upon completion of the IPO, warrants to purchase

15,499,324

shares of Series D preferred stock were reclassified into warrants to purchase

2,066,543

shares of the Company’s common stock.

During

2013,

the Company issued

$3.8

million of convertible notes and the warrants (the

“2013

Warrants”) to purchase

1,079,453

shares of equity securities in a future financing meeting specified requirements (a “Qualified Financing”). The

2013

Warrants allow the holders to purchase shares of the same class and series of equity securities issued in the Qualified Financing for an exercise price equal to the per share price paid by the purchasers of such equity securities in the Qualified Financing. When the Company entered into the Deerfield Facility Agreement, the

2013

Warrants became warrants to purchase

1,079,453

shares of Series D preferred stock. Upon completion of the IPO, the

2013

Warrants automatically converted into warrants to purchase

143,466

shares of the Company’s common stock at an exercise price of

$5.85

per share. The

2013

Warrants, if unexercised, expire on the earlier of

June 2, 2019,

or upon a liquidation event.

June 2, 2014,

pursuant to the terms of the Deerfiel

d Facility Agreement, the Company issued the Deerfield Warrant to purchase

14,423,076

shares of Series D preferred stock (Note F). The Company recorded the fair value of the Deerfield Warrant as a debt discount and a warrant liability. The Deerfield Warrant, if unexercised, expires on the earlier of

June 2, 2024,

or upon a liquidation event. Upon completion of the IPO, the Deerfield Warrant automatically converted into a warrant to purchase

1,923,077

shares of the Company’s common stock at an exercise price of

$5.85

per share.

The Company is amortizing the debt discount over the term of the Deerfield Convertible Notes and the expense is recorded as interest expense related to amortization of debt issuance costs and discount in the statements of operations

The Company determined that the

2013

Warrants and Deerfield Warrant should be recorded as a liabili

ty and stated at fair value at each reporting period upon inception. As stated above, upon completion of the IPO, the

2013

Warrants and the Deerfield Warrant automatically converted into warrants to purchase the Company’s common stock. The Company marked the

2013

Warrants to fair value and reclassified them to equity upon closing of the IPO. The Deerfield Warrant remains classified as a liability and is recorded at fair value at each reporting period since it can be settled in cash. Changes to the fair value of the warrant liability are recorded through the statements of operations as a fair value adjustment (Note L).